UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

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

 

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☐Preliminary Proxy Statement

☐Confidential, For Use of the Commission Only (As Permitted by Rule 14a-6(e)(2))

☒Definitive Proxy Statement

☐Definitive Additional Materials

☐Soliciting Material Pursuant to § 240.14a-12

 

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☐Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.  Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

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1 AVX Boulevard    •     Fountain Inn, South Carolina 29644

 

Message from the Chairman of the Board

Dear Fellow Shareholders:

I want to take this opportunity to address you in my new role as Chairman of the Board of AVX Corporation. Recent changes in senior management of the Company allowed for the promotion of a successful AVX vice president who has a long track history of running a significant product group and for me to step in as Chairman of the Board. John Gilbertson’s March 31, 2015 retirement after a long tenure as Chairman of the Board and CEO of AVX capped a wonderful period of growth and financial wellbeing in the Company’s history. We thank John for his tremendous efforts on behalf of all of AVX’s shareholders.

I am confident that John Sarvis, as CEO and President, will continue this tradition and drive AVX to new heights of sales and profit growth. He is supported by a strong management team, that also have long histories of success at AVX.

My role as Chairman of the Board presents me with the opportunity to ensure that the strength of Kyocera Corporation and the other Board members stand ready to support John Sarvis and the AVX management team in their endeavors. On behalf of the AVX Board of Directors, we solicit your support as well.

Regards,

 

Tetsuo Kuba

Chairman of the Board

 

 

The Annual Meeting of Shareholders of AVX Corporation (the “Company”), a Delaware corporation, will be held at the Warwick New York Hotel, 65 West 54th Street, New York, NY 10019 on Wednesday, July 22, 2015, at 10:00 a.m., for the following purposes as described in the accompanying proxy statement:

 

 

 

Only shareholders of record of the Company on May 29, 2015, will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. Please vote in one of the following ways:

 

The Company is providing an Annual Report on Form 10-K to shareholders in lieu of a separate annual report.  Our Annual Report on Form 10-K is also available electronically to shareholders on the Company’s website at www.avx.com.

Whether or not you plan to attend the meeting, you are urged to promptly complete, sign, date and return the enclosed proxy card in the envelope provided (or follow the instructions set forth in the enclosed proxy to vote by telephone or the

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Internet). Returning your proxy card as described above does not deprive you of your right to attend the meeting and to vote your shares in person.  However, in order to vote your shares in person at the meeting, you must be a shareholder of record or hold a valid proxy from your broker permitting you to vote at the meeting. 

 

Greenville, South Carolina
June 5,  2015

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YOUR VOTE IS IMPORTANT

PLEASE COMPLETE, DATE AND SIGN YOUR PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE, OR USE TELEPHONE OR INTERNET VOTING BEFORE THE ANNUAL MEETING.

THE PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K OF AVX CORPORATION IS ALSO AVAILABLE AT WWW.PROXYVOTE.COM.

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TABLE OF CONTENTS

 

 

 

 

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AVX Corporation
1 AVX Boulevard, Fountain Inn, SC 29644

 

PROXY STATEMENT
Annual Meeting of Shareholders
To be held Wednesday, July 22,  2015

 

 

INTRODUCTION

 

This Proxy Statement is furnished to the shareholders of AVX Corporation (“AVX” or the “Company”) in connection with the solicitation on behalf of the Board of Directors (the “Board”) of proxies to be used at the Annual Meeting of Shareholders (as may be adjourned or postponed, the “Annual Meeting”) to be held on Wednesday, July 22, 2015, at 10:00 a.m., at Warwick New York Hotel, 65 West 54th Street, New York, NY 10019, and any adjournment or postponement thereof. The Company expects that this Proxy Statement, with the accompanying Notice of Annual Meeting and form of proxy and the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2015, will be mailed to shareholders on or about June 9, 2015. The Annual Report on Form 10-K for the fiscal year ended March 31, 2015 is also available to shareholders on the Company’s website at www.avx.com.

 

Each share of AVX common stock, par value $0.01 per share (the “Common Stock”), outstanding at the close of business on May 29, 2015, will be entitled to one vote on all matters acted upon at the Annual Meeting. On May 29,  2015,  168,084,918 shares of Common Stock were outstanding.

 

Shares will be voted in accordance with the instructions indicated in a properly executed proxy. In the event that voting instructions are omitted on any such proxy, the shares represented by such proxy will be voted as recommended by the Board.  Shareholders have the right to revoke their proxies at any time prior to a vote being taken by: (i) delivering written notice of revocation before the Annual Meeting to the Corporate Secretary at the Company’s principal offices; (ii) delivering a proxy bearing a later date or time than the proxy being revoked; (iii) resubmitting a vote by telephone or Internet (as explained in the proxy voting instructions attached to the proxy card); or (iv) voting in person at the Annual Meeting. You may attend the Annual Meeting and vote in person if you are a shareholder of record on May 29, 2015. If your shares are held in “street name” by your broker or bank, you may vote your shares in person only if you have a legal proxy from the entity that holds your shares giving you the right to vote the shares. A legal proxy is a written document from your brokerage firm or bank authorizing you to vote the shares it holds in its name. 

 

The presence at the Annual Meeting, in person or by proxy, of shareholders holding in the aggregate a majority of the outstanding shares of the Company’s Common Stock entitled to vote shall constitute a quorum for the transaction of business.  The election of directors shall be determined by a plurality of the votes of shareholders of the Company present in person or represented by proxy and entitled to vote at the Annual Meeting. The ratification of the appointment of PricewaterhouseCoopers, LLP shall be decided by a majority of the votes cast by the holders of the Common Stock present in person or by proxy and entitled to vote at the Annual Meeting. Proxies indicating shareholder abstentions will, in accordance with Delaware law, be counted as represented at the Annual Meeting for purposes of determining whether there is a quorum present. Abstentions will also be counted as a vote cast on any proposal (other than the election of directors) and, accordingly, will have the effect of a vote against the proposal. Shares represented by “broker non-votes” (i.e., shares held by brokers or nominees that are represented at a meeting, but with respect to which the broker or nominee is not empowered to vote on a particular proposal) will be counted for purposes of determining whether there is a quorum, but will not be voted on such matter and will not be counted for purposes of determining the number of votes cast on such matter. 

 

The Company has been informed by the Trustee for the Company’s retirement plans that shares of Common Stock held by the Trustee for such plans will be voted by the Trustee in accordance with instructions received from the participants, and if no instructions are received with respect to any shares, such shares will be voted in the same proportion as shares for which instructions are received from other participants in the plan.

 

At the date of this Proxy Statement, management does not know of any matter to be brought before the Annual Meeting for action other than the matters described in the Notice of Annual Meeting and matters incident thereto.  If any other matters should properly come before the Annual Meeting, the holders of the proxies will vote and act with respect to such matters in accordance with their best judgment. Discretionary authority to do so is conferred by the proxy.

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Holders of our Common Stock are not entitled to dissenters’ rights or appraisal rights with respect to the proposals to be considered at the Annual Meeting.

 

 

PROPOSAL I
ELECTION OF DIRECTORS

 

NOMINATIONS FOR THE BOARD OF DIRECTORS

 

The Board has fixed the size of the Board at nine (9). It is currently divided into three classes elected for staggered three year terms.  Each director holds office until a successor has been duly elected and qualified, or until such director’s death, resignation, or removal in the manner provided in the Company’s Bylaws. The Board believes that the nominees identified below have the industry experience, qualifications, attributes and skills to be effective directors and be elected as directors to serve for the terms indicated.

 

Directors Standing for Election

CLASS II

 

Terms expiring at the Annual Meeting in 2018

 

 

 

Mr. Sarvis was appointed as a Director on April 1, 2015 to serve in place of John Gilbertson who retired effective March 31, 2015 as a Director in Class II and as Chief Executive Officer of the Company. The three persons listed above have been nominated for election by the Board. Unless contrary instructions are given, it is intended that the votes represented by the proxies will be cast FOR the election of each of the three persons listed above as directors. In the event that any of the nominees should become unavailable to stand for election, the Board may designate a substitute. It is intended that all properly executed and returned proxies will be voted FOR such substitute nominee.

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THE BOARD OF DIRECTORS RECOMMENDS

A  VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE.

 

Directors Continuing in Office

 

CLASS I

 

Terms expiring at the Annual Meeting in 2016

 

 

 

 

 

 

 

 

CLASS III

 

Terms expiring at the Annual Meeting in 2017

 

 

 

 

 

 

 

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PROPOSAL II
RATIFICATION OF
APPOINTMENT OF INDEPENDENT ACCOUNTANTS

 

The Audit Committee of the Company’s Board of Directors has appointed PricewaterhouseCoopers LLP (“PwC”), an independent registered public accounting firm, as the independent accountants to examine and audit the accounts of the Company for the fiscal year ending March 31, 2016. Although the Company’s Bylaws do not require that shareholders ratify the appointment of PwC as outside auditors, the Board determined that annual selection of the outside auditors would be submitted as a matter of good corporate governance. In the event that ratification of this selection of independent accountants is not approved by the shareholders, the Audit Committee will reconsider the selection of independent accountants. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of different independent accountants at any time during the year.

 

A representative of PwC is expected to be in attendance at the Annual Meeting and will have an opportunity to make a statement and to respond to appropriate questions from shareholders.

 

See “Report of the Audit Committee – Principal Independent Registered Public Accounting Firm Fees” for information relating to the fees of PwC during fiscal 2014 and fiscal 2015.

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 2016.

 

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Ownership of Securities by Directors, Director Nominees and Executive Officers

 

The Common Stock is the only class of equity securities of the Company outstanding.  As of March 31, 2015, the directors, director nominees and each executive officer currently named in the Summary Compensation Table below, individually, and all directors, director nominees and executive officers of the Company as a group, beneficially owned (i) shares of Common Stock of the Company and (ii) equity securities of Kyocera, as follows:

 

* Less than 1% 

 

 

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The information provided in the above chart as to each director and Named Executive Officer, individually, and all directors and executive officers as a group, is based, in part, on information received from such individuals.

 

Security Ownership of Certain Beneficial Owners

 

Set forth below is a table indicating those persons whom the management of the Company believes to be beneficial owners of more than 5% of the Company’s Common Stock as of March 31, 2015.

 

 

 

 

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors, officers and persons who own more than 10% of the Common Stock, to file reports of ownership and changes in ownership of any class of the Company’s equity securities. To the Company’s knowledge, during the fiscal year ended March 31, 2015, all of its directors, officers and persons who hold more than 10% of the Common Stock complied on a timely basis with all applicable Section 16(a) filing requirements, other than one late report for Kathleen Kelly regarding the exercise of stock options and one late report for Donald B. Christiansen regarding a grant of stock options.

 

Board of Directors – Governance

 

The Board has adopted Corporate Governance Guidelines to assist it in the performance of its duties and the exercise of its responsibilities and in accordance with the listing requirements of the New York Stock Exchange (“NYSE”). The guidelines are available on the Company’s website at www.avx.com in the “Corporate Information – Corporate Governance” section.  The Board has also adopted a Code of Business Conduct and Ethics that applies to all of our directors and employees.  The code is available on the Company’s website at www.avx.com in the “Corporate Information – Corporate Governance” section. In the event of any amendment or waiver of our Code of Business Conduct and Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, such amendment or waiver will be posted on our website.    

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Because a majority of the Company’s shares are owned by Kyocera, the Company is considered a “controlled company” under the applicable rules of the NYSE. Accordingly, the Company is not required to, and does not have a Board of Directors with a majority of independent directors or Nominating/Corporate Governance and Compensation Committees composed entirely of independent directors. Nevertheless, the Board has determined that Messrs. Christiansen, DeCenzo and Stach are independent under NYSE listing standards. In addition to the NYSE’s standards, the Board has determined that an independent director is one who is free from any relationship that would interfere with his or her exercise of independent business judgment, receives no compensation from the Company or its subsidiaries other than director’s fees and is not an affiliate of the Company or its subsidiaries. The AVX/Kyocera Foundation, which may be considered an affiliate of the Company, donated $21,500 to CCU during the fiscal year ended March 31, 2015 and $56,500 during the fiscal year ended March 31, 2014 for educational purposes. The Board considered Mr. DeCenzo’s position at CCU, and has determined that such donations do not impair Mr. DeCenzo’s independence.

 

Board of Directors – Leadership Structure

 

The Board of Directors of AVX Corporation is responsible for overseeing the business, property and affairs of the Company. Members of the Board are kept informed of the Company’s business through discussions with the Chief Executive Officer, participating in presentations regarding the operations made by the business managers, by reviewing materials provided to them and by participating in meetings of the Board and its Committees.

 

Through March 31, 2015, the Board was composed of John S. Gilbertson, who served as Chairman of the Board and Chief Executive Officer of the Company, and eight additional Directors, three of whom are independent. The Board has determined that Messrs. Christiansen, Stach and DeCenzo are independent under the applicable rules of the NYSE. Donald Christiansen, one of the independent directors, has served as Presiding Director since 2008. Effective April 1, 2015, Tetsuo Kuba was appointed as Chairman of the Board. The Chairman conducts the actual Board meetings. The Presiding Director organizes and presides over all executive sessions of the Non-Management Directors, which are those attended solely by independent directors. The other principal responsibilities of the Presiding Director include:

 

 

Effective March 31, 2015, Mr. Gilbertson retired from the Board and effective April 1, 2015, John Sarvis was appointed by the Board in Mr. Gilbertson’s place until the next annual election of directors, which will occur at this annual meeting of stockholders. The Board is composed of qualified and experienced leaders with the ability to provide oversight to the Company. We believe that all directors have demonstrated seasoned leadership and are familiar with Board processes.

 

 The Board believes that there is no single best organizational model that is the most effective in all circumstances and that the shareholders’ interests are best served by allowing the Board to retain the flexibility to determine the optimal organizational structure for the Company at a given time, including who should best serve as Chairman. The members of the Board possess considerable experience and unique knowledge of the challenges and opportunities the Company faces and are in the best position to evaluate the needs of the Company, the risks facing the Company and how best to maximize the capabilities of the directors and management to meet those needs.

 

We believe that at this time with the current management and Board composition, the Company is best served by having one person serve as Chairman of the Board and another person as Chief Executive Officer of the Company. The Board believes that through this leadership structure, John Sarvis is able to draw on his intimate knowledge of the daily operations of the Company and its relationships with customers and employees to provide the Chairman with input in setting the Board’s agenda and properly focusing its discussions.

 

The appointment by the Board of an experienced independent Presiding Director provides additional strength and balance to our Board leadership structure.

 

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Board of Directors – Director Nomination Process

 

The Company’s Corporate Governance Guidelines provide that the Board as a whole is responsible for nominating and considering individuals for election to the Board by the shareholders based on candidates suggested by members of the Board, management and shareholders. As indicated above, the Company has not established a separate Nominating and Governance committee because it is a “controlled company” under the applicable rules of the NYSE. The Board does not currently operate under a formal written charter when discharging its nominating functions. The Company has a policy of including a diverse mix of both men and women from corporate and non-corporate environments in the pool of potential candidates for director nominations, and the Board considers diversity of gender, business, academic and leadership experience as factors in assessing the Board makeup and appropriate skills and characteristics required of Board members.

 

The Board has not adopted specific objective requirements for service on the Board. Instead, the Board will consider various factors in determining whether to nominate an individual for election by the shareholders. Among other things, the Board expects each director to:

 

 

The Board will consider candidates recommended by shareholders in the same manner as other candidates.

 

Shareholders and other interested parties who wish to communicate with the Board (including, in the case of shareholders, in order to recommend or nominate director candidates to the Board), individual Board members, the Chairman of the Board,  the Presiding Director or the Non-Management Directors as a group may do so by either of the following means:

 

 

All questions and concerns will be received and processed by the Corporate Compliance Office. Questions and concerns relating to AVX’s accounting, internal accounting controls or auditing matters will be referred to the Chairman of the Audit Committee. Questions and concerns addressed to the Board will be referred to the Presiding Director. Other questions and concerns will be processed by the Corporate Compliance Office and forwarded to the addressees or distributed at the next scheduled Board meeting, as appropriate.

 

To be timely, a shareholder’s proposal for the recommendation or nomination of directors must be received by the Company in the timeframes described under “Shareholder Proposals” elsewhere in this Proxy Statement. A shareholder’s proposal for nomination must comply with the requirements of the Bylaws of the Company. Among other things, the Bylaws require that a shareholder’s notice of a director nomination must include a representation that the nominee will not have any undisclosed voting arrangements with respect to such nominee’s actions as director and an agreement to complete a nominee questionnaire relating to such nominee’s independence and other information to be included in a proxy statement pursuant to Regulation 14A under the Exchange Act of 1934, as amended or otherwise requested by the Company. Such notice of intent to make a nomination shall be accompanied by the written consent of each nominee to serve as director of the Company if so elected.  

 

Board of Directors – Risk Oversight

 

The Board takes an active role in risk oversight of the Company both as a full Board and through its Committees. Through detailed reviews, discussions and presentations by the heads of the Company’s various businesses, the Board reviews and 

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advises with respect to the Company’s business strategies and financial plans, with attention and focus on the risks to achievement of these strategies and plans. Such risks include those involving the leadership structure, those inherent in the Company’s businesses and compensation programs as well as the risks from external sources such as competitors, the economy and regulatory and legislative developments.

 

These reviews, discussions and presentations are intended to assist the Board and management in its evaluation of the Company’s risk management practices and to promote a culture that actively identifies and manages risk.

 

The Audit Committee meets regularly with Company management with regard to the Company’s financial risk management processes, controls and capabilities and with the Company’s Chief Internal Auditor with regard to significant control matters. In addition, the Audit Committee reviews the Company’s procedures regarding the receipt, retention and treatment of complaints regarding internal accounting, accounting controls or audit matters.

 

The Compensation Committee oversees the Company’s executive compensation arrangements.  The Compensation Committee considers the risks arising from the Company’s overall senior management and other employee compensation policies and practices in connection with administering the Management Incentive Plan and other Employee Benefit Plans.

 

The Special Advisory Committee reviews and approves all material agreements and transactions not covered by such agreements between the Company and related parties. The Special Advisory Committee operates under a written charter which sets forth the policies and procedures for such approvals. In approving any such agreement or transaction pursuant to those procedures, the Special Advisory Committee must determine that, in its judgment, the terms thereof are equivalent to those to which an independent unrelated party would agree at arm’s-length or are otherwise in the best interests of the Company and its shareholders generally. See “Relationship With Kyocera” below for more information.

 

Board of Directors - Meetings Held and Committees

 

The Board held four meetings during the fiscal year ended March 31, 2015. During that period, all of the directors attended at least 75% of the meetings of the Board and meetings of the Committees of the Board on which they served except for Mr. Inamori. The directors are encouraged and expected to attend the Annual Meeting of Shareholders if reasonably possible. All of the directors, except for Mr. Inamori, attended the Company’s Annual Meeting of Shareholders held on July 23, 2014.    

 

As of May 29, 2015,  the Board had the following standing committees and no nominating committee:

 

Executive Committee. The Executive Committee has been delegated authority by the Board to exercise the powers of the Board in matters pertaining to the management of the business. The Executive Committee held no meetings during the fiscal year ended March 31, 2015.  As of March 31, 2015, the members of the Executive Committee were Messrs. Inamori (Chairman), Gilbertson,  replaced by Mr. Sarvis effective April 1, 2015, Kuba, Yamaguchi, and Maeda.

 

Audit Committee. The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act and operates under a written charter adopted by the Board of Directors. The Audit Committee is appointed by the Board of Directors to provide assistance to the Board in fulfilling its oversight responsibility relating to the integrity of the Company’s consolidated financial statements and the financial reporting processes; the systems of internal accounting and financial controls; the annual independent audit of the Company’s consolidated financial statements; the independent registered public accounting firm’s qualifications and independence; the performance of the Company’s internal audit function and independent registered public accounting firm and any other areas of potential financial risks to the Company specified by the Board of Directors. The Audit Committee is also responsible for hiring, retaining and terminating the Company’s independent registered public accounting firm. The Audit Committee met five times during the fiscal year ended March 31, 2015.  

 

The Audit Committee is composed of three members. The members of the Audit Committee are Messrs. Christiansen (Chairman), Stach and DeCenzo. Each member of the Audit Committee is financially literate, knowledgeable and qualified to review financial statements. The Board of Directors has determined that the Company has at least one “audit committee financial expert”, as defined by the SEC, serving on the Audit Committee. The “audit committee financial expert” designated by the Board is Mr. Christiansen. The Board of Directors has determined that all members of the Audit Committee are “independent” under the NYSE audit committee member independence requirements.

 

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Compensation Committee. The Compensation Committee has the full power and authority of the Board with respect to the determination of compensation for all executive officers of the Company. The Compensation Committee, operating under a written charter adopted by the Board of Directors, also has full power and authority over any executive compensation plan approved by the Board for the Company and its subsidiaries, including the issuance of shares of Common Stock, as the Compensation Committee may deem necessary or desirable in accordance with such compensation plans. The Compensation Committee held three meetings during the fiscal year ended March 31, 2015.  As indicated above, the Company is not required to, and does not have, a Compensation Committee composed entirely of independent directors because it is a “controlled company” under the applicable rules of the NYSE. The members of the Compensation Committee are Messrs. Kuba (Chairman), Yamaguchi, Aoki, Stach and DeCenzo. To the extent permitted under Delaware law, the Board or the Compensation Committee may expressly delegate to any individual or group of individuals some or all of the Compensation Committee’s authority to grant awards under the Company’s equity incentive plans, except that no delegation of its duties and responsibilities may be made with respect to awards to executive officers.  The acts of such delegates shall be treated hereunder as acts of the Compensation Committee, and such delegates shall report to the Compensation Committee regarding the delegated duties and responsibilities.  Additional information regarding the Compensation Committee and its processes and procedures for the consideration and determination of executive compensation can be found in the Compensation Discussion and Analysis section in this Proxy Statement.

 

Special Advisory Committee. The Special Advisory Committee is composed of independent directors. The committee is required to review and approve all material agreements and significant transactions not covered by such agreements between the Company and related parties (including any agreements and transactions between the Company and any related party that are or may be within the scope of applicable rules, regulations and guidance of the NYSE and Item 404 of Regulation S-K) and to meet periodically in an executive session without management. The Board has adopted a written charter for the Special Advisory Committee. The Special Advisory Committee held five meetings during the fiscal year ended March 31, 2015.  The members of the Special Advisory Committee are Messrs. Stach (Chairman), DeCenzo and Christiansen.

 

The Board has adopted written charters for the Audit, Compensation, and Special Advisory Committees.  The charters, as amended, are available on the Company’s website at www.avx.com in the “Corporate Information – Corporate Governance” section.

 

Director Compensation

 

The Board determines compensation for all directors. The following table and narrative provides information related to the compensation of directors during fiscal 2015.

 

 

 

 

 

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During the year ended March 31, 2015, each director who was not an employee of the Company or Kyocera was paid an annual director’s fee of $32,500, an attendance fee of $2,700 per Board or committee meeting and reimbursement of travel expenses. The Chairman of the Audit Committee also received an additional $5,500 per year. Each director who was an employee of Kyocera was paid an attendance fee of $2,700 per Board or committee meeting and reimbursement of travel expenses.  In addition, each director who is not an employee of the Company is eligible to receive stock options pursuant to the Non-Employee Directors’ Stock Option Plans, as described below.  

 

AVX feels that it is important for members of the Board to be shareholders of the Company, to have an incentive to help the Company grow and prosper, and to share in that prosperity. 

 

The 2014 Non-Employee Directors’ Stock Option Plan authorizes the issuance of up to 1,000,000 shares of Common Stock, and provides for the grant of an option to purchase 15,000 shares of Common Stock to each director not employed by AVX (a “Non-Employee Director”) as of the date on which a Non-Employee Director is elected to the Board for the first time and every third anniversary thereafter. In addition, options to purchase shares of Common Stock may also be granted from time to time upon prior approval by the Board. The options become exercisable 33 1/3% one year after the date of the grant and an additional 33 1/3% at the end of each of the following two years, provided that in order to exercise the options, the Non-Employee Director must continue to be a director at the date of exercise. However, if such Non-Employee Director’s service terminates due to retirement, death or disability, his options shall thereupon become fully vested and remain outstanding and exercisable for their original term. Options have an exercise price equal to the Fair Market Value (as defined in the plan) of the Common Stock on the date of grant. 

 

The 2014 Restricted Stock Unit Plan (the “2014 RSU Plan”) approved by stockholders at the July 2014 Annual Meeting authorizes the granting of awards in the form of restricted stock units to directors and employees that provides the participants the right to receive shares of Common Stock. The number of shares reserved and available for issuance under the plan is 3,000,000. The RSU Plan is administered by the Compensation Committee of the Board, or by the Board itself. No restricted stock units have yet been awarded under the 2014 RSU Plan.

 

Equity Compensation Plan Information

 

The following table provides information as of March 31, 2015 about the Common Stock that may be issued under all of the Company’s existing equity compensation plans.

 

 

Compensation Committee Interlocks and Insider Participation

 

During the fiscal year ended March 31, 2015, the Compensation Committee was composed of Messrs. Kuba, Yamaguchi, Aoki, Stach and DeCenzo. During the fiscal year ended March 31, 2015, Mr. Kuba was Chairman of the Board of Kyocera, Mr. Yamaguchi was President and Representative Director of Kyocera and Mr. Aoki was a Managing Executive Officer, General Manager and Director of Kyocera. Kyocera owns 121,800,000 shares, or approximately 72%, of the Company’s outstanding Common Stock as of March 31, 2015, and has engaged in a significant number and variety of related company transactions with the Company.  The significant agreements between the Company and Kyocera are described under the caption “Relationship with Kyocera” below. For additional information concerning positions with Kyocera held by executive officers and directors of the Company, see “Proposal I – Election of Directors” above. Except as described above (or in other

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sections of this Proxy Statement indicated), during the fiscal year ended March 31, 2015, no member of the Board or the Compensation Committee and none of our executive officers served as a member of a board of directors or compensation committee of any entity whose executive officers served on the Board or Compensation Committee.

 

Report of the Audit Committee

 

In accordance with its written charter, as adopted by the Board, the Audit Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Company. During the fiscal year ended March 31, 2015, the Audit Committee met five times, and the Audit Committee discussed the interim financial information contained in each quarterly earnings announcement with company management and representatives from the independent registered public accounting firm prior to each public release.

 

In discharging its oversight responsibility as to the audit process, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence.  The Audit Committee also discussed with management and the independent registered public accounting firm the quality and adequacy of the Company’s internal controls. The Audit Committee reviewed with the independent registered public accounting firm its audit plans, audit scope, and identification of audit risks.

 

The Audit Committee reviewed and discussed with the independent registered public accounting firm all matters required to be discussed in accordance with standards adopted by the Public Company Accounting Oversight Board and, with and without management present, discussed and reviewed the results of the independent registered public accounting firm’s examination of the financial statements.

 

The Audit Committee reviewed and discussed the audited financial statements of the Company as of and for the fiscal year ended March 31, 2015, with management and the independent registered public accounting firm. Management has the responsibility for the preparation of the Company’s financial statements, and the independent registered public accounting firm has the responsibility for the examination of those statements.

 

Based on the above-mentioned review and discussions with management and the independent registered public accounting firm, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2015, for filing with the SEC. The Audit Committee also reappointed the independent registered public accounting firm, PricewaterhouseCoopers LLP, for the fiscal year ending March 31, 2016.

 

SUBMITTED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS:

 

Donald B. Christiansen, Chairman of the Audit Committee

Joseph Stach

David DeCenzo 

 

Principal Independent Registered Public Accounting Firm Fees

As reflected in the table below, the Company incurred fees of $4,101,004 and $3,760,448 in fiscal 2014 and 2015, respectively, for services performed by PwC. Of these sums, $3,403,051 in fiscal 2014 and $3,301,882 in fiscal 2015 were for audit and audit related services.  PwC did not perform any financial system consulting services in fiscal 2014 or 2015.

 

 

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The Audit Committee of the Company’s Board of Directors determined that the provision of non-audit services by PwC to the Company during fiscal 2014 and fiscal 2015 was compatible with maintaining the independent registered public accounting firm’s independence.

 

It is the policy of the Audit Committee to pre-approve all audit and permitted non-audit services (and the related fees and terms) to be provided to the Company by the independent registered public accounting firm. The authority to pre-approve non-audit services may be delegated by the Audit Committee to one or more members of the Audit Committee, who shall present any decision to pre-approve an activity to the full Audit Committee at the first meeting following such decision. None of the services described above were approved by the Audit Committee pursuant to the exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X. 

 

Relationship With Kyocera

Relationship With Kyocera

 

Since January 1990, the Company’s business has included transactions with Kyocera.  During the three years ended March 31, 2015, such transactions have involved the purchase of resale inventories, raw materials, supplies, and equipment, the sale of products for resale, raw materials, supplies and equipment, and the payment of commissions and dividends, as set forth in the table below (in thousands):

 

One principal strategic advantage for the Company is its ability to provide a broad product offering to its customers. The inclusion of products manufactured by Kyocera in that product offering is a significant component of this advantage. In addition, the exchange of information with Kyocera relating to the development and manufacture of multi-layer capacitors and various other ceramic products benefits the Company. An adverse change in the Company’s relationship with Kyocera could have a negative impact on the Company’s results of operations. AVX and Kyocera have executed several agreements which govern the foregoing transactions and which are described below.

 

Kyocera notified AVX in February 2014 of its intent, effective April 1, 2015, to market its connector products in Asia using Kyocera’s sales force rather than continuing to have AVX resell such products in Asia. Sales of Kyocera connector products in Asia were $41.3 million, $43.9 million and $47.5 million with operating profit of $2.6 million, $2.7 million and $1.9 million for the fiscal years ended March 31, 2013, March 31, 2014 and March 31, 2015, respectively. 

 

The Special Advisory Committee of the Board, composed of our independent directors (currently Messrs. Stach, DeCenzo, and Christiansen), reviews and approves any material agreements between AVX and Kyocera and any significant transactions between AVX and Kyocera not covered by such agreements. The committee is also responsible for reviewing 

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and approving any other agreements and transactions between the Company and any related party that are or may be within the scope of applicable rules, regulations and guidance of the NYSE and Item 404 of Regulation S-K, if they arise. The Special Advisory Committee operates under a written charter which sets forth the policies and procedures for such approvals. In approving any such agreement or transaction pursuant to those procedures, the Special Advisory Committee must determine that, in its judgment, the terms thereof are equivalent to those to which an independent unrelated party would agree at arm’s-length or are otherwise in the best interests of the Company and its shareholders generally. Each of the agreements described below contains provisions requiring that the terms of any transaction under such agreement be equivalent to those to which an independent unrelated party would agree at arm’s-length. 

 

Products Supply and Distribution Agreement.  Pursuant to the Products Supply and Distribution Agreement (the “Distribution Agreement”) (i) AVX will act as the non-exclusive distributor of certain Kyocera-manufactured products to certain customers in certain territories outside of Japan, and (ii) Kyocera will act as the non-exclusive distributor of certain AVX-manufactured products within Japan.  The Distribution Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least three months prior written notice.

 

Disclosure and Option to License Agreement.  Pursuant to the Disclosure and Option to License Agreement (the “License Agreement”), AVX and Kyocera exchange confidential information relating to the development and manufacture of multi-layered ceramic capacitors and various other ceramic products, as well as the license of technologies in certain circumstances.  The License Agreement has a term of one year with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.

 

Materials Supply Agreement.  Pursuant to the Materials Supply Agreement (the “Supply Agreement”), AVX and Kyocera will from time to time supply the other party with certain raw and semi-processed materials used in the manufacture of capacitors and other electronic components.  The Supply Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.

 

Machinery and Equipment Purchase Agreement.  Pursuant to the Machinery and Equipment Purchase Agreement (the “Machinery Purchase Agreement”), AVX and Kyocera will, from time to time, design and manufacture for the other party certain equipment and machinery of a proprietary and confidential nature used in the manufacture of capacitors and other electronic components. The Machinery Purchase Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

 

Compensation Committee Report

 

The Compensation Committee believes the executive compensation program is appropriate to accomplish the program’s goal of attracting, retaining and motivating highly qualified management professionals. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and based on the review and discussions, the Compensation Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year and March 31, 2015.

 

SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:

 

Tetsuo Kuba, Chairman of the Compensation Committee

Goro Yamaguchi

Shoichi Aoki
Joseph Stach

David DeCenzo

 

Compensation Discussion and Analysis

 

The Company’s executive compensation program is designed to enable the Company to attract, retain and motivate highly qualified management professionals who are encouraged to work as a team to accomplish the Company’s goals and objectives.  The Company’s compensation philosophy is to directly align executive compensation with the financial performance of the organization. The Company believes that the relationship between executive compensation and Company performance will create a benefit for all shareholders.

 

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The executive compensation program has been developed by the Compensation Committee using various factors over time, although the Committee does not set compensation levels based on any particular benchmarking against a peer group.  No outside consultant review of executive compensation was performed during the last three fiscal years. The Chief Executive Officer has historically played a significant role in the recommendation of the amounts of base salary, salary adjustments, incentive compensation and equity-based compensation to be paid to other members of executive management. The key elements of the executive compensation program are base salary, annual incentive bonus and stock options and other stock awards, in addition to those benefits provided under the Company’s retirement and deferred compensation plans.

 

The Compensation Committee reviews and approves each element of the Company’s executive compensation program and periodically assesses the effectiveness of the program as a whole. The program covers the Chief Executive Officer, other Named Executive Officers (as defined below), and other designated Corporate Officers of the Company. Specifically, the Committee approves the salaries of all Named Executive Officers, cash awards under the Company’s 2014 Management Incentive Plan (“MIP”), the grant of stock options under the Stock Option Plans, the grant of restricted stock units under the 2014 RSU Plan, and the provision of any significant special benefits or perquisites to the Named Executive Officers. Each component of compensation for them, including those established for fiscal 2015, is set on a discretionary, not formulaic, basis taking into account a subjective assessment of the individual’s overall responsibilities and performance rather than specific corporate performance goals for all Named Executive Officers.

 

 Base Salary Program

The base salary program is, in general and for fiscal 2015 in particular, intended to provide base salary levels that are externally competitive and internally equitable, and to reflect each individual’s sustained performance and cumulative contribution to the Company. Each of the other senior management’s individual performance is reviewed by the Chief Executive Officer to arrive at annual merit increase recommendations taking into account the results of operations for the Officer’s area of responsibility. These merit increase recommendations for the Named Executive Officers are then reviewed by the Compensation Committee for reasonableness based on general economic factors, such as increases in the cost of living.  The Chief Executive Officer’s base salary and merit increases from year to year are established by the Compensation Committee taking these same considerations into account. The salary increases for the Named Executive Officers effective April 1, 2014 took into account the Company’s operating performance in addition to the factors noted above.

 

Annual Cash Incentives - Management Incentive Plan

The MIP is intended to provide the Named Executive Officers and other senior management incentive to continue and increase their efforts with respect to, and remain in the employ of, the Company. Through fiscal 2015, the MIP provides for annual cash incentive compensation based on the Company’s pre-tax financial results and a subjective analysis of each person’s individual performance. Bonus awards are generally paid under the MIP during the summer following each fiscal year end if the Company’s financial results, excluding special, unusual, restructuring or extraordinary items, exceed 90% of a pre-determined annual profit target. The annual pre-tax profit target is established by the Compensation Committee. The target profits are typically based on improving on the prior year’s actual results taking into account general economic conditions.  For the fiscal year ended March 31, 2013, 87% of the pre-tax profit target of $175 million was achieved after taking into account the special environmental charge and limited bonus awards were earned under the MIP. For the fiscal year ended March 31, 2014, the pre-tax profit target of $152 million was exceeded by 7% and limited bonus awards were earned under the MIP. For the fiscal year ended March 31, 2015, the pre-tax profit target of $157 million was exceeded by 39% and full bonus awards were earned.

 

The bonus awards for the Chief Executive Officer are determined as a percentage of salary (up to 150% of base salary) based on the Company’s financial results related to target profits and are paid currently in the summer when they are determined. The other Named Executive Officers and other Corporate Officers’ individual bonuses are determined by the Chief Executive Officer based on a subjective evaluation of each person’s annual performance. Through fiscal 2015, these bonuses were derived from a pool determined as a percentage of combined named Executive Officers and other Corporate Officers’ salaries (up to 100% of combined base salaries) based on the Company’s financial results related to target profits. Through fiscal year 2014, these bonuses were paid 75% currently in the summer when they were determined and 25% of the bonuses were earned and paid at the end of the following fiscal year, provided the officer was employed by the Company at the end of the fiscal year.  Starting with fiscal year 2015, the other Corporate Officer bonuses are to be paid currently in the summer at the time they are determined.  

 

 

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Long-Term Equity Incentives

 

The Stock Option Plans are designed to reward Named Executive Officers, senior managers, and other key employees directly for increases in the long-term price of the Common Stock. The Stock Option Plans directly link the compensation of such officers, senior managers, and key employees to gains by the shareholders and encourages adoption of a strong stakeholder orientation in their work. 

The Compensation Committee approves awards generally following each fiscal year end, but will consider grants at other times of the year if deemed necessary. The Chief Executive Officer recommends to the Committee the potential recipients and the number of awards for each other key employee’s grant on a discretionary basis generally based on a subjective evaluation of that individual’s responsibilities and performance. The Chief Executive Officer’s awards are established from year to year (including fiscal 2015) by the Compensation Committee taking these same considerations into account. The Committee reviews and approves the final awards.    

 

Stock Option Plans

 

The stock option grants in fiscal 2015 were generally consistent, for each employee and in total, with the prior year grant awards. The grant price is the fair market value on the date of grant approval, which is defined in the plans as the closing price on that date. The Company does not have any program or practice to time option grants to take advantage of the release of material, non-public information. The vesting feature of the option awards is intended to address and mitigate the risk associated with employees giving undue attention to short-term business goals.

 

Restricted Stock Unit Plan

 

The 2014 RSU Plan approved by stockholders at the July 2014 Annual Meeting authorizes the granting of awards in the form of restricted stock units to Directors and employees that provide the participants the right to receive shares of Common Stock. The number of shares reserved and available for issuance under the plan is 3,000,000. The RSU Plan is administered by the Compensation Committee of the Board, or by the Board itself. No restricted stock units have yet been awarded under the 2014 RSU Plan.

 

Family Income Assurance Plan

The Company has in effect a Family Income Assurance Plan for officers. Coverage under this Company self-insured plan provides that, in the event of the death of an officer while employed by the Company, the officer’s surviving spouse, or estate, is entitled to receive the equivalent of two years base salary during the following 24 months.

 

Retirement and Other Benefits

Retirement, medical benefits and Board approved discretionary cash awards for the Named Executive Officers and other senior management are largely the same as those provided to the general salaried employee population applicable to each geographic region. The AVX Nonqualified Supplemental Retirement Plan was established to provide certain U.S. based senior management with supplemental retirement benefits, primarily to promote tax efficiency and replacement of benefit opportunities lost due to regulatory limits. Amounts contributed to this plan’s separate trust earn market-based returns depending upon the investment choices made by the participant. The investment choices are generally the same as available under the AVX Corporation Retirement Plan.

 

Miscellaneous benefits offered to officers and other senior management are designed to provide a safety net of protection against the financial catastrophes that can result from liability suits, illness, disability or death.

 

Chief Executive Officer Compensation

In addition to participation in the executive compensation programs described above, Mr. Gilbertson had an employment agreement that provides for a two-year advisory period upon retirement from the Company in order to assist with Chief Executive Officer transition issues. As noted above, Mr. Gilbertson retired as Chairman of the Board and CEO effective as of March 31, 2015. During the advisory period under his employment agreement,  which began on April 1, 2015, Mr. Gilbertson will receive total advisory payments equal to two times the amount of his base salary in effect on the last day of his full time employment. Such payments shall commence six months following his retirement and be paid thereafter in 18 equal

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monthly installments through the end of the advisory period. If Mr. Gilbertson dies prior to or during the advisory period, his heirs will be entitled to the payments he would have received.

 

In addition, in connection with Mr. Gilbertson’s retirement and in recognition of his many years of dedicated service, on March 31, 2015, the Compensation Committee awarded Mr. Gilbertson a special bonus of $1,085,000.

 

Tax and Accounting Considerations 

The accounting and tax treatment of compensation generally has not been a factor in determining the amounts or types of compensation for our executive officers. Section 162(m) of the Internal Revenue Code (the “Code”) generally disallows a tax deduction to public companies for some forms of compensation over $1 million paid to executive officers unless certain conditions are met. Certain compensation, including qualified performance-based compensation, will not be subject to the deduction limit if certain requirements are met. We intend to use our best efforts to structure future compensation so that executive compensation paid by the Company is fully deductible in accordance with Section 162(m) of the Code. However, the Compensation Committee reserves the right to approve compensation that may prove not to be deductible when it believes such payments are appropriate and in the best interests of our shareholders, after taking into consideration changing business conditions and the performance of our employees.

 

EXECUTIVE COMPENSATION

 

The following table shows cash compensation paid and certain other compensation paid or accrued by the Company for the last three fiscal years to each of the Company’s Chief Executive Officer, Chief Financial Officer and the next three most highly compensated executive officers (“Named Executive Officers”) in all capacities in which they served.

 

Summary Compensation Table

Fiscal Year Ended March 31, 2015

 

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The investments in the Supplemental Plan have no above-market or preferential earnings. See the Nonqualified Deferred Compensation table and related narrative herein for information related to the Supplemental Plan.

 

Also reflects the value of automobile allowances and Company contributions to group life, disability, or excess liability insurance programs, respectively, as follows for fiscal 2015: John S. Gilbertson - $24,000 and $30,035; Peter Venuto - $10,200 and $5,706;  Keith Thomas - $10,200 and $5,075; Kurt Cummings - $12,000 and $4,621; and John Lawing -

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$12,000 and $5,211. The Company also provides the Named Executive Officers with certain medical benefits generally available to all salaried employees. 

 

 

 

 

The following table sets forth information regarding grants of plan-based awards, including bonus opportunities under the MIP and options to acquire shares of Common Stock, granted to the Named Executive Officers during fiscal 2015.

 

Grants of Plan-Based Awards

Fiscal Year Ended March 31, 2015

 

 

 

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The following tables set forth information regarding unexercised options, both vested and unvested, for each Named Executive Officer outstanding at March 31, 2015. The Named Executive Officers do not hold any stock awards.

 

Outstanding Equity Awards at Fiscal Year Ended March 31, 2015

 

 

 

 

 

 

 

 

 

All option awards vest 25% on each of the first four anniversaries of the date of grant.

The following table sets forth information with respect to options exercised and the aggregate dollar value realized upon exercise of the options during fiscal 2015 by the Named Executive Officers. The value realized on exercise reflects the excess of the fair market value of the shares at the time of exercise over the exercise price of the options.

Option Exercises

Fiscal Year Ended March 31, 2015

 

 

 

 

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The following table and narrative provides information related to the Company’s Supplemental Plan for fiscal 2015.

 

Nonqualified Deferred Compensation

Fiscal Year Ended March 31, 2015

 

 

   

Under the Supplemental Plan,  the participants select among the various investment options that are also currently available to employees of the Company participating in the Retirement Plan. The value of the participants’ balance fluctuates based on the performance of the investments. The market value of the trust is included as an asset and a liability on the Company’s Consolidated Balance Sheet as of March 31, 2015 as disclosed  in the Annual Report on Form 10-K for the fiscal year ended March 31, 2015 because the trust’s assets are available to the Company’s general creditors in the event of the Company’s insolvency.

 

Additional Plan information is detailed as follows:

 

Deferred Compensation Contribution

A participant may elect to defer all or a portion of his eligible compensation otherwise payable by the Company to such participant. The participant can choose to have his deferrals credited to his Retirement Account and/or an In-Service Account. The deferred amount will be withheld from each paycheck throughout the year. 

 

Company Matching Contribution

On an annual basis, the Company will match participant contributions equal to 100% of the first 3% of the amount that is deferred in the Plan. To receive any matching contributions, a participant must have received the maximum matching contribution available under the AVX Retirement Plan. A participant’s eligible compensation for the purposes of receiving a Company Matching Contribution in the Plan cannot exceed the annual dollar limit established by the Plan Administrator. 

 

Non-discretionary Contribution

The Company will make an annual contribution equal to 5% of eligible compensation between $260,000 (i.e., the IRS Compensation Limit for 2014) and $600,000.

 

Discretionary Contribution

The Company may make an annual contribution between 0% - 5% of eligible compensation between $260,000 (i.e., the IRS Compensation Limit for 2014) and $600,000. The contribution amount is subject to approval by the Company’s Board of Directors.

 

Vesting

Each participant shall be fully vested and have a non-forfeitable interest in his account.

 

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Payment of Benefits

A participant’s Retirement Account balance shall be payable to the participant or beneficiary upon the earlier of such participant’s separation from service, disability or death in a lump-sum payment or in installments over a period not to exceed 10 years, as selected by the participant. A participant’s In-Service Account balance will be paid to the participant in a single lump-sum on a date previously elected by the participant.

 

Potential Payments Upon Termination

 

The following discussion summarizes the value of payments and benefits that (i) the continuing Named Executive Officers would be entitled to receive assuming that a termination of employment under various circumstances had occurred on March 31, 2015 and (ii) Mr. Gilbertson received in connection with his retirement effective as of March 31, 2015.

 

In the event of a termination of employment due to death, disability or retirement, all outstanding stock options held by the Named Executive Officers would become fully vested. The intrinsic value of the stock options that would become vested upon such termination (calculated based on the excess of the fair market value of the underlying shares as of March 31, 2015 over the exercise price of the options) is as follows: Mr. Cummings, $133,520; Mr. Lawing, $133,015; Mr. Venuto, $117,750; and Mr. Thomas, $71,815. In the event of a termination of employment for any reason, the Named Executive Officers would be entitled to a payout of their vested balance under the Company’s Supplemental Plan, which amounts are reflected in the Nonqualified Deferred Compensation table.  In the event of the death of a Named Executive Officer while actively employed, the person’s spouse or estate would continue to receive that person’s base salary for the ensuing two years.   

 

Mr. Gilbertson retired as Chairman of the Board and CEO effective as of March 31, 2015.  Pursuant to his employment agreement, Mr. Gilbertson will receive during a two year advisory period which began on April 1, 2015, total payments equal to two times the amount of his base salary in effect on the last day of his full time employment, or approximately $1,914,314 in the aggregate. Such payments shall commence six months following his retirement and be paid thereafter in 18 equal monthly installments through the end of the advisory period. In addition, in connection with Mr. Gilbertson’s retirement and in recognition of his many years of dedicated service, on March 31, 2015, the Compensation Committee awarded Mr. Gilbertson a special bonus of $1,085,000. Also, in connection with his retirement, all unvested stock options held by Mr. Gilbertson became fully vested. The intrinsic value of such stock options (calculated based on the excess of the fair market value of the underlying shares as of March 31, 2015 over the exercise price of the options) was $490,000.

 

Shareholder Proposals

 

If any shareholder intends to present a proposal to the Company for inclusion in its proxy statement relating to the annual meeting of shareholders expected to be held in July 2016 or wishes to recommend nominees to the Board, such proposal, in writing and addressed to the Corporate Secretary, must be received by the Company no later than February 5, 2016.

 

In general, in order to be considered timely under the Bylaws of the Company, shareholder proposals intended to be presented at an annual shareholders meeting, including proposals for the nomination of directors, must be received by the Company no earlier than April 23, 2016 and no later than May 23, 2016 (not earlier than 90 days nor later than 60 days prior  to the anniversary of the preceding year’s annual meeting of shareholders); provided, however, in the event that the date of the annual meeting is advanced more than 30 days prior to such anniversary date or delayed more than 60 days after such anniversary date then to be timely such notice must be received by the Company no later than the later of 70 days prior to the date of the meeting or the 10th day following the day on which public announcement of the date of the meeting was made.

 

Proxy Solicitation

 

The entire cost of this solicitation will be borne by the Company, including reimbursement of banks, brokerage firms, custodians, nominees and fiduciaries for their reasonable expenses in sending proxy materials to the beneficial owners of the Common Stock. Solicitation will primarily be made by mail, but proxies may be solicited personally by the Company’s officers, directors or employees, by telephone or by facsimile. The officers, directors or employees who may participate in the solicitation of proxies will not receive any additional compensation for such solicitation. The costs and expenditures in connection with the solicitation of security holders are only those normally expended for a solicitation for an election of Directors in the absence of a contest.

 

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The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments filed with or furnished to the SEC pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act are available free of charge on the Company’s website at www.avx.com as soon as reasonably practicable after being filed with the SEC.  To view the reports from the Company’s website, go to “Corporate Information,” then “Investor Relations,” then “SEC Filings.” A copy of any such report is available, without charge, upon written request directed to our Secretary at the corporate address set forth above.

 

 

By order of the Board,

                           

Kurt Cummings

Corporate Secretary