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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
C. P. Clare Corporation
(Name of Registrant as Specified In Its Charter)
C. P. Clare Corporation
(Name of Person(s) Filing Proxy Statement
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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[CP CLARE LOGO]
78 CHERRY HILL DRIVE
BEVERLY, MA 01915
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 16, 1997
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of C.P. Clare Corporation (the "Company") will be held on
Tuesday, September 16, 1997, at 10:00 a.m. at State Street Bank & Trust Company,
225 Franklin Street, Boston, Massachusetts for the following purposes:
1. To elect one Class II director of the Company to serve until the
2000 Annual Meeting of Stockholders and until his successor is duly elected
and qualified;
2. To consider and act upon any other matters that may properly be
brought before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned, or to which the Annual Meeting
may be postponed.
The Board of Directors has fixed the close of business on July 14, 1997 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournments or postponements thereof.
Only stockholders of record of the Company's common stock, $.01 par value per
share, at the close of business on that date will be entitled to notice of and
to vote at the Annual Meeting and at any adjournments or postponements thereof.
You are requested to fill in and sign the enclosed proxy card, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
By Order of the Board of Directors
[Signature of Lori M. Henderson]
LORI M. HENDERSON
Clerk
Beverly, Massachusetts
July 25, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
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[CP CLARE LOGO]
78 CHERRY HILL DRIVE
BEVERLY, MASSACHUSETTS 01915
------------------------
PROXY STATEMENT
------------------------
FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 16, 1997
July 25, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of C.P. Clare Corporation (the "Company") for
use at the 1997 Annual Meeting of Stockholders of the Company to be held on
Tuesday, September 16, 1997, and at any adjournments or postponements thereof
(the "Annual Meeting"). At the Annual Meeting, stockholders will be asked to
vote upon the election of one Class II director of the Company and to act upon
any other matters properly brought before them.
This Proxy Statement and the accompanying Notice of Annual Meeting and form
of proxy are first being sent to stockholders on or about July 29, 1997. The
Board of Directors has fixed the close of business on July 14, 1997, as the
record date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting (the "Record Date"). Only stockholders of record of
the Company's common stock, par value $.01 per share (the "Common Stock"), at
the close of business on the Record Date will be entitled to notice of and to
vote at the Annual Meeting. As of the Record Date, there were 9,232,886 shares
of Common Stock outstanding and entitled to vote at the Annual Meeting. Holders
of Common Stock outstanding as of the close of business on the Record Date will
be entitled to one vote for each share held by them.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. Both abstentions and broker "non-votes" (as defined below) will be
counted in determining the presence of a quorum. The affirmative vote of the
holders of a plurality of the shares of Common Stock present and represented
(and entitled to vote) at the Annual Meeting is required for the election of
directors. Broker "non-votes" are proxies from brokers or other nominees
indicating that such person has not received instructions from the beneficial
owner or other person entitled to vote the shares which are the subject of the
proxy on a particular matter with respect to which the broker or other nominee
does not have discretionary voting power. Abstentions and broker non-votes will
have no effect on the outcome of the election of directors.
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Stockholders of the Company are requested to complete, sign, date and
promptly return the accompanying Proxy Card in the enclosed postage-prepaid
envelope. Shares represented by a properly executed proxy received prior to the
vote at the Annual Meeting and not revoked will be voted at the Annual Meeting
as directed on the proxy. If a properly executed proxy is submitted prior to
such time and no instructions are given, the proxy will be voted FOR the
election of the nominee for the Board of Directors of the Company named in this
Proxy Statement. It is not anticipated that any matters other than those set
forth in this Proxy Statement will be presented at the Annual Meeting. If other
matters are presented, proxies will be voted in accordance with the discretion
of the proxy holders.
A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Clerk of the Company at the
address of the Company set forth above; by filing a duly executed proxy bearing
a later date; or by appearing in person and voting by ballot at the Annual
Meeting. Any stockholder of record as of the Record Date attending the Annual
Meeting may vote in person whether or not a proxy has been previously given, but
the presence (without further action) of a stockholder at the Annual Meeting
will not constitute revocation of a previously given proxy.
The Company's 1997 Annual Report, including financial statements for the
fiscal year ended March 31, 1997, is being mailed to stockholders concurrently
with this Proxy Statement. The Annual Report, however, is not part of the proxy
solicitation material.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of five members and is
divided into three classes. Directors serve for three-year terms with one class
of Directors being elected by the Company's stockholders at each annual meeting.
At the Annual Meeting, one Class II director will be elected to serve until
the 2000 Annual Meeting of stockholders and until his successor is duly elected
and qualified. The Board of Directors has nominated John D. Turner (the
"Nominee") for election as a Class II director at the Annual Meeting. Mr. Turner
is currently serving as a director of the Company. The Board of Directors
anticipates that Mr. Turner will serve as a director, if elected. However, if
any person nominated by the Board of Directors is unable to accept election, the
proxies will be voted for the election of such other person as the Board of
Directors may recommend. The Board of Directors will consider a nominee for
election to the Board of Directors recommended by a stockholder of record if the
stockholder submits the nomination in compliance with the requirements of the
Company's Bylaws. See "Other Matters -- Stockholder Proposals" for a summary of
these requirements.
RECOMMENDATION
The Board of Directors recommends a vote FOR its Nominee, John D. Turner.
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INFORMATION REGARDING NOMINEES, OTHER DIRECTORS AND EXECUTIVE OFFICERS
The following table and biographical descriptions set forth certain
information with respect to the Nominee for election as a Class II director at
the Annual Meeting, the continuing directors whose terms expire at the annual
meetings of stockholders in 1998 and 1999 and the executive officers of the
Company who are not directors, based on information furnished to the Company by
such directors and executive officers. The following information is as of June
30, 1997, unless otherwise specified.
NUMBER OF SHARES
DIRECTOR AND UNITS PERCENT OF
NAME AGE SINCE BENEFICIALLY OWNED ALL SHARES(1)
- ----------------------------------------------- --- -------- ------------------ -------------
Class II Nominee for Election at 1997 Annual
Meeting (Term to Expire in 2000)
John G. Turner............................... 57 1993 122,002(2) 1.3%
Class III Continuing Directors (Term to Expire
in 1998)
Arthur R. Buckland........................... 49 1993 418,170(3) 4.5%
James K. Sims................................ 50 1996 15,000(4) *
Class I Continuing Director (Term to Expire in
1999)
Winston R. Hindle, Jr........................ 67 1995 11,000(4) *
Clemente C. Tiampo........................... 68 1996 11,000(4) *
Executive Officers who are not Directors
Michael J. Ferrantino........................ 54 12,605(5) *
Harsh Koppula................................ 42 43,663(6) *
Richard Morgan............................... 40 7,000(7) *
William Reed................................. 46 --
Executive Officers and Directors as a Group (9
Total)....................................... 640,440(8) 6.8%
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* Less than one percent
(1) As of June 30, 1997 there were 9,224,082 shares of Common Stock outstanding.
(2) Includes 10,000 shares subject to options that are immediately exercisable.
Also includes 112,002 shares held by Late Stage Fund 1990 Limited
Partnership ("Late Stage"), of which MVP Capital L.P. is investment general
partner and holder of a 0.9% interest. Mr. Turner is a general partner of
MVP and shares voting control over Late Stage. Shares beneficially owned by
Mr. Turner include only 362 of the 112,002 shares owned by Late Stage. While
Mr. Turner may be an affiliate of Late Stage, he disclaims beneficial
ownership of the remainder of such shares.
(3) Includes 54,000 shares subject to options that are immediately exercisable.
(4) Includes 10,000 shares subject to options that are immediately exercisable.
(5) Includes 3,648 shares subject to options that are immediately exercisable.
(6) Includes 26,704 shares subject to options or warrants that are immediately
exercisable.
(7) Represents options that are immediately exercisable.
(8) Includes 131,352 shares subject to options and warrants that are immediately
exercisable.
Nominee for Election as a Director
JOHN G. TURNER. Mr. Turner has been a Director of the Company since 1993.
Mr. Turner is a General Partner of MVP Ventures, a venture capital investment
firm based in Boston, Massachusetts, a position he has held since 1988. Mr.
Turner also serves a Director of Ampro Corporation and Micro Module Systems
Corporation.
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Incumbent Directors -- Term Expiring in 1998
ARTHUR R. BUCKLAND. Mr. Buckland has been President, Chief Executive
Officer and a Director of the Company since September 1993. He was elected
Chairman of the Board in January, 1996. Prior to assuming these
responsibilities, he served as a consultant to the Company from July 1993 to
September 1993. Mr. Buckland was President and Chief Executive Officer of Four
Pi Systems, a process control capital equipment company based in San Diego, CA,
from September 1992 until June 1993, and served as a consultant to that company
from May 1992 to September 1992. From September 1990 until September 1991, Mr.
Buckland was President of Lex Electronics, a wholly-owned subsidiary of Lex plc,
a London-based automotive/distribution company, and from January 1982 until June
1990, he served as Vice President and General Manager for Schlumberger Ltd., a
diversified multinational company, in multiple locations. Mr. Buckland is also a
director of Helix Technologies Corporation.
JAMES K. SIMS. Mr. Sims has been a Director since March, 1996. He is the
President and Chief Executive Officer of Cambridge Technology Partners, a
position he has held since the Company's inception in 1991. Prior to founding
Cambridge Technology Partners, Mr. Sims was Chairman and Chief Executive Officer
of Concurrent Computer Corporation. Mr. Sims is also a director of Iprax
Corporation.
Incumbent Directors -- Term Expiring in 1999
WINSTON R. HINDLE, JR. Mr. Hindle has been a Director since July 1995. He
was a Senior Vice President of Digital Equipment Corporation and a member of the
Executive Committee prior to his retirement in 1994 after 32 years with the
company. Mr. Hindle also serves on the Board of Directors of Keane, Inc. and
Mestek, Inc.
CLEMENTE C. TIAMPO. Mr. Tiampo has been a Director since January 1996. He
is a private investor.
Executive Officers Who Are Not Directors
MICHAEL J. FERRANTINO. Mr. Ferrantino has been Vice President and General
Manager, Components Group, since January 1997. Prior to that, Mr. Ferrantino was
Vice President and General Manager, Semiconductor Group, a position he held
since April 1995 when he joined the Company. Prior to joining the Company, Mr.
Ferrantino was President of Trontech, a subsidiary of Dynatech Corporation and a
solid state, Rf and Microwave amplifier and subsystem design and manufacturing
company, a position he held since February 1994. From December 1989, until he
joined Trontech, Mr. Ferrantino was Vice President of Unitrode Corporation,
responsible for the design, manufacturing and marketing of all products within
the discrete semiconductor, data conversion and switching power supply
businesses. Prior to Unitrode, Mr. Ferrantino spent 25 years at M/A Com, a
defense electronics company, most recently in the position of Senior Vice
President and Group Executive.
HARSH KOPPULA. Mr. Koppula is currently Vice President and General Manager
of the Advanced Magnetic Products Group, a position he has held since October
1993. From January 1991 until October 1993, he held the position of Director,
Strategic Marketing. Mr. Koppula joined the Company in 1988, as Director,
Materials. Before joining the Company, Mr. Koppula was Director of Materials at
Schlumberger Technologies, a division of Schlumberger Ltd. which manufactures
and markets automatic test equipment. Prior to that Mr. Koppula was part of the
corporate staff of Schlumberger Ltd. as an Internal Consultant to Global
Operations.
RICHARD E. MORGAN. Mr. Morgan was named Vice President of Human Resources
in April 1996. From November 1994 until April 1996, Mr. Morgan served as an
Executive Director with Russell Reynolds Associates, an international executive
recruiting firm. Prior to that Mr. Morgan held the position of Vice President of
Human Resources at The Timberland Company, an international manufacturer of
footwear and casual apparel.
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WILLIAM REED. Mr. Reed was named Vice President of Worldwide Sales and
Corporate Marketing in September 1996. Prior to joining CP Clare, Mr. Reed
served as an Executive Director of Russell Reynolds Associates, an international
executive recruiting firm from December 1994 to August 1996. From March 1989 to
November 1994, Mr. Reed held various positions with Praxis International Inc., a
database software vendor, most recently as its Executive Vice President and as
President and Chief Operating Officer of its principal operating subsidiary,
Computer Corporation of America.
THE BOARD OF DIRECTORS AND BOARD COMMITTEES
The business of the Company is managed under the direction of the Company's
Board of Directors. The Company's Amended and Restated Articles of Organization
provide that the Company's Board of Directors shall be divided into three
classes and that the members of each class of Directors will serve for staggered
three-year terms. The Board consists of two Class I Directors (Messrs. Hindle
and Tiampo), one Class II Director (Mr. Turner) and two Class III Directors
(Messrs. Buckland and Sims), whose initial terms will expire upon the election
and qualification of Directors at the annual meeting of stockholders held
following the fiscal years ending March 31, 1999, 2000 and 1998, respectively.
At each annual meeting of stockholders, Directors will be reelected or elected
for a full term of three years to succeed those Directors whose terms are
expiring.
The Company's Board of Directors has established an Audit Committee to
recommend the appointment of independent accountants to audit financial
statements and to perform services related to the audit, review the scope and
results of the audit with the independent accountants, review with management
and the independent accountants the Company's year-end operating results,
consider the adequacy of the internal accounting procedures and consider the
effect of such procedures on the accountants' independence. The Audit Committee
consists of Mr. Hindle, the Chairman, and Mr. Tiampo. During fiscal 1997 the
Audit Committee held 2 meetings.
The Company's Board of Directors has also established a Compensation
Committee which reviews and recommends the compensation arrangements for all
Directors and executive officers, approves such arrangements for other senior
level employees and administers certain compensation and incentive plans of the
Company and its subsidiaries. The Compensation Committee consists of Mr. Turner,
the Chairman, and Mr. Hindle. During fiscal 1997 the Compensation Committee held
3 meetings.
Officers of the Company are elected annually at the first meeting of the
Board of Directors following the annual meeting of stockholders and serve at the
discretion of the Board of Directors. There are no family relationships among
any officers or Directors of the Company. The Company does not maintain a
nominating committee.
During the fiscal year ended March 31, 1997, the Board of Directors held 6
meetings. All directors attended at least 75% of the total number of meetings of
the Board of Directors and all committees of the Board on which they served.
COMPENSATION OF DIRECTORS
Non-employee Directors ("Independent Directors") of the Company receive an
annual fee of $10,000 and are reimbursed for travel expenses incurred in
attending meetings of the Board of Directors and its committees. In addition,
under the Stock Option Plan, each Independent Director then serving was granted
a stock option to purchase 10,000 shares of Common Stock upon the effectiveness
of the Company's initial public offering in June 1995 and will receive an annual
stock option to purchase 5,000 shares of Common Stock. Each new Independent
Director will, upon initial election to the Board of Directors, be granted a
stock option to purchase 10,000 shares of the Company's Common Stock and will
also receive an annual stock option grant to purchase 5,000 shares of Common
Stock, beginning the year following such Director's initial election to the
Board. All options granted to Independent Directors vest in full one year after
they are granted and the exercise price of each stock option is the fair market
value of the Common Stock on the date the option is granted. Directors who are
employees of the Company are not paid any separate fees for serving as
Directors.
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EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth for the fiscal
years ended March 31, 1995, 1996 and 1997, the cash and non-cash compensation
awarded to the Chief Executive Officer and each of the other four most highly
compensated executive officers (the "Named Executive Officers") of the Company
whose compensation exceeded $100,000 during the fiscal year ended March 31,
1997. Also included is one former executive officer who resigned prior to the
end of the fiscal year and whose compensation is required to be disclosed
pursuant to the rules of the Securities and Exchange Commission.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
---------------------------
ANNUAL COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
FISCAL SALARY BONUS(1) OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $ # $
- ------------------------------------------- ------ ------- -------- ---------- ------------
Arthur R. Buckland......................... 1997 315,000 -- 125,000 24,718(3)
President & Chief Executive Officer 1996 315,000 141,750 150,000 29,438(3)
1995 275,000 37,500 24,000(2) 19,445(3)
Michael J. Ferrantino...................... 1997 200,000 -- 90,000 29,241(4)
Vice President & General Manager 1996 152,018* 77,500 120,000 29,810(4)
Components Group 1995 N/A N/A N/A N/A
William D. Reed............................ 1997 107,917* 46,250 160,000 4,200(5)
Vice President, World Wide Sales & 1996 N/A N/A N/A N/A
Corporate Marketing 1995 N/A N/A N/A N/A
Harsh Koppula.............................. 1997 150,000 -- 95,000 12,412(6)
Vice President, Advanced Magnetic 1996 126,250 10,000 35,000 9,685(6)
Products 1995 99,167 7,500 15,000(2) 3,114(6)
Richard Morgan............................. 1997 122,676* -- 80,000 5,725(5)
Vice President, Human Resources 1996 N/A N/A N/A N/A
1995 N/A N/A N/A N/A
Jacqueline D. Arthur(7).................... 1997 200,000 -- -- 23,184(8)
Vice President & Chief Financial Officer 1996 155,000 65,100 -- 23,541(8)
1995 85,863* 35,938 125,000(2) 10,580(8)
- ---------------
* Named Executive Officer hired after the beginning of the fiscal year.
(1) Bonuses earned in fiscal 1995, 1996 and 1997 were awarded to the Named
Executive Officers and paid by the Company in the following fiscal year.
(2) Represents options earned as a portion of the Named Executive Officer's
bonus compensation in fiscal 1995 and awarded as of April 26, 1995. With
respect to Ms. Arthur, 120,000 shares were granted upon joining the Company
on September 5, 1994.
(3) Includes insurance premiums of $18,070, $17,031 and $12,418 paid by the
Company, matching contributions of $1,375, $4,607 and $4,500 made by the
Company on behalf of Mr. Buckland under the Company's 401(k) Savings Plan
for fiscal years 1995, 1996 and 1997, respectively and a car allowance of
$7,800 in fiscal years 1996 and 1997.
(4) Includes insurance premiums of $19,331 and $15,605, a car allowance of
$7,350 and $7,800 and matching contributions of $3,129 and $5,836 made by
the Company on behalf of Mr. Ferrantino under the Company's 401(k) Savings
Plan in fiscal years 1996 and 1997, respectively.
(5) Represents a car allowance.
(6) Includes a car allowance of $1,200, $6,400 and $7,800, and matching
contributions of $1,914, $3,285 and $4,612 made by the Company on behalf of
Mr. Koppula under the Company's 401(k) Savings Plan in fiscal years 1995,
1996 and 1997, respectively.
(7) Ms. Arthur resigned from the Company effective March 28, 1997. See
"Employment and Consulting Agreements."
(8) Includes insurance premiums of $6,030, $12,254 and $10,204 paid by the
Company and a car allowance of $4,550, $7,800 and $7,825 in fiscal years
1995, 1996 and 1997, respectively, and matching contributions of $3,487 and
$5,155 made by the Company on behalf of Ms. Arthur under the Company's
401(k) Savings Plan in fiscal years 1996 and 1997 respectively.
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Option Grants in Fiscal Year 1997. The following table sets forth the
options granted to the Company's Chief Executive Officer and each of the Named
Executive Officers with respect to the fiscal year ended March 31, 1997.
OPTION GRANTS IN FISCAL YEAR 1997
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
PERCENT OF RATES OF STOCK PRICE
TOTAL OPTIONS APPRECIATION FOR OPTION
NUMBER OF SHARES GRANTED TO EXERCISE OR TERM(1)
UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------
GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5% 10%
------------------ -------------- ----------- ---------- -------- ----------
Arthur R. Buckland........... 125,000(2) 11.9% $ 9.125 3/4/04 $464,349 $1,082,130
Michael J. Ferrantino........ 90,000(2) 8.5% $ 9.125 3/4/04 $334,331 $ 779,134
William D. Reed.............. 100,000(3) 9.5% $ 10.50 9/17/06 $660,339 $1,673,429
60,000(2) 5.7% $ 9.125 3/4/04 $222,887 $ 519,422
Harsh Koppula................ 35,000(3) 3.3% $ 8.125 11/4/06 $178,842 $ 453,220
60,000(2) 5.7% $ 9.125 3/4/04 $222,887 $ 519,422
Richard E. Morgan............ 35,000(3) 3.3% $ 17.50 4/8/06 $390,700 $ 990,111
15,000(3) 1.4% $ 8.125 11/4/06 $ 76,646 $ 194,237
30,000(2) 2.8% $ 9.125 3/4/04 $111,443 $ 259,711
- ---------------
(1) This column shows the hypothetical gains or option spreads of the options
granted based on assumed annual compound stock appreciation rates of 5% and
10% over the full ten year term of the options. The assumed rates of
appreciation are mandated by the rules of the Securities and Exchange
Commission and do not represent the Company's estimate or projection of
future Common Stock prices.
(2) These stock options vest on the achievement of certain Company performance
goals measured on March 31, 2000 and March 31, 2002. If the performance
goals are not met, options will vest in full on March 4, 2004, subject to
continued employment by the Named Executive Officer.
(3) These stock options vest in five equal annual installments commencing one
year from the date of grant.
Option Exercises and Year-End Holdings. The following table sets forth the
aggregate number of options exercised in fiscal 1997, and the value of options
held on March 31, 1997, by the Company's Chief Executive Officer and Named
Executive Officers.
OPTION EXERCISES AND YEAR-END HOLDINGS
OPTIONS AT
OPTIONS AT FISCAL
FISCAL YEAR-END
SHARES YEAR-END (#) ($)(1)
ACQUIRED ON -------------- --------------
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---------------------------------- ----------- ------------ -------------- --------------
Arthur R. Buckland................ 99,170 842,945 34,000/363,421 13,770/920,936
Michael J. Ferrantino............. 20,352 231,205 3,648/186,000 1,477/61,380
Harsh Koppula..................... 16,444 272,092 19,000/129,000 75,455/157,220
Jacqueline D. Arthur.............. 72,000 630,000 N/A N/A
- ---------------
(1) Based on the fair market value at the fiscal year end less the option
exercise price.
EMPLOYMENT AND CONSULTING AGREEMENTS
The Company has entered into the following employment agreements:
Arthur R. Buckland. Under an agreement dated September 15, 1993, Mr.
Buckland shall serve as President, Chief Executive Officer and a Director of the
Company at an annual salary of at least $275,000. Mr. Buckland is also eligible
to participate in the Company's management bonus plan. Under the agreement,
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Mr. Buckland received options to purchase 492,107 shares of Common Stock,
one-fifth of which vested upon grant and the rest of which vest in equal annual
installments over the following four years. In the event that Mr. Buckland
terminates his employment for Good Reason (as defined in his agreement,
including a Change in Control) or Mr. Buckland's employment is terminated by the
Company without Cause (as defined in the agreement) or because the Company
elects not to extend the term of the agreement, the Company shall pay Mr.
Buckland for a period of 12 months. Mr. Buckland has agreed not to compete with
the Company or solicit customers or employees of the Company for a period of two
years following the termination of employment with the Company. The initial term
of the agreement expired on September 15, 1995, but was extended and will
continue to be extended for one-year periods thereafter unless terminated by
either party on 60 days' notice.
Other Executive Officers. The Company has entered into Employment
Agreements (together, the "Management Employment Agreements") with Messrs.
Ferrantino, Koppula, Morgan and Reed (together, the "Contracting Parties"). The
Management Employment Agreements provide that each Contracting Party shall
receive a base salary and be entitled to participate in any bonus program
implemented by the Company. Each Contracting Party has also been granted options
to purchase shares of the Company's Common Stock, such options to vest ratably
over a five year period. If a Contracting Party is terminated by the Company
without Cause, by the Contracting Party for Good Reason or in the event of a
Change of Control (as all such terms are defined in the applicable Management
Employment Agreement), the Company is obligated to pay the Contracting Party for
12 months. Prior to her resignation, the Company had a similar employment
agreement with Ms. Arthur. The Company is fulfilling its obligations under this
contract and upon her resignation, the Company also agreed to accelerate the
vesting date on the options held by Ms. Arthur.
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STOCK PERFORMANCE GRAPH
The following graph provides a comparison, from the Company's initial
public offering on June 21, 1995 through March 31, 1997, of the cumulative total
stockholder return (assuming reinvestment of any dividends) among the Company,
the Standard & Poor's 500 Index (the "S&P 500 Index") and the NASDAQ Electronic
Components Index. Upon written request, the Company will provide any stockholder
with a list of the Companies included in the NASDAQ Electronic Components Index.
The historical information set forth below is not necessarily indicative of
future performance.
Measurement Period C.P. Clare NASDAQ Electronic
(Fiscal Year Covered) Corporation S&P 500 Components
6/21/95 100 100 100
3/31/96 122 121 92
3/31/97 66 145 161
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Objective of the Company's Compensation Program. The Company's executive
compensation program is intended to attract, retain and reward executives who
are capable of and responsible for leading the Company effectively and
continuing its growth. The Company's objective is to utilize a combination of
cash and equity-based compensation to provide appropriate incentives for
executives while aligning their interests with those of the Company's
stockholders.
The Company uses a three-pronged approach to its compensation program.
First, the executive's base salary is intended to create a competitive level of
compensation for each executive for the following twelve months. Second, the
Company maintains an annual incentive bonus program for executive officers and
certain other members of management under which bonuses are payable based upon
the achievement of corporate and individual performance goals which are set each
fiscal year. Bonuses can be paid in cash or stock. The objective of the annual
incentive bonus program is to encourage effective performance relative to
current plans and objectives. Finally, the Company utilizes stock options
granted under the 1995 Stock Option and Incentive Plan as a long-term incentive
for the executive officers. The Company believes that stock options are an
important way of aligning management and stockholder interests and retaining
effective management. Accordingly, options generally provide for incremental
vesting over a five-year period.
Compensation Committee Procedures. The Company's executive compensation
program is administered under the direction of the Compensation Committee, which
is composed of two nonemployee directors. At the Board of Director's meeting
which most closely coincides with the Company's fiscal year-end, the
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Chief Executive Officer's bonus, if any, is determined for the past year's
performance, his base salary for the following fiscal year is set, and option
grants for the officers and other employees may be made. With respect to the
compensation of the Chief Executive Officer, the Committee exercises its
independent discretion in determining his compensation, subject to review by all
of the nonemployee directors. With respect to the compensation of the other
executive officers, the Compensation Committee generally relies to a significant
extent on Mr. Buckland's recommendations as the Company's Chief Executive
Officer which are given in the framework of the Company's overall compensation
philosophy.
Compensation of the Chief Executive Officer. The Compensation Committee
considers the Company's financial performance to be a significant determinant in
Mr. Buckland's overall compensation package. The Committee considers the
Company's sales, earnings and return on capital and the growth thereof, to be
the most important performance factors in setting Mr. Buckland's compensation.
Along with these corporate performance factors, the directors also consider
subjective factors including Mr. Buckland's leadership role and his efforts on
behalf of the Company in developing the Company's reputation among both its
customer and investor bases during the year. The Committee has set Mr.
Buckland's total annual compensation, including that derived from the Company's
bonus and option program, at a level it believes to be competitive with other
companies in its industry.
During the 1997 fiscal year Mr. Buckland's annual cash compensation
remained level at $315,000. He was not awarded a cash bonus due to the fact that
the Company did not meet the necessary goals established at the beginning of the
performance year. In March, 1997, the Compensation Committee considered and
granted performance stock option awards to the Chief Executive Officer and the
other Named Executive Officers. The performance stock options were given in
order to (a) provide long term incentive for senior executives, (b) balance
short-term incentives and focus management on long term results, (c) reward
executives for attaining high performance levels and (d) retain key executives
during the next critical period of the Company's growth. The awards are designed
to cover a three-year award cycle and vesting of the options granted is
contingent upon the achievement of performance targets ratified by the full
Board of Directors. The awards granted during this fiscal year will vest 50% on
March 31, 2000 and 100% on March 31, 2002, if the performance goals relating to
the achievement of compounded growth on earnings per share are achieved. The
performance options vest in all cases on March 4, 2004, subject to the continued
employment of the executive officer. Pursuant to this program, the Board awarded
Mr. Buckland options to purchase 125,000 shares.
Compensation of Other Executive Officers. The Company's executive
compensation program utilizes several different performance factors in
determining the compensation of the Company's other executive officers. Each
executive officer's compensation is based upon the achievement of specific
individual and Company performance goals. During fiscal 1997, each executive
officer's compensation was set at what the committee determined to be
competitive levels. Bonuses were not granted in 1997 except to one executive
officer who was paid a bonus for fiscal 1997 in accordance with the terms of his
employment contract. During fiscal 1997, certain executive officers were granted
options in order to encourage long term retention and recognize long-term
achievement. In addition, certain executive officers were granted options upon
joining the Company. Each of the Named Executive Officers also participated in
the performance option program discussed above.
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Compliance with Internal Revenue Code Section 162 (m). The Securities and
Exchange Commission requires that this report comment upon the Company's policy
with respect to Section 162(m) of the Internal Revenue Code of 1986, as amended.
This section generally limits the deductibility on the Company's tax return of
compensation over $1 million to the chief executive officer and any of the named
executive officers of the Company unless the compensation is paid pursuant to a
plan which is performance-related, non-discretionary and has been approved by
the Company's stockholders. The Committee's policy with respect to Section
162(m) is to make every reasonable effort to ensure that compensation is
deductible to the extent permitted and appropriate while simultaneously
providing executives with appropriate rewards for their performance.
Submitted by the Compensation
Committee:
John G. Turner, Chairman
Winston R. Hindle, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is an officer or employee of the
Company, and no executive officer of the Company serves on the compensation
committee of an entity or serves as a director of an entity, one of whose
executive officers serves on the Compensation Committee of the Company or serves
as a Director of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who beneficially own
more than 10% of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the National Association of Securities Dealers. Officers,
directors and greater than 10% beneficial owners are required by Securities and
Exchange Commission regulations to furnish the Company with copies of all forms
they file in compliance with Section 16(a). To the Company's knowledge, based
solely on its review of the copies of such reports furnished to the Company and
written representations that no other reports were required during the fiscal
year ended March 31, 1997, all Section 16(a) filing requirements applicable to
its executive officers, directors and greater than 10% beneficial owners were
satisfied.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
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OTHER MATTERS
PRINCIPAL STOCKHOLDERS
The following table sets forth the beneficial ownership of Common Stock for
each person who the Company believes to be the beneficial owner of more than a
5% of the Company's Common Stock on June 30, 1997. All such information was
provided by the stockholders as specified in the footnotes to the table.
NUMBER OF
NAME AND BUSINESS ADDRESS SHARES PERCENT OF
OF BENEFICIAL OWNERS BENEFICIALLY OWNED ALL SHARES(*)
- --------------------------------------------------------------- ------------------ -------------
Heartland Advisors, Inc. (1)................................... 588,400 6.4%
790 North Milwaukee Street
Milwaukee, WI 53202
The TCW Group, Inc. (2)........................................ 671,800 7.3%
865 South Figueroa Street
Los Angeles, CA 90017
Wisconsin Investment Board(3).................................. 695,000 7.5%
121 East Wilson Street
Madison, Wisconsin 53702
Fund Asset Management L.P. (3)................................. 825,950 8.9%
PO Box 9011
Princeton, NJ 08543
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* As of June 30, 1997, there were 9,224,082 shares of Common Stock
outstanding.
(1) Information received from stockholder as filed on Schedule 13G with the
Securities and Exchange Commissions in February, 1997.
(2) Information received from stockholder as filed on Schedule 13G with the
Securities and Exchange Commissions on February 12, 1997.
(3) Information received from stockholder.
INDEPENDENT AUDITORS
The accounting firm of Arthur Andersen LLP serves as the Company's
independent public accountants. A representative of Arthur Andersen LLP will be
present at the Annual Meeting, will be given the opportunity to make a statement
if he so desires and will be available to respond to appropriate questions.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
paid by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding
shares in their names or in the names of their nominees, which are beneficially
owned by others, to send proxy materials to and obtain proxies from such
beneficial owners. The Company will reimburse such holders for their reasonable
expenses.
STOCKHOLDER PROPOSALS
Stockholder proposals submitted pursuant to 1934 Act Rule 14a-8 for
inclusion in the Company's proxy statement and form of proxy for the 1998 annual
meeting of stockholders must be received in writing by the Company before April
3, 1998. Such proposals must also comply with the requirements as to form and
substance established by the Securities and Exchange Commission if such
proposals are to be included in the proxy statement and form of proxy. Any such
proposals should be mailed to: C.P. Clare Corporation, 78 Cherry Hill Drive,
Beverly, MA 01915, Attn.: Clerk of the Corporation.
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Stockholder proposals to be presented at the 1998 annual meeting of
stockholders, other than stockholder proposals submitted pursuant to 1934 Act
Rule 14a-8, must be received in writing by the Company not earlier than May 20,
1998 or later than July 3, 1998, unless the 1998 annual meeting of stockholders
is scheduled to take place before August 16, 1998 or after November 16, 1998.
The Company's Bylaws provide that any stockholder wishing to nominate a director
or have a stockholder proposal, other than a stockholder proposal submitted
pursuant to 1934 Act Rule 14a-8, considered at an annual meeting must provide
written notice of such nomination or proposal and appropriate supporting
documentation, as set forth in the Bylaws, to the Company not less than 75 days
nor more than 120 days prior to the anniversary of the immediately preceding
annual meeting of stockholders (the "Anniversary Date"); provided, however, that
in the event that the annual meeting is scheduled to be held more than 30
calendar days prior to or more than 60 calendar days after the Anniversary Date,
such nominations or proposals must be delivered to the Company not later than
the later of 75 calendar days prior to or 15 calendar days after the date on
which public announcement of the date of such meeting is first made. Any such
proposals should be mailed to: C.P. Clare Corporation, 78 Cherry Hill Drive,
Beverly, MA 01915, Attn: Clerk of the Corporation.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement which will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD
TODAY.
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[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
-------------------------- 1. To elect one Class II director to serve until the
C.P. CLARE CORPORATION 2000 Annual Meeting of Stockholders and until
-------------------------- his successor is duly elected and qualified. For Withhold
John D. Turner [ ] [ ]
RECORD DATE SHARES: 2. In their discretion, such other matters as may For Withhold
properly come before the meeting or any
adjournment thereof. [ ] [ ]
---------------- Mark box at right if an address change or comment has been
Please be sure to sign and date this Proxy. Date noted on the reverse side of this card. [ ]
- -------------------------------------------------------------
- ------Stockholder sign here-----------Co-owner sign here-----
DETACH CARD DETACH CARD
C.P. CLARE CORPORATION
Dear Stockholder,
Please take note of the important information enclosed with this Proxy Card.
Issues related to the management and operation of your Company are discussed in
detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
September 16, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
C.P. Clare Corporation
17
C.P. CLARE CORPORATION
78 Cherry Hill Drive, Beverly, Massachusetts 01915
Annual Meeting of Stockholder - September 16, 1997
The undersigned hereby appoints Arthur R. Buckland, Thomas B. Sager and Lori M.
Henderson, and all or any of them, with full power of substitution, as proxies
and attorneys in fact, to vote and act at the Annual Meeting of Stockholders
(the "Annual Meeting") of C.P. Clare Corporation (the "Company"), to be held
September 16, 1997 at State Street Bank & Trust Company, 225 Franklin Street,
Boston, Massachusetts, and at any adjournment thereof, in respect of all shares
of Common Stock par value $0.1 per share, of the Company with respect to which
the undersigned would be entitled to vote and act if personally present.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting
and the accompanying Proxy Statement and herby directs said proxies, or their
substitutes, to vote and act on the following matters set forth in such Notice
and Proxy Statement as specified by the undersigned. You may revoke this Proxy
by submitting a proxy bearing a later date or by voting in person if you attend
the Annual Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF C.P. CLARE CORPORATION AND
WILL BE VOTED AS DIRECTED. IF NO CHOICE IS INDICATED, IT WILL BE VOTED "FOR" ALL
ITEMS AND IN THE DISCRETION OF THE PROXIES AS TO ANY OTHER MATTER WHICH MAY
PROPERLY COME BEFORE THE ANNUAL MEETING.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
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Please sign this Proxy exactly as your name(s) appear(s) on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than
one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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