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. )
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[ ] 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-12
BELDEN CDT INC.
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(Name of Registrant as Specified in Its Charter)
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0-11.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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statement number, or the form or schedule and the date of its filing.
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(BELDEN LOGO)
April 7, 2005
Dear Shareholder:
I am pleased to invite you to attend the annual meeting of shareholders of
Belden CDT Inc. to be held on Tuesday, May 17, 2005, at 11 o'clock in the
morning at the Saint Louis Club (16th Floor), Pierre Laclede Center, 7701
Forsyth Boulevard, St. Louis, Missouri.
Details of the business to be conducted at the meeting are given in the
attached Notice of Annual Meeting and Proxy Statement.
Whether or not you plan to attend, I hope you will vote as soon as
possible. You may vote over the Internet as well as by telephone or by mailing a
proxy card. Voting in such manner will ensure your representation at the meeting
if you do not attend in person. Please review the instructions on the proxy card
regarding each of these voting options.
Thank you for your support and continued interest in Belden CDT.
Sincerely,
/s/ C. BAKER CUNNINGHAM
C. Baker Cunningham
President and
Chief Executive Officer
2005 ANNUAL MEETING OF SHAREHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING.................................... 1
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE
ANNUAL MEETING............................................ 2
Why am I receiving these materials?....................... 2
What information is contained in these materials?......... 2
What matters will be voted on at the meeting?............. 2
What is Belden CDT's voting recommendation?............... 2
What shares owned by me can be voted?..................... 2
What is the difference between holding shares as a
shareholder of record and as a beneficial owner?....... 3
How can I vote my shares in person at the meeting?........ 3
How can I vote my shares without attending the meeting?... 3
How do I vote my Belden CDT shares held in the Belden CDT
Retirement Savings Plan and the Belden UK Employee
Share Ownership Plan?.................................. 4
Can I change my vote?..................................... 4
How are votes counted and what is the voting requirement
to approve the proposals?.............................. 4
What does it mean if I receive more than one proxy or
voting instruction card?............................... 5
Where can I find the voting results of the meeting?....... 5
What happens if additional proposals are presented at the
meeting?............................................... 5
What class of shares is entitled to be voted?............. 5
What is the quorum requirement for the meeting?........... 5
Who will count the votes?................................. 5
Is my vote confidential?.................................. 5
Who will bear the cost of soliciting votes for the
meeting?............................................... 5
May I propose actions for consideration at next year's
annual meeting of shareholders or nominate individuals
to serve as directors?................................. 6
BOARD STRUCTURE AND COMPENSATION............................ 7
COMMITTEES..................................................
Audit Committee........................................... 8
Audit Committee Report.................................... 8
Fees to Independent Registered Public Accountants for 2004
and 2003............................................... 9
Audit Committee's Pre-Approval Policies and Procedures.... 9
Compensation Committee.................................... 10
Nominating and Corporate Governance Committee............. 10
Communications with Directors............................. 10
DIRECTOR COMPENSATION....................................... 11
MATTERS TO BE VOTED ON:
Item 1 -- To elect directors.............................. 12
Item 2 -- To approve an additional 2,500,000 shares for
the Company's 2001 Long-Term Performance Incentive
Plan................................................... 14
EQUITY COMPENSATION PLAN INFORMATION........................ 17
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................ 18
Beneficial Ownership Table of Directors, Nominees and
Executive Officers..................................... 18
Beneficial Ownership Table of Shareholders Owning More
Than Five Percent...................................... 19
EXECUTIVE COMPENSATION....................................................................................... 21
Report of the Compensation Committee on Executive Compensation............................................. 21
Summary Compensation Table................................................................................. 24
Option Grants in Last Fiscal Year.......................................................................... 26
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values.......................... 27
Cash Long-Term Performance Plan............................................................................ 27
Certain Relationships and Related Transactions............................................................. 27
Certain Change in Control Arrangements and Other Matters................................................... 27
Pension Plans.............................................................................................. 30
Pension Benefits Table..................................................................................... 30
Performance Graph.......................................................................................... 31
BELDEN CDT INC.
7701 FORSYTH BOULEVARD
SUITE 800
ST. LOUIS, MISSOURI 63105
(314) 854-8000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TIME: 11:00 a.m. on Tuesday, May 17, 2005
PLACE: Lewis & Clark Room, 16th Floor Saint Louis Club,
Pierre Laclede Center 7701 Forsyth Boulevard St.
Louis, Missouri 63105
ITEMS OF BUSINESS: To elect ten directors, each for a term of one
year.
To approve an additional 2,500,000 shares for the
Company's 2001 Long-Term Performance Incentive
Plan.
To consider any other matters that properly come
before the meeting.
RECORD DATE: You are entitled to vote if you were a shareholder
at the close of business on Monday, March 28, 2005.
FINANCIAL STATEMENTS: Included with this mailing is the Company's 2004
Annual Report to Shareholders which includes the
Company's Annual Report on Form 10-K. The Form 10-K
includes the Company's audited financial statements
and notes for the year ended December 31, 2004, and
the related Management's Discussion and Analysis of
Financial Condition and Results of Operations.
VOTING BY PROXY: Please submit a proxy as soon as possible so your
shares can be voted at the meeting in accordance
with your instructions. You may submit your proxy
(1) over the Internet, (2) by telephone, or (3) by
mail. For specific instructions, please refer to
the Questions and Answers beginning on page 2 of
this proxy statement and the instructions on the
proxy card.
By Order of the Board of Directors,
/s/ KEVIN BLOOMFIELD
Kevin L. Bloomfield
Secretary
This proxy statement and accompanying proxy card are being distributed on or
about April 11, 2005.
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The Board of Directors (the "Board") of Belden CDT Inc. (sometimes referred
to as the "Company" or "Belden CDT") is providing these proxy materials to
you in connection with the solicitation of proxies by Belden CDT on behalf
of the Board for the 2005 annual meeting of shareholders which will take
place on May 17, 2005. This proxy statement includes information about the
issues to be voted on at the meeting. You are invited to attend the meeting
and are requested to vote on the proposals described in this proxy
statement.
On July 15, 2004, Belden Inc. ("Belden") and Cable Design Technologies
Corporation ("CDT"), each publicly reporting companies, completed a merger
transaction ("Merger") pursuant to which Belden became a wholly owned
subsidiary of CDT and CDT, as the surviving parent, changed its name to
Belden CDT Inc. Prior to the time of the Merger, CDT effected a one-for-two
reverse stock split of its common stock ("Stock Split") and as a result of
the Merger, each Belden share of common stock was converted into a right to
receive one share of CDT common stock. Because Belden's shareholders as a
group received a larger portion of the voting rights in the combined entity
(as well as other factors), Belden was considered the acquirer for
accounting purposes and accounted for the merger as a reverse acquisition
under the purchase method of accounting for business combinations under U.S.
generally accepted accounting principles. However, because CDT became the
ultimate parent company of the combined entity, CDT (now Belden CDT) has
remained the reporting person, post-merger, for purposes of the federal
securities laws.
On or about April 7, 2005, we began mailing these proxy materials to all
shareholders of record at the close of business on March 28, 2005, the
record date for our 2005 annual meeting. On the record date, there were
47,092,428 shares of Belden CDT common stock outstanding. Each share is
entitled to one vote on each matter properly brought before the annual
meeting.
As required by Delaware law (the state where the Company is incorporated), a
list of shareholders entitled to vote at the annual meeting will be
available at the annual meeting, and for ten days prior to the meeting, at
the Company's headquarters at 7701 Forsyth Boulevard, Suite 800, St. Louis,
Missouri 63105.
Q: WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
A: The information included in this proxy statement relates to the proposals to
be voted on at the meeting, the voting process, the compensation of
directors and our most highly-paid officers, and certain other required
information. Our 2004 Annual Report to Shareholders which includes our 2004
Annual Report on Form 10-K is also enclosed. The Form 10-K includes our 2004
audited financial statements with notes and the related Management's
Discussion and Analysis of Financial Condition and Results of Operations.
Q: WHAT MATTERS WILL BE VOTED ON AT THE MEETING?
A: Two matters will be voted on at the meeting:
- To elect ten directors, each for a term of one year; and
- To approve an additional 2,500,000 shares for the Company's 2001
Long-Term Performance Incentive Plan.
Q: WHAT IS BELDEN CDT'S VOTING RECOMMENDATION?
A: Our Board of Directors recommends that you vote your shares "FOR" each
proposal.
Q: WHAT SHARES OWNED BY ME CAN BE VOTED?
A: All shares owned by you as of March 28, 2005, the record date, may be voted
by you. These shares include those (1) held directly in your name as the
shareholder of record, and (2) held for you as the beneficial owner through
a stockbroker, bank or other nominee, including those shares purchased
through the Belden CDT Inc. Retirement Savings Plan (the Company's 401-k
plan) and those
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shares purchased through the Belden U.K. Employee Share Ownership Plan.
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD AND
AS A BENEFICIAL OWNER?
A: Most Belden CDT shareholders hold their shares through a stockbroker, bank
or other nominee rather than directly in their own name. As summarized
below, there are some distinctions between shares held of record and those
owned beneficially.
SHAREHOLDER OF RECORD
If your shares are registered directly in your name with Belden CDT's
Transfer Agent, EquiServe Trust Company, N.A. ("EquiServe"), you are
considered (with respect to those shares) the shareholder of record and
these proxy materials are being sent directly to you by Belden CDT. As the
shareholder of record, you have the right to grant your voting proxy
directly to Belden CDT or to vote in person at the meeting. Belden CDT has
enclosed a proxy card for you to use.
BENEFICIAL OWNER
If your shares are held in a stock brokerage account or by a bank or other
nominee, you are considered the beneficial owner of shares held in "street
name" (that is, the name of your stock broker, bank or other nominee) and
these proxy materials are being forwarded to you by your broker or nominee
who is considered, with respect to those shares, the shareholder of record.
As the beneficial owner, you have the right to direct your broker or nominee
how to vote and are also invited to attend the meeting. However, since you
are not the shareholder of record, you may not vote these shares in person
at the meeting. Your broker or nominee has enclosed a voting instruction
card for you to use.
Q: HOW CAN I VOTE MY SHARES IN PERSON AT THE MEETING?
A: Shares held directly in your name as the shareholder of record may be voted
in person at the annual meeting. If you choose to do so, please bring the
enclosed proxy card or other proof of identification.
Even if you plan to attend the annual meeting, we recommend that you also
submit your proxy as described below so that your vote will be counted if
you decide later not to attend the meeting.
Q: HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE MEETING?
A: Whether you hold shares directly as the shareholder of record or
beneficially in street name, you may direct your vote without attending the
meeting. You may vote by granting a proxy or, for shares held in street
name, by submitting voting instructions to your broker or nominee. You will
be able to do this over the Internet, by telephone or by mail. Please refer
to the summary instructions below and those included on your proxy card or,
for shares held in street name, the voting instruction card provided by your
broker or nominee.
BY INTERNET -- If you have Internet access, you may submit your proxy or, if
you hold shares in street name, your voting instruction card provided by
your broker or nominee from any location in the world by following the "Vote
by Internet" instructions on the proxy card or voting instruction card.
BY TELEPHONE -- If you live in the United States or Canada, you may submit
your proxy or voting instruction card provided by your broker or nominee by
following the "Vote by Phone" instructions on such cards.
BY MAIL -- You may do this by signing your proxy card or, for shares held in
street name, the voting instruction card provided by your broker or nominee
and mailing it in the enclosed, postage prepaid and addressed envelope. If
you provide specific voting instructions, your shares will be voted as you
instruct. If you sign but do not provide instructions, your shares will be
voted as described below in "HOW ARE VOTES COUNTED AND WHAT IS THE VOTING
REQUIREMENT TO APPROVE THE PROPOSALS?".
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Q: HOW DO I VOTE MY BELDEN CDT SHARES HELD IN THE BELDEN CDT INC. RETIREMENT
SAVINGS PLAN (F/K/A THE BELDEN WIRE & CABLE COMPANY RETIREMENT SAVINGS
PLAN), BELDEN COMMUNICATIONS COMPANY OCCUPATIONAL EMPLOYEE PLAN, AND THE
BELDEN UK EMPLOYEE SHARE OWNERSHIP PLAN?
A: Belden CDT Inc. Retirement Savings Plan and Belden Communications Company
Occupational Employee Plan:
You will receive a proxy card for the shares you own through the Belden CDT
Inc. Retirement Savings Plan or Belden Communications Company Occupational
Employee Plan. If you own shares separately from either plan as a registered
holder, you may receive one proxy card that covers shares of Belden CDT
common stock credited to your plan account as well as shares of record
registered in exactly the same name. The proxy card you receive for your
plan shares will serve as voting instructions for the trustee of each plan,
Prudential Bank & Trust, F.S.B. If you own shares through either plan and do
not return your proxy by Friday, May 13, 2005, the trustee will vote your
shares in the same proportion as the shares that are voted by the other
participants in the applicable plan.
BELDEN UK EMPLOYEE SHARE OWNERSHIP PLAN:
If you participate in the Belden UK Employee Share Ownership Plan, you will
receive a proxy card for your plan shares of Belden common stock, which will
serve as voting instructions for the trustee of the plan, the Yorkshire
Building Society. The trustee will vote your plan shares in accordance with
your instructions. The terms of the plan bar the trustee from voting any
plan shares for which the trustee has not received instructions.
Q: CAN I CHANGE MY VOTE?
A: You may change your proxy or voting instructions at any time prior to the
vote at the annual meeting. For shares held directly in your name, you may
accomplish this by granting a new proxy or by attending the annual meeting
and voting in person. Attendance at the meeting will not cause your
previously granted proxy to be revoked unless you specifically so request.
For shares held beneficially by you, you may accomplish this by submitting
new voting instructions to your broker or nominee.
Q: HOW ARE VOTES COUNTED AND WHAT IS THE VOTING REQUIREMENT TO APPROVE THE
PROPOSALS?
A: Election of ten directors (Item I):
Directors are elected by a plurality of the votes of shares present in
person or represented by proxy and entitled to vote in the election of
directors. If you withhold your vote with respect to the election of one or
more directors, your vote will not be voted with respect to the director or
directors indicated, although it will be counted for purposes of whether
there is a quorum.
Approve an additional 2,500,000 shares for the Company's 2001 Long-Term
Performance Incentive Plan (Item II):
The proposal requires the affirmative vote of a majority of those shares
present in person or represented by proxy and entitled to vote. If you
abstain from voting on this proposal, your vote will not be voted, although
it will be counted for determining if there is a quorum. An abstention will
have the same effect as if you voted against the proposal.
Signed but uninstructed proxy cards:
If you sign your proxy card or broker voting instruction card with no
further instructions, your shares will be voted in accordance with the
recommendations of the Board ("FOR" all the Company's nominees to the Board
and "FOR" the other proposal, and at the discretion of the proxy holders, on
any other matter that comes properly before the meeting).
Plan Shares:
If you own shares through the Belden CDT Inc. Retirement Savings Plan or the
Belden Communications Occupational Employee Plan and do not vote, the plan
trustee will vote your shares in the same proportion to the way the other
participants in the plan vote their shares. Shares you hold in the Belden UK
Employee Share Ownership Plan, for which the trustee has not received
instructions, will not be voted.
Broker non-votes:
"Broker non-votes" may arise when the beneficial owner of shares held in
street name has not
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instructed the broker on how to vote and the proxy includes proposals in which
brokers do not have discretionary voting authority under the rules of the New
York Stock Exchange (NYSE). Brokers will have discretionary authority to vote on
Item I (Election of Directors), but will not have discretionary authority
to vote on Item II (Approve an additional 2,500,000 shares for the
Company's 2001 Long-Term Performance Incentive Plan). Broker non-votes will
not be treated as shares present and entitled to vote on Item II and
therefore, assuming the total votes cast on the proposal is more than 50%
of all shares entitled to vote, will have no effect on the outcome of the
vote of Item II.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY OR VOTING INSTRUCTION
CARD?
A: It means your shares are registered differently or are in more than one
account. Please provide voting instructions for all proxy and voting
instruction cards you receive.
Q: WHERE CAN I FIND THE VOTING RESULTS OF THE MEETING?
A: We will announce preliminary voting results at the meeting and publish final
results in our quarterly report on Form 10-Q for the second quarter of 2005.
Q: WHAT HAPPENS IF ADDITIONAL PROPOSALS ARE PRESENTED AT THE MEETING?
A: Other than the proposals described in this proxy statement, we do not expect
any matters to be presented for a vote at the annual meeting. If you grant a
proxy, the persons named as proxy holders, Kevin L. Bloomfield, the
Company's Secretary, and Christopher E. Allen, the Company's Assistant
Secretary, will have the discretion to vote your shares on any additional
matters properly presented for a vote at the meeting. If for any unforeseen
reason any of our nominees are not available as a candidate for director,
the persons named as proxy holders will vote your proxy for such other
candidate or candidates as may be nominated by the Board of Directors.
Q: WHAT CLASS OF SHARES IS ENTITLED TO BE VOTED?
A: Each share of our common stock outstanding as of the close of business on
March 28, 2005, the record date, is entitled to one vote at the annual
meeting.
Q: WHAT IS THE QUORUM REQUIREMENT FOR THE MEETING?
A: The quorum requirement for holding the meeting and transacting business is a
majority of the outstanding shares entitled to be voted. The shares may be
present in person or represented by proxy at the meeting. Both abstentions
and withheld votes are counted as present for the purpose of determining the
presence of a quorum.
Q: WHO WILL COUNT THE VOTES?
A: A representative of ADP Investor Communi-cation Services will tabulate the
votes and will act as the inspector of election.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots and voting tabulations that identify individual
shareholders are handled in a manner that protects your voting privacy. Your
vote will not be disclosed either within Belden CDT or to third parties
except (1) as necessary to meet applicable legal requirements, (2) to allow
for the tabulation of votes and certification of the vote, or (3) to
facilitate a successful proxy solicitation by our Board. Occasionally,
shareholders provide written comments on their proxy cards, which are then
forwarded to Belden CDT management.
Q: WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE MEETING?
A: Belden CDT will pay the entire cost of preparing, assembling, printing,
mailing and distributing these proxy materials. In addition to the mailing
of these proxy materials, the solicitation of proxies or votes may be made
in person, by telephone or by electronic communication by our directors,
officers, and employees, who will not receive any additional compensation
for such solicitation activities. We have hired ADP Investor Communication
Services to assist us in the distribution of proxy materials and tabulating
votes. We also have retained Mor-
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row & Co. to provide assistance in soliciting proxies for a fee of $6,500, plus
distribution costs and other expenses. We will also reimburse brokerage houses
and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation materials to
shareholders.
Q: MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETING OF
SHAREHOLDERS OR NOMINATE INDIVIDUALS TO SERVE AS DIRECTORS?
A: You may submit proposals for consideration at future shareholder meetings,
including director nominations.
SHAREHOLDER PROPOSALS: To be included in the Company's proxy statement and
form of proxy for the 2006 annual meeting, a shareholder proposal must, in
addition to satisfying the other requirements of the Securities and Exchange
Commission's rules and regulations, be received at the Company's principal
executive offices not later than December 8, 2005.
NOMINATION OF DIRECTOR CANDIDATES: The Company's by-laws provide that until
the third anniversary of the Merger, the Board of Directors will consist of
ten directors. Five of the current directors are Belden-designated directors
and five are CDT-designated directors. (See below under the caption "Board
Structure and Compensation" for a list of each Belden-designated director
and CDT-designated director.)
Until the third anniversary of the Merger, if any director ceases to serve
on the Board of Directors for any reason (including expiration of term) the
members of the Board of Directors designated by Belden or CDT, as
appropriate, may appoint or nominate, as the case may be, the person to fill
such directorship. The Company's by-laws also provide that, until the third
anniversary of the Merger, the CDT-designated directors will have the right
to nominate the Chairman of the Board of Directors and the Belden-designated
directors will have the right to nominate the chief executive officer.
Subject to the Company's by-laws, the Nominating and Corporate Governance
Committee will consider nominees recommended by shareholders if such
nominations are submitted to the Company prior to the deadline for proposals
to be included in future proxy statements as noted above under the caption
"Shareholder Proposals." To have a candidate considered by the Committee, a
stockholder must submit the recommendation in writing and must include the
following information:
- The name of the stockholder and evidence of the person's ownership of
Company stock, including the number of shares owned and the length of
time of ownership; and
- The name of the candidate, the candidate's resume or a listing of his or
her qualifications to be a director of Belden CDT and the person's
consent to be named as a director if selected by the Committee and
nominated by the Board.
In considering candidates submitted by shareholders, the Committee will take
into consideration the needs of the Board and the qualifications of the
candidate. The Committee may also take into consideration the number of
shares held by the recommending shareholder and the length of time that such
shares have been held. The Committee believes that the minimum
qualifications for serving as a director of the Company are that a nominee
demonstrate, by significant accomplishment in his or her field, an ability
to make a meaningful contribution to the Board's oversight of the business
and affairs of the Company and have an impeccable record and reputation for
honest and ethical conduct in both his or her professional and personal
activities. In addition, the Committee examines a candidate's specific
experiences and skills, time availability in light of other commitments,
potential conflicts of interest and independence from management and Belden
CDT. The Committee also seeks to have the Board represent a diversity of
backgrounds and experience.
Apart from candidates recommended by shareholders, the Committee will
identify potential nominees by asking current directors and executive
officers to notify the Committee if they become aware of persons, meeting
the criteria described above. The Committee also, from time to time, may
engage firms that specialize in identifying director candidates.
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Once a person has been identified by the Committee as a potential candidate,
the Committee may collect and review publicly available information
regarding the person to assess whether the person should be considered
further. If the Committee determines that the candidate warrants further
consideration, the Chairman or another member of the Committee may contact
the person. Generally, if the person expresses a willingness to be
considered and to serve on the Board, the Committee will request information
from the candidate, review the person's accomplishments and qualifications,
and conduct one or more interviews with the candidate. In certain instances,
Committee members may contact one or more references provided by the
candidate or may contact other members of the business community or other
persons that may have greater first-hand knowledge of the candidate's
accomplishments. The Committee's evaluation process will not vary based on
whether or not a candidate is recommended by a shareholder, although, as
stated above, the Board may take into consideration the number of shares
held by the recommending shareholder and the length of time that such shares
have been held.
BOARD STRUCTURE AND COMPENSATION
The Belden CDT Board has ten members (the number specified under its by-laws
until the third anniversary of the merger) and three committees: Audit,
Compensation, and Nominating and Corporate Governance. Prior to the Merger, the
CDT Board had nine meetings during the calendar year of 2004; and after the
Merger, the Belden CDT Board had two regular meetings during the remainder of
the year and one post-merger (telephonic) special meeting. All directors
attended 75% or more of the CDT Board meetings, the Belden CDT Board meetings
and the Board committee meetings on which they served.
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NOMINATING AND
NAME OF DIRECTOR CORPORATE
AUDIT COMPENSATION GOVERNANCE
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Lorne D. Bain X
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Lance C. Balk X X
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Christopher I. Byrnes X X*
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Bryan C. Cressey X
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C. Baker Cunningham
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Michael F.O. Harris X
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Glenn Kalnasy X X*
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Ferdinand C. Kuznik
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John M. Monter X X
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Bernard G. Rethore X*
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Number of meetings held before July
15, 2004: 5 1 --
Number of meetings held on or after
July 15, 2004: 5 2 2
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X -- Committee member, * -- Chair
As a result of the Merger, the Company expanded its Board to ten members: five
members designated by Belden (Messrs. Cunningham, Bain, Byrnes, Monter and
Rethore) and five designated by CDT (Messrs. Cressey, Balk, Harris, Kalnasy and
Kuznik). Mr. Cressey, who served as CDT's Chairman of the Board, continued to
serve as the Company's Chairman of the Board. Mr. Cunningham
7
was appointed its President and Chief Executive Officer; Mr. Kuznik, the
Company's previous Chief Executive Officer, continues to serve as a director.
Following the Merger, the committees of the Board were reconstituted with an
equal number of CDT-designated directors and Belden-designated directors.
Under the Company's by-laws, until the third anniversary of the Merger, (i) each
committee of the Board will consist of an equal number of the directors
designated by Belden and CDT; (ii) if any director designated by either Belden
or CDT ceases to serve on the Board for any reason, the members of the Board
designated by Belden or CDT, as appropriate, may appoint or nominate, as the
case may be, the person to fill such directorship; and (iii) the affirmative
vote of at least 70% of the Company's entire Board will be required to remove
certain named officers and remove any of the members of the Board.
At its first regular meeting in August 2004 following the Merger, the Board
determined that each of Messrs. Cressey, Balk, Harris, Kalnasy, Byrnes, Monter,
Rethore and Bain met the independence requirements of the NYSE listing
standards. Following the Merger, the Board also conducted a review of the
Company's corporate governance principles, committee charters and code of
conduct, the revised versions of which are posted on the Company's website,
WWW.BELDENCDT.COM under the caption "Corporate Governance."
THE AUDIT COMMITTEE
The Audit Committee operates under a written charter approved by the Board. The
Committee assists the Board in overseeing the Company's corporate accounting and
reporting practices by:
- meeting with its financial management and independent auditors (Ernst &
Young LLP) to review the financial statements, quarterly earnings releases
and financial data of the Company;
- reviewing and selecting the independent auditors who will audit the
Company's financial statements;
- reviewing the selection of the internal auditors (KPMG LLP) who provide
internal audit services;
- reviewing the scope, procedures and results of Company financial audits,
internal audit procedures and internal controls assessments and procedures
under Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX"); and
- evaluating the Company's key financial and accounting personnel.
A representative of Ernst & Young is expected to be present at the annual
meeting and will have the opportunity to make a statement if the representative
desires to do so, and is expected to be available to respond to appropriate
questions. The Board has determined that each of Messrs. Rethore, Bain, Harris
and Kalnasy is an Audit Committee Financial Expert as defined in the rules
pursuant to the Sarbanes-Oxley Act of 2002. As of March 11, 2005, Mr. Kalnasy is
no longer on the Audit Committee but continues to serve as the Chair of the
Company's Compensation Committee.
AUDIT COMMITTEE REPORT
The Audit Committee assists the Company's Board of Directors in its general
oversight of the Company's financial reporting process. Management is
responsible for the preparation and presentation of the Company's financial
statements. Ernst & Young LLP ("EY"), the Company's independent auditor for
2004, is responsible for performing an independent audit of the consolidated
financial statements and expressing an opinion on the conformity of the
Company's audited financial statements with generally accepted accounting
principles. The Committee reviews the Audit Committee charter annually. The
Company's Board of Directors has reviewed the NYSE listing standards regarding
the definition of independence for audit committee members and has determined
that each member of the Committee meets the standard.
The Committee has reviewed and discussed the Company's audited financial
statements for 2004 with management and has discussed with EY the matters that
are required to be discussed by SAS 61 (Codification of Statements on Auditing
Standards, AU Section 380).
EY has provided to the Committee the written disclosures and the letter required
by Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees) and the Committee has discussed with EY and confirmed that
firm's independence. The Committee has concluded that EY's provision of
non-audit services to the
8
Company and its subsidiaries is compatible with EY's independence.
Based on these reviews and discussions, the Committee recommended to the Board
of Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for 2004.
Bernard G. Rethore (Chair)
Lorne D. Bain
Michael F.O. Harris
Glenn Kalnasy
FEES TO INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR 2004 AND 2003
The following table presents fees for professional services rendered by EY (i)
for the audit of the Company's annual financial statements and internal control
over financial reporting for fiscal 2004 and (ii) for the audit of Belden's
annual financial statements for fiscal 2003, together with fees for audit-
related services and tax services by EY for fiscal 2004 and fiscal 2003,
respectively. We provide fees for Belden with respect to 2003 because Belden was
considered the acquirer for "accounting purposes" with respect to the Merger.
2004 2003
---------- ----------
Audit Fees $2,489,256 $ 528,231
Audit-Related Fees $ 68,800 $ 42,995
Tax Fees $ 510,717 $ 568,759
All Other Fees 0 0
Total EY fees $3,068,773 $1,139,985
"Audit fees" primarily represent amounts paid or expected to be paid for audits
of the Company's financial statements and internal control over financial
reporting procedures under SOX 404, and reviews of SEC Forms 10-Q, Forms 8-K and
Form 10-K and statutory audit requirements at certain non-U.S. locations.
"Audit-related fees" are primarily related to audits of employee benefit plans.
"Tax fees" for 2004 and 2003 are for domestic and international compliance
totaling $164,677 and $221,816, tax consulting totaling $261,846 and $276,757,
and expatriate and executive tax compliance totaling $84,194 and $70,186,
respectively.
The Audit Committee did not approve any of the services covered under
Audit-Related Fees, Tax Fees or All Other Fees pursuant to the waiver of the
pre-approval provisions set forth in the applicable rules of the SEC.
As a result of the Merger, Belden became a wholly owned subsidiary of the
Company. Although the Company was deemed to be the legal acquirer, Belden was
considered the acquirer for accounting purposes. The Company's independent
auditor was Deloitte & Touche LLP while Belden's independent auditor was EY.
Following the Merger, on August 31, 2004, the Audit Committee replaced Deloitte
& Touche by appointing EY as its independent auditor for the fiscal year ending
December 31, 2004.
For the fiscal years ended July 31, 2002 and July 31, 2003, Deloitte's report on
the Company's financial statements did not contain any adverse opinion or
disclaimer of opinion, nor was such report qualified or modified as to
uncertainty, audit scope or accounting principles. In addition, during the
fiscal years ended July 31, 2002 and July 31, 2003, and through August 31, 2004,
there were no disagreements between the Company and Deloitte on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreement, if not resolved to the satisfaction of
Deloitte, would have caused it to make reference to the subject matter of the
disagreement in connection with its report.
AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES
Audit Fees: Historically, the Audit Committee of Belden would annually review
and pre-approve the audit services and estimated fees for the following year.
The projections would be updated quarterly and the Committee would consider and,
if appropriate, pre-approve any amounts exceeding the original estimates.
For 2004, because of the challenge of estimating the fees for EY's auditing of
the Company's internal control over financial reporting procedures under SOX 404
and the Company's post-merger integration activities, the Audit Committee
reviewed and pre-approved the audit services, hourly rates of EY representatives
who were involved in conducting the 2004 audit, and an estimate of total fees.
Thereafter, at least quarterly, the Committee would review the actual fees EY
incurred for such work and the Committee (or Committee Chair) would authorize
the payment of such fees by the Company.
9
Non-Audit Services and Fees: Annually, and otherwise as necessary, the
Committee will review and pre-approve all non-audit services and the estimated
fees for such services. For recurring services, such as employee benefit plans,
tax compliance, expatriate tax returns, and statutory filings the Committee will
review and pre-approve the services and estimated total fees for such matters by
category and location of service. The projections will be updated quarterly and
the Committee will consider and, if appropriate, pre-approve any amounts
exceeding the original estimates.
For non-recurring services such as special tax projects, due diligence or other
consulting, the Committee will review and pre-approve the services and estimated
fees by individual project. The projections will be updated quarterly and the
Committee will pre-approve any amounts exceeding the original estimates.
Should an engagement need pre-approval before the next Committee meeting,
authority to grant such approval is delegated to the Audit Committee Chairman
(or if he were unavailable, another Committee member). Such approval would be
reviewed with the entire Committee at the next quarterly meeting.
COMPENSATION COMMITTEE
The Compensation Committee of Belden CDT determines, approves and reports to the
Board on all elements of compensation for the Company's elected officers. The
Committee also assists the Company in developing compensation and benefit
strategies to attract, develop and retain qualified employees. The Committee
operates under a written charter approved by the Board.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee identifies, evaluates and
recommends nominees for the Board for each annual meeting; evaluates the
composition, organization, and governance of the Board and its committees; and
develops and recommends corporate governance principles and policies applicable
to the Company. Subject to the Company's by-laws, the Nominating and Corporate
Governance Committee will consider nominees recommended by shareholders if such
nominations are submitted to the Company prior to the deadline for proposals to
be included in future proxy statements as noted above under the caption
"Nomination of Director Candidates."
The Committee's responsibilities with respect to its governance function include
considering matters of corporate governance and reviewing and revising the
Company's corporate governance guidelines, code of conduct and conflict of
interest policy. Mr. Cressey, a Committee member, presides over all
non-management executive sessions of the Board.
The Committee is governed by a written charter approved by the Board. Current
copies of the Audit, Compensation and Nominating and Corporate Governance
charters, as well as the Company's governance principles and code of conduct,
are available on the Company's website at www.beldencdt.com under the heading
"Corporate Governance." Printed copies of these materials are also available to
shareholders upon request, addressed to the Corporate Secretary at 7701 Forsyth
Boulevard, Suite 800, St. Louis, Missouri 63105.
COMMUNICATIONS WITH DIRECTORS
The Company's Board has established a process to receive communications from
shareholders and other interested parties. Shareholders and other interested
parties may contact any member (or all members) of the Board (including Bryan
Cressey, the presiding director for non-management director meetings), any Board
committee or any chair of any such committee by U.S. mail, through calling the
Company's hotline or via e-mail.
To communicate with the Board, any individual directors or any group or
committee of directors by U.S. Mail, correspondence should be addressed to the
Company's Board or any such individual directors or group or committee of
directors by either name or title. All such correspondence should be sent "c/o
Corporate Secretary" at 7701 Forsyth Boulevard, Suite 800, St. Louis, MO 63105.
To communicate with any of our directors electronically or through the Company's
hotline, shareholders should go to our corporate website at www.beldencdt.com.
Under the heading "Corporate Governance," you will find the Company's hotline
number (with access codes for dialing from outside the U.S.) and an e-mail
address that may be used for writing an electronic message to the Board, any
individual directors, or any group or committee of directors. Please follow the
instructions on our website in order to send your message.
10
All communications received as set forth in the preceding paragraph will be
opened by (or in the case of the hotline, initially reviewed by) the office of
our corporate ombudsman for the sole purpose of determining whether the contents
represent a message to our directors. Any contents that are not in the nature of
advertising, promotions of a product or service, or patently offensive material
will be forwarded promptly to the addressee. In the case of communications to
the Board or any group or committee of directors, the corporate ombudsman's
office will make sufficient copies of the contents to send to each director who
is a member of the group or committee to which the envelope or e-mail is
addressed.
In addition, it is the Company's policy that each of our directors attend the
annual meeting absent exceptional cause. Each of the seven directors then on the
Board of Directors of CDT attended its last annual meeting held in December
2003.
DIRECTOR COMPENSATION
The following table provides information on Belden CDT's compensation practices
during 2004 for non-employee directors. (Neither Mr. Cunningham nor Mr. Kuznik
received any compensation for his Board activities. Effective January 2005, Mr.
Kuznik became a non-employee director of the Company and began receiving
compensation in such capacity.)
----------------------------------------------------------------------------------------------
COMPENSATION TABLE FOR 2004 (Effective September 1, 2004)*
----------------------------------------------------------------------------------------------
Annual Director Retainer $40,000
----------------------------------------------------------------------------------------------
Fee paid for Special Committee or Board Meetings $1,000
----------------------------------------------------------------------------------------------
Reimbursement for Expenses Attendant to Board Membership Yes
----------------------------------------------------------------------------------------------
Annual Restricted Stock Award** 2,000
----------------------------------------------------------------------------------------------
Annual Retainer for Committee Chairs $4,000
----------------------------------------------------------------------------------------------
* Amounts shown in table were the amounts provided to Belden-designated
non-employee directors. In consultation with a compensation consultant
engaged by the Nominating and Corporate Governance Committee, the Belden CDT
Board adopted the Belden non-employee director compensation program for its
non-employee directors effective September 1, 2004. In further consultation
with the compensation consultant, the Board approved the following changes
to these compensation levels for its non-employee directors, effective
January 1, 2005: an annual retainer of $50,000, an annual restricted stock
award of 2,500 shares and an Audit Committee attendance fee of $1,000 per
meeting (other compensation terms remaining the same). Prior to September 1,
2004, the CDT-designated, non-employee directors received (i) an annual
retainer of $10,000; (ii) a grant of 1,500 stock options on the first day of
the 2nd, 3rd, and 4th quarters (and for each Committee on which the director
served, an option grant of an additional 500 shares), with options vesting
at one-third per year at an exercise price equal to the fair market value of
CDT shares on the grant date; (iii) an annual retainer of $10,000 to audit
committee members plus meeting fees of $1,500 for attendance in person and
$500 for telephonic attendance; (iv) an annual stock grant with a fair
market value of $15,000; and (v) reimbursement for expenses attendant to
Board membership.
** For CDT-designated directors, issued under the Cable Design Technologies
Corporation 2001 Long-Term Performance Incentive Plan on July 15, 2004. For
Belden-designated directors, issued under the Belden Inc. 2003 Long-Term
Incentive Plan on July 15, 2004. The restricted stock cannot be sold or
otherwise disposed of prior to the non-employee director's departure from
the Board and the director will not be entitled to the restricted stock if
his departure is for cause. With respect to the grants to Belden-designated
directors, the Belden 2003 plan also prohibits the transfer of restricted
shares prior to the expiration of six months from the grant date.
11
ITEM I -- ELECTION OF DIRECTORS
The current term of office of all of the Company's directors expires at the
2005 annual meeting. As a result of the Merger, the Company's Board consists of
ten directors -- five directors designated by Belden (Messrs. Bain, Byrnes,
Cunningham, Monter, and Rethore) and five designated by CDT (Messrs. Balk,
Cressey, Harris, Kuznik, and Kalnasy). The Board proposes that the following
nominees, all of whom are currently serving as directors, be re-elected for a
new term of one year and until their successors are duly elected and qualified.
Each nominee has consented to serve if elected. If any of them becomes
unavailable to serve as a director, the Board may designate a substitute
nominee. In that case, the persons named as proxies will vote for the substitute
nominee designated by the Board.
(LORNE D. BAIN PHOTO) LORNE D. BAIN, 63, had been a director of Belden since 1993
and was appointed to the Company's Board at the time of the
Merger. Until September 2000, he served as Chairman,
President and Chief Executive Officer of WorldOil.com, a
trade publication and Internet-based business serving the
oilfield services industry. From 1997 to February 2000, he
was Managing Director of Bellmeade Capital Partners, L.L.C.,
a venture capital firm. From 1991 to 1996, he was Chairman
and Chief Executive Officer of Sanifill, Inc., an
environmental services company. Mr. Bain received a B.B.A.
degree from St. Edwards University, a Juris Doctor degree
from the University of Texas School of Law and completed
Harvard Business School's Advanced Management Program.
(LANCE C. BALK PHOTO) LANCE C. BALK, 47, has been a director of the Company since
March 2000. Mr. Balk has been a partner of Kirkland & Ellis
LLP since 1989, specializing in securities law and mergers
and acquisitions. Mr. Balk received a B.A. degree from
Northwestern University and a Juris Doctor degree and a
M.B.A. degree from the University of Chicago.
(CHRISTOPHER I. BYRNES CHRISTOPHER I. BYRNES, 55, had been a director of Belden
PHOTO) since 1995 and was appointed to the Company's Board at the
time of the Merger. He has been Dean of the School of
Engineering and Applied Science of Washington University
since 1991. He has served on the engineering faculty at
Arizona State, Harvard, and the Royal Institute of
Technology in Stockholm. He has held visiting appointments
in Austria, France, Germany, Italy, Japan, the Netherlands,
Sweden and the former Soviet Union. Dr. Byrnes was elected a
Fellow of the Institute of Electrical and Electronics
Engineers and of the Japan Society for the Promotion of
Science. Dr. Byrnes received a B.S. degree in mathematics
from Manhattan College and M.S. and Ph.D. degrees in
mathematics from the University of Massachusetts. In 1998,
he received an Honorary Doctor of Technology from the Royal
Institute of Technology in Stockholm.
(BRYAN C. CRESSEY PHOTO) BRYAN C. CRESSEY, 55, has been Chairman of the Board of the
Company since 1988 and a director of the Company since 1985.
For the past twenty-four years, he has also been a General
Partner and Principal of Golder, Thoma and Cressey and Thoma
Cressey Equity Partners, both private equity firms. He is
also a director of Select Medical Corporation, a public
company, and several private companies. Mr. Cressey received
a Juris Doctor degree and a M.B.A. degree from Harvard
University.
Director, Select Medical Corporation
12
C. BAKER CUNNINGHAM, 63, had been director, Chairman, President and Chief
Executive Officer of Belden since its incorporation in July 1993 through the
effective time of the Merger. Since the date of the Merger, Mr. Cunningham has
been a director of the Company and has served as its President and Chief Executive
Officer. From February 1982 until July 1993, he was an Executive Vice President,
Operations, of Cooper Industries, Inc., a manufacturer of electrical equipment and
tools and hardware and the former parent corporation of Belden. Mr. Cunningham
has a B.S. degree in civil engineering from Washington University, a M.S. degree
in civil engineering from Georgia Institute of Technology and a M.B.A. from
(C. BAKER CUNNINGHAM PHOTO) Harvard Business School.
Director, Cooper Cameron Corporation
(MICHAEL F.O. HARRIS PHOTO) MICHAEL F.O. HARRIS, 66, has been a director of the Company since 1985. From 1982
to 2003, Mr. Harris was a Managing Director of The Northern Group, Inc., which
acted as Managing General Partners of various investment partnerships that owned
several manufacturing companies. Mr. Harris has a B.S. degree from Yale University
and a M.B.A. degree from Harvard University.
(GLENN KALNASY PHOTO) GLENN KALNASY, 61, has been a director of the Company since 1985. From February
2002 through October 2003, Mr. Kalnasy served as the Chief Executive Officer and
President of Elan Nutrition Inc., a privately held company. From 1982 to 2003, he
was a Managing Director of The Northern Group, Inc. Mr. Kalnasy has a B.S. degree
from Southern Methodist University.
(FERDINAND C. KUZNIK PHOTO) FERDINAND C. KUZNIK, 63, has been a director of the Company since June 2000 and
was Chief Executive Officer of the Company from December 10, 2001 through the
effective time of the Merger. In June 2001, Mr. Kuznik retired from Motorola,
Inc.,where he had served since 1999 as Executive Vice President of Motorola, Inc.,
and President of Motorola's operations in Europe, the Middle East and Africa. From
1997 to 1999, Mr. Kuznik served as President of Motorola's Personal Communications
Sector. Mr. Kuznik has also served as Managing Director of Philips
Telecommunications and held management positions with A.D. Little and AT&T
Switching Systems. Mr. Kuznik has a Dipl. Ing. Degree from the Technical
University of Ostrava and a Master's degree in computer science from the Illinois
Institute of Technology in Chicago.
(JOHN M. MONTER PHOTO) JOHN M. MONTER, 57, had been a director of Belden since 2000 and was appointed to
the Company's Board at the time of the Merger. From 1996 through 2004, he was
President and Chief Executive Officer of Brand Services, Inc. ('Brand'). Brand is
a supplier of scaffolding and specialty industrial services. From 1996 to 2002,
Mr. Monter served as director of Brand DLJ Holdings, a parent company of Brand,
and, since 2002, has been a director of Brand Holdings, LLC, another parent
company of Brand, and, in January 2005, became chairman of its board. Since 2001,
he has been chairman of the board of directors of DLJ Holdings, a Brand affiliate.
Mr. Monter received a B.S. degree in journalism from Kent State University and a
M.B.A. degree from the University of Chicago.
13
(BERNARD G. RETHORE BERNARD G. RETHORE, 63, had been a director of Belden since
PHOTO) 1997 and was appointed to the Company's Board at the time of
the Merger. In 1995 he became Director, President and Chief
Executive Officer of BW/IP, Inc., a supplier of fluid
transfer equipment, systems and services, and was elected
its Chairman in 1997. In July 1997, Mr. Rethore became
Chairman and Chief Executive Officer of Flowserve
Corporation, which was formed by the merger of BW/IP, Inc.,
and Durco International, Inc. In 2000 he retired as an
executive officer and director and was named Chairman of the
Board Emeritus. From 1989 to 1995, Mr. Rethore was Senior
Vice President of Phelps Dodge Corporation and President of
Phelps Dodge Industries. He received a B.A. degree in
economics (Honors) from Yale University and a M.B.A. degree
from the Wharton School of the University of Pennsylvania.
Director, Maytag Corporation, Dover Corporation and Walter
Industries, Inc.
ITEM II -- APPROVE AN ADDITIONAL 2,500,000 SHARES FOR THE COMPANY'S 2001
LONG-TERM PERFORMANCE INCENTIVE PLAN
GENERAL
In 2000, the shareholders of CDT approved the Cable Design Technologies
Corporation 2001 Long-Term Performance Incentive Plan (the "Plan"). The Board
has amended the Plan to increase the number of shares available under the Plan,
subject to approval by the Company's shareholders. At this meeting, you are
requested to approve an amendment to the Plan that increases by 2,500,000 the
number of shares that may be granted under the Plan.
As of March 28, 2005, 297,524 shares of common stock were available for issuance
under the Plan for future awards. If the amendment is approved the number of
shares available for future grants would be 2,797,524. In accordance with the
NYSE rules, the Company also intends to issue awards under the Belden Inc. 2003
Long-Term Incentive Plan ("Belden Plan"). As of March 28, 2005, 415,838 shares
of common stock were available for issuance under the Belden Plan for future
awards.
On March 30, 2005, up to 590,100 stock options were granted to eligible
participants (including the named officers) under both plans. Awards to the
named officers were as follows: Mr. Cunningham, 120,000 options; Mr. Reece,
23,000 options; Mr. Matz, 23,000 options; Mr. Rose, 23,000 options; and Mr.
Bloomfield, 20,000 options. The options were issued with an exercise price equal
to the average of the high and low price of Belden CDT stock on March 30, 2005
($22.66). The exercise of one-third of the shares is permitted on the first,
second and third anniversaries of the grant date. The options expire ten years
after the grant date.
The Plan has been amended to prohibit the exchange or repricing of options
without shareholder approval. The Plan is intended to promote the long-term
interest of the Company by aligning employee financial interests with long-term
stockholder value. The Board believes that the number of shares remaining
available for issuance will be insufficient to achieve the purpose of the Plan
over its 10-year term unless the additional shares are authorized.
THE BELDEN CDT BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPROVAL OF THE RESERVE INCREASE.
SUMMARY OF PLAN
General. The Plan provides for the granting to employees, directors and other
individuals who perform services for the Company ("Participants") the following
types of incentive awards: stock options, stock appreciation rights ("SARs"),
restricted stock, performance grants and other types of awards that the Board of
Directors or a duly appointed committee of the Board of Directors deems to be
consistent with the purposes of the Plan.
The Plan provides that no Participant is entitled to receive grants of common
stock, stock options or SARs in a calendar year in excess of 100,000 shares. The
Plan affords the Company latitude in tailoring incentive compensation to support
corporate and business objectives, and to anticipate and respond to
14
a changing business environment and competitive compensation practices.
Plan Administration. The Plan is administered by the Compensation Committee and
the Committee has the exclusive authority to select Plan participants and to
determine the type, size and terms of each award, to modify the terms of awards,
to determine when awards will be granted and paid, and to make all other
determinations which it deems necessary or desirable in the interpretation and
administration of the Plan.
With limited exceptions, including termination of employment as a result of
death, disability or retirement, or except as otherwise determined by the
Committee, rights to these forms of contingent compensation are forfeited if a
recipient's employment or performance of services terminates within a specified
period following the award. Generally, a Participant's rights and interests
under the Plan will not be transferable except by will or by the laws of descent
and distribution.
AWARDS UNDER THE PLAN
Options: The Committee may grant non-qualified stock options and incentive
stock options at a price fixed by the Committee. The option price may be less
than, equal to or greater than the fair market value of the underlying shares of
common stock, but in no event less than 50% of the fair market value on the date
of grant. The Committee has not issued any option at an exercise price of less
than the fair market value on the grant date, and does not intend to do so for
the Plan's duration.
Options generally will expire not later than ten years after the date on which
they are granted. Options will become exercisable at such times and in such
installments as the Committee shall determine. Payment of the option price must
be made in full at the time of exercise in such form (including cash, common
stock of the Company or the surrender of another outstanding award or any
combination thereof) as the Committee may determine.
SARs: A SAR (or stock appreciation right) entitles the holder to receive cash
or common stock (or combination thereof) equal to (or, in the discretion of the
Committee, less than) the difference between the exercise price or option price
per share and the fair market value per share at the time of such exercise,
times the number of shares subject to the SAR or option or other award, or
portion thereof, which is exercised. The Committee has not issued any SARs under
the Plan.
Restricted Stock Awards. A restricted stock award is an award of a given number
of shares of common stock which are subject to a restriction against transfer
and to a risk of forfeiture during a period set by the Committee. During the
restriction period, a participant generally has the right to vote and receive
dividends on the shares, payment of which may be deferred until the restricted
stock vests.
Performance Grants: Performance grants are awards whose final value, if any, is
determined by the degree to which specified performance objectives have been
achieved during an award period set by the Committee, subject to such
adjustments as the Committee may approve based on relevant factors. The
Committee may determine performance measures based on measures of industry,
Company, unit or participant performance (or any combination of the foregoing)
and the Committee may adjust these as it deems appropriate.
A target value of an award is established (and may be amended thereafter) by the
Committee and may be a fixed dollar amount, an amount that varies from time to
time based on the value of a share of common stock, or an amount that is
determinable from other criteria specified by the Committee. Payment of the
final value of an award is made as promptly as practicable after the end of the
award period or at such other times as the Committee may determine.
ADJUSTMENTS
Upon the liquidation or dissolution of the Company, all outstanding awards under
the Plan shall terminate immediately prior to the consummation of such
liquidation or dissolution, unless otherwise provided by the Committee. In the
event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, all
restrictions on any outstanding awards shall lapse and Participants will be
entitled to the full benefit of such awards immediately prior to the closing
date of such sale or merger, unless otherwise provided by the Committee.
AMENDMENTS
The Board of Directors or the Committee may amend or terminate the Plan, except
that no amend-
15
ment shall become effective without the prior approval of the Company's
stockholders if such approval is necessary for continued compliance with the
performance-based compensation exception of Section 162(m) of the Internal
Revenue Code, under the Incentive Stock Options provisions of Section 422 of the
Internal Revenue Code or by any NYSE listing requirements. Furthermore, any
termination may not materially and adversely affect any outstanding right or
obligation under the Plan without the affected participant's consent.
TERMINATION
By its terms, the Plan will expire on December 6, 2010, ten years from the date
that the Plan was initially approved by the Company's shareholders. However,
prior to such expiration, the Plan permits the Company's Board to extend the
Plan for up to an additional five years.
PRIOR AWARDS UNDER THE PLAN
As of March 28, 2005, on a post-merger basis, 368,520 options are outstanding or
have been exercised and 70,996 restricted stock awards have been issued under
the Plan. No performance shares or SARs have been issued under the Plan.
U.S. FEDERAL TAX CONSEQUENCES UNDER THE PLAN
Federal Income Tax Consequences -- Incentive Stock Options. The grant of
incentive stock options to an employee does not result in any income tax
consequences. The exercise of an incentive stock option does not result in any
income tax consequences to the employee if the incentive stock option is
exercised by the employee during his employment with the Company or a
subsidiary, or within a specified period after termination of employment due to
death or retirement for age or disability under then established rules of the
Company. However, the excess of the fair market value of the shares of stock as
of the date of exercise over the option price is a tax preference item for
purposes of determining an employee's alternative minimum tax. An employee who
sells shares acquired pursuant to the exercise of an incentive stock option
after the expiration of (i) two years from the date of grant of the incentive
stock option, and (ii) one year after the transfer of the shares to him (the
"Waiting Period") will generally recognize long-term capital gain or loss on the
sale.
An employee who disposes of his incentive stock option shares prior to the
expiration of the Waiting Period (an "Early Disposition") generally will
recognize ordinary income in the year of sale in an amount equal to the excess,
if any, of the lesser of (i) the fair market value of the shares as of the date
of exercise or (ii) the amount realized on the sale, over the option price. Any
additional amount realized on an Early Disposition should be treated as capital
gain to the employee, short- or long-term, depending on the employee's holding
period for the shares. If the shares are sold for less than the option price,
the employee will not recognize any ordinary income but will recognize a capital
loss, short- or long-term, depending on the holding period.
The Company will not be entitled to a deduction as a result of the grant of an
incentive stock option, the exercise of an incentive stock option, or the sale
of incentive stock option shares after the Waiting Period. If an employee
disposes of his incentive stock option shares in an Early Disposition, the
Company will be entitled to deduct the amount of ordinary income recognized by
the employee.
Federal Income Tax Consequences -- Non-Qualified Stock Options. The grant of
NSO's under the Incentive Plan will not result in the recognition of any taxable
income by the participants. A participant will recognize income on the date of
exercise of the non-qualified stock option equal to the difference between (i)
the fair market value on the date the shares were acquired, and (ii) the
exercise price. The tax basis of these shares for purposes of a subsequent sale
includes the option price paid and the ordinary income reported on exercise of
the option. The income reportable on exercise of the option by an employee is
subject to federal and state income and employment tax withholding.
Generally, the Company will be entitled to a deduction in the amount reportable
as income by the participant on the exercise of a non-qualified stock option.
Federal Income Tax Consequences -- Stock Appreciation Rights and Performance
Shares. Stock Appreciation Rights and Performance Share awards involve the
issuance of shares or the payment of cash, without other payment by the
recipient, as additional compensation for services to the Company. The recipient
will recognize taxable income equal to cash received or the fair market value of
the shares on the date of the award, which becomes the tax basis in a subsequent
sale. Generally, the
16
Company will be entitled to a corresponding deduction in an amount equal to the
income recognized by the recipient.
Federal Income Tax Consequences -- Restricted Stock Grants. Restricted stock
granted under the Incentive Plan generally will not be taxed to the recipient,
nor deductible by the Company, at the time of grant. On the date the
restrictions lapse and the shares become transferable or not subject to a
substantial risk of forfeiture, the recipient recognizes ordinary income equal
to the excess of the fair market value of the shares on that date over the
purchase price paid for the stock, if any. The participant's tax basis for the
shares includes the amount paid for the shares and the ordinary income
recognized. Generally, the Company will be entitled to a deduction in an amount
of income recognized by the recipient.
The discussion set forth above is intended only as a summary and does not
purport to be a complete enumeration or analysis of all potential tax effects
relevant to recipients of awards under the Plan. Accordingly, all award
recipients are advised to consult their own tax advisors concerning the federal,
state, local and foreign income and other tax considerations relating to such
awards and rights thereunder.
INCORPORATION BY REFERENCE. The foregoing is only a summary of the Plan and is
qualified in its entirety by reference to the full text of the amended Plan, a
copy of which is attached hereto as Appendix I.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2004 with respect to
the shares of the Company's common stock that may be issued under the Company's
existing equity compensation plans.
A B C
-------------------- ------------------- -------------------------
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES FUTURE ISSUANCE UNDER
TO BE ISSUED UPON WEIGHTED AVERAGE EQUITY COMPENSATION PLANS
EXERCISE OF EXERCISE PRICE OF (EXCLUDING SECURITIES
PLAN CATEGORY OUTSTANDING OPTIONS OUTSTANDING OPTIONS REFLECTED IN COLUMN A)
------------- -------------------- ------------------- -------------------------
Equity Compensation Plans Approved
by Stockholders(1) 3,497,781(3) $24.0103 713,362(5)
Equity Compensation Plans Not
Approved by Stockholders(2) 644,857(4) $25.5635 0
--------- -------
TOTAL 4,142,638 713,362
========= =======
(1) Consists of the Belden Inc. Long-Term Incentive Plan (the "1993 Belden
Plan"); the Belden Inc. 2003 Long-Term Incentive Plan (the "2003 Belden
Plan"); the Cable Design Technologies Corporation Long-Term Performance Plan
(the "CDT Plan"); the Cable Design Technologies Corporation Supplemental
Long-Term Performance Incentive Plan (the "CDT Supplemental Plan") and the
Cable Design Technologies Corporation 2001 Long-Term Incentive Plan (the
"2001 CDT Plan"). The 1993 Belden Plan and the CDT Plan have expired or have
been terminated, subject to outstanding options under such plans.
(2) Consists of the Belden UK Employee Share Ownership Plan (the "Belden UK
Plan") and the Cable Design Technologies Corporation 1999 Long-Term
Performance Incentive Plan (the "1999 CDT Plan"). The Belden UK Plan
permitted UK employees of Belden to purchase Belden stock over a
twelve-month period through payroll deductions. The Company has terminated
this plan and none of the named executive officers participate in this plan.
The 1999 CDT Plan has also been terminated, subject to outstanding options
under such plan.
(3) Consists of 2,519,451 shares under the 1993 Belden Plan; 194,000 shares
under the 2003 Belden Plan; 56,708 shares under the CDT Plan; 290,484 shares
under the CDT Supplemental Plan; and 437,138 shares under the 2001 CDT Plan.
(4) Consists of 644,857 shares under the 1999 CDT Plan.
(5) Consists of 415,838 shares under the 2003 Belden Plan and 297,524 shares
under the 2001 CDT Plan.
17
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the amount of Belden CDT common stock beneficially
owned (unless otherwise indicated) by our directors, the executive officers
named in the Summary Compensation Table below and the directors and named
executive officers as a group. Except as otherwise noted, all information is as
of March 2, 2005.
BENEFICIAL OWNERSHIP TABLE OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
NUMBER OF SHARES
BENEFICIALLY ACQUIRABLE WITHIN PERCENT OF CLASS
NAME OWNED(1)(2)(3) 60 DAYS(4) OUTSTANDING(5)
---- ---------------- ----------------- ----------------
Lorne D. Bain 10,300 6,000 *
Lance Balk 9,354 10,000 *
Kevin Bloomfield 44,448 122,000 *
Christopher I. Byrnes 8,000 6,000 *
Bryan C. Cressey 120,959 12,750 *
C. Baker Cunningham 223,296 595,000 1.74
Michael F. O. Harris 21,253 11,000 *
Glenn Kalnasy 12,904 10,000 *
Ferdinand C. Kuznik 49,354(6) 3,000 *
Robert W. Matz 22,760 30,000 *
John M. Monter 8,600 6,000 *
Richard K. Reece 67,565(7) 186,000 *
Bernard G. Rethore 9,600(8) 6,000 *
D. Larrie Rose 28,778(9) 89,500 *
All directors and named officers as a group (14
persons) 637,171 1,093,250 3.68
* Less than one percent.
(1) The number of shares shown includes shares that are individually or jointly
owned, as well as shares over which the individual has either sole or shared
investment or voting authority. Mr. Cressey does not include 20,000 shares
held by the Bryan and Christina Cressey Foundation. Mr. Cressey is the
President of the foundation and disclaims any beneficial ownership of the
shares owned by the foundation.
(2) For executive officers (other than Mr. Kuznik), the number of shares listed
includes the following interest in shares held in the Company's 401-K
savings plans as of December 31, 2004: Mr. Cunningham -- 4,089 shares; Mr.
Bloomfield -- 4,088 shares; Mr. Matz -- 1,472 shares; Mr. Reece -- 4,165
shares; Mr. Rose -- 4,006; and all executive officers as a group -- 17,820
shares.
(3) For executive officers, the number of shares listed includes unvested
restricted stock awards under the Company's long-term incentive plans as of
March 31, 2005: Mr. Cunningham -- 100,886 shares; Mr. Bloomfield -- 18,561
shares; Mr. Matz -- 15,935 shares; Mr. Reece -- 23,813 shares; Mr. Rose --
16,472 and all named executive officers as a group -- 175,667 shares. Mr.
Kuznik's restricted stock vested upon the time of the merger in accordance
with the Agreement and Plan of Merger (as amended) by CDT, BC Merger Corp.
and Belden as of February 4, 2004 and Mr. Kuznik's change of control
agreement.
(4) Reflects the number of shares that could be purchased by exercise of options
available at March 31, 2005, or within 60 days thereafter under the
Company's long-term incentive plans. See Summary Compensation Table below
and footnote (3) of Summary Compensation Table for amounts and terms of the
restricted share awards. Table does not include any long-term compensation
awards made in 2005.
(5) Based on the number of shares outstanding at March 1, 2005 -- i.e.,
47,002,801.
(6) Includes 24,677 shares held by Mr. Kuznik, as Trustee of the Ferdinand C.
Kuznik Declaration of Trust, and 24,677 shares held by his spouse, Milena
Kuznik, Trustee of the Milena Kuznik Declaration of Trust.
18
(7) Includes 34,097 shares held in a revocable trust in which Mr. Reece and his
spouse are co-trustees.
(8) Includes 7,600 shares held in trust.
(9) Includes 4,006 shares held jointly by Mr. Rose and his spouse in an IRA
account and 27,112 shares jointly held by Mr. Rose and his spouse in another
account.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of filings with the Securities and Exchange Commission and
other reports submitted by our directors and officers, we believe that all of
our directors and executive officers complied during 2004 with the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934, with the
exception of: Messrs. Balk, Cressey, Harris, and Kalnasy who, due to an
administrative error on the part of the Company, each filed one late report
relating to an option grant of 2,000 shares (1,000 post Stock Split) at an
exercise price of $8.83 per share ($17.66 post Stock Split) issued on May 3,
2004.
BENEFICIAL OWNERSHIP TABLE OF SHAREHOLDERS
OWNING MORE THAN FIVE PERCENT
The following table shows information regarding those shareholders known to
the Company to beneficially own more than 5% of the outstanding Belden CDT
shares for the period ending on December 31, 2004.
AMOUNT AND NATURE PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OUTSTANDING
OF BENEFICIAL OWNER OWNERSHIP COMMON STOCK(1)
------------------- --------------------- ---------------
T. Rowe Price Associates, Inc. 4,954,624(2) 10.54%
100 E. Pratt Street
Baltimore, Maryland 21202
FMC Corp. 4,336,785(3) 9.23%
82 Devonshire Street
Boston, MA 02109
HYMF Limited 3,131,930(4) 6.66%
Walker House Mary Street
P.O. Box 908 GT
George Town, Grand Cayman (Cayman Islands)
Dimension Fund Advisors Inc. 2,403,520(5) 5.11%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
(1) Information based upon 47,002,801 shares of Belden CDT stock outstanding as
of March 1, 2005.
(2) Information based on a Schedule 13G/A filed with the SEC by T. Rowe Price
Associates, Inc. and other members of the reporting group on February 14,
2005, with certain members of the reporting group reporting sole voting
power over 1,335,249 shares and sole dispositive power over 4,954,624 shares
in the aggregate.
(3) Information based on Schedule 13G/A filed with the SEC by FMR Corp. ("FMR")
on February 14, 2005, reporting sole dispositive power over 4,336,785
shares.
(4) Information based on a Schedule 13G/A filed with the SEC by HYMF Ltd. on
February 14, 2005, reporting sole voting power over 2,855,697 shares and
sole dispositive power over 3,131,930 shares on behalf of the following
affiliate companies: Barclays Bank (sole voting and sole dispositive powers
over 49,809 shares, .11%); Barclays Global Investors, NA. (sole dispositive
power over 1,482,061 shares and sole voting power over 1,206,368 shares,
3.16%); Barclays Capital Securities (sole voting and sole dispositive powers
over 395,500 shares, .84%); and Barclays Global Fund Advisors (sole
dispositive power over 1,204,560 shares and sole voting power over 1,204,020
shares, 2.57%).
(5) Information based on a Schedule 13G/A filed with the SEC by Dimension Fund
Advisors Inc. on February 9, 2005, reporting sole voting and dispositive
powers over 2,403,520 shares.
19
In addition, at December 31, 2004, Prudential Bank & Trust, FSB, as Trustee of
the Belden CDT Inc. Retirement Savings Plan (f/k/a the Belden Wire & Cable
Retirement Savings Plan), held of record 1,031,815 shares, and as Trustee of the
Belden Communications Company Occupational Employees Plan, held of record 4,833
shares, the aggregate of which represents 2.20% of common stock.
20
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
This Compensation Committee report reviews the Company's compensation policy and
programs for its executive officers, including Mr. Cunningham, the Company's
Chief Executive Officer. Unless otherwise noted, this report will focus on the
period following the Merger. The Committee (all members of which meet the
independence standards of the NYSE) determines, approves and reports to the
Board on all elements of compensation for the Company's executive officers. The
Committee also reviews and approves corporate goals relevant to compensation and
evaluates performance for all executive officers. The Committee's charter, which
sets out its duties and responsibilities, can be found on the Company's website.
The Committee has retained an independent compensation consultant, who reports
directly to the Committee.
Philosophy
The compensation philosophy of the Committee is to align the Company's
compensation programs with its strategic objectives and desired Company culture.
The Company's compensation program is designed to motivate performance so
individual and Company objectives are achieved. The main compensation objective
for executive officers is to enhance shareholder value over the long term. A
secondary goal is to provide significant rewards to those individuals for
achieving superior returns for our shareholders. The Committee strives to
achieve these goals by providing competitive base salaries to attract, motivate
and retain employees; an annual cash bonus that gives management cash incentives
for achievement of predetermined performance targets; and long-term compensation
awards so management's interest is aligned with that of other shareholders.
Salary
Pursuant to Company policies, base salaries are reviewed annually. Adjustments
to base salaries are determined based on individual performance, the competitive
market, executive experience and internal equity. The salaries paid to the named
executive officers for the past three years are shown in the Summary
Compensation Table noted below.
Annual Cash Incentive Program
Following the Merger, the Committee decided to continue (with certain
modifications) Belden's annual cash incentive program for the remainder of 2004.
With respect to 2004, the Belden program permitted eligible management to
receive an annual incentive cash bonus of up to 100% of his or her base salary
mid-point (or base salary) based on the achievement of predetermined performance
criteria. At the target level, a participant may receive a bonus of 50% of the
base salary mid-point (or base salary), and at the maximum level a bonus of 100%
of the base salary mid-point (or base salary). The criteria for Mr. Cunningham
are based solely on working capital (33%) and earnings per share (67%). For
officers other than Mr. Cunningham, an individual performance element is
included with the weight assigned to each as follows: 53% earnings per share;
27% working capital; and 20% individual performance.
Under the Belden program, performance goals were established at the beginning of
the year. The overall financial performance of Belden (and post-Merger, with
some adjustments, the Company) determined the size of the bonus pool to be
distributed to the executives participating in the program. For the year 2004,
upon the Merger becoming effective, the Company had to adjust the performance
criteria for participants under the Belden plan to reflect the performance of
the combined company going forward and the inclusion of eligible CDT employees.
Under the CDT bonus plan, participants received quarterly payments based on the
attainment of predetermined performance measures and an individual performance
measure. Participants under the CDT plan received their last payment for the
fiscal quarter ending April 30, 2004. Other than Mr. Kuznik (who retired as
CDT's Chief Executive Officer upon the Merger becoming effective but continues
as a director of Belden CDT), all of the Company's named executive officers
participated in the Belden incentive plan prior to (and after) the Merger.
As part of its adjustments to the Belden incentive plan, the Committee
authorized an interim payout to Belden participants for the first half of the
year based on the original bonus measures set at the beginning of the year. At
the same time, the Committee also made adjustments for CDT participants to
compensate them for the period of April 30 (the end of CDT's fiscal third
quarter) to July 15, 2004
21
(the date of the Merger). Upon the Merger becoming effective, CDT (now Belden
CDT) changed to a calendar year end. Mr. Kuznik did not receive any adjustment,
nor did he receive any cash incentive payment under the Belden program.
At its February 2005 meeting, the Committee reviewed and approved bonus payouts
for the second half of 2004 based on adjusted performance levels for the period
that reflected the combined company. For the year, the Company exceeded its
target working capital goal (measured as a percent of revenues), and its target
earnings per share goal. Based on these performance measures, Mr. Cunningham
received a cash bonus for the year of $781,100.
Long-Term Incentive Awards
Both CDT's and Belden's long-term incentive plans authorized their respective
compensation committees to grant officers and key management various awards
intended to promote success by aligning employee financial interests with
long-term shareholder value. Awards that may be granted under either company's
plans include stock options and restricted shares. In February 2004, Belden's
compensation committee made awards of restricted shares or stock options (or
both) to key management, including the named executive officers (other than Mr.
Kuznik who was not an officer of Belden). Consistent with the purpose of the
Belden plan, the options were issued at market value on the grant date. They
were to vest over three years and expire in ten years (all Belden outstanding
options vested at the time of the Merger). The restricted shares were subject to
a three-year vesting period with the holder forfeiting his shares if he were to
leave the Company before vesting occurred. All dividends accrued on the
restricted shares are accumulated and become payable only upon vesting. The size
of individual grants of options and restricted shares is based on various
factors primarily relating to the responsibilities of the individual officer,
and the recipient's expected future contributions and prior grants.
The number of Belden awards for 2004 was comparable to the number awarded in
2003 even though the 2004 awards were on average about forty-five percent above
the market median (i.e., the 2003 Belden awards totaled 295,500 and the 2004
Belden awards totaled 301,500). The reason for the change in competitiveness was
that the Belden stock price increased significantly since the 2003 grants and
the market long-term incentive data had decreased significantly over the same
period (except for the position of CEO). The Belden Committee's independent
compensation consultant recommended that the 2003 grant sizes be used as the
basis for setting 2004 grants and suggested that Belden wait a year before
recalibrating grant sizes since market data for long-term incentives could
change significantly (in the opposite direction) in 2004 as it did in 2003. But,
considering total compensation -- base salary, bonus and long-term incentive
awards -- the Belden named officers were within the median to seventy-fifth
percentile of the market.
Prior to the Merger, CDT's compensation committee had made periodic grants to
its executive officers of stock options and restricted stock under CDT's
long-term incentive plans. Mr. Kuznik, as CEO of CDT, received 30,000 stock
options (15,000 stock options after the reverse stock split that occurred prior
to the effective time of the Merger); he also received 150,000 restricted stock
awards (75,000 restricted shares after the reverse stock split) in exchange for
the cancellation of 500,000 stock options that Mr. Kuznik received in October
2001 upon becoming CEO of CDT. (All CDT outstanding options vested at the time
of the Merger.)
Cash Long-Term Performance Plan
In 2003, based in part on the recommendations of Belden's independent
compensation consultant, the Belden compensation committee adopted a cash
long-term performance plan having performance cycles of four years (with new
cycles beginning each year). Following the Merger, the Committee decided to
discontinue the plan prospectively. Performance measures are based on the
average annual growth rate of EBITDA (using the Dow Jones Electrical Equipment
Index), assuming a Return on Invested Capital ("ROI") payout threshold is met
using the same index. Starting in 2007, cash awards could be made under the plan
if the ROI payout threshold and performance criteria are met. Cash awards could
be made in 2008 if the same criteria are met. Thereafter, the plan will
terminate.
Retention and Integration Awards Program
The Merger constituted a change of control for purposes of stock options under
the Belden and CDT plans, and all restricted stock grants under the Belden and
CDT plans became fully vested except
22
that each of the named executive officers (other than Mr. Kuznik) waived the
lapse of restrictions on his restricted stock in connection with the Merger in
consideration of their participating in a retention and integration awards
program. In exchange for receiving a retention and integration award if the
Merger became effective, each of the named officers (other than Mr. Kuznik)
agreed to amend his change of control agreement (i) to remove the provision
regarding the unilateral right of termination with respect to the Merger within
thirty days of the first anniversary of the date of the change of control and
(ii) to waive the acceleration of the vesting of restricted stock held by such
officer as a result of the Merger. Mr. Cunningham also agreed that the
appointment of Mr. Cressey as Chairman of the Board of Directors of Belden CDT
did not constitute a "good reason" for termination under his amended change of
control agreement.
The value of each payment with respect to the retention and integration award
for the named executive officer is equal to 110% (140% in the case of Mr.
Cunningham) of the executive's salary. Fifty percent of the value relating to
the retention and integration awards is paid in the form of cash and the
remaining fifty percent in shares of restricted stock of Belden CDT, with all of
the shares of restricted stock of Belden CDT being based on the value of Belden
CDT stock on the Merger date. The awards are paid (or in the case of restricted
stock, vest) in three installments: one-third upon each of the consummation of
the Merger and the first and second anniversaries of the consummation of the
Merger, in each case if the executive is still employed by Belden CDT on those
dates. Each named officer received the first payment upon completion of the
Merger. If Mr. Cunningham were to become entitled to payment of the entire
award, the approximate amount he would receive is $882,000.
The retention and integration awards agreement of each executive officer also
provides that if the officer's employment is terminated after the Merger by
Belden CDT without cause or by the employee for good reason (as such terms are
defined in the officer's change of control agreement), immediately prior to the
effective time of such termination (i) any unvested restricted stock (other than
unvested restricted stock awarded under the retention and integration awards
agreement) will vest and (ii) any unvested stock options will vest and the
officer may exercise all outstanding stock options (subject to the terms of such
options) for twelve months following such termination of employment.
The Merger constituted a change of control under Mr. Kuznik's change of control
agreement and his employment was terminated. As a result, he received the cash
payment under his change of control agreement and the non-cash benefits began
following the termination of his retention letter agreement to provide
integration services (discussed below) to Belden CDT following the Merger. The
Company also agreed to indemnify and gross-up Mr. Kuznik in connection with any
excise tax imposed under the Internal Revenue Code with respect to excess
parachute payments. Mr. Kuznik was deemed to have retired for purposes of his
option grants, which enable him to exercise his options for three years
following his termination of employment.
In connection with the Merger, the Company formed an integration committee led
by Messrs. Kuznik and Graeber (CDT's former President and Chief Operating
Officer) to supervise the combination of the two companies. Prior to the Merger,
Belden CDT entered into a retention letter agreement that set out Mr. Kuznik's
integration responsibilities commencing upon the Merger. The agreement expired
on December 30, 2004 and provided for annual compensation as in effect on the
date of the Merger agreement (February 4, 2004) plus benefits to which Mr.
Kuznik was entitled as of the date of the Merger agreement. As part of the
consideration for entering into his letter agreement, Mr. Kuznik agreed that his
employment agreement was terminated (without the payment of any severance
payment under such agreement).
Chief Executive Officer Compensation
All elements of compensation for Mr. Cunningham, including base salary, bonus
and long-term incentives, are reviewed and approved solely by the Committee or
the full Board.
23
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code imposes a limitation on the
deductibility of non performance-based compensation in excess of $1 million paid
to the executive officers named in the compensation table. Although the
Committee considers this provision when reviewing executive compensation, the
Committee uses sound business judgment to determine whether specific
compensation programs are appropriate -- even though certain elements may not
meet the performance criteria under the tax code provision.
Glenn Kalnasy (Chair)
Lance C. Balk
Christopher I. Byrnes
John M. Monter
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION AWARDS
-----------------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
--------------------------- STOCK UNDERLYING ALL
NAME AND PRINCIPAL SALARY(1) BONUS(2) AWARDS(3) OPTIONS(4) OTHER(5)
COMPENSATION POSITION YEAR ($) ($) ($) (#) ($)
--------------------- ---- --------- -------- ---------- ---------- ---------
C. Baker Cunningham 2004 625,910 781,100 765,913 50,000 368,814
President, 2003 606,667 350,000 337,500 50,000 39,558
and Chief Executive Officer 2002 587,499 0 421,800 40,000 37,543
Ferdinand C. Kuznik 2004 316,154 144,450 -- -- 5,532,883
Chief Executive Officer 2003 600,000 60,885 1,477,500 15,000 27,922
2002 392,308 150,000 308,370 -- 183
Richard K. Reece 2004 330,000 230,700 292,417 15,000 284,260
Vice President, Finance and 2003 320,000 136,000 121,500 15,000 39,961
Chief Financial Officer 2002 309,999 0 189,810 18,000 153,646
Robert W. Matz 2004 260,038 208,900 196,168 10,000 154,922
Vice President, Operations and 2003 218,333 115,000 81,000 10,000 85,269
President of Networking 2002 133,673 0 117,400 10,000 46,024
D. Larrie Rose 2004 276,288 208,900 207,176 10,000 228,018
Vice President, Operations and 2003 248,333 115,000 81,000 10,000 85,278
President of European Operations 2002 231,941 0 126,540 12,000 88,811
Kevin L. Bloomfield 2004 260,000 178,800 228,251 12,000 182,669
Vice President, Secretary 2003 250,000 105,000 94,500 12,000 11,250
and General Counsel 2002 240,000 0 105,450 10,000 10,550
(1) Salaries are amounts actually received. Mr. Kuznik's salary for 2002 and
2003 is based on a fiscal year end of July 31. At the time of the Merger,
the Company changed its fiscal year end to December 31. For 2004, Mr. Kuznik
received as salary $316,154 through July 15, 2004, the date of the Merger.
Thereafter, Mr. Kuznik entered into a retention letter agreement under which
he provided post-merger integration services to the Company through December
30, 2004, in exchange for receiving $357,692. The amount of his retention
letter agreement is reflected in column "All Other". (See footnote 5 for
details.) The aggregate amount of perquisites and other personal benefits
for any named executive does not exceed $50,000 or 10% of the total annual
salary and bonus for any such named executive and, therefore, such items
have been excluded.
24
(2) For the period of January 1, 2004 through the July 15, 2004 (the date of the
Merger), determined by the Compensation Committee at its August 2004
meeting; for the period of July 16, 2004 through December 31, 2004,
determined by the Compensation Committee at its February 2005 meeting.
(3) The following is a summary of the restricted stock grants awarded to the
named officers except for Mr. Kuznik; see below under the caption "Mr.
Kuznik's Restricted Stock Awards" for a summary of Mr. Kuznik's grants. With
respect to the 2002 grants, the figures in this column reflect the closing
price of Belden shares ($21.09 per share) on February 15, 2002, the
effective grant date price. With respect to the 2003 grants, the figures in
this column reflect the closing price of Belden shares ($13.50 per share) on
February 18, 2003, the effective grant date price. With respect to the 2004
grants, the figures in this column reflect (i) the closing price of Belden
shares ($19.25) on February 23, 2004, the effective grant date price and
(ii) with respect to the restricted stock awarded to the named officers
pursuant to their retention and integration awards agreement (which were
entered into at the time of the Merger), the closing price of Belden CDT
shares ($20.50) on July 15, 2004. A summary of the retention and integration
award agreements are set out below under the caption "Certain Change in
Control Arrangements and Other Matters." All restricted stock awards are
subject to forfeiture in the event the individual does not remain employed
by the Company for a prescribed period. For all awards (other than those
provided under the retention and integration awards agreements) the
prescribed period is three years from the grant date. The restricted stock
granted under a retention and integration awards agreement is paid in three
installments: one-third upon each of the consummation of the Merger, and the
first and second anniversary of the consummation of the Merger, provided the
named officer is still employed by the Company. The retention and
integration awards agreements also provide that if the officer's employment
is terminated after the Merger by the Company without cause or by the
officer for good reason (as those terms are defined in the officer's change
of control agreement), immediately prior to the effective time of such
termination any unvested restricted stock (other than unvested restricted
stock awarded under the retention and integration awards agreements) will
vest. The following chart shows the value of such shares as of the end of
2004 (i.e., $23.20 per share, the closing price of Belden CDT shares on
December 31, 2004):
2002 GRANT 2003 GRANT 2004 GRANTS
---------- ---------- -----------
C. Baker Cunningham $464,000 $580,000 $902,155
Richard K. Reece 208,800 208,800 343,492
Robert W. Matz -- 139,200 230,492
D. Larrie Rose 139,200 139,200 242,950
Kevin L. Bloomfield 116,000 162,400 268,215
Mr. Kuznik's Restricted Stock Awards: On October 16, 2002, Mr. Kuznik (the
CEO of the Company prior to the Merger) received a restricted stock award of
67,037 shares (33,518 shares after the Stock Split that occurred immediately
prior to the effective time of the Merger). The closing price of CDT's stock
on such date was $4.60 ($9.20 after adjusting for the Stock Split). The
restricted stock vested after three years or upon a change of control. On
November 3, 2003, Mr. Kuznik received a restricted stock award of 150,000
shares (75,000 shares after adjusting for the Stock Split) in exchange for
the cancellation of a stock option grant of 500,000 shares (250,000 shares
after adjusting for the Stock Split) which Mr. Kuznik received at the time of
his appointment as Chief Executive Officer of CDT in December 2001. The
closing price of CDT's stock on November 3, 2003 was $9.85 ($19.70 after
adjusting for the Stock Split). This grant of restricted stock had a vesting
schedule similar to the vesting schedule of his 500,000 stock option grant,
and provided for acceleration of vesting upon a change of control. All of Mr.
Kuznik's unvested restricted stock vested at the time of the Merger.
Dividends on restricted stock accumulate and become payable after the
applicable vesting period. The dividend rate on the shares of restricted
stock is the dividend rate payable on all outstanding shares of Company
common stock.
(4) All unvested stock options became vested upon the time of the Merger. For
Messrs. Cunningham, Reece, Matz, Rose and Bloomfield, the exercise price for
the 2002 options is $20.865; the exercise price for the 2003 options is
$13.30 (except the exercise price is $12.445 for the options granted to Mr.
Cunningham);
25
and the exercise price for the 2004 options is $19.075. In each instance, the
exercise price equaled the average of the high and low of Belden shares on the
effective grant date. Mr. Kuznik's 2003 option award reflects the one for two
reverse stock split that occurred prior to the merger. The exercise price is
$12.66 per share, which equaled the closing price of the Company's shares on
the grant date adjusted for the reverse stock split.
(5) Messrs. Cunningham, Reece, Matz, Rose and Bloomfield: Amounts include (i)
Company contributions and allocations in Company-sponsored defined
contribution plans and other plans; (ii) "cash out"of the 2004 offering
under the Belden Employee Stock Purchase Plan (which offering was cancelled
prior to the time of Merger); (iii) restricted stock dividends paid on the
2001 restricted stock award which vested in February 2004 (Mr. Cunningham
has deferred the vesting of his 2001 grant and the dividends accrued
thereon); (iv) cash and restricted stock received under the retention and
integration awards agreement as of July 15, 2004; and (v) the value of the
2001 restricted stock award which vested in February 2004 (Mr. Cunningham
deferred vesting of his award). For Mr. Reece, this column also includes,
for 2002, reimbursements related to relocation totaling $63,356 and
incentive compensation of $80,000, which he received in connection with his
returning as the Company's Chief Financial Officer and Vice President of
Finance and, for 2003, reimbursements related to relocation totaling
$24,561. For Mr. Rose, this column also includes, for 2002, 2003, and 2004,
payments related to foreign cost-of-living differentials totaling $80,561,
$63,868, and $35,592, respectively, and, for 2003 and 2004, reimbursements
related to relocation of $5,201 and $4,298, respectively. For Mr. Matz, this
column also includes, for 2004, reimbursements related to moving/relocation
totaling $47,639.
Mr. Kuznik: For 2004, the amount consists of (i) auto allowance of $3,558;
(ii) holiday pay of $24,230; (iii) payment under his change of control
agreement (including gross-up for excise tax) of $3,585,500; (iv) amounts
paid under his retention letter agreement for the period of July 16, 2004
through December 30, 2004 of $357,692; (v) the value of restricted stock
that vested as a result of the Merger and the reportable gain from the
exercise of non-qualified stock options of $1,530,575; (vi) and amounts of
Company contributions to West Penn Wire Division Incentive Profit Sharing
Plan and Trust (the "Incentive Plan") of $30,750. For 2003, the amount
includes Company contributions to the Incentive Plan and payment of term
life insurance premiums of $25,500 and $2,422, respectively. For 2002, the
amount includes Company payments of term life insurance premiums of $183.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUES AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(1)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION -----------------------
GRANTED(#)(2) FISCAL YEAR ($/SH)(3) DATE 5%($) 10%($)
------------- ------------ -------------- ---------- --------- -----------
C. Baker Cunningham 50,000 24.3% 19.075 2014 599,808 1,520,032
Ferdinand C. Kuznik -- -- -- -- -- --
Richard K. Reece 15,000 7.3% 19.075 2014 179,942 456,010
Robert W. Matz 10,000 4.9% 19.075 2014 119,962 304,006
D. Larrie Rose 10,000 4.9% 19.075 2014 119,962 304,006
Kevin L. Bloomfield 12,000 5.8% 19.075 2014 143,954 364,808
(1) The Company elected to use "Potential Realizable Values at Assumed Annual
Rates of Stock Price Appreciation for Option Term." The dollar amounts under
these columns are the result of calculations at the 5% ($31.07) and 10%
($49.48) rates set by the SEC and therefore are not intended to forecast
possible future appreciation, if any, of the stock price of the Company.
(2) Grants of stock options in 2004 awarded under the Belden 2003 Long-Term
Incentive Plan. The grants provided for the exercise of one-third of the
shares on the first, second, and third anniversaries of the grant date. As
of the Merger, all grants were vested.
26
(3) The purchase price of shares subject to an option is the average of the high
and low of Belden shares on February 23, 2004, the effective grant date
price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY OPTIONS AT
SHARES VALUE UNEXERCISED OPTIONS AT DECEMBER 31, 2004($)
ACQUIRED ON REALIZED DECEMBER 31, 2004(#) EXERCISABLE/
EXERCISE(#) ($) EXERCISABLE/UNEXERCISABLE(1) UNEXERCISABLE(2)
----------- -------- ---------------------------- ---------------------------
C. Baker Cunningham 0 $ 0 595,000/0 1,358,900/0
Ferdinand C. Kuznik 15,000 101,880 3,000/0 31,620/0
Richard K. Reece 0 $ 0 186,000/0 397,280/0
Robert W. Matz 0 $ 0 30,000/0 140,250/0
D. Larrie Rose 0 $ 0 89,500/0 272,883/0
Kevin L. Bloomfield 0 $ 0 122,000/0 306,338/0
(1) For each named executive officer (other than Mr. Kuznik), the table reflects
option grants on February 28, 1996, at an exercise price of $30.75 per
share; on February 20, 1998, at an exercise price of $39.53 per share; on
January 5, 1999, at an exercise price of $20.06; on February 16, 2000, at an
exercise price of $21.75; on February 14, 2001, at an exercise price of
$26.38 per share; on February 15, 2002, at an exercise price of $20.86; on
February 18, 2003, at an exercise price of $13.30 ($12.445 for Mr.
Cunningham); and on February 23, 2004, at an exercise price of $19.07. For
Mr. Reece, the table reflects an option grant on February 26, 1997, at
$35.18 per share. For Mr. Rose, the table reflects an option grant on
November 4, 1998, at $16.93 per share. For each grant, the exercise price
was the average of the high and low of Belden shares on the effective date
of the grant. The grants provided that options became exercisable for
one-third of such options on each of the first three anniversaries of the
date of grant. However, all options became vested at the time of the Merger
and the options will expire ten years after the date of grant. For Mr.
Kuznik, the table reflects option grants on October 1, 2002 at an exercise
price of $12.66 per share. On August, 19, 2004, Mr. Kuznik exercised 15,000
options.
(2) "Value" represents the difference between the closing price of the common
stock on the New York Stock Exchange on December 31, 2004 ($23.20) and the
exercise price of such options.
CASH LONG-TERM PERFORMANCE PLAN
In 2003, Belden adopted a cash long-term performance plan having performance
cycles of four years, with new cycles beginning each year. Following the Merger,
the Compensation Committee decided to discontinue the plan prospectively.
Performance measures are based on the average annual growth rate of EBITDA using
the Dow Jones Electrical Equipment Index (the "Peer Group"), assuming that a
Return on Invested Capital ("ROI") payout threshold is met using the same index.
Starting in 2007, cash awards could be made under the plan if the ROI payout
threshold and performance criteria are met. Cash awards could be made in 2008 if
the same criteria are met. Thereafter, the plan will terminate. The target
payout is for performance at the median performance of the Peer Group. The
maximum payout is for performance at the 90% level of the Peer Group. No payout
is earned for performance below the 40% level of the Peer Group. The threshold
for payouts of awards is an ROI at least equal to the median for the Peer Group
over the four-year performance period. Each of the named officers participates
in the plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Lance C. Balk, a director, is a partner of Kirkland & Ellis LLP. Kirkland &
Ellis LLP represented CDT in connection with the Merger and has performed (and
continues to perform) legal services for Belden CDT. As discussed above, the
Board determined Mr. Balk is an independent director under the independence
listing standards of the NYSE.
CERTAIN CHANGE IN CONTROL ARRANGEMENTS AND OTHER MATTERS
Messrs. Cunningham, Reece, Matz, Rose and Bloomfield:
Grantor Trust
Belden CDT maintains a "grantor trust" under Section 671 of the Code to provide
certain partici-
27
pants in designated compensation and supplemental retirement plans with greater
assurance that the benefits and payments to which those participants are
entitled under those plans will be paid. Prior to a "change of control" of
Belden CDT (as defined in the amended trust agreement), Belden CDT has the
discretion to make contributions to the trust. After a change in control of
Belden CDT, the Company must transfer to the trust the amount of the benefits
participants have earned through the date of the change in control and
thereafter continue to fund the trust as benefits accrue. The amount held in
trust at December 31, 2004 was de minimis. The assets of the trust are subject
to claims of the creditors of the Company in the event the Company becomes
"insolvent" as defined in the amended trust agreement. The consummation of the
Merger did not constitute a change of control under the trust agreement.
Change of Control Agreement
Belden entered into change of control agreements with the named officers in the
Summary Compensation Table above (the "change of control agreements"). The
change of control agreements provide for, among other things, certain payments
and benefits in the event of a "qualifying termination" of employment (i.e., a
termination of employment by the executive officer for "good reason" or a
termination of employment by Belden without "cause," each as defined in the
change of control agreements) within three years following a change of control.
In the event of a qualifying termination, the executive will become entitled to
outplacement services and health benefit continuation and a lump sum severance
payment generally equal to the sum of:
- two times (2.99 in the case of Mr. Cunningham) the sum of the executive's
base salary and the highest annual bonus earned by the executive with
respect to the two completed fiscal years preceding the date of
termination;
- an amount equal to the executive's "target" bonus with respect to the
year in which termination occurs; and
- the amount necessary to make the executive whole with respect to any
excise taxes imposed under the Internal Revenue Code with respect to
excess parachute payments.
The Merger constituted a change of control under these change of control
agreements. In addition, upon completion of the Merger, all stock options under
the Belden incentive plans (including those issued to Belden-designated
directors and officers) became fully vested and all restricted stock grants
issued under the Belden incentive plans became fully vested, except that each of
the named officers in the Summary Compensation Table above waived the lapse of
restrictions on his or her restricted stock in connection with the Merger in
consideration of their participating in the retention and integration awards
program discussed below.
In exchange for receiving a retention and integration award if the Merger became
effective, each of the named officers agreed to amend his change of control
agreement (i) to remove the provision regarding the unilateral right of
termination with respect to the Merger within 30 days of the first anniversary
of the date of the change of control and (ii) to waive the acceleration of the
vesting of restricted stock held by such officer as a result of the Merger. Mr.
Cunningham also agreed that the appointment of Mr. Cressey as Chairman of the
Board of Directors of Belden CDT did not constitute a "good reason" for
termination under his amended change of control agreement. In connection with
the Merger, CDT (now, Belden CDT) assumed all of Belden's obligations under each
change of control agreement.
Retention and Integration Award
The value of each payment with respect to the retention and integration award
for the executive officer is equal to 110% (140% in the case of Mr. Cunningham)
of the executive's salary. Fifty percent of the value relating to the retention
and integration awards is paid in the form of cash and the remaining fifty
percent in shares of restricted stock of Belden CDT, with all of the shares of
restricted stock of Belden CDT being issued on the date of the Merger and based
on the value of the Belden CDT stock on that date.
The awards are paid (or, in the case of the restricted stock, vest) in three
installments: one-third upon each of the consummation of the Merger and the
first and second anniversaries of the consummation of the Merger, in each case
if the executive is still employed by Belden CDT on those dates. Each named
officer received the first payment upon completion of the Merger. If each of
28
Messrs. Cunningham, Reece, Matz, Rose and Bloomfield were to become entitled to
payment of the entire award, the approximate amount that would be paid to such
officer would be $882,000, $357,500, $253,000, $286,000, and $280,500,
respectively.
The retention and integration awards agreement of each executive officer also
provides that if the officer's employment is terminated after the Merger by
Belden CDT without cause or by the employee for good reason (as such terms are
defined in the officer's change of control agreement), immediately prior to the
effective time of such termination (i) any unvested restricted stock (other than
unvested restricted stock awarded under the retention and integration awards
agreement) will vest and (ii) any unvested stock options will vest and the
officer may exercise all outstanding stock options (subject to the terms of such
options) for twelve months following such termination of employment.
Letter Agreement
In addition, in connection with Mr. Reece returning to the position of Chief
Financial Officer and Vice President, Finance of Belden, he entered into an
agreement with Belden (the "Letter Agreement"). The Letter Agreement provides
that if Mr. Reece no longer reports directly to Mr. Cunningham, Mr. Reece may
elect to leave Belden and have the right to receive severance payments paid over
twelve months equal to his then current base salary and the greater of his
current target bonus or his most recent actual bonus. During the twelve-month
period, Mr. Reece would also be entitled to exercise stock options and his
restricted shares would vest in accordance with their terms. If the Letter
Agreement applies (in the sense that Mr. Reece no longer reports directly to Mr.
Cunningham) and Mr. Reece elects to receive payments under it, such payments
would be in lieu of any payment under his change of control agreement noted
above. However, if the Letter Agreement does not apply or if it does apply but
Mr. Reece does not make the election to receive payments under it, Mr. Reece
will be entitled to receive the benefits of his change of control agreement in
accordance with its terms.
Mr. Kuznik:
Mr. Kuznik was a party to an employment agreement with CDT ("Employment
Agreement"), pursuant to which he was entitled to participate in certain bonus
plans and was entitled to termination payments if he were terminated without
cause. Termination pay was based upon prior compensation and would have been
paid for a period of twelve months. Mr. Kuznik's Employment Agreement also
imposed certain additional restrictions upon him, including confidentiality
obligations and assignment of the benefits of inventions and patents. Mr. Kuznik
also was a party to a change of control agreement with CDT. Under this
agreement, if his employment were terminated other than for cause (as defined in
the agreement) or he were to resign for good reason (as defined in the
agreement) following a change of control, he would (i) receive an amount equal
to three times the sum of (a) his highest annual compensation (excluding bonus)
over the prior three calendar years and (b) his average annual bonus over the
prior three calendar years and (ii) be provided health and other employee
benefits existing on the Merger (excluding profit sharing and 401(k)
contributions) for two years following the change of control.
If such events were to occur, pursuant to his change of control agreement, Mr.
Kuznik also would receive certain unvested options, restricted stock, employer
contributions to 401(k) benefit plans and other long-term incentives would vest,
and accrued bonuses and other similar amounts would be payable. The Merger
constituted a change of control under Mr. Kuznik's change of control agreement
and his employment was terminated. As a result, Mr. Kuznik received the cash
portion of his change of control agreement promptly following the closing of the
Merger and the non-cash benefits began, following the termination of his
retention letter agreement to provide integration services (discussed below) to
Belden CDT following the Merger. The Company also agreed to indemnify and
gross-up Mr. Kuznik in connection with any excise tax imposed under the Internal
Revenue Code with respect to excess parachute payments. Mr. Kuznik was deemed to
have retired for purposes of his option grants, which enables him to exercise
the options for three years following his employment termination.
In connection with the Merger, Belden and CDT formed an integration committee
led by Messrs. Kuznik and Graeber (CDT's former President and Chief Operating
Officer) to supervise the combination of the two companies. Effective upon the
Merger, Belden CDT entered into a retention letter agreement that set out Mr.
Kuznik's integra-
29
tion responsibilities. The agreement expired on December 30, 2004 and provided
for annual compensation of 125% of Mr. Kuznik's annualized compensation in
effect on the date of the Merger agreement (February 4, 2004) plus benefits to
which Mr. Kuznik was entitled as of the date of the Merger agreement. As part of
the consideration for entering into his Letter Agreement, Mr. Kuznik waived the
right to receive compensation under his Employment Agreement.
PENSION PLANS
Except for Mr. Kuznik, the executives named in the Summary Compensation Table
may, upon retirement, be entitled to benefits from the Belden CDT Inc. Pension
Plan (the "Pension Plan") and the Supplemental Excess Defined Benefit Plan of
Belden CDT Inc. (the "Supplemental Plan"). Upon retirement, benefits under the
plans are determined based upon compensation during the employment period and
years of service.
Pursuant to the Pension Plan, the Company credits to each individual's account
thereunder 4% of each year's total compensation up to the Social Security wage
base for the year, plus 8% of each year's total compensation that exceeds the
Social Security wage base. For this purpose, total compensation is cash
remuneration paid by the Company to or for the benefit of a participant in the
Pension Plan for services rendered while an employee.
For the executives named in the Summary Compensation Table, the total
compensation will be computed as shown in the columns "Salary" and "Bonus" of
the Summary Compensation Table. Employees who were formerly employees of Cooper
Industries, Inc., were credited for service while employed by Cooper. Benefits
for service through August 1, 1993 were determined under the Cooper Salaried
Employees' Retirement Plan then in effect and converted to initial balances
under the Pension Plan. Funds equal to the actuarial value of the accrued
liabilities for all participants plus a pro rata portion of the Cooper plan
excess assets have been transferred from the Cooper pension trust to a trust
established by Belden for the Pension Plan.
Employees do not make any contributions to the Pension Plan. Benefits at
retirement are payable, as the participant elects, in the form of an escalating
annuity, a level annuity with or without survivorship, or a lump-sum payment.
The Company contributes to a trust fund sufficient to meet the minimum
requirements under the Internal Revenue Code ("Code") to maintain the status of
the Pension Plan as a qualified defined benefit plan.
The Supplemental Plan is an unfunded, nonqualified plan which provides to
certain employees, including those named in the Summary Compensation Table,
Pension Plan benefits that generally cannot be paid from a qualified, defined
benefit plan due to provisions of the Code. Belden established a grantor trust
with respect to the Supplemental Plan, which is discussed above under the
heading Grantor Trust.
PENSION BENEFITS TABLE
YEARS OF
CREDITED YEAR ESTIMATED
SERVICE AS OF INDIVIDUAL ANNUAL
JANUARY 1, REACHES BENEFIT AT
2003 AGE 65 AGE 65
------------- ---------- ----------
C. Baker Cunningham 34.5 2006 $2,032,217
Richard K. Reece 11.4 2021 $ 346,161
Robert W. Matz 2.6 2011 $ 55,669
D. Larrie Rose 32.5 2012 $ 337,924
Kevin L. Bloomfield 23.5 2016 $ 360,281
For each of the individuals shown in the Summary Compensation Table, the table
above shows current credited years of service, the year each attains age 65, and
the projected annual pension benefit at age 65. The projected annual pension
benefit is based on the following assumptions: benefits will be paid on a
straight-line annuity basis, continued compensation at 2004 levels and an
interest credit rate of 4.5%. Amounts payable under the Supplemental Plan are
included in the estimated annual benefit.
30
PERFORMANCE GRAPH
(PERFORMANCE GRAPH)
(INCLUDES REINVESTMENT OF DIVIDENDS)
INDEXED RETURNS
Base Years Ending
Period -------------------------------------
Company/Index Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04
Belden CDT Inc 100 121.75 113.98 74.51 104.65 115.94
S&P 500 Index 100 90.90 80.09 62.39 80.29 89.03
S&P Smallcap
Communications
Equipment 100 49.11 34.65 17.47 28.69 30.48
By Order of the Board of Directors
KEVIN L. BLOOMFIELD
SECRETARY
APRIL 7, 2005
31
MARCH 30, 2005
APPENDIX I
CABLE DESIGN TECHNOLOGIES CORPORATION
2001 LONG-TERM PERFORMANCE INCENTIVE PLAN
1. Purpose. The purpose of the 2001 Long-Term Performance Incentive Plan
(the "Plan") is to advance the interests of Cable Design Technologies
Corporation, a Delaware corporation (the "Company") and its stockholders by (i)
providing incentives to certain employees of the Company, directors and to
certain other individuals who perform services for, or to whom an offer of
employment has been extended by, the Company, including those who contribute
significantly to the strategic and long-term performance objectives and growth
of the Company and (ii) to enable the Company to attract, retain and reward the
best available persons for positions of responsibility.
2. Administration. The Plan shall be administered solely by the Board of
Directors (the "Board") of the Company or, if the Board shall so designate, by a
committee of the Board that shall be comprised of not fewer than two directors
(the "Committee"); provided that the Committee may delegate the administration
of the Plan in whole or in part, on such terms and conditions, and to such
person or persons as it may determine in its discretion. References to the
Committee hereunder shall include the Board where appropriate.
The Committee has all the powers vested in it by the terms of the Plan set
forth herein, such powers to include exclusive authority (except as may be
delegated as permitted herein) to select the employees and other individuals to
be granted Awards under the Plan, to determine the type, size and terms of the
Award to be made to each individual selected, to modify the terms of any Award
that has been granted, to determine the time when Awards will be granted, to
establish performance objectives, to make any adjustments necessary or desirable
as a result of the granting of Awards to eligible individuals located outside
the United States and to prescribe the form of the instruments embodying Awards
made under the Plan. The Committee is authorized to interpret the Plan and the
Awards granted under the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, and to make any other determinations which it
deems necessary or desirable for the administration of the Plan. The Committee
(or its delegate as permitted herein) may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Award in the
manner and to the extent the Committee deems necessary or desirable to carry it
into effect. Any decision of the Committee (or its delegate as permitted herein)
in the interpretation and administration of the Plan, as described herein, shall
lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned. The Committee may act only by a majority of
its members in office, except that the members thereof may authorize any one or
more of their members or any officer of the Company to execute and deliver
documents or to take any other ministerial action on behalf of the Committee
with respect to Awards made or to be made to Plan participants. No member of the
Committee and no officer of the Company shall be liable for anything done or
omitted to be done by him, by any other member of the Committee or by any
officer of the Company in connection with the performance of duties under the
Plan, except for his own willful misconduct or as expressly provided by statute.
Determinations to be made by the Committee under the Plan may be made by its
delegates.
3. Participation. Consistent with the purposes of the Plan, the Committee
shall have exclusive power (except as may be delegated as permitted herein) to
select the employees, directors and other individuals performing services for
the Company who may participate in the Plan and be granted Awards under the
Plan. Eligible individuals may be selected individually or by groups or
categories, as determined by the Committee in its discretion.
4. Awards under the Plan.
(a) Types of Awards. Awards under the Plan may include, but need not be
limited to, one or more of the following types, either alone or in any
combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights,"(iii)
"Restricted Stock," (iv) "Performance Grants" and (v) any other type of Award
deemed by the Committee in its discretion to be consistent with the purposes of
the Plan (including, but not limited to,
I-1
Awards of or options or similar rights granted with respect to unbundled stock
units or components thereof, and Awards to be made to participants who are
foreign nationals or are employed or performing services outside the United
States). Stock Options, which include "Nonqualified Stock Options" (which may be
awarded to participants or sold at a price determined by the Committee
("Purchased Options")) and "Incentive Stock Options" or combinations thereof,
are rights to purchase common shares of the Company having a par value of $.01
per share and stock of any other class into which such shares may thereafter be
changed (the "Common Shares"). Nonqualified Stock Options and Incentive Stock
Options are subject to the terms, conditions and restrictions specified in
Paragraph 5. Stock Appreciation Rights are rights to receive (without payment to
the Company) cash, Common Shares, other Company securities (which may include,
but need not be limited to, unbundled stock units or components thereof,
debentures, preferred stock, warrants, securities convertible into Common Shares
or other property ("Other Company Securities")) or property, or other forms of
payment, or any combination thereof, as determined by the Committee, based on
the increase in the value of the number of Common Shares specified in the Stock
Appreciation Right. Stock Appreciation Rights are subject to the terms,
conditions and restrictions specified in Paragraph 6. Shares of Restricted Stock
are Common Shares which are issued subject to certain restrictions pursuant to
Paragraph 7. Performance Grants are contingent awards subject to the terms,
conditions and restrictions described in Paragraph 8, pursuant to which the
participant may become entitled to receive cash, Common Shares, Other Company
Securities or property, or other forms of payment, or any combination thereof,
as determined by the Committee.
(b) Maximum Number of Shares that May be Issued. There may be issued under
the Plan (as Restricted Stock, in payment of Performance Grants, pursuant to the
exercise of Stock Options or Stock Appreciation Rights, or in payment of or
pursuant to the exercise of such other Awards as the Committee, in its
discretion, may determine) an aggregate of not more than 3,400,000 Common
Shares, subject to adjustment as provided in Paragraph 14. In any one calendar
year, the Committee shall not grant to any one participant options or SARs to
purchase a number of shares of Common Stock, and shall not grant to any one
participant Restricted Stock or Performance Grants, in excess of 100,000 shares.
Common Shares issued pursuant to the Plan may be either authorized but unissued
shares, treasury shares, reacquired shares, or any combination thereof;
provided, however, that, unless and until this plan is approved by the Company's
shareholders, only treasury shares shall be issued hereunder. If any Common
Shares issued as Restricted Stock or otherwise subject to repurchase or
forfeiture rights are reacquired by the Company pursuant to such rights, or if
any Award is canceled, terminates or expires unexercised, any Common Shares that
would otherwise have been issuable pursuant thereto will be available for
issuance under new Awards.
(c) Rights with respect to Common Shares and Other Securities.
(i) Unless otherwise determined by the Committee in its discretion, a
participant to whom an Award of Restricted Stock has been made (and any
person succeeding to such a participant's rights pursuant to the Plan)
shall have, after issuance of a certificate for the number of Common Shares
awarded and prior to the expiration of the Restricted Period (as
hereinafter defined) or the earlier repurchase of such Common Shares as
herein provided, ownership of such Common Shares, including the right to
vote the same and to receive dividends or other distributions made or paid
with respect to such Common Shares (provided that such Common Shares, and
any new, additional or different shares, or Other Company Securities or
property, or other forms of consideration which the participant may be
entitled to receive with respect to such Common Shares as a result of a
stock split, stock dividend or any other change in the corporate or capital
structure of the Company, shall be subject to the restrictions hereinafter
described as determined by the Committee in its discretion), subject,
however, to the options, restrictions and limitations imposed thereon
pursuant to the Plan. Notwithstanding the foregoing, a participant with
whom an Award agreement is made to issue Common Shares in the future, shall
have no rights as a stockholder with respect to Common Shares related to
such agreement until issuance of a certificate to him.
(ii) Unless otherwise determined by the Committee in its discretion, a
participant to whom a grant of Stock Options, Stock Appreciation Rights,
Performance Grants or any other Award is made (and any person succeeding to
such a participant's rights pursuant to the Plan) shall have no rights as a
stockholder
I-2
with respect to any Common Shares or as a holder with respect to other
securities, if any, issuable pursuant to any such Award until the date of
the issuance of a stock certificate to him for such Common Shares or other
instrument of ownership, if any. Except as provided in Paragraph 14, no
adjustment shall be made for dividends, distributions or other rights
(whether ordinary or extraordinary, and whether in cash, securities, other
property or other forms of consideration, or any combination thereof) for
which the record date is prior to the date such stock certificate or other
instrument of ownership, if any, is issued.
5. Stock Options. The Committee may grant or sell Stock Options either
alone, or in conjunction with Stock Appreciation Rights, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter; provided
that an Incentive Stock Option may be granted only to an eligible employee of
the Company or any parent or subsidiary corporation. Each Stock Option (referred
to herein as an "Option") granted or sold under the Plan shall be evidenced by
an instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including, but not limited
to, restrictions upon the Option or the Common Shares issuable upon exercise
thereof, as the Committee, in its discretion, shall establish:
(a) The option price may be less than, equal to, or greater than, the
fair market value of the Common Shares subject to such Option at the time
the Option is granted, as determined by the Committee, but in no event will
such option price be less than 50% of the fair market value of the
underlying Common Shares at the time the Option is granted; provided,
however, that in the case of an Incentive Stock Option granted to such an
employee, the option price shall not be less than the fair market value of
the Common Shares subject to such Option at the time the Option is granted,
or if granted to such an employee who owns stock representing more than ten
percent of the voting power of all classes of stock of the Company or any
parent or subsidiary (a "Ten Percent Employee"), such option price shall
not be less than 110% of such fair market value at the time the Option is
granted; but in no event will such option price be less than the par value
of such Common Shares.
(b) The Committee shall determine the number of Common Shares to be
subject to each Option. The number of Common Shares subject to an
outstanding Option may be reduced on a share-for-share or other appropriate
basis, as determined by the Committee, to the extent that Common Shares
under such Option are used to calculate the cash, Common Shares, Other
Company Securities or property, or other forms of payment, or any
combination thereof, received pursuant to exercise of a Stock Appreciation
Right attached to such Option, or to the extent that any other Award
granted in conjunction with such Option is paid.
(c) The Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution or to a participant's family member (as defined in
General Instruction A.1(a)(5) to Form S-8 under the Securities Act of 1933,
as amended, and any successor thereto) by gift or a qualified domestic
relations order (as defined in the Internal Revenue Code of 1986, as
amended), and shall be exercisable during the grantee's lifetime only by
him. Unless the Committee determines otherwise, the Option shall not be
exercisable for at least six months after the date of grant, unless the
grantee ceases employment or performance of services before the expiration
of such six-month period by reason of his disability as defined in
Paragraph 12 or his death.
(d) The Option shall not be exercisable:
(i) in the case of any Incentive Stock Option granted to a Ten
Percent Employee, after the expiration of five years from the date it is
granted, and, in the case of any other Option, after the expiration of
ten years from the date it is granted. Any Option may be exercised
during such period only at such time or times and in such installments
as the Committee may establish;
(ii) unless payment in full is made for the shares being acquired
thereunder at the time of exercise as set forth in paragraph (e) below;
such payment shall be made in such form (including, but not limited to,
cash, Common Shares, or the surrender of another outstanding Award under
the Plan, or any combination thereof) as the Committee may determine in
its discretion; and
I-3
(iii) unless the person exercising the Option has been, at all
times during the period beginning with the date of the grant of the
Option and ending on the date of such exercise, employed by or otherwise
performing services for the Company, or a corporation, or a parent or
subsidiary of a corporation, substituting or assuming the Option in a
transaction to which Section 424(a) of the Internal Revenue Code of
1986, as amended, or any successor statutory provision thereto (the
"Code"), is applicable, except that
(A) if such person shall cease such employment or performance of
services by reason of his disability as defined in Paragraph 12 or
early, normal or deferred retirement under an approved retirement
program of the Company (or such other plan or arrangement as may be
approved by the Committee, in its discretion, for this purpose) while
holding an Option which has not expired and has not been fully
exercised, such person, at any time within three years (or such
period determined by the Committee) after the date he ceased such
employment or performance of services (but in no event after the
Option has expired), may exercise the Option with respect to any
shares as to which he could have exercised the Option on the date he
ceased such employment or performance of services, or with respect to
such greater number of shares as determined by the Committee;
(B) if any person to whom an Option has been granted shall die
holding an Option which has not expired and has not been fully
exercised, his executors, administrators, heirs or distributees, as
the case may be, may, at any time within one year (or such other
period determined by the Committee) after the date of death (but in
no event after the Option has expired), exercise the Option with
respect to any shares as to which the decedent could have exercised
the Option at the time of his death, or with respect to such greater
number of shares as determined by the Committee; or
(C) if such person shall cease employment or performance of
services while holding an Option which has not expired and has not
been fully exercised, the Committee may determine to allow such
person at any time within the one year (or three months in the case
of an Incentive Stock Option) or such other period determined by the
Committee after the date he ceased such employment or performance of
services (but in no event after the Option has expired), to exercise
the Option with respect to any shares as to which he could have
exercised the Option on the date he ceased such employment or
performance of services, or with respect to such greater number of
shares as determined by the Committee.
(e) Unless otherwise determined by the Committee, payment for shares
being acquired under any Option shall be made (i) in cash (including check,
bank draft, money order or wire transfer of immediately available funds),
(ii) by delivery of outstanding Common Shares with a fair market value on
the date of exercise equal to the aggregate exercise price payable with
respect to the Options' exercise, (iii) by simultaneous sale through a
broker reasonably acceptable to the Committee of shares acquired on
exercise, as permitted under Regulation T of the Federal Reserve Board,
(iv) by authorizing the Company to withhold from issuance a number of
shares issuable upon exercise of the Options which, when multiplied by the
fair market value of a Common Shares on the date of exercise, is equal to
the aggregate exercise price payable with respect to the Options so
exercised or (v) by any combination of the foregoing. Options may also be
exercised upon payment of the exercise price of the shares to be acquired
by delivery of the optionee's promissory note, but only to the extent
specifically approved by and in accordance with the policies of the
Committee.
In the event a grantee elects to pay the exercise price payable with
respect to an Option pursuant to clause (ii) above, (A) only a whole number of
Common Shares (and not fractional Common Shares) may be tendered in payment, (B)
such grantee must present evidence acceptable to the Company that he or she has
owned any such Common Shares tendered in payment of the exercise price (and that
such tendered Common Shares have not been subject to any substantial risk of
forfeiture) for at least six months prior to the date of exercise, and (C)
Common Shares must be delivered to the Company. Delivery for this purpose may,
at the election of the grantee, be made either by (A) physical delivery of the
certificate(s) for all such Common
I-4
Shares tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (B) direction to
the grantee's broker to transfer, by book entry, of such Common Shares from a
brokerage account of the grantee to a brokerage account specified by the
Company. When payment of the exercise price is made by delivery of Common
Shares, the difference, if any, between the aggregate exercise price payable
with respect to the Option being exercised and the fair market value of the
Common Shares tendered in payment (plus any applicable taxes) shall be paid in
cash. No grantee may tender Common Shares having a fair market value exceeding
the aggregate exercise price payable with respect to the Option being exercised
(plus any applicable taxes).
In the event a grantee elects to pay the exercise price payable with
respect to an Option pursuant to clause (iv) above, (A) only a whole number of
share(s) (and not fractional shares) may be withheld in payment and (B) such
grantee must present evidence acceptable to the Company that he or she has owned
a number of Common Shares at least equal to the number of shares to be withheld
in payment of the exercise price (and that such owned Common Shares have not
been subject to any substantial risk of forfeiture) for at least six months
prior to the date of exercise. When payment of the exercise price is made by
withholding of shares, the difference, if any, between the aggregate exercise
price payable with respect to the Option being exercised and the fair market
value of the shares withheld in payment (plus any applicable taxes) shall be
paid in cash. No grantee may authorize the withholding of shares having a fair
market value exceeding the aggregate exercise price payable with respect to the
Option being exercised (plus any applicable taxes). Any withheld shares shall no
longer be issuable under such Option (except pursuant to any Reload Option (as
defined below) with respect to any such withheld shares).
(f) In the case of an Incentive Stock Option, the amount of the
aggregate fair market value of Common Shares (determined at the time of
grant of the Option pursuant to subparagraph 5(a) of the Plan) with respect
to which incentive stock options are exercisable for the first time by an
employee during any calendar year (under all such plans of his employer
corporation and its parent and subsidiary corporations) shall not exceed
$100,000.
(g) It is the intent of the Company that Nonqualified Stock Options
granted under the Plan not be classified as Incentive Stock Options, that
the Incentive Stock Options granted under the Plan be consistent with and
contain or be deemed to contain all provisions required under Section 422
and the other appropriate provisions of the Code and any implementing
regulations (and any successor provisions thereof), and that any
ambiguities in construction shall be interpreted in order to effectuate
such intent.
(h) The Committee may provide (either at the time of grant or exercise
of an Option), in its discretion, for the grant to a grantee who exercises
all or any portion of an Option ("Exercised Options") and who pays all or
part of such exercise price with Common Shares, of an additional Option (a
"Reload Option") for a number of Common Shares equal to the sum (the
"Reload Number") of the number of Common Shares tendered or withheld in
payment of such exercise price for the Exercised Options plus, if so
provided by the Committee, the number of Common Shares, if any, tendered or
withheld by the grantee or withheld by the Company in connection with the
exercise of the Exercised Options to satisfy any federal, state or local
tax withholding requirements. The terms of each Reload Option, including
the date of its expiration and the terms and conditions of its
exercisability and transferability, shall be the same as the terms of the
Exercised Option to which it relates, except that (i) the grant date for
each Reload Option shall be the date of exercise of the Exercised Option to
which it relates and (ii) the exercise price for each Reload Option shall
be the fair market value of the Common Shares on the grant date of the
Reload Option.
6. Stock Appreciation Rights. The Committee may grant Stock Appreciation
Rights either alone, or in conjunction with Stock Options, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter. Each Award
of Stock Appreciation Rights granted under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including,
I-5
but not limited to, restrictions upon the Award of Stock Appreciation Rights or
the Common Shares issuable upon exercise thereof, as the Committee, in its
discretion, shall establish:
(a) The Committee shall determine the number of Common Shares to be
subject to each Award of Stock Appreciation Rights. The number of Common
Shares subject to an outstanding Award of Stock Appreciation Rights may be
reduced on a share-for-share or other appropriate basis, as determined by
the Committee, to the extent that Common Shares under such Award of Stock
Appreciation Rights are used to calculate the cash, Common Shares, Other
Company Securities or property, or other forms of payment, or any
combination thereof, received pursuant to exercise of an Option attached to
such Award of Stock Appreciation Rights, or to the extent that any other
Award granted in conjunction with such Award of Stock Appreciation Rights
is paid.
(b) The Award of Stock Appreciation Rights may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will
or the laws of descent and distribution or to a participant's family member
(as defined in General Instruction A.1(a)(5) to Form S-8 under the
Securities Act of 1933, as amended, and any successor thereto) by gift or a
qualified domestic relations order (as defined in the Internal Revenue Code
of 1986, as amended), and shall be exercisable during the grantee's
lifetime only by him. Unless the Committee determines otherwise, the Award
of Stock Appreciation Rights shall not be exercisable for at least six
months after the date of grant, unless the grantee ceases employment or
performance of services before the expiration of such six-month period by
reason of his disability as defined in Paragraph 12 or his death.
(c) The Award of Stock Appreciation Rights shall not be exercisable:
(i) in the case of any Award of Stock Appreciation Rights which is
attached to an Incentive Stock Option granted to a Ten Percent Employee,
after the expiration of five years from the date it is granted, and, in
the case of any other Award of Stock Appreciation Rights, after the
expiration of ten years from the date it is granted. Any Award of Stock
Appreciation Rights may be exercised during such period only at such
time or times and in such installments as the Committee may establish;
(ii) unless the Option or other Award to which the Award of Stock
Appreciation Rights is attached is at the time exercisable; and
(iii) unless the person exercising the Award of Stock Appreciation
Rights has been, at all times during the period beginning with the date
of the grant thereof and ending on the date of such exercise, employed
by or otherwise performing services for the Company, except that
(A) if such person shall cease such employment or performance of
services by reason of his disability as defined in Paragraph 12 or
early, normal or deferred retirement under an approved retirement
program of the Company (or such other plan or arrangement as may be
approved by the Committee, in its discretion, for this purpose) while
holding an Award of Stock Appreciation Rights which has not expired
and has not been fully exercised, such person may, at any time within
three years (or such other period determined by the Committee) after
the date he ceased such employment or performance of services (but in
no event after the Award of Stock Appreciation Rights has expired),
exercise the Award of Stock Appreciation Rights with respect to any
shares as to which he could have exercised the Award of Stock
Appreciation Rights on the date he ceased such employment or
performance of services, or with respect to such greater number of
shares as determined by the Committee; or
(B) if any person to whom an Award of Stock Appreciation Rights
has been granted shall die holding an Award of Stock Appreciation
Rights which has not expired and has not been fully exercised, his
executors, administrators, heirs or distributees, as the case may be,
may at any time within one year (or such other period determined by
the Committee) after the date of death (but in no event after the
Award of Stock Appreciation Rights has expired), exercise the Award
of Stock Appreciation Rights with respect to any shares as to which
the decedent could have exercised the Award of Stock Appreciation
Rights at the time of his death, or with respect to such greater
number of shares as determined by the Committee.
I-6
(d) An Award of Stock Appreciation Rights shall entitle the holder (or
any person entitled to act under the provisions of subparagraph
6(c)(iii)(B) hereof) to exercise such Award and surrender unexercised the
Option (or other Award), if any, to which the Stock Appreciation Right is
attached (or any portion of such Option or other Award) to the Company and
to receive from the Company in exchange thereof, without payment to the
Company, that number of Common Shares having an aggregate value equal to
(or, in the discretion of the Committee, less than) the excess of the fair
market value of one share, at the time of such exercise, over the exercise
price (or Option Price, as the case may be), times the number of shares
subject to the Award or the Option (or other Award), or portion thereof,
which is so exercised or surrendered, as the case may be. The Committee
shall be entitled in its discretion to elect to settle the obligation
arising out of the exercise of a Stock Appreciation Right by the payment of
cash or Other Company Securities or property, or other forms of payment, or
any combination thereof, as determined by the Committee, equal to the
aggregate value of the Common Shares it would otherwise be obligated to
deliver. Any such election by the Committee shall be made as soon as
practicable after the receipt by the Committee of written notice of the
exercise of the Stock Appreciation Right. The value of a Common Share,
Other Company Securities or property, or other forms of payment determined
by the Committee for this purpose shall be the fair market value thereof on
the last business day next preceding the date of the election to exercise
the Stock Appreciation Right, unless the Committee, in its discretion,
determines otherwise.
(e) A Stock Appreciation Right may provide that it shall be deemed to
have been exercised at the close of business on the business day preceding
the expiration date of the Stock Appreciation Right or of the related
Option (or other Award), or such other date as specified by the Committee,
if at such time such Stock Appreciation Right has a positive value. Such
deemed exercise shall be settled or paid in the same manner as a regular
exercise thereof as provided in subparagraph 6(d) hereof.
(f) No fractional shares may be delivered under this Paragraph 6, but
in lieu thereof a cash or other adjustment shall be made as determined by
the Committee in its discretion.
7. Restricted Stock. Each Award of Restricted Stock under the Plan shall
be evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions as the Committee,
in its discretion, shall establish:
(a) The Committee shall determine the number of Common Shares to be
issued to a participant pursuant to the Award, and the extent, if any, to
which they shall be issued in exchange for cash, other consideration, or
both.
(b) Restricted Stock awarded to a participant in accordance with the
Award shall be subject to the following restrictions until the expiration
of such period as the Committee shall determine, from the date on which the
Award is granted (the "Restricted Period"): (i) a participant to whom an
award of Restricted Stock is made shall be issued, but shall not be
entitled to the delivery of a stock certificate, (ii) unless otherwise
determined by the Committee, certificates representing Restricted Stock
will be held in escrow by the Company on the participant's behalf during
the Restricted Period and will bear an appropriate legend specifying the
applicable restrictions thereon, and the participant will be required to
execute a blank stock power, (iii) the Restricted Stock shall not be
transferable prior to the end of the Restricted Period, (iv) the Restricted
Stock shall be forfeited and the stock certificate shall be returned to the
Company and all rights of the holder of such Restricted Stock to such
shares and as a shareholder shall terminate without further obligation on
the part of the Company if the participant's continuous employment or
performance of services for the Company shall terminate for any reason
prior to the end of the Restricted Period, except as otherwise provided in
subparagraph 7(c), and (v) such other restrictions as determined by the
Committee in its discretion.
(c) If a participant who has been in continuous employment or
performance of services for the Company since the date on which a
Restricted Stock Award was granted to him shall, while in such employment
or performance of services, die, or terminate such employment or
performance of services by reason of disability as defined in Paragraph 12
or by reason of early, normal or deferred retirement under
I-7
an approved retirement program of the Company (or such other plan or
arrangement as may be approved by the Committee in its discretion, for this
purpose) and any of such events shall occur after the date on which the
Award was granted to him and prior to the end of the Restricted Period of
such Award, the Committee may determine to cancel any and all restrictions
on any or all of the Common Shares subject to such Award.
8. Performance Grant. The Award of the Performance Grant ("Performance
Grant") to a participant will entitle him to receive a specified amount
determined by the Committee (the "Actual Value"), if the terms and conditions
specified herein and in the Award are satisfied. Each Award of a Performance
Grant shall be subject to the following terms and conditions, and to such other
terms and conditions, including but not limited to, restrictions upon any cash,
Common Shares, Other Company Securities or property, or other forms of payment,
or any combination thereof, issued in respect of the Performance Grant, as the
Committee, in its discretion, shall establish, and shall be embodied in an
instrument in such form and substance as is determined by the Committee:
(a) The Committee shall determine the value or range of values of a
Performance Grant to be awarded to each participant selected for an Award
and whether or not such a Performance Grant is granted in conjunction with
an Award of Options, Stock Appreciation Rights, Restricted Stock or other
Award, or any combination thereof, under the Plan (which may include, but
need not be limited to, deferred Awards) concurrently or subsequently
granted to the participant (the "Associated Award"). As determined by the
Committee, the maximum value of each Performance Grant (the "Maximum
Value") shall be: (i) an amount fixed by the Committee at the time the
Award is made or amended thereafter, (ii) an amount which varies from time
to time based in whole or in part on the then current value of the Common
Shares, Other Company Securities or property, or other securities or
property, or any combination thereof or (iii) an amount that is
determinable from criteria specified by the Committee. Performance Grants
may be issued in difference classes or series having different names, terms
and conditions. In the case of a Performance Grant awarded in conjunction
with an Associated Award, the Performance Grant may be reduced on an
appropriate basis to the extent that the Associated Award has been
exercised, paid to or otherwise received by the participant, as determined
by the Committee.
(b) The award period ("Award Period") related to any Performance Grant
shall be a period determined by the Committee. At the time each Award is
made, the Committee shall establish performance objectives to be attained
within the Award Period as the means of determining the Actual Value of
such a Performance Grant. The performance objectives shall be based on such
measure or measures of performance, which may include, but need not be
limited to, the performance of the participant, the Company, one or more of
its subsidiaries or one or more of their divisions or units, or any
combination of the foregoing, as the Committee shall determine, and may be
applied on an absolute basis or be relative to industry or other indices,
or any combination thereof. The Actual Value of a Performance Grant shall
be equal to its Maximum Value only if the performance objectives are
attained in full, but the Committee shall specify the manner in which the
Actual Value of Performance Grants shall be determined if the performance
objectives are met in part. Such performance measures, the Actual Value or
the Maximum Value, or any combination thereof, may be adjusted in any
manner by the Committee in its discretion at any time and from time to time
during or as soon as practicable after the Award Period, if it determines
that such performance measures, the Actual Value or the Maximum Value, or
any combination thereof, are not appropriate under the circumstances.
(c) The rights of a participant in Performance Grants awarded to him
shall be provisional and may be canceled or paid in whole or in part, all
as determined by the Committee, if the participant's continuous employment
or performance of services for the Company shall terminate for any reason
prior to the end of the Award Period.
(d) The Committee shall determine whether the conditions of
subparagraph 8(b) or 8(c) hereof have been met and, if so, shall ascertain
the Actual Value of the Performance Grants. If the Performance Grants have
no Actual Value, the Award and such Performance Grants shall be deemed to
have been
I-8
canceled and the Associated Award, if any, may be canceled or permitted to
continue in effect in accordance with its terms. If the Performance Grants
have any Actual Value and:
(i) were not awarded in conjunction with an Associated Award, the
Committee shall cause an amount equal to the Actual Value of the
Performance Grants earned by the participant to be paid to him or his
beneficiary as provided below; or
(ii) were awarded in conjunction with an Associated Award, the
Committee shall determine, in accordance with criteria specified by the
Committee (A) to cancel the Performance Grants, in which event no amount
in respect thereof shall be paid to the participant or his beneficiary,
and the Associated Award may be permitted to continue in effect in
accordance with its terms, (B) to pay the Actual Value of the
Performance Grants to the participant or his beneficiary as provided
below, in which event the Associated Award may be canceled or (C) to pay
to the participant or his beneficiary as provided below, the Actual
Value of only a portion of the Performance Grants, in which event all or
a portion of the Associated Award may be permitted to continue in effect
in accordance with its terms or be canceled, as determined by the
Committee.
Such determination by the Committee shall be made as promptly as
practicable following the end of the Award Period or upon the earlier
termination of employment or performance of services, or at such other time or
times as the Committee shall determine, and shall be made pursuant to criteria
specified by the Committee.
Payment of any amount in respect of the Performance Grants which the
Committee determines to pay as provided above shall be made by the Company as
promptly as practicable after the end of the Award Period or at such other time
or times as the Committee shall determine, and may be made in cash, Common
Shares, Other Company Securities or property, or other forms of payment, or any
combination thereof or in such other manner, as determined by the Committee in
its discretion. Notwithstanding anything in this Paragraph 8 to the contrary,
the Committee may, in its discretion, determine and pay out the Actual Value of
the Performance Grants at any time during the Award Period.
9. Deferral of Compensation. The Committee shall determine whether or not
an Award shall be made in conjunction with deferral of the participant's salary,
bonus or other compensation, or any combination thereof, and whether or not such
deferred amounts may be
(i) forfeited to the Company or to other participants or any
combination thereof, under certain circumstances (which may include, but
need not be limited to, certain types of termination of employment or
performance of services for the Company),
(ii) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures and/or
(iii) credited with income equivalents (which may include, but need
not be limited to, interest, dividends or other rates of return) until the
date or dates of payment of the Award, if any.
10. Deferred Payment of Awards. The Committee may specify that the
payment of all or any portion of cash, Common Shares, Other Company Securities
or property, or any other form of payment, or any combination thereof, under an
Award shall be deferred until a later date. Deferrals shall be for such periods
or until the occurrence of such events, and upon such terms, as the Committee
shall determine in its discretion. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of certain
investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return or any
combination thereof) as may accrue thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents to
be determined by the Committee in its discretion.
11. Amendment or Substitution of Awards under the Plan. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including,
but not limited to, acceleration of the date of exercise of any Award and/or
payments
I-9
thereunder); provided that no such amendment shall adversely affect in a
material manner any right of a participant under the Award without his written
consent, unless the Committee determines in its discretion that there have
occurred or are about to occur significant changes in the participant's
position, duties or responsibilities, or significant changes in economic,
legislative, regulatory, tax, accounting or cost/benefit conditions which are
determined by the Committee in its discretion to have or to be expected to have
a substantial effect on the performance of the Company, or any subsidiary,
affiliate, division or department thereof, on the Plan or on any Award under the
Plan. Notwithstanding any contrary provision, without approval of shareholders,
the Committee may not reprice Options or permit holders of Awards to surrender
outstanding Awards in exchange for the grant of new Awards under the Plan.
12. Disability. For the purposes of this Plan, a participant shall be
deemed to have terminated his employment or performance of services for the
Company and its Affiliates by reason of disability, if the Committee shall
determine that the physical or mental condition of the participant by reason of
which such employment or performance of services terminated was such at that
time as would entitle him to payment of monthly disability benefits under any
Company disability plan. If the participant is not eligible for benefits under
any disability plan of the Company, he shall be deemed to have terminated such
employment or performance of services by reason of disability if the Committee
shall determine that his physical or mental condition would entitle him to
benefits under any Company disability plan if he were eligible therefore.
13. Termination of a Participant. For all purposes under the Plan, the
Committee shall determine whether a participant has terminated employment with,
or the performance of services for, the Company.
14. Dilution and Other Adjustments. In the event of any change in the
outstanding Common Shares of the Company by reason of any stock split, dividend,
split-up, split-off, spin-off, recapitalization, merger, consolidation, rights
offering, reorganization, combination or exchange of shares, a sale by the
Company of all of its assets, any distribution to stockholders other than a
normal cash dividend, or other extraordinary or unusual event, if the Committee
shall determine, in its discretion, that such change equitably requires an
adjustment in the terms of any Award (including, without limitation, the number
and type of consideration subject to any Award), maximum number of awards to any
one participant, or the number of Common Shares available for Awards, such
adjustment may be made by the Committee and shall be final, conclusive and
binding for all purposes of the Plan.
In the event of the proposed dissolution or liquidation of the Company, all
outstanding Awards shall terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, all restrictions on any
outstanding Awards shall lapse and participants shall be entitled to the full
benefit of all such Awards immediately prior to the closing date of such sale or
merger, unless otherwise provided by the Committee.
15. Designation of Beneficiary by Participant. A participant may name a
beneficiary to receive any payment to which he may be entitled in respect of any
Award under the Plan in the event of his death, on a written form to be provided
by and filed with the Committee, and in a manner determined by the Committee in
its discretion. The Committee reserves the right to review and approve
beneficiary designations. A participant may change his beneficiary from time to
time in the same manner, unless such participant has made an irrevocable
designation. Any designation of beneficiary under the Plan (to the extent it is
valid and enforceable under applicable law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Committee in its
discretion. If no designated beneficiary survives the participant and is living
on the date on which any amount becomes payable to such a participant's
beneficiary, such payment will be made to the legal representatives of the
participant's estate, and the term "beneficiary" as used in the Plan shall be
deemed to include such person or persons. If there are any questions as to the
legal right of any beneficiary to receive a distribution under the Plan, the
Committee in its discretion may determine that the amount in question be paid to
the legal representatives of the estate of the participant, in which event the
Company, the Board and the Committee and the members thereof, will have no
further liability to anyone with respect to such amount.
I-10
16. Financial Assistance. If the Committee determines that such action is
advisable, the Company may assist any person to whom an Award has been granted
in obtaining financing from the Company (or under any program of the Company
approved pursuant to applicable law), or from a bank or other third party, on
such terms as are determined by the Committee, and in such amount as is required
to accomplish the purposes of the Plan, including, but not limited to, to permit
the exercise of an Award, the participation therein, and/or the payment of any
taxes in respect thereof. Such assistance may take any form that the Committee
deems appropriate, including, but not limited to, a direct loan from the
Company, a guarantee of the obligation by the Company, or the maintenance by the
Company of deposits with such bank or third party.
17. Miscellaneous Provisions.
(a) No employee or other person shall have any claim or right to be granted
an Award under the Plan. Determinations made by the Committee under the Plan
need not be uniform and may be made selectively among eligible individuals under
the plan, whether or not such eligible individuals are similarly situated.
Neither the Plan nor any action taken hereunder shall be construed as giving any
employee or other person any right to continue to be employed by or perform
services for the Company, and the right to terminate the employment of or
performance of services by any participants at any time and for any reason is
specifically reserved.
(b) No participant or other person shall have any right with respect to the
Plan, the Common Shares reserved for issuance under the Plan or in any Award,
contingent or otherwise, until written evidence of the Award shall have been
delivered to the recipient and all the terms, conditions and provisions of the
Plan and the Award applicable to such recipient (and each person claiming under
or through him) have been met.
(c) Except as may be approved by the Committee, a participant's rights and
interest under the Plan may not be assigned or transferred, hypothecated or
encumbered in whole or in part either directly or by operation of law or
otherwise (except in the event of a participant's death) including, but not by
way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy
or in any other manner; provided, however, that any Option or similar right
(including, but not limited to, a Stock Appreciation Right) offered pursuant to
the Plan shall not be transferable other than by will or the laws of descent and
distribution and shall be exercisable during the participant's lifetime only by
him.
(d) No Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment shall be issued hereunder with
respect to any Award unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, local and foreign
legal, securities exchange and other applicable requirements.
(e) The Company shall have the right to deduct from any payment made under
the Plan any federal, state, local or foreign income or other taxes required by
law to be withheld with respect to such payment. It shall be a condition to the
obligation of the Company to issue Common Shares, Other Company Securities or
property, other securities or property, or other forms of payment, or any
combination thereof, upon exercise, settlement or payment of any Award under the
Plan, that the participant (or any beneficiary or person entitled to act) pay to
the Company, upon its demand, such amount as may be required by the Company for
the purpose of satisfying any liability to withhold federal, state, local or
foreign income or other taxes. If the amount requested is not paid, the Company
may refuse to issue Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment, or any combination thereof.
Notwithstanding anything in the Plan to the contrary, the Committee may, in its
discretion, permit an eligible participant (or any beneficiary or person
entitled to act) to elect to pay a portion or all of the amount requested by the
Company for such taxes with respect to such Award, at such time and in such
manner as the Committee shall deem to be appropriate (including, but not limited
to, by authorizing the Company to withhold, or agreeing to surrender to the
Company on or about the date such tax liability is determinable, Common Shares,
Other Company Securities or property, other securities or property, or other
forms of payment, or any combination thereof, owned by such person or a portion
of such forms of payment that would otherwise be distributed, or have been
distributed, as the case may be, pursuant to such Award to such person, having a
fair market value on the date that the amount of tax to be withheld is
determined equal to the amount of such taxes). Any election that a participant
makes shall be irrevocable.
I-11
(f) The expenses of the Plan shall be borne by the Company.
(g) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and rights to the
payment of Awards shall be no greater than the rights of the Company's general
creditors.
(h) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board or the Committee or its
delegates.
(i) Fair market value in relation to Common Shares, Other Company
Securities or property, other securities or property or other forms of payment
of Awards under the Plan, or any combination thereof, as of any specific time
shall mean such value as determined by the Committee in accordance with
applicable law.
(j) The masculine pronoun includes the feminine and the singular includes
the plural wherever appropriate.
(k) The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding Awards hereunder of any Common
Shares issued pursuant hereto as may be required by Section 13 or 15(d) of the
Exchange Act (or any successor provision) or any other applicable statute, rule
or regulation.
(l) The validity, construction, interpretation, administration and effect
of the Plan, and of its rules and regulations, and rights relating to the Plan
and to Awards granted under the Plan, shall be governed by the substantive laws,
but not the choice of law rules, of the State of Delaware.
18. Amendment and Termination of the Plan. The Board of Directors or the
Committee, without the approval of the stockholders, may amend or terminate the
Plan, except that no amendment shall become effective without prior approval of
the stockholders of the Company if stockholder approval would be required by
applicable law or regulations, including if required for continued compliance
with the performance-based compensation exception of Section 162(m) of the Code,
under the provisions of Section 422 of the Code or any successor thereto or by
any listing requirements of the principal stock exchange on which the Common
Stock is then listed.
19. Plan Termination. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the
Plan; or
(b) ten years from the date the Plan is initially approved and adopted
by the stockholders of the Company; provided, however, that the Board may,
prior to the expiration of such ten-year period, extend the term of the
Plan for an additional period of up to five years for the grant of Awards
other than Incentive Stock Options. No termination of the Plan shall
materially alter or impair any of the rights or obligations of any person,
without his consent, under any Award theretofore granted under the Plan,
except that subsequent to termination of the Plan, the Committee may make
amendments permitted under Paragraph 11.
I-12
[BELDEN CDT LOGO]
PROXY
BELDEN CDT INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2005
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Belden CDT Inc. appoints Kevin L.
Bloomfield and Christopher E. Allen, as proxies, acting jointly or severally and
with full power of substitution, for and in the name of the undersigned to vote
at the Annual Meeting of Stockholders to be held on May 17, 2005, beginning at
11:00 a.m., local time, at the Lewis & Clark Room, 16th Floor, the Saint Louis
Club, Pierre Laclede Center, 7701 Forsyth Blvd., St. Louis, Missouri 63105 and
at any adjournments or postponements thereof, as directed, on the matters set
forth in the accompanying Proxy Statement and on all other matters that may
properly come before the Annual Meeting, including on a motion to adjourn or
postpone the Annual Meeting to another time or place (or both) for the purpose
of soliciting additional proxies.
Signing and dating this proxy card will have the effect of revoking any
proxy card that you signed on an earlier date, and will constitute a revocation
of all previously granted authority to vote for every proposal included on any
proxy card.
THIS PROXY CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO CHOICE IS SPECIFIED AND THE PROXY IS SIGNED AND RETURNED,
THEN THE PROXY WILL BE VOTED "FOR" APPROVAL OF EACH OF PROPOSAL 1 AND 2 AND IN
THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE ANNUAL MEETING.
To Participants in the Belden Communications Company Occupational
Employee Plan and the Belden CDT Inc. Retirement Savings Plan (collectively
"Plan"): The number of shares shown on the reverse side includes shares credited
to the accounts of participants in the Plan. This card therefore will constitute
voting instructions not only for shares held directly by participants outside
the Plan but also for shares held indirectly by participants in the Plan. If you
own shares through the Plan and do not vote, the trustee of the Plan (i.e.,
Prudential Bank & Trust, FSB) will vote your Plan shares in the same proportion
as shares for which instructions from other participants were received under the
Plan.
To Participants in the Belden UK Employee Share Ownership Plan (the "UK
Plan"): The number of shares shown on the reverse side includes shares credited
to the accounts of participants in the UK Plan. This card therefore will
constitute voting instructions not only for shares held directly by participants
outside the UK Plan but also for shares held indirectly by participants in the
UK Plan. If you own shares through the UK Plan and do not vote, the trustee of
the Plan (i.e., Yorkshire Building Society) will not be able to vote your shares
because the terms of the UK Plan bar the trustee from voting uninstructed
shares.
RECEIPT IS HEREBY ACKNOWLEDGED OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND PROXY STATEMENT, EACH DATED APRIL 7, 2005, AND THE ANNUAL
REPORT TO SHAREHOLDERS FOR THE YEAR ENDING DECEMBER 31, 2004.
Comments:
---------------------------------------------
SEE REVERSE SIDE
INSTRUCTIONS FOR VOTING YOUR PROXY
Belden CDT Inc. encourages you to take advantage of a cost-effective,
convenient way to vote your shares. You may vote your proxy 24 hours a day, 7
days a week using either a touch-tone telephone or the Internet. Your telephone
or Internet vote must be received no later than 11:59 p.m. Eastern Time on May
16, 2005, and authorizes the proxies named on the proxy card on the reverse
side to vote these shares in the same manner as if you marked, signed and
returned your proxy card. If you vote by telephone or Internet, do not return
your proxy card by mail.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until
11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have
your proxy card in hand when you call and then follow the instructions.
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before the
cut-off date or meeting date. Have your proxy card in hand when you access the
web site and follow the instructions to obtain your records and to create an
electronic voting instruction form.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we have provided or return it to Belden CDT Inc., c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
Please mark your votes as in this example. [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
PROPOSAL 1: TO ELECT A BOARD OF DIRECTORS FOR THE ENSUING YEAR.
--------------------------------------------------------------------------------
(01) LORNE D. BAIN, (02) LANCE C. BALK, (03) CHRISTOPHER I. BYRNES, (04) BRYAN
C. CRESSEY, (05) C. BAKER CUNNINGHAM, (06) MICHAEL F.O. HARRIS, (07) GLENN
KALNASY, (08) FERDINAND C. KUZNIK, (09) JOHN M. MONTER, (10) BERNARD G. RETHORE
FOR ALL WITHHELD FOR ALL
[ ] [ ]
[ ]
------------------------------------------------
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
--------------------------------------------------------------------------------
PROPOSAL 2: TO APPROVE AN ADDITIONAL 2,500,000 SHARES FOR THE CABLE DESIGN
TECHNOLOGIES CORPORATION 2001 LONG-TERM PERFORMANCE INCENTIVE PLAN
--------------------------------------------------------------------------------
[ ] FOR [ ] AGAINST [ ] ABSTAIN
--------------------------------------------------------------------------------
IN THEIR DISCRETION PROXIES ARE AUTHORIZED TO TRANSACT AND VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
--------------------------------------------------------------------------------
(Please sign exactly as name appears on
your proxy card. Joint owners should
each sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.)
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
------------------------------ ------------------------------------
Number of shares Signature(s) Date
------------------------------------
Signature(s) Date
For comments, please check this box and write them on the back
where indicated / /
YES NO
Please indicate if you plan to attend this meeting / / / /
HOUSEHOLDING ELECTION - Please indicate if you
consent to receive certain future investor
communications in a single package per household / / / /