UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
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[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CABLE DESIGN TECHNOLOGIES CORPORATION
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(Name of Registrant as Specified In Its Charter)
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SEC 1913 (3-99)
[LOGO OF CABLE DESIGN TECHNOLOGIES]
CABLE DESIGN TECHNOLOGIES
Foster Plaza 7 . 661 Andersen Drive PAUL M. OLSON
Pittsburgh, PA 15220 . (412) 937-2300 President/Chief Executive Officer
November 7, 2001
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders on Monday, December 10, 2001, at 2:30 P.M.,
eastern standard time. The meeting will be held at the Hilton Hotel & Towers,
600 Commonwealth Place, Pittsburgh, Pennsylvania 15222.
The matters scheduled to be considered at the meeting are the election of
directors and the election of an auditor for the Company. These matters are
more fully explained in the attached Proxy Statement, which you are encouraged
to read.
The Board of Directors values and encourages stockholder participation. It
is important that your shares be represented, whether or not you plan to attend
the meeting. Please take a moment to sign, date and return your Proxy in the
envelope provided even if you plan to attend the meeting.
We hope you will be able to attend the meeting.
Sincerely,
/s/ Paul M. Olson
PAUL M. OLSON
President and Chief Executive Officer
Innovative Connective Technology
[LOGO OF CABLE DESIGN TECHNOLOGIES]
CABLE DESIGN TECHNOLOGIES CORPORATION
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------------
Notice is hereby given that the Annual Meeting of Stockholders of Cable
Design Technologies Corporation (the ''Company'') will be held at the Hilton
Hotel & Towers, 600 Commonwealth Place, Pittsburgh, Pennsylvania 15222 on
Monday, December 10, 2001, at 2:30 P.M., eastern standard time, for the
following purposes:
1. To elect eight directors to serve until the next Annual Meeting of
Stockholders;
2. To elect an Auditor for the Company for the ensuing year; the
Board of Directors of the Company has recommended Arthur Andersen LLP,
the present Auditor, for election as Auditor; and
3. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
In accordance with the provisions of the Bylaws, the Board of Directors has
fixed the close of business on October 26, 2001 as the record date for the
determination of the holders of Common Stock entitled to notice of and to vote
at the Annual Meeting.
By order of the Board of Directors
/s/ Charles B. Fromm
CHARLES B. FROMM
Secretary
Pittsburgh, Pennsylvania
November 7, 2001
CABLE DESIGN TECHNOLOGIES CORPORATION
Foster Plaza 7
661 Andersen Drive
Pittsburgh, Pennsylvania 15220
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PROXY STATEMENT
Annual Meeting of Stockholders to be Held
December 10, 2001
-----------------
November 7, 2001
The Proxy is solicited by the Board of Directors of Cable Design
Technologies Corporation (the ''Company'') for use at the 2001 Annual Meeting
of Stockholders to be held on Monday, December 10, 2001, at 2:30 P.M., eastern
standard time, at the Hilton Hotel & Towers, 600 Commonwealth Place,
Pittsburgh, Pennsylvania 15222. Solicitation of the Proxy may be made through
officers and regular employees of the Company by telephone or by oral
communications with some stockholders. No additional compensation will be paid
to such officers and regular employees for any such Proxy solicitation.
Expenses incurred in the solicitation of Proxies will be borne by the Company.
This Proxy Statement is first being sent to the stockholders on or about
November 7, 2001.
VOTING MATTERS
The representation in person or by proxy of a majority of the outstanding
shares of common stock of the Company, par value $.01 per share (the ''Common
Stock''), entitled to a vote at the meeting is necessary to provide a quorum
for the transaction of business at the meeting. Shares can only be voted if the
stockholder is present in person or is represented by a properly signed proxy.
Each stockholder's vote is very important. Whether or not you plan to attend
the meeting in person, please sign and promptly return the enclosed proxy card,
which requires no postage if mailed in the United States. All signed and
returned proxies will be counted towards establishing a quorum for the meeting,
regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on the
proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted for the Board of Director's proposals, and
as the individuals named as proxy holders on the proxy deem advisable on all
other matters as may properly come before the meeting.
For all matters to be voted upon at the meeting other than the election of
directors, the affirmative vote of a majority of shares present in person or
represented by proxy, and entitled to vote on the matter, is necessary for
approval. The directors are elected by a plurality of the votes of the shares
present in person or represented by proxy and entitled to vote in the election
of directors. Withholding authority to vote or an instruction to abstain from
voting on a proposal will be treated as shares present and entitled to vote
and, for purposes of determining the outcome of the vote, will have the same
effect as a vote against the proposal. A broker ''non-vote'' occurs when a
nominee holding shares for a beneficial holder does not have discretionary
voting power and does not receive voting instructions from the beneficial
owner. Broker ''non-votes'' will not be treated as shares present and entitled
to vote on a voting matter and will have no effect on the outcome of the vote.
1
Any stockholder giving the enclosed Proxy has the power to revoke such Proxy
prior to its exercise either by voting by ballot at the meeting, by executing a
later-dated proxy or by delivering a signed written notice of the revocation to
the Secretary of the Company before the meeting begins. The Proxy will be voted
at the meeting if the signer of the Proxy was a stockholder of record on
October 26, 2001 (the ''Record Date'').
On the Record Date, there were outstanding and entitled to vote at the
meeting 44,069,562 shares of Common Stock. Each outstanding share of Common
Stock is entitled to one vote. A list of the stockholders entitled to vote at
the meeting will be available for inspection at the meeting for purposes
relating to the meeting.
MATTERS TO BE ACTED UPON
1. Election of Directors
Pursuant to the Bylaws of the Company, the Board of Directors has determined
that the number of directors constituting the full Board of Directors shall be
eight. The Board of Directors recommends that the stockholders vote FOR each
nominee set forth below. Proxies are solicited in favor of the nominees named
on the following pages and it is intended that the Proxies will be voted for
the eight nominees. In the event that any of the nominees should become unable
or unwilling to serve as a director, it is intended that the Proxies will be
voted for the election of such other person, if any, as shall be designated by
the Board of Directors. It is not anticipated that any of the nominees will be
unable or unwilling to serve as a director. Each director to be elected will
serve until the next Annual Meeting of Stockholders or until a successor is
elected and shall qualify.
Information Regarding Nominees for Election of Directors
A brief statement of the business experience and positions with the Company
for the past five years, a listing of certain other directorships and the ages
(as of September 30, 2001) of each person nominated to become a director of the
Company are set forth on the following pages. There are no family relationships
between any of the directors, nominees and executive officers of the Company
nor any arrangement or understanding between any director or nominee and any
other person pursuant to which he or she was or is to be selected as a director
or nominee.
Bryan C. Cressey, 52, has been Chairman of the Board of the Company since
1988 and a director since 1985. For the past twenty-one years he has also been
a General Partner and Principal of Golder, Thoma and Cressey ("GTC") and Thoma
Cressey Equity Partners, both private equity firms. He is also a director of
Select Medical Corporation, a public company, and several private companies,
all of which are unaffiliated with the Company. Mr. Cressey received a Juris
Doctor degree and a MBA degree from Harvard University.
Paul M. Olson, 67, has been President and a director of the Company since
1985, and Chief Executive Officer of the Company since 1993. From 1972 to 1984
Mr. Olson was the President of Phalo Corporation, a wire and cable
manufacturer, and directed sales and marketing at Phalo Corporation from 1967
to 1972. From 1963 to 1967, Mr. Olson was employed at General Electric and,
from 1960 to 1963, at General Cable, in wire and cable related sales and
marketing positions. Mr. Olson has a B.A. degree in economics from Hobart
College.
Lance Balk, 43, has been a director since March, 2000. Mr. Balk has been a
partner of Kirkland & Ellis since 1989 in the securities and mergers &
acquisition practice groups. Mr. Balk received a Juris Doctor degree and a MBA
degree from the University of Chicago.
George Graeber, 59, has been a director and Chief Operating Officer of the
Company since 1998. Between 1992 and 1998, Mr. Graeber served in various other
positions with the Company, including Executive Vice President of the Company
and President of Montrose/CDT. From 1990 to 1992 Mr. Graeber was a Vice
President and General Manager of the Energy division of Anixter International
Inc. Mr. Graeber also was the President of the Industrial Electronic division
of Brintec Corp. and a Vice President of Brand Rex Cable. Mr. Graeber has a
Master's degree in Electrical Engineering from the University of Connecticut.
2
Michael F.O. Harris, 63, has been a director of the Company since 1985. For
the past nineteen years he has also been a Managing Director of NGI, Inc. and
The Northern Group, Inc. (''Northern''), which act as Managing General Partners
of Northern Investment Limited Partnership (''NILP'') and Northern Investment
Limited Partnership II (''NILP II''), respectively. NILP and NILP II are
investment partnerships which own several manufacturing companies unaffiliated
with the Company. Mr. Harris has a B.S. degree from Yale University and a MBA
degree from Harvard University.
Glenn Kalnasy, 58, has been a director of the Company since 1985. For the
past nineteen years he has also been a Managing Director of NGI, Inc. and
Northern, which act as Managing General Partners of NILP and NILP II,
respectively. Mr. Kalnasy has a B.S. degree from Southern Methodist University.
Ferdinand Kuznik, 60, has been a director of the Company since June, 2000.
In June, 2001 Mr. Kuznik retired from Motorola, Inc. where he had served since
1999 as Executive Vice President of Motorola, Inc. and President of Motorola's
operations in Europe, the Middle East and Africa. From 1997 to 1999, Mr. Kuznik
served as President of Motorola's Personal Communications Sector. Mr. Kuznik
has also served as Managing Director of Philips Telecommunications and held
management positions with A.D. Little and AT&T Switching Systems. Mr. Kuznik
has a Dipl. Ing. degree from the Technical University of Ostrava and a Master's
degree in computer science from the Illinois Institute of Technology in Chicago.
Richard C. Tuttle, 46, has been a director of the Company since 1989. Since
1997, Mr. Tuttle has been a Principal of Prospect Partners, L.L.C., a private
equity investment firm. From 1992 to 1996, Mr. Tuttle was an Executive Vice
President at Health Care & Retirement Corp., a publicly traded health care
company that is unaffiliated with the Company. From 1987 to 1992, he was a
Principal at GTC, a private equity investment firm. Mr. Tuttle has a B.A.
degree and MBA degree from Stanford University.
2. Election of Auditors
The Board of Directors recommends that the stockholders vote FOR the
election of the firm of Arthur Andersen LLP as the auditors to audit the
financial statements of the Company and certain of its subsidiaries for the
fiscal year ending July 31, 2002. It is intended that the Proxies in the form
enclosed with this Proxy Statement will be voted for such firm unless
stockholders specify to the contrary in their Proxies or specifically abstain
from voting on this matter.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting of Stockholders. They will have the opportunity to make
statements if they desire to do so and will be available to respond to
appropriate questions.
3. Other Business
The Board of Directors does not know of any other business to be presented
at the Annual Meeting of Stockholders. If any other matters properly come
before the meeting, however, it is intended that the persons named in the
enclosed form of Proxy will vote said Proxy in accordance with their best
judgment.
DIRECTORS MEETINGS AND COMPENSATION
Directors Meetings
The Board of Directors held four regular meetings and one special telephonic
meeting during the year ended July 31, 2001 (''fiscal 2001''). The Audit
Committee, which consists of Richard C. Tuttle, Michael F.O. Harris and Glenn
Kalnasy, oversees actions taken by the Company's independent auditors,
recommends the engagement of auditors and reviews the Company's internal
audits. The Compensation Committee approves the compensation of executives of
the Company, makes recommendations to the Board of Directors with respect to
3
standards for setting compensation levels and administers the Company's
incentive plans. The Compensation Committee consists of Bryan C. Cressey and
Richard C. Tuttle. There is no standing nominating committee. During fiscal
2001, each of the Company's incumbent directors participated in excess of 75%
of the aggregate of the meetings of the Board of Directors and the meetings of
committees of the Board of Directors of which such director was a member.
During fiscal 2001, the Compensation Committee met informally, either in person
or by phone, on a number of occasions and took all formal actions by written
consent and the Audit Committee met, either in person or by telephonic meeting,
four times.
Compensation of Directors
Directors who are also officers of the Company do not currently receive
compensation from the Company for their services as directors. Those directors
who are not officers of the Company receive $2,500 quarterly for their services
as directors. All directors are reimbursed for expenses incurred in connection
with their attendance at meetings. Under the Company's Non-Employee Director
Stock Plan (the ''Director Plan'') each participating director under such plan
is entitled to receive shares of common stock annually with a fair market value
of $15,000. Also, on the first day of each of the Company's 2nd, 3rd and 4th
fiscal quarters each non-employee director will receive an option grant of
1,500 shares of Common Stock and, for each Committee on which a director
serves, an option grant of an additional 500 shares. Grants are made under the
2001 Long-Term Performance Incentive Plan. The option grants vest 33 1/3% each
year following grant and have an exercise price equal to the fair market value
of the Common Stock on the date of grant.
4
MANAGEMENT COMPENSATION AND CERTAIN TRANSACTIONS
Summary Compensation Table
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information for Mr. Olson and the four other
most highly compensated executive officers who were serving as executive
officers at the end of fiscal 2001 (collectively, the ''named executives'').
Long-Term
Annual Compensation Compensation
---------------------- ------------
Option Other Incentive
Fiscal Salary Bonus Awards Compensation Payments
Name and Principal Position Year ($)(1) ($)(2) (#)(3) ($)(4) ($)(5)
--------------------------- ------ ------- ------- ------------ ------------ ---------
Paul M. Olson...................... 2001 500,000 77,613 -- 28,572 --
President, Chief Executive Officer 2000 496,616 695,334 -- 30,009 --
1999 476,692 232,375 405,000 31,561 1,018,847
George C. Graeber.................. 2001 428,750 46,383 -- 25,548 --
Chief Operating Officer 2000 364,339 364,500 -- 26,102 --
1999 310,015 116,250 112,500 26,700 --
David R. Harden.................... 2001 301,991 36,913 -- 26,376 --
Senior Vice President 2000 286,331 229,110 -- 27,259 --
1999 266,597 146,630 225,000 26,856 949,062
Normand Bourque.................... 2001 257,792 335,773(6) -- 20,886 --
Executive Vice President 2000 252,219 478,461(6) -- 20,135 --
1999 225,319 423,978(6) -- 20,023 --
Ian Mack........................... 2001 241,887 282,471(7) 75,000 25,376 --
Group President-Europe 2000 -- -- -- -- --
1999 -- -- -- -- --
- --------
(1) Amounts in this column reflect salaries paid in the applicable fiscal year.
(2) Amounts in this column reflect bonuses paid with respect to the applicable
fiscal year.
(3) Adjusted for the August, 2000 3-for-2 stock split.
(4) Figures in this column include amounts with respect to Company
contributions to the West Penn Wire Division Incentive Profit Sharing Plan
and Trust (the ''Incentive Plan'') (which is a defined contribution plan)
and term life insurance premiums paid by the Company (both of which reflect
payments made in the 2000 calendar year), which for each of the named
executives other than Mr. Bourque and Mr. Mack are: Mr. Olson, Incentive
Plan $24,000, term life insurance premium $4,572; Mr. Harden, Incentive
Plan $24,000, term life insurance premium $2,376; and Mr. Graeber,
Incentive Plan $24,000, term life insurance premium $1,548. Figures in this
column for Mr. Bourque represent term life insurance and medical benefit
premium, $4,400, and earned amounts with respect to projected benefits
under NORDX/CDT, Inc. defined benefit plans, $16,486. Assuming continued
service with the Company until age 65, Mr. Bourque's estimated benefits
upon retirement under such plans would be a lump sum payment of $202,557
upon retirement and an annual benefit of $27,402. Figures in this column
for Mr. Mack represent Company pension contribution, $23,828 and medical
benefit premium, $1,548.
(5) Represents one-time incentive payments to certain members of senior
management made in connection with the Company's repurchases of common
stock received by such members of senior management upon the exercise of
incentive stock options which entitled the Company to a tax benefit of
approximately $12.8 million.
(6) Bonus includes $112,500, $206,250 and $168,750 in 2001, 2000 and 1999,
respectively, of signing bonus paid pursuant to Mr. Bourque's employment
agreement entered into on February 5, 1996, and $200,000 in fiscal 2001
under a retention bonus plan adopted in fiscal 2001 and expiring in fiscal
2002.
(7) Bonus includes $241,887 of signing bonus paid pursuant to Mr. Mack's
employment agreement entered into on August 1, 2000.
5
Option Grants in Fiscal Year 2001
The following table shows information regarding the grant of stock options
during fiscal 2001 to the named executives.
Potential Realizable Value
% of Total at Assumed Annual Rates
Number of Options of Stock Price Appreciations
Securities Granted to Exercise for Option Term
Underlying Employees in Price Expiration ----------------------------
Name Options (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- ----------- ------------ -------- ---------- --------- ---------
Ian Mack 75,000(1) 20.9% $23.583 8/01/10 1,112,025 2,819,025
- --------
(1) Such options were granted on August 1, 2000 and vest ratably over five
years from the grant date.
Option Exercises and Year End Values for Fiscal Year 2001
The following table shows information regarding the number and value of any
unexercised stock options held by the named executives as of July 31, 2001.
Value of
Number of Unexercised in the
Shares Unexercised Money Options at
Acquired Value Options at FY-End (#) FY-End ($)
on Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable (1)
---- ----------- -------- --------------------- ------------------
Paul M. Olson.... -- -- 242,000/163,000 481,750/479,225
David R. Harden.. -- -- 150,000/75,000 182,550/91,275
George C. Graeber 13,137 169,861(2) 45,000/67,500 255,375/383,063
Normand Bourque.. -- -- 98,820/98,730 273,929/273,680
Ian Mack......... -- -- 0/75,000 0/0
- --------
(1) Based on the closing price of the Common Stock on July 31, 2001 of $15.05.
(2) Shares were not sold by Mr. Graeber. Value realized is based upon market
price at time of exercise.
Employment Agreements
None of the named executives, other than Normand Bourque and Ian Mack, have
employment agreements with the Company or any of its affiliates. Pursuant to an
employment agreement between Mr. Bourque and the Company, effective as of
February 5, 1996 and Mr. Mack and the Company effective August 1, 2000, Messrs.
Bourque and Mack are entitled to participate in certain bonus plans, and are
entitled to termination payments if terminated without cause. Termination pay
is based upon prior compensation and would be paid for a period of 18 months,
in the case of Mr. Bourque, and 12 months, in the case of Mr. Mack. The Company
also entered into Senior Management Agreements with each of Messrs. Olson and
Harden in 1988, pursuant to which each purchased shares of common stock.
Messrs. Bourque's and Mack's employment agreements and the Senior Management
Agreements also impose certain additional restrictions upon the executives,
including confidentiality obligations, assignment of the benefit of inventions
and patents to the Company and a requirement that such executives devote
substantially all of their business time to the Company.
Messrs. Olson, Graeber and Mack are also parties to agreements whereby in
the event their employment is terminated other than for cause after a change of
control or they resigned for good reason following a change of control (i) they
would receive an amount equal to 3 times (in the case of Mr. Olson) or 2 times
(in the case of Messrs. Graeber and Mack) the sum of (a) their highest annual
compensation (excluding bonuses) over the prior 3 calendar years and (b) their
average annual bonus over the prior 3 calendar years and (ii) be provided
health benefits for 2 years following such change of control. In addition,
certain unvested options and other long-term incentives would vest.
6
Certain Transactions
Until August 2000, the Company purchased converted copper from an entity
controlled by family members of David Harden, an officer of the Company, and
purchases, from time to time, production equipment from a Company controlled by
Mr. Harden. In fiscal 2001, total purchases by the Company from such entities
were approximately $300,000. Purchases were made on an ''as needed'' basis, and
there is no contract relating to such purchases. The Company believes that the
foregoing transactions were consummated on terms no less favorable than those
that could be obtained by the Company from an unrelated third party in a
transaction negotiated on an arms-length basis.
Lance Balk, a director, is a partner of the law firm of Kirkland & Ellis.
Kirkland & Ellis performed legal services for the Company prior to and during
fiscal 2001.
Compensation Committee Report
Compensation Policies Applicable to Executive Officers
During fiscal 2001, the Compensation Committee continued to follow
established compensation policies. The compensation program for salaried
employees has been designed and is administered to ensure that employee
compensation motivates superior job performance and the achievement of business
objectives. The main policy objective of executive officer compensation is the
maximization of stockholder value over the long term. The Compensation
Committee believes that this can best be accomplished by an executive
compensation program which reflects the following three principles:
First, base salaries should be sufficient to attract and retain qualified
management talent.
Second, annual bonus and incentive programs should provide opportunity
for significant increases in compensation, based on meeting or exceeding
pre-determined performance targets.
Third, a substantial portion of total long-term compensation should
reflect performance on behalf of the Company's stockholders, as measured by
increases in the Company's stock price.
The Compensation Committee made no fundamental changes in the basic
executive compensation program during fiscal 2001.
Base Salary
The Compensation Committee meets in the fall of each year and is currently
evaluating compensation for fiscal 2002. Annual base salaries of the executive
officers for fiscal 2001 were reviewed by the Compensation Committee at its
October 2000 meeting and adjusted as appropriate effective October 1, 2000.
Following previously stated policies, the Compensation Committee adjusted
salaries based upon competitive salary levels, past individual performance as
measured by both qualitative and quantitative factors and the potential for
making significant contributions to future Company performance. The
Compensation Committee approved a general salary increases for fiscal 2001 of
5% for executive officers, although certain executive officers received higher
increases to reflect additional responsibilities and salaries for persons in
comparable positions in other companies.
Bonus Plan
Each of the named executive officers and certain other key personnel of the
Company participate in an executive/management bonus plan (the ''Bonus Plan'').
The Bonus Plan provides for annual bonus awards based upon financial results
compared to a projected budget prepared at the beginning of each fiscal year.
Employees at each of the Company's operating units receive bonuses determined
by the financial results of their respective division and/or by the overall
financial results of the Company. Other participants, including the Chief
Executive Officer (the ''CEO''), receive bonuses based on the overall financial
results of the Company. The individual's Target Bonus ranges from 15% to 70% of
base salary, as determined by the Compensation Committee, and based primarily
on the employee's position and place of employment within the Company. An
individual participant's
7
actual bonus is determined as a percentage ranging from 0% to 200% of the
Target Bonus based upon (i) the relevant performance target(s) achieved, and
(ii) the weight given to the relevant operating unit and overall Company
performance targets. Bonus amounts are prorated for new participants who are
added during the course of a given year. One half of the Bonus Plan bonuses
earned are paid quarterly, with the balance paid after final fiscal year
results are available. Bonus payments under the Bonus Plan are subject to
modification at the discretion of the Compensation Committee. All senior
executive/management bonus plans are approved by the Board of Directors.
Stock Options
Options for 75,000 shares were granted under the Supplemental Long-Term
Performance Incentive Plan to Mr. Mack upon commencement of his employment with
the Company. No other stock options were issued to senior management during
fiscal 2001. Shares of common stock that remain reserved for grant under the
Company's stock option plans as of October 26, 2001 are: for the Long- Term
Performance Incentive Plan, 58,852 shares; for the Supplemental Long-Term
Performance Incentive Plan, 6,970 shares; for the 1999 Long-Term Performance
Incentive Plan, 37,730 shares and for the 2001 Long-Term Performance Incentive
Plan, 1,753,000.
In order to create and provide an option incentive structure similar to that
for its employees, the Company adopted the Director Plan in 1995. Under this
plan, the Company's outside Directors are eligible to receive shares of common
stock in an amount and at a price set by a pre-arranged formula. Under the
Director Plan 144,265 shares of common stock remain reserved for grant to the
Company's outside Directors.
Compensation of Chief Executive Officer
The compensation policies described above apply as well to the compensation
of the CEO. The Compensation Committee is directly responsible for determining
the CEO's salary level and for all awards and grants to the CEO under the
incentive components of the compensation program. The overall compensation
package of the CEO is designed to recognize that the CEO bears primary
responsibility for increasing the value of stockholders' investments.
Accordingly, a substantial portion of the CEO's compensation is
incentive-based, providing greater compensation as direct and indirect
financial measures of stockholder value increase. The CEO's compensation is
thus structured and administered to motivate and reward the successful exercise
of these responsibilities.
There were no changes made to Mr. Olson's compensation package for fiscal
2001.
Internal Revenue Code Section 162(m)
The Compensation Committee has determined that it is unlikely that the
Company would pay any material amounts in fiscal 2002 that would result in the
loss of a Federal income tax deduction under Section 162(m) of the Internal
Revenue Code of 1986, as amended, and accordingly, has not recommended that any
special actions be taken or that any plans or programs be revised at this time
in light of such tax law provision.
Conclusion
Through the programs described above and the stock ownership of management
through options, the Compensation Committee believes that a significant portion
of the Company's executive compensation is linked directly to corporate
performance.
Respectfully submitted,
COMPENSATION COMMITTEE MEMBERS
Bryan C. Cressey Richard C. Tuttle
* * * * * *
8
Performance Graph
The following graphs compare the cumulative total return on $100 invested on
November 24, 1993 (the first day of public trading of the Common Stock) through
July 31, 2001 in the common stock of the Company, the S&P 500 Index and the S&P
Electrical Equipment Index and $100 invested on July 31, 1996 through July 31,
2001 in the common stock of the Company, the S&P 500 Index, the S&P Electrical
Equipment Index and the S&P Smallcap Communications Equipment Index. The
Company is adding the S&P Smallcap Communications Equipment Index to replace
the S&P Electrical Equipment Index in the 5-year comparison because it believes
it better reflects the Company's industry. The S&P Smallcap Communications
Equipment Index was not available when the Company went public. The return of
the indices is calculated assuming reinvestment of dividends during the period
presented. The Company has not paid any dividends since its initial public
offering. The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURNS AMONG CABLE DESIGN TECHNOLOGIES
CORPORATION, S&P 500 INDEX AND
S&P ELECTRICAL EQUIPMENT INDEX
[CHART]
Cable Design
Technologies S&P Electrical
Corporation S&P 500 Index Equipment Index
11/24/93 $100.00 $100.00 $100.00
7/29/94 $134.18 $100.99 $105.74
7/31/95 $227.85 $127.36 $126.30
7/31/96 $444.08 $148.47 $170.61
7/31/97 $517.63 $223.03 $274.14
7/31/98 $478.29 $261.90 $326.41
7/30/99 $407.82 $310.51 $405.96
7/31/00 $794.55 $334.36 $541.84
7/31/01 $507.96 $283.03 $451.57
9
COMPARISON OF CUMULATIVE TOTAL RETURNS AMONG CABLE DESIGN TECHNOLOGIES
CORPORATION, S&P 500 INDEX, S&P ELECTRICAL EQUIPMENT INDEX AND
S&P SMALLCAP COMMUNICATIONS EQUIPMENT INDEX
[CHART]
Cable Design S&P Smallcap
Technologies Communications S&P Electrical
Date Corporation S&P 500 Index Equipment Index Equipment Index
7/31/96 $100.00 $100.00 $100.00 $100.00
7/31/97 $116.45 $150.22 $102.49 $160.68
7/31/98 $107.69 $176.41 $81.09 $191.33
7/30/99 $92.95 $209.16 $72.37 $237.95
7/31/00 $181.09 $225.24 $126.14 $317.57
7/31/01 $115.77 $190.67 $67.07 $264.66
10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information regarding beneficial
ownership of common stock as of October 26, 2001, by each person or entity
known to the Company who owns of record or beneficially five percent or more of
the common stock, by each named executive officer and director nominee and all
executive officers and director nominees as a group.
Number of Shares Percentage of
of Outstanding Common
Name Common Stock(1) Stock(1)
- ---- ---------------- ------------------
Fidelity Research and Management Corporation........................ 6,316,050 14.3%
Massachusetts Financial Services.................................... 5,814,098 13.2%
Bryan C. Cressey(2)(4).............................................. 399,738 *
Paul M. Olson(2)(5)................................................. 778,521 1.8%
Lance C. Balk(2)(6)................................................. 10,499 *
George C. Graeber(2)(7)............................................. 54,000 *
David R. Harden(8).................................................. 732,430 1.7%
Michael F.O. Harris(2)(3)(9)........................................ 34,463 *
Glenn Kalnasy(2)(3)(6).............................................. 17,958 *
Ferdinand Kuznik(2)(6).............................................. 4,634 *
Ian Mack(10)........................................................ 15,000 *
Richard C. Tuttle(2)(3)(11)......................................... 48,341 *
Norman Bourque(12).................................................. 100,455 *
All executive officers and director nominees as a group (15 persons) 2,420,868 5.5%
- --------
* Represents less than 1%.
(1) Figures are based upon 44,069,562 shares of common stock outstanding as of
October 26, 2001. The figures assume exercise by only the stockholder or
group named in each row of all options for the purchase of common stock
held by such stockholder or group which are exercisable within 60 days of
October 26, 2001. Figures for Fidelity Research and Management Corporation
and Massachusetts Financial Services are as of June 30, 2001, which
represents the latest available data.
(2) Messrs. Cressey, Olson, Balk, Graeber, Harris, Kalnasy, Kuznik and Tuttle
are directors of the Company.
(3) Member of the Audit Committee.
(4) Includes 666 shares covered by options and 70,000 shares held by the Bryan
and Christina Cressey Foundation (the ''Foundation''). Mr. Cressey is the
President of the Foundation and may be deemed to be a beneficial owner of
the common stock of the Company owned by the Foundation, but Mr. Cressey
disclaims any such beneficial ownership.
(5) Includes 242,000 shares covered by options.
(6) Includes 500 shares covered by options for each of Messrs. Balk, Kalnasy
and Kuznik.
(7) Includes 45,000 shares covered by options.
(8) Includes 150,000 shares covered by options.
(9) Includes 666 shares covered by options.
(10) Includes 15,000 shares covered by options.
(11) Includes 17,902 shares covered by options.
(12) Includes 98,820 shares covered by options.
11
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is comprised of the three
directors named below. Each member of the Audit Committee is an independent
director as defined by New York Stock Exchange rules. The Audit Committee has
adopted a written charter which has been approved by the Board of Directors,
and which is set forth in Appendix A of this Proxy Statement. The Audit
Committee has reviewed and discussed the Company's audited financial statements
with management, which has primary responsibility for the financial statements.
Arthur Andersen LLP, the Company's independent auditor for fiscal 2001, is
responsible for expressing an opinion on the conformity of the Company's
audited financial statements with generally accepted accounting principles. The
Audit Committee has discussed with Arthur Andersen the matters that are
required to be discussed by Statement on Auditing Standards No. 61
(Communication With Audit Committees). Arthur Andersen has provided to the
Audit Committee the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and the Audit Committee discussed with Arthur Andersen that firm's
independence. The Audit Committee also considered whether Arthur Andersen's
provision of non-audit services to the Company and its affiliates is compatible
with Arthur Andersen's independence.
Audit Fees: An aggregate of $489,540 was billed for professional services
rendered for the audit of the Company's annual financial statements for the
2001 fiscal year and for the reviews of financial statements included in the
Company's quarterly reports on Form 10-Q for the 2001 fiscal year.
Audit-Related Fees: An aggregate of $276,252 was billed for audit-related
services for the 2001 fiscal year including statutory audits, employee benefit
plan audits and internal audit services.
Financial Information Systems Design and Implementation Fees: Arthur
Andersen LLP did not render professional services to the Company relating to
financial information systems design and implementation during the 2001 fiscal
year.
All Other Fees: Fees billed to the Company by Arthur Andersen LLP during the
2001 fiscal year for all other services rendered to the Company totaled
$288,434.
The Company's Audit Committee considered whether the provision of non-audit
services rendered by Arthur Andersen LLP to the Company was compatible with
maintaining Arthur Andersen LLP's independence and concluded that Arthur
Andersen's independence was not impaired.
Based on the considerations referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for fiscal 2001 and that
Arthur Andersen be appointed independent auditors for the Company for fiscal
2002. The foregoing report is provided by the following independent directors,
who constitute the Audit Committee:
Michael F.O. Harris (Chairman)
Richard C. Tuttle
Glenn Kalnasy
12
DIRECTOR AND OFFICER AND TEN PERCENT STOCKHOLDER SECURITIES REPORTS
The federal securities laws require the Company's directors and officers,
and persons who own more than ten percent of the Company's Common Stock, to
file with the Securities and Exchange Commission, the New York Stock Exchange
and the Secretary of the Company initial reports of ownership and reports of
changes in ownership of the common stock of the Company.
Due to an administrative error on the part of the Company, (i) the Form 4's
for the non-employee directors in connection with director options issued in
the 3rd and 4th fiscal quarters were not filed, (ii) Form 4's were not filed
with respect to purchases of stock made in fiscal 2001 by Messrs. Dudley,
Harden and Bourque through automatic payroll deductions under the Company's
Employee Stock Purchase Program and (iii) Bryan Cressey's Form 5 with respect
to certain gifted shares was not filed. Form 5's with respect to such options
and stock were, or are in the process of being, filed. To the Company's
knowledge, based solely on review of the copies of such reports furnished to
the Company and representations that no other reports were required, during the
fiscal year 2001, all of the Company's officers, directors and
greater-than-ten-percent beneficial owners made all other required filings.
STOCKHOLDER PROPOSALS
Proposals of stockholders to be presented at the 2002 Annual Meeting of
Stockholders must be received by the Secretary of the Company by July 10, 2002
to be considered for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. It is anticipated that the 2002 Annual Meeting
will be scheduled for December 10, 2002.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not know
of any business to come before the Annual Meeting other than the matters
described in the notice. If other business is properly presented for
consideration at the Annual Meeting, the enclosed Proxy authorizes the persons
named therein to vote the shares in their discretion.
SOLICITATION OF PROXIES
Solicitation of the Proxies may be made through officers and regular
employees of the Company by telephone or by oral communications with some
stockholders following the original solicitation period. No additional
compensation will be paid to such officers and regular employees for proxy
solicitation. Expenses incurred in the solicitation of Proxies will be borne by
the Company, including the charges and expenses of brokerage firms and others
of forwarding solicitation material to beneficial owners of Common Stock. In
addition to use of the mails, Proxies may be solicited by officers and
employees of the Company in person or by telephone. The Company has no present
plans to hire special employees or paid solicitors to assist in obtaining
proxies, but reserves the option of doing so if it should appear that a quorum
might otherwise not be obtained or for solicitation of proxies in connection
with any of the proposed matters.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report for the fiscal year ended July 31, 2001,
including the financial information included therein, has been filed with the
Securities and Exchange Commission and is incorporated in this Proxy Statement
by reference.
13
Appendix A
CABLE DESIGN TECHNOLOGIES CORPORATION
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Adopted March 7, 2000
PURPOSE
The Audit Committee is appointed by the Board of Directors of Cable Design
Technologies Corporation (the "Company") to assist the Board in fulfilling its
oversight responsibilities. The Audit Committee's primary functions are to:
. Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting and legal
compliance.
. Monitor the independence and performance of the Company's independent
auditors and internal auditing department.
. Provide an avenue of communication among the independent auditors,
management, the internal auditing department and the Board.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the Company. The Audit Committee has
the ability to retain, at the Company's expense, special legal, accounting or
other consultants or experts it deems necessary in the performance of its
duties.
COMPOSITION
Audit Committee members shall be appointed by the Board and shall meet the
requirements of the New York Stock Exchange. The Audit Committee shall be
initially comprised of two or more directors, as determined by the Board. No
later than June 14, 2001, the Audit Committee shall be comprised of three or
more directors, as determined by the Board. Each of the members of the Audit
Committee shall be independent non-executive directors, free from any
relationship that, in the judgment of the Board, would interfere with the
exercise of his or her independent judgment. All members of the Committee shall
have a basic understanding of finance and accounting and be able to read and
understand fundamental financial statements, and at least one member of the
Audit Committee shall have, in the judgment of the Board, accounting or related
financial management expertise.
The Audit Committee shall meet with such frequency as the Audit Committee
determines necessary or appropriate.
RESPONSIBILITIES AND DUTIES
The Audit Committee shall exercise the following powers and duties with
respect to the Company and, unless otherwise specified, any of its direct or
indirect subsidiaries:
Review
. Review and reassess the adequacy of this Charter at least annually. Submit
any proposed changes to this Charter to the Board of Directors.
. Discuss with management and independent auditors any significant issues
regarding accounting principles, practices and judgments applicable to the
Company's quarterly and annual financial statements prior to such
financial statements being filed with the SEC. Included should be a
discussion of any items required to be communicated by the independent
auditors in accordance with SAS 61.
A-1
. In consultation with the management, the independent auditor and the
internal auditors, consider the integrity of the Company's financial
reporting processes and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control and
report such exposures. Review significant findings prepared by the
independent auditors and the internal auditing department together with
management's responses.
Independent Auditors
. The independent auditors are ultimately accountable to the Audit Committee
and the Board of Directors. On an annual basis, the Audit Committee shall
review the independence and performance of the independent auditors and
recommend to the Board of Directors this appointment of the independent
auditors or approve any discharge of auditors when circumstances warrant.
In connection with such review, the Audit Committee shall cause the
auditors to provide a report that discloses all of the relationships with
the Company that the auditor believes may impact independence and
objectivity.
. Approve the fees and other significant compensation to be paid to the
independent auditors.
. Review the independent auditors' audit plan, including the scope,
staffing, locations, reliance upon management, and internal audit and
general audit approach.
. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
Internal Audit Department
. Review the budget, plan, changes in plan, activities, organizational
structure and qualifications of the internal audit department, as needed.
. Review significant reports prepared or presented by the internal audit
department together with management's response and follow-up to these
reports.
Other Audit Committee Responsibilities
. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission.
. Recommend to the Board that the audited financial statements be included
in the Company's Annual Report on Form 10-K as required by the Securities
and Exchange Commission.
. Perform any other activities consistent with this Charter, the Company's
by-laws and governing law as the Audit Committee or the Board deems
necessary or appropriate.
. Periodically report to the Board of Directors on significant results of
the foregoing activities.
* * * * * *
A-2
DETACH HERE
PROXY
CABLE DESIGN TECHNOLOGIES CORPORATION
For Annual Meeting of Stockholders - December 10, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul M. Olson, Kenneth O. Hale and Charles B.
Fromm, and each or any of them, as the true and lawful attorneys of the
undersigned, with full power of substitution and revocation, and authorizes
them, and each of them, to vote all the shares of capital stock of the
Corporation which the undersigned is entitled to vote at said meeting and any
adjournment thereof upon the matters specified below and upon such other matters
as may be properly brought before the meeting or any adjournments thereof,
conferring authority upon such true and lawful attorneys to vote in their
discretion on such other matters as may properly come before the meeting and
revoking any proxy heretofore given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE
---
PROPOSALS IN ITEM 2 AND AUTHORITY WILL BE DEEMED GRANTED UNDER PROPOSAL 3.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
CABLE DESIGN TECHNOLOGIES
CORPORATION
C/O EQUISERVE
P.O. BOX 9398
BOSTON, MA 02205-9398
DETACH HERE
[X] Please mark
votes as in !
this example. !___
1. To elect a Board of Directors 2. To elect Arthur Andersen LLP as FOR AGAINST ABSTAIN
for the ensuing year. auditors for the fiscal year [ ] [ ] [ ]
Nominees: (01) Bryan C. Cressey, ending July 31, 2002.
(02) Paul M. Olson, (03) Lance Balk,
(04) George Graeber, (05) Michael 3. To transact such other business as may properly come before the meeting.
F. O. Harris,(06) Glenn Kalnasy,
(07) Ferdinand Kuznik, (08) Richard
C. Tuttle.
FOR WITHHELD
[ ] [ ]
[ ] __________________________
For all nominees except
as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
(If signing as attorney, executor, trustee or guardian, please give your
full title as such. If shares are held jointly, each holder should sign.)
Signature: ________________ Date: ______ Signature: ______________ Date: ______