SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
ANIXTER INTERNATIONAL INC.
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(Name of Registrant as Specified in Its Charter)
ANIXTER INTERNATIONAL INC.
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[ANIXTER LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 2003
To the Stockholders of Anixter International Inc.:
The Annual Meeting of Stockholders of Anixter International Inc. will be
held at One North Franklin Street, Chicago, Illinois on Thursday, May 22, 2003,
at 1:00 p.m., for the purpose of:
(1) electing 11 Directors; and
(2) transacting such other business as may properly be brought before the
meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on March 31, 2003 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the meeting or any adjournment(s) thereof. A complete list of the
stockholders entitled to vote at the meeting will be open for examination by any
stockholder for any purpose germane to the meeting during ordinary business
hours for ten days prior to the meeting at the offices of Anixter International
Inc., 2301 Patriot Boulevard, Glenview, Illinois 60025, and will also be
available at the meeting.
A copy of Anixter International Inc.'s Annual Report to Stockholders for
the fiscal year ended January 3, 2003 is being mailed to all registered holders.
Only one annual report and proxy statement is being delivered to consenting
multiple stockholders sharing an address unless Anixter International Inc. has
received contrary instructions from one or more of the holders. Stockholders at
a shared address who are receiving a single copy of the annual report and proxy
statement and who wish to receive separate copies now and/or in the future
should make a request in writing to the Corporate Secretary at Anixter
International Inc., 2301 Patriot Boulevard, Glenview, Illinois 60025 or by phone
at 224-521-8000. Additional copies of the annual report and proxy statement may
be obtained without charge by writing to the Corporate Secretary or from the
Company's website at
http://web.anixter.com/Anixter/anixter.nsf/InvestorRelations/InvestorRelations.
Stockholders at a shared address who are receiving multiple copies of those
documents and who wish to receive a single copy should direct their request to
the bank or brokerage firm which holds their shares.
By Order of the Board of Directors
[/s/ JOHN A. DUL]
JOHN A. DUL, Secretary
Chicago, Illinois
April 18, 2003
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
EXPECT TO ATTEND, PLEASE DATE, SIGN AND COMPLETE THE ENCLOSED PROXY AND MAIL IT
PROMPTLY IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
OF ANIXTER INTERNATIONAL INC.
TO BE HELD MAY 22, 2003
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Anixter International Inc., a Delaware
corporation (the "Company," which as used herein shall mean together with or
without its subsidiaries, as the context may require). The Company's corporate
headquarters are located at 2301 Patriot Boulevard, Glenview, Illinois 60025
(telephone 224-521-8000). The Proxy Statement and form of proxy were first
mailed to stockholders on or about April 18, 2003. Proxies solicited by the
Board of Directors of the Company are to be voted at the Annual Meeting of
Stockholders of the Company to be held on Thursday, May 22, 2003, at 1:00 p.m.,
at One North Franklin Street, Chicago, Illinois, or any adjournment(s) thereof.
This solicitation is being made by mail, although directors, officers and
regular employees of the Company may solicit proxies from stockholders
personally or by telephone, telegram or letter. The costs of this solicitation
will be borne by the Company. The Company may request brokerage houses, nominees
or fiduciaries and other custodians to solicit their principals or customers for
their proxies, and may reimburse them for their reasonable expenses in so doing.
In addition, the Company has retained Morrow & Co. to assist in the solicitation
for a fee of $5,000 plus expenses.
VOTING
Shares of Common Stock, $1.00 par value, of the Company ("Common Stock")
represented by proxies in the accompanying form which are properly executed and
returned to the Company (and which are not effectively revoked) will be voted at
the meeting in accordance with the stockholders' instructions contained therein.
In the absence of contrary instructions, shares represented by such proxies will
be voted IN FAVOR OF the election as directors of the nominees listed herein,
and in the discretion of the appointed proxies upon such other business as may
properly be brought before the meeting.
Each stockholder has the power to revoke his or her proxy at any time
before it is voted by (i) delivering to the Company prior to or at the meeting
written notice of revocation or a later dated proxy or (ii) attending the
meeting and voting his or her shares in person.
The Board of Directors has fixed the close of business on March 31, 2003 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the meeting or any adjournment(s) thereof.
As of March 31, 2003, 36,772,024 shares of Common Stock were outstanding.
Each holder is entitled to one vote per share.
A majority of the outstanding shares of Common Stock will constitute a
quorum for purposes of the meeting. If a quorum is present, in person or by
proxy, the election of directors will be determined by a plurality of the votes.
As a result, shares represented at the meeting and entitled to vote for
directors, but which abstain from voting or withhold votes, will be counted
toward a quorum, and will not affect the election of directors. Since brokers
have authority to vote on the election of directors, it is not anticipated that
there will be any broker non-votes.
ELECTION OF DIRECTORS
In the absence of contrary instructions, the proxies received will be voted
for the election as directors of the nominees listed below to hold office until
the next annual meeting of stockholders or until their successors are elected
and qualified. Although the Board of Directors does not contemplate that any
nominee will decline or be unable to serve as a director, in either such event
the proxies will be voted for another person selected by the Board of Directors
upon recommendation of the Nominating and Governance Committee, unless the
Nominating and Governance Committee acts to reduce the size of the Board in
accordance with the provisions of the Company's by-laws. The current number of
directors has been set by the Nominating and Governance Committee at eleven.
The following table sets forth the name and age as of March 20, 2003 of
each director or nominee for director of the Company, the year each director was
first elected, his or her position with the Company, his or her principal
occupation(s) during the last five years, any other directorships held by such
person in companies which have a class of securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or subject to the requirements of Section 15(d) of the Exchange Act or
directorships of issuers registered as investment companies under the Investment
Company Act of 1940, and family relationships between directors and other
directors or executive officers. The term of office of each director will extend
until the holding of the next annual meeting of stockholders or until his or her
successor is elected and qualified.
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME AND AGE DURING PAST FIVE YEARS
------------ -----------------------------------
Lord James Blyth, 62........... Director of the Company since 1995; Chairman since 2000 of
Diageo plc, a beverage and food company; Chairman from 1998
to 2000, Deputy Chairman from 1994 to 1998 and Chief
Executive Officer from 1987 to 1998 of The Boots Company,
involved in retailing, manufacturing and property.
Robert L. Crandall, 67......... Director of the Company since 1999; Chairman of the Board of
Directors and Chief Executive Officer from 1985 to 1998 of
AMR Corporation, an air transportation and diversified
services company; Director of Celestica Inc., Halliburton
Company and i2 Technologies, Inc.
Robert W. Grubbs Jr., 46....... Director since 1997, and President and Chief Executive
Officer since 1998 of the Company; President and Chief
Executive Officer of Anixter Inc., a subsidiary of the
Company, since 1994; Director of A.M. Castle & Co.
F. Philip Handy, 58............ Director of the Company since 1986; a private investor;
Chief Executive Officer since 2001 of Strategic Industries,
LLC, a diversified global manufacturing enterprise;
Managing Director of EGI Corporate Investments, a
diversified management and investment business, from 1997
to 1999; Partner of Winter Park Capital Company, a private
investment firm, from 1980 to 1997; Director of I Dine
Rewards Network Inc. and WCI Communities, Inc.
Melvyn N. Klein, 61............ Director of the Company since 1985; President of JAKK
Holding Corp., a General Partner of the investment
partnership GKH Partners, L.P., since 1987; Attorney and
counselor-at-law since 1968; a founder of Questor Partners
Fund, L.P. in 1995 and a principal of that partnership
through 1999; a member of the Advisory Committee on
International Economic Policy to the U.S. Secretary of
State; Director of Bayou Steel Corporation and Hanover
Compressor Company.
John R. Petty, 72.............. Director of the Company since 1988; Chairman of TECSEC
Incorporated, a data security company, since 1997; Chairman
of Federal National Payables, Inc., a factoring company,
since 1992; Private investor since 1988; Director of Arris
Group, Inc.
2
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME AND AGE DURING PAST FIVE YEARS
------------ -----------------------------------
Stuart M. Sloan, 59............ Director of the Company since 1994; a Principal since 1984
of Sloan Capital Companies, a private investment company;
Chairman of the Board of Directors from 1986 to 1998 and
Chief Executive Officer from 1991 to 1996 of Quality Food
Centers, Inc., a supermarket chain; Director of Rite Aid
Corp.
Thomas C. Theobald, 65......... Director of the Company since 1995; Managing Director of
William Blair Capital Partners, L.L.C. since 1994; Chairman
and Chief Executive Officer from 1987 to 1994 of
Continental Bank Corporation; Director of Jones, Lang
LaSalle Incorporated, MONY Group, and Liberty Funds.
Mary Agnes Wilderotter, 48..... Director of the Company since 2002; Senior Vice
President -- Global Business Strategy of Microsoft
Corporation since 2002; President, Chief Executive Officer
and a director of Wink Communications, Inc., an
interactive telecommunications and media company, from
1997 to 2002; Executive Vice President of National
Operations and Chief Executive Officer of the Aviation
Communications Division of AT&T Wireless Services, Inc.
from 1995 to 1997; Director of Airborne Express, American
Tower Corporation and The McClatchy Company.
Matthew Zell, 36............... Director of the Company since 2001; Managing Director since
2001 of Equity Group Investments, L.L.C., an investment
company; President from 1990 to 2001 of Prometheus
Technologies, Inc. and its predecessor, an information
technology consulting firm. Mr. Zell is the son of Samuel
Zell.
Samuel Zell, 61................ Director since 1984, and Chairman of the Board of Directors
since 1985 of the Company; Chairman since 1999 of Equity
Group Investments, L.L.C., an investment company; Chairman
of the Board of Directors from before 1994 through 1999 of
Equity Group Investments, Inc., a real estate and
corporate investment firm; Chairman of the Board of
Directors of Manufactured Home Communities, Inc.; Chairman
of the Board of Directors of Capital Trust, Inc.,
Danielson Holding Corporation and Chairman of the Board of
Trustees of Equity Residential Properties Trust and Equity
Office Properties Trust. Mr. Zell is the father of Matthew
Zell.
BOARD AND COMMITTEE MEETINGS
The Audit Committee currently consists of Messrs. Crandall (Chair), Klein,
Petty and Theobald, each of whom are believed to be "independent" as defined in
Sections 303.01(B)(2)(a) and (3) of the listing standards of the New York Stock
Exchange. Mr. Crandall has been designated as the "audit committee financial
expert," as defined by the Securities and Exchange Commission. Pursuant to its
written charter, the Audit Committee provides general review of the Company's
accounting and auditing procedures, selects its independent auditors, meets with
the Company's independent auditors to review their recommendations, and reviews
related party transactions. The Audit Committee held seven meetings in 2002.
The Compensation Committee, currently consisting of Messrs. Sloan (Chair)
and Crandall, Lord Blyth and Ms. Wilderotter, each of whom are believed to meet
the independence requirements being proposed by the New York Stock Exchange,
exercises all powers of the Board of Directors in connection with compensation
matters, including incentive compensation, benefit plans and stock grants. The
Compensation Committee held three meetings in 2002.
The Executive Committee, currently consisting of Messrs. Klein and Petty
and Samuel Zell (Chair), exercises the full powers of the Board of Directors to
the extent permitted by law in the intervals between Board meetings. The
Executive Committee did not meet in 2002.
3
The Nominating and Governance Committee, currently consisting of Ms.
Wilderotter (Chair), Lord Blyth, and Messrs. Crandall, Handy, Klein, Petty,
Sloan and Theobald, each of whom are believed to meet the independence
requirements being proposed by the New York Stock Exchange, identifies and
recommends director nominees, advises the Board of Directors on corporate
governance issues and Board organization, and assesses Board performance. The
Nominating and Governance Committee held its inaugural meeting in November,
2002. This Committee considers director nominees proposed by shareholders. To
recommend a prospective nominee for consideration by the Committee, shareholders
should submit the candidate's name and qualifications, in writing, to: Corporate
Secretary, Anixter International Inc., 2301 Patriot Boulevard, Glenview,
Illinois 60025.
The Board of Directors held five meetings in 2002. Each of the directors
attended 75 percent or more of the total of all meetings held by the Board and
the committees on which the director served.
4
EXECUTIVE COMPENSATION
The following tables set forth information about the compensation of the
chief executive officer and the four other most highly compensated executive
officers of the Company.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION AWARDS
-------------------
ANNUAL COMPENSATION SECURITIES
--------------------------- OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME & SALARY BONUS COMPENSATION(1) STOCK AWARD(2) OPTIONS COMPENSATION(3)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
------------------ ---- ------ ----- --------------- -------------- ---------- ---------------
Robert W. Grubbs........ 2002 580,000 299,400 -- -- 200,000 2,750
President & Chief 2001 580,000 156,400 13,242 -- 300,000 2,550
Executive Officer 2000 525,000 305,000 22,208 932,427 150,000 2,550
Dennis J. Letham........ 2002 325,000 153,750 -- -- 75,000 2,750
Senior Vice
President-- 2001 325,000 91,800 8,843 -- 90,000 2,550
Finance and Chief 2000 310,000 175,950 16,961 551,935 65,000 2,550
Financial Officer
Terrance A. Faber....... 2002 183,365 39,175 -- -- 8,000 2,750
Vice President-- 2001 180,000 24,750 48 -- 5,000 2,625
Controller 2000(4) 38,077 23,400 23 -- -- 218
John A. Dul............. 2002 180,000 44,300 -- -- 8,000 2,750
Vice President-- 2001 180,000 20,250 541 -- 5,000 2,550
General Counsel 2000 168,000 99,500 340 -- 5,000 2,550
and Secretary
Philip F. Meno.......... 2002 158,000 52,251(5) -- -- 8,000 2,750
Vice President-- 2001 158,000 38,290(5) 3,052 -- 5,000 2,518
Taxes 2000 152,000 112,300(5) 4,925 -- 5,000 2,550
---------------
(1) Represents above-market earnings on deferred compensation.
(2) Value of restricted stock units for 2000, on the date granted. Stock and
units vest annually in thirds beginning on the second anniversary of the
grant or earlier in the case of certain events. Holders of stock units are
entitled to receive any distributions on the stock of the Company or an
equitable adjustment to the number of stock units based on such
distribution. At January 3, 2003, the aggregate value of restricted stock
and restricted stock units granted to Messrs. Grubbs and Letham was
$1,624,656 and $962,733, respectively.
(3) Contributions to employee savings plan.
(4) 2000 compensation since date of hire, October 9, 2000.
(5) Includes special project bonus.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS ASSUMED ANNUAL RATES OF
UNDERLYING GRANTED TO STOCK PRICE APPRECIATION FOR
OPTIONS EMPLOYEES IN EXERCISE OR DATE OPTION TERM(1)
GRANTED FISCAL BASE PRICE OF ------------------------------
NAME (#) YEAR ($/SH) EXPIRATION 5%($) 10%($)
---- ---------- ------------ ----------- ---------- ----- ------
Robert W. Grubbs(2)........... 200,000 16.4% 26.20 2-21-12 3,295,408 8,351,210
Dennis J. Letham(2)........... 75,000 6.2% 26.20 2-21-12 1,235,778 3,131,704
Terrance A. Faber(2).......... 8,000 0.7% 26.20 2-21-12 131,816 334,048
John A. Dul(2)................ 8,000 0.7% 26.20 2-21-12 131,816 334,048
Philip F. Meno(2)............. 8,000 0.7% 26.20 2-21-12 131,816 334,048
---------------
(1) These numbers are for presentation purposes only and are not predictions of
future stock prices.
(2) 25% of options become exercisable on each anniversary of grant.
5
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION VALUE
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FY-END(#) AT FY-END($)
SHARES VALUE -------------------- --------------------
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------- ------------- -------------
Robert W. Grubbs.................... 0 0 592,500/537,500 3,563,944/665,531
Dennis J. Letham.................... 0 0 252,500/187,500 1,482,100/246,838
Terrance A. Faber................... 400 490 850/11,750 --/--
John A. Dul......................... 0 0 23,000/15,500 146,794/22,184
Philip F. Meno...................... 0 0 34,250/15,500 239,207/22,184
PENSION PLAN TABLE
ANNUAL
REMUNERATION
ON WHICH YEARS OF SERVICE
BENEFITS ARE -------------------------------------------------------------------------
BASED 5 10 15 20 25 30 35
------------ - -- -- -- -- -- --
$200,000 $12,000 $ 23,000 $ 35,000 $ 47,000 $ 59,000 $ 70,000 $ 70,000
300,000 18,000 36,000 55,000 73,000 91,000 109,000 109,000
400,000 25,000 49,000 74,000 99,000 124,000 148,000 148,000
500,000 31,000 62,000 94,000 125,000 156,000 187,000 187,000
600,000 38,000 75,000 113,000 151,000 189,000 226,000 226,000
700,000 44,000 88,000 133,000 177,000 221,000 265,000 265,000
800,000 51,000 101,000 152,000 203,000 254,000 304,000 304,000
900,000 57,000 114,000 172,000 229,000 286,000 343,000 343,000
1,000,000 64,000 127,000 191,000 255,000 319,000 382,000 382,000
1,200,000 77,000 153,000 230,000 307,000 384,000 460,000 460,000
1,400,000 90,000 179,000 269,000 359,000 449,000 538,000 538,000
Above amounts are annual straight life annuity amounts (which are not
reduced for social security benefits) payable upon retirement at age 65 under
Anixter Inc. funded and unfunded defined benefit plans for Messrs. Grubbs,
Letham, Faber, Dul and Meno, who have 25, 10, 3, 14 and 17 years of service,
respectively. The determination of remuneration is based upon payment, not
accrual, and therefore the covered compensation for 2002 will be the salary
shown in the summary compensation table for 2002 and the bonus shown in that
table for 2001. Under the enhanced portion of the management incentive plan in
effect in 1999, 2000 and 2001, the regular bonus opportunities for Messrs.
Grubbs and Letham were halved; therefore, their cash bonuses for these years
will be doubled in computing their covered compensation for pension purposes.
COMPENSATION OF DIRECTORS
In 2002, the Company paid its non-employee directors annual retainers of
$60,000 of its stock in the form of stock units which convert to Common Stock at
the pre-arranged time selected by each director and fees of $1,750 for each
board meeting attended, $1,000 for each committee meeting attended and a $5,000
annual retainer for committee chairpersons.
In recognition of market factors, for 2003 the Company will pay its
non-employee directors (except the Chairman of the Board) annual retainers of
$90,000 payable in stock units as described above, $2,500 for each Board,
Compensation Committee and Nominating and Governance Committee meeting attended,
and a $5,000 annual retainer for the chair of each of these committees. Audit
Committee members will receive $3,500 for each meeting attended, and the chair
will receive an annual retainer of $10,000.
6
The Chairman of the Board will receive an annual retainer of $200,000
payable in stock units as described above, and will not receive meeting fees.
Directors are reimbursed for any expenses they incur in attending meetings.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
Messrs. Grubbs and Letham are employed pursuant to contracts terminable on
six months notice by either party, or earlier if there is good cause for
termination as defined in the contracts. Good cause for termination by the
executive includes forced relocation, significant reduction of salary, regular
bonus opportunity, and other benefits, no longer holding his current position as
defined in the contracts or any other significant reduction of responsibilities.
Good cause for termination by the Company includes material fiduciary breaches
and dishonest acts. If employment is terminated by the executive for good cause
or by the Company without good cause within four years after a change of control
as defined in the contracts, the executive is entitled to certain benefits.
These benefits include (i) payment of a pro rata portion of his regular bonus
for that year and his salary and regular bonus for the next two years, (ii) all
his options to purchase stock will vest and be exercisable for the lesser of two
years or their remaining life, (iii) his medical and life insurance coverage
will continue during this two year period, and (iv) he will be held harmless
from any golden parachute federal excise tax on these benefits. The executive is
required to delay his termination for a specified period if the good cause is
based on a change of position or reduction in responsibilities, but his stock
options will vest at the time of the change of control if he is not continuing
in his current position. If in connection with a change of control, at least 25%
of the Common Stock is being exchanged for any consideration other than publicly
traded common stock, the contracts provide that the executive's stock options
will be exercisable to the extent necessary to enable the executive to
participate in such exchange on a pro rata basis. Change of control is defined
by the contracts as any third person (other than Samuel Zell and his affiliates)
acquiring at least 25% of the Common Stock or substantially all the assets of
the Company or the majority of the directors of the Company being comprised of
individuals who were not nominated by the Board of Directors of the Company.
Such a change of control will also vest the restricted shares or restricted
stock units granted to Messrs. Grubbs and Letham and the other participants in
the enhanced portion of the Company's management incentive plan. See
"Compensation Committee Report on Executive Compensation."
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
Stuart Sloan, Lord James Blyth and Robert Crandall were members of the
Compensation Committee of the Board of Directors in 2002.
During the year ended January 3, 2003, no person who is or was formerly an
officer or employee of the Company or any of its subsidiaries served as (i) a
member of the Compensation Committee; (ii) a member of the compensation
committee (or other board committee or full board performing equivalent
functions) of another entity, one of whose executive officers served on the
Board of Directors of the Company; or (iii) a director of another entity, one of
whose executive officers served on the Board of Directors of the Company.
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933, or the Exchange Act that might
incorporate future filings, including this Proxy Statement, in whole or in part,
the Compensation Committee Report on Executive Compensation, the Audit Committee
Report and the Performance Graph presented below shall not be incorporated by
reference into any such filings.
7
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The compensation policy of the Company for its executive officers
(including those named in the Summary Compensation Table) has been to pay, based
on performance and seniority, base salaries and annual bonuses at or above the
median of the range paid by others for comparable positions, and to provide
long-term incentive opportunities within the high end of the range provided by
others for comparable positions. From time to time, the Committee reviews
studies comparing the compensation of the Company's executives with the
compensation of similar executives of selected groups of companies. The
companies in the comparison groups were selected because they were believed to
be representative of the types of companies with which the Company competes for
executives. The companies in the comparison group were of all sizes and in
several industries and have no correlation to the companies included in the peer
group used in the "Performance Graph." Because of the great differences in size
and industry between the Company and the companies in the comparison group, the
determination of the Committee that the current compensation of the Company's
executives is consistent with the Company's compensation policy is subjective.
The salary of Mr. Grubbs was not increased in 2002 consistent with the
Company's decision to defer salary reviews as a cost-containment measure.
Mr. Grubbs participated in the 2002 regular management incentive plan. Mr.
Grubbs' incentive target opportunity for 2002 was established at 114% of his
salary, with 38% of this opportunity determined by the operating earnings of the
Company, 37% of this opportunity determined by the Company's return on tangible
capital, and 25% of this opportunity determined by the achievement of specified
qualitative goals, with no weighting among these goals. Mr. Grubbs was awarded a
regular incentive bonus for 2002 of $299,400. This represented 45% of his
incentive target because one of the Company's financial goals was partially
achieved and his qualitative goals in the aggregate were exceeded.
The incentive opportunities for the other executive officers who
participated in the 2002 regular incentive plan were set by the Committee at the
beginning of the year at 38% to 106% of salary. Seventy to seventy-five percent
(70-75%) of this opportunity was based on the financial results of the Company
and the remainder was based on the achievement of specified qualitative goals.
The components of the financial results were operating earnings and return on
tangible capital, with the weighting dependent upon responsibilities. Incentive
awards for 2002 for these executive officers were from 45% to 59% of target
incentive opportunities because one of the Company's financial goals was
partially achieved and the qualitative goals in the aggregate of each
participant were exceeded.
The guideline to determine option grants was assessment of the incentives
required to pay at or above the median of comparator companies for long-term
compensation.
The components of executive officer compensation related to the performance
of the Company are the levels of the annual incentive awards as described above
and the ultimate value of long-term incentive awards as determined by the stock
market.
It is the policy of the Company to structure its compensation in a manner
which will avoid the limitations imposed by the Omnibus Budget Reconciliation
Act of 1993 on the deductibility of executive compensation under Section 162(m)
of the Internal Revenue Code to the extent it can reasonably do so consistent
with its goal of retaining and motivating its executives in a cost effective
manner.
Stuart Sloan
Lord James Blyth
Robert L. Crandall
Maggie Wilderotter
8
REPORT OF AUDIT COMMITTEE
Pursuant to its written charter, the Audit Committee oversees the Company's
financial reporting process on behalf of the Board of Directors. Our
responsibility is to monitor and review these processes. It is not our duty or
our responsibility to conduct auditing or accounting reviews or procedures. We
are not employees of the Company and we do not represent ourselves to be or to
serve as accountants or auditors by profession. Therefore, we have relied,
without independent verification, on management's representation that the
financial statements have been prepared with integrity and objectivity and in
conformity with accounting principles generally accepted in the United States of
America and on the representations of the independent auditors included in their
report on the Company's financial statements. Our oversight does not provide us
with an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or policies, or
appropriate internal controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations. Furthermore, our
considerations and discussions with management and the independent auditors do
not assure that the Company's financial statements are presented in accordance
with generally accepted accounting principles, that the audit of our Company's
financial statements has been carried out in accordance with generally accepted
auditing standards or that our Company's independent accountants are in fact
independent.
Management has the primary responsibility for the financial statements and
the reporting process, including the systems of internal controls. In fulfilling
our oversight responsibilities, we reviewed the audited financial statements in
the Annual Report with management, including a discussion of the quality, not
just the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the disclosures in the financial statements.
We reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles, their judgments as to the
quality, not just the acceptability of the Company's accounting principles and
such other matters as are required to be discussed with the Committee under
generally accepted auditing standards. In addition, we discussed with the
independent auditors the auditors' independence from management and the Company,
including the matters in the written disclosures required by the Independence
Standards Board, and considered the compatibility of nonaudit services provided
by the auditors to the Company with their independence.
We discussed with the Company's internal and independent auditors the
overall scope and plans for their respective audits. The Committee regularly
meets with the internal and independent auditors, with and without management
present, to discuss the results of their examinations, their evaluations of the
Company's internal controls, and the overall quality of the Company's financial
reporting. We held seven meetings during fiscal year 2002. In addition, the
Committee reviews proposed interim financial statements with management and the
independent auditors.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board of Directors has accepted
that recommendation) that the audited financial statements be included in the
Annual Report on Form 10-K for the fiscal year ended January 3, 2003 for filing
with the Securities and Exchange Commission. The Committee selects the Company's
independent auditors.
Robert L. Crandall
Melvyn N. Klein
John R. Petty
Thomas C. Theobald
9
PERFORMANCE GRAPH
Below is a graph comparing total shareholder return on the Company's Common
Stock over the last five years with a broad equity market index and a peer group
index as required by the rules of the Securities and Exchange Commission.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
(PERFORMANCE GRAPH)
1997 1998 1999 2000 2001 2002
------- ------- ------- ------- ------- -------
ANIXTER INTL INC.................... $100.00 $123.11 $125.00 $131.06 $175.82 $140.91
RUSSELL 2000........................ $100.00 $ 97.76 $118.64 $115.19 $118.22 $ 94.00
PEER GROUP.......................... $100.00 $ 90.44 $ 80.27 $ 69.79 $ 84.35 $ 58.74
The Company's Peer Group Index consists of the following companies: Arrow
Electronics Inc., Avnet Inc., W.W. Grainger Inc., Ingram Micro, Pioneer-Standard
Electronics, Inc., Premier Farnell, Richardson Electronics Ltd., and Tech Data.
This peer group was selected based on a review of publicly available information
about these companies and the Company's determination that they are engaged in
distribution businesses similar to that of the Company.
10
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 31, 2003, certain information
with respect to the Common Stock that may be deemed to be beneficially owned
(including options exercisable within 60 days) by each director or nominee for
director of the Company, the officers named in the Summary Compensation Table
and by all directors and officers as a group.
OPTIONS
COMMON FOR COMMON PERCENT
STOCK STOCK TOTAL OF CLASS
------------ ---------- ---------- ---------
Name of Beneficial Owner(1)
Lord James Blyth..................... 20,900(7) 10,000 30,900 *
Robert L. Crandall................... 13,020(9) 0 13,020 *
F. Philip Handy...................... 61,900(10) 30,000 91,900 *
Melvyn N. Klein...................... 43,900(4)(7) 30,000 73,900 *
John R. Petty........................ 16,991(3) 30,000 46,991 *
Stuart Sloan......................... 45,900(7) 10,000 55,900 *
Thomas C. Theobald................... 40,900(10) 10,000 50,900 *
Mary Agnes Wilderotter............... 3,684(13) 0 3,684 *
Matthew Zell......................... 10,776(12) 0 10,776 *
Samuel Zell.......................... 5,129,782(5) 75,000 5,204,782 14.1%(6)
Robert W. Grubbs..................... 155,627(2) 792,500 948,127 2.5%(6)
Dennis J. Letham..................... 81,230(8) 322,500 403,730 1.1%(6)
Terrance A. Faber.................... 3,900(11) 4,100 8,000 *
John A. Dul.......................... 4,318(14) 28,750 33,068 *
Philip F. Meno....................... 3,000(15) 40,000 43,000 *
All directors and executive officers as
a group including the above-named
persons.............................. 5,641,828 1,395,350 7,037,178 18.4%(6)
---------------
* Percentage of shares beneficially owned does not exceed one percent of the
class.
(1) Unless otherwise indicated, each person included in the group has sole
investment power and sole voting power with respect to the securities
beneficially owned by such person.
(2) Includes 68,745 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(3) Includes 2,636 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(4) Includes 4,000 shares held in trust for Mr. Klein's minor children and of
which Mr. Klein disclaims beneficial ownership.
(5) The shares of Common Stock shown in this table include 4,647,147 shares
that are owned by a limited liability company whose sole member is the Sam
Investment Trust, whose beneficiaries are Samuel Zell and members of his
family and whose trustee is a limited liability company; 285,000 shares
that are owned by a limited liability company whose sole member is the
Samuel Zell Revocable Trust, of which Samuel Zell is the trustee and
beneficiary, 55,588 shares that are owned by a limited liability company
whose sole member is ZFT Partnership, an Illinois general partnership,
whose sole partners are various trusts for the benefit of Samuel Zell and
members of his family; 55,587 shares that are owned by a limited liability
company whose sole member is Alphabet Partners, an Illinois general
partnership, whose sole partners are various trusts for the benefit of
Samuel Zell and members of his family; and 81,334 shares and 5,126 common
stock units that are owned directly by Samuel Zell. Common stock units
convert to Common Stock on a 1 for 1 basis at the time determined when the
stock units were granted. (See "Security Ownership of Principal
Stockholders" below.)
(6) All options exercisable within 60 days of the date of this table which may
be deemed to be beneficially owned by the person or persons for whom the
calculation is being made are deemed to have been exercised for the purpose
of calculating this percentage.
11
(7) Includes 20,900 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(8) Includes 35,015 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(9) Includes 11,020 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(10) Includes 6,909 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(11) Includes 3,500 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(12) Includes 5,276 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(13) Includes 3,684 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(14) Includes 4,000 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
(15) Includes 3,000 common stock units which convert to Common Stock on a 1 for
1 basis at the time determined when the stock units were granted.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of March 31, 2003 with respect
to the shares of the Company's common stock that may be issued under the
Company's existing equity compensation plans.
NUMBER OF SECURITIES WEIGHTED-AVERAGE NUMBER OF SECURITIES
TO BE ISSUED UPON EXERCISE PRICE OF REMAINING AVAILABLE
EXERCISE OF OUTSTANDING OUTSTANDING FOR FUTURE ISSUANCE
OPTIONS, WARRANTS, OPTIONS, WARRANTS, UNDER EQUITY
AND RIGHTS AND RIGHTS COMPENSATION PLANS(4)
----------------------- ------------------ ---------------------
Equity compensation plans approved by
security holders................... 4,532,339 $20.69(3) 1,719,801
Equity compensation plans not
approved by security holders:
2001 Mid-level stock option plan... 603,875(1) $25.26 --
1998 Mid-level stock option plan... 69,875(2) $17.50 --
--------- ------ ---------
Total......................... 5,206,089 $21.20 1,719,801
========= ====== =========
---------------
(1) Pursuant to this Plan, the Compensation Committee of the Board of Directors
can approve the grant to mid-level employees of options to purchase up to
700,000 shares of the Company's common stock ("Shares"). The exercise price
of the option shall not be less than the fair market value of a
corresponding number of Shares as of the date of grant, no person may be
granted options to purchase more than 25,000 Shares, no options may be
granted to any officer and no options may be granted after the 2001 annual
meeting of the Company's stockholders. Options granted vest annually in
fourths beginning on the anniversary of the grant date.
(2) Pursuant to this Plan, the Compensation Committee of the Board of Directors
can approve the grant to mid-level employees of options to purchase up to
360,500 shares of the Company's Common Stock ("Shares"). The exercise price
of the option shall not be less than 85% of the fair market value of a
corresponding number of Shares as of the date of grant, no person may be
granted options to purchase more than 5,000 Shares and no options may be
granted after December 31, 1998. Options granted vest annually in fourths
beginning on the anniversary of the grant date.
(3) Excludes 208,589 stock units that are granted at no cost to the participant.
12
(4) Shares represented in this column are available under the following Plans:
The 1983 Stock Incentive Plan (11,122 shares remain available for issuance), The
1987 Key Executive Equity Plan (1,394 shares remain available for issuance), The
1989 Employee Stock Incentive Plan (1,345 shares remain available for issuance),
The 1996 Stock Incentive Plan (2,920 shares remain available for issuance), The
1998 Stock Incentive Plan (84,698 shares remain available for issuance), The
2001 Stock Incentive Plan (1,261,960 shares remain available for issuance), The
Director Stock Plan (85,000 shares remain available for issuance), and the
Employee Stock Purchase Plan (271,362 shares remain available for purchase under
the plan).
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The following table sets forth information as of March 31, 2003 with
respect to each person who is known by the management of the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock.
Unless otherwise indicated, the beneficial owner has sole voting and investment
power.
TITLE NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
-------- ------------------- -------------------- --------
Common Samstock/SZRT, L.L.C. 285,000(1) 14.1%(4)
Samstock/SIT, L.L.C. 4,647,147(1)
Samstock/ZFT, L.L.C. 55,588(1)
Samstock/Alpha, L.L.C. 55,587(1)
Samuel Zell 161,460(1)
Two North Riverside Plaza
Chicago, Illinois 60606
Common Ariel Capital Management, Inc. 4,387,364(2) 11.9%
200 East Randolph Drive
Suite 2900
Chicago, Illinois 60601
Common Robert H. and Ann Lurie Trust 1,988,500(3) 5.4%
Two North Riverside Plaza
Chicago, Illinois 60606
---------------
(1) Samstock/SZRT, L.L.C. is a limited liability company whose sole member is
the Samuel Zell Revocable Trust, of which Samuel Zell is the trustee and
beneficiary. Samstock/SIT, L.L.C. is a limited liability company whose sole
member is the Sam Investment Trust, whose trustee is the Chai Trust Company,
L.L.C., a limited liability company. The beneficiaries of the Sam Investment
Trust are Samuel Zell and members of his family. Samstock/ZFT, L.L.C. is a
limited liability company whose sole member is ZFT Partnership, an Illinois
general partnership, whose sole partners are various trusts for the benefit
of Samuel Zell and members of his family. Samstock/Alpha, L.L.C. is a
limited liability company whose sole member is Alphabet Partners, an
Illinois general partnership, whose sole partners are various trusts for the
benefit of Samuel Zell and members of his family. The amounts shown include
5,126 common stock units and 75,000 shares obtainable within 60 days of the
date of this table by the exercise of options by Samuel Zell.
(2) According to a Schedule 13G, dated February 4, 2003, Ariel Capital
Management, Inc. has sole power to vote 4,004,964 shares and sole power to
dispose of 4,387,364 shares.
(3) Mrs. Lurie is the beneficiary and a co-trustee of the Robert H. and Ann
Lurie Trust.
(4) All options exercisable within 60 days of the date of this table which may
be deemed to be beneficially owned by the person or persons for whom the
calculation is being made are deemed to have been exercised for the purpose
of calculating this percentage.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1999, the Company entered into a financial advisory agreement with
Equity Group Investments, L.L.C. ("EGI"). This agreement provides for EGI to
provide financial advisory services as requested by the Company in connection
with tender offers, acquisitions, sales, mergers and similar transactions. For
such
13
services, EGI will be paid a fee of 49 basis points of the enterprise value of
the transaction (amount paid plus assumed debt). EGI is beneficially owned by
trusts for the benefit of Samuel Zell and his family. The terms of this
agreement were determined by the Audit Committee. No payments have been made
under this agreement.
In 2002, the Company acquired the assets and operations of Pentacon, Inc.,
a distributor of fasteners and other small components, for $108.5 million and
the assumption of trade debt. Proceeds were used by the seller to, among other
things, pay its creditors in a bankruptcy proceeding, including holders of its
12.25% senior subordinated notes ("Notes"). An investment company indirectly
beneficially owned by trusts for the benefit of Samuel Zell and his family owned
Notes with a face value of $24.5 million. The Audit Committee determined that
the terms of the acquisition had been negotiated in an arm's-length manner and
that they were fair to the Company.
INDEPENDENT AUDITORS AND THEIR FEES
The Audit Committee has selected Ernst & Young LLP as independent auditors
of the Company for 2003. Ernst & Young LLP (and predecessor firm) have audited
the Company's financial statements since 1980. Representatives of Ernst & Young
LLP, who are expected to be present at the meeting, will be given an opportunity
to make a statement if they so desire and to respond to appropriate questions
asked by stockholders.
AUDIT FEES
Fees for audit services totaled approximately $1,158,400 in 2002 and
approximately $1,082,300 in 2001, including fees associated with the annual
audit, reviews of the Company's quarterly reports on Form 10-Q, and statutory
audits of foreign subsidiaries.
AUDIT-RELATED FEES
Fees for audit-related services totaled approximately $140,000 in 2002 and
approximately $57,300 in 2001. Audit-related services generally include pension
plan audits and accounting consultations.
TAX FEES
Fees for tax services, including tax compliance, tax advice and tax
planning (including expatriate tax services), totaled approximately $453,700 in
2002 and $441,800 in 2001.
ALL OTHER FEES
Fees for all other services not included above totaled approximately
$18,700 in 2002 and $40,900 in 2001.
See "Report of the Audit Committee" for discussion of consideration of
these fees by the Audit Committee.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon its review of the Forms 3, 4 and 5 furnished to the
Company pursuant to Section 16(a) of the Securities Exchange Act of 1934, the
Company believes that all of its directors, officers and beneficial owners of
more than 10% of its common stock filed all such reports on a timely basis
during 2002, except as follows. Samuel Zell filed one late Form 4 reporting a
stock unit award.
14
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2004 Annual
Meeting of Stockholders must be received by the Company at its principal offices
by December 21, 2003 in order to be considered for inclusion in the Company's
Proxy Statement and Proxy relating to the 2004 Annual Meeting of Stockholders.
CONCLUSION
The Board of Directors knows of no other matters to be presented for
stockholder action at the meeting. However, if other matters do properly come
before the meeting, it is intended that the persons named in the proxies will
vote upon them in accordance with their best judgment.
April 18, 2003
By Order of the Board of Directors
[/s/ JOHN A. DUL]
JOHN A. DUL, Secretary
15
DETACH HERE
--------------------------------------------------------------------------------
PROXY
ANIXTER INTERNATIONAL INC.
PROXY SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John A. Dul, Dennis J. Letham and Robert W.
Grubbs and each of them (with full power of substitution in each) proxies of
the undersigned to vote at the Annual Meeting of Stockholders of Anixter
International Inc. to be held at 1:00 P.M., Central time, May 22, 2003, at One
North Franklin Street, Chicago, Illinois, and at any adjournments thereof, all
of the shares of Common Stock of Anixter International Inc. in the name of the
undersigned on the record date.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF ALL NOMINEES.
1. Election of the following nominees as directors:
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below). to vote for all nominees
listed below.
Nominees: Lord James Blyth, Robert L. Crandall, Robert W. Grubbs Jr.,
F. Philip Handy, Melvyn N. Klein, John R. Petty, Stuart M.
Sloan, Thomas C. Theobald, Mary Agnes Wilderotter, Matthew
Zell and Samuel Zell.
(INSTRUCTION: WRITE THE NAME OF THE NOMINEE(S) FROM WHOM YOU ARE WITHHOLDING
YOUR VOTE IN THIS SPACE.)
--------------------------------------------------------------------------------
Please Check Box if you intend to be present at meeting [ ]
(PLEASE SIGN AND DATE THE PROXY CARD ON THE REVERSE SIDE.)
DETACH CARD
--------------------------------------------------------------------------------
2. In their discretion, such other matters as properly may come before the
meeting or at any adjournment(s) thereof.
[ ] By checking the box to the left, I consent to future delivery of annual
reports, proxy statements, prospectuses and other materials and shareholder
communications electronically via the Internet at a webpage which will be
disclosed to me. I understand that the Company may no longer distribute printed
materials to me from any future shareholder meeting until such consent is
revoked. I understand that I may revoke my consent at any time by contacting the
Company's transfer agent, National City Bank, Cleveland, OH, and that costs
normally associated with electronic delivery, such as usage and telephone
charges as well as any costs I may incur in printing documents, will be my
responsibility.
Dated:__________________, 2003
______________________________
Signature
______________________________
(Signature if held jointly)
IMPORTANT: Please date this
proxy and sign exactly as your
name appears hereon. If stock
is held jointly, both holders
should sign. Executors,
administrators, trustees,
guardians and others signing in
a representative capacity
should give full title.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.