|
|
 | | | |
- close
- close
- close
- close
Molex DEF 14A 2009 Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
MOLEX INCORPORATED
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
Table of Contents
MOLEX
INCORPORATED
2222 Wellington
Court
Lisle, Illinois
60532
Dear Stockholders:
We will hold the annual meeting of Molex Incorporated
stockholders on Friday, October 30, 2009 at
10:00 a.m., Central time, at our corporate headquarters at
2222 Wellington Court, Lisle, Illinois 60532.
The purpose of the annual meeting is to consider and take action
on the following matters:
1. The election of five Class I directors nominated by
Molex’s Board of Directors for a term of three years;
2. The ratification of the selection of Ernst &
Young LLP as Molex’s independent auditors for the fiscal
year ending June 30, 2010; and
3. Any other business that properly comes before the
meeting or any adjournments or postponements thereof.
The items of business listed above are more fully described in
the Proxy Statement accompanying this Notice. Stockholders of
record as of the close of business on September 8, 2009 are
entitled to vote at the annual meeting or any adjournments or
postponements thereof.
Your vote is important. Whether or not you plan to attend the
annual meeting in person, it is important that your shares be
represented and voted. You may vote via the Internet, telephone
or mail before the annual meeting or in person at the annual
meeting.
By Order of the Board of Directors
Mark R. Pacioni
Secretary
September 10, 2009
Lisle, Illinois
Table of Contents
Table of Contents
MOLEX
INCORPORATED
2222 Wellington
Court
Lisle, Illinois 60532
PROXY STATEMENT
INFORMATION
CONCERNING VOTING AND SOLICITATION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Molex
Incorporated (“Molex” or the “Company”), a
Delaware corporation, for use at the annual meeting of
stockholders to be held on Friday, October 30, 2009, at
10:00 a.m., Central time, or at any postponements or
adjournments thereof, for the purposes discussed in this Proxy
Statement and in the accompanying Notice of Annual Meeting of
Stockholders and for any business properly brought before the
annual meeting. Proxies are solicited to give all stockholders
of record an opportunity to vote on matters properly presented
at the annual meeting, which will be held at our corporate
headquarters at 2222 Wellington Court, Lisle, Illinois 60532.
In accordance with rules adopted by the Securities and Exchange
Commission (the “SEC”), we now furnish to our
stockholders proxy materials, including our Annual Report to
Stockholders, on the Internet. We will begin distributing a
Notice of Internet Availability of Proxy Materials (the
“Notice of Internet Availability”) to our stockholders
of record and beneficial owners on or about September 10,
2009. The Notice of Internet Availability contains instructions
on how to access this Proxy Statement and our 2009 Annual Report
to Stockholders and how to vote. If you receive a Notice of
Internet Availability, you will not receive a printed copy of
the proxy materials unless you specifically request them, which
you may do by following the instructions included in the Notice
of Internet Availability.
You are entitled to vote at the annual meeting if you were a
stockholder of record of Molex voting stock as of the close of
business on September 8, 2009. Your shares may be voted at
the annual meeting only if you are present in person or
represented by a valid proxy.
Whether you hold shares directly as a stockholder of record or
beneficially in street name, you may direct how your shares are
voted without attending the meeting. If you are a stockholder of
record, you may vote by submitting a proxy. If you hold shares
beneficially in street name, you may vote by submitting voting
instructions to your broker, trustee or nominee. For directions
on how to vote, please refer to the instructions below and those
on the Notice of Internet Availability, proxy card or voting
instruction form provided.
By Internet. Stockholders of record may submit
proxies over the Internet by following the instructions on the
Notice of Internet Availability or, if printed copies of the
proxy materials were received, the instructions on the printed
proxy card. Most beneficial stockholders may vote by accessing
the website specified on the voting instruction forms provided
by their brokers, trustees or nominees. Please check your voting
instruction form for Internet voting availability. Voting
instructions must be received by 11:59 p.m., Eastern time,
October 29, 2009.
By Telephone. Stockholders of record may
submit proxies using any touch-tone telephone from within the
United States by following the instructions regarding accessing
a copy of the proxy statement on the Notice of Internet
Availability or, if printed copies of the proxy materials were
received, the instructions on the printed proxy card. Most
beneficial owners may vote using any touch-tone telephone from
within the United States by calling the number specified on the
voting instruction
Table of Contents
forms provided by their brokers, trustees or nominees. Voting
instructions must be received by 11:59 p.m., Eastern time,
October 29, 2009.
By Mail. Stockholders of record may submit
proxies by mail by requesting printed proxy cards and
completing, signing and dating the printed proxy cards and
mailing them in the accompanying pre-addressed envelopes.
Beneficial owners may vote by completing, signing and dating the
voting instruction forms provided and mailing them in the
accompanying pre-addressed envelopes.
In Person. Stockholders of record may also
vote in person at the annual meeting. We will provide a ballot
to anyone who requests one at the meeting. Shares held in your
name as the stockholder of record may be voted on that ballot.
Shares held beneficially in street name may be voted on a ballot
only if you bring a legal proxy from the broker, trustee or
nominee that holds your shares, giving you the right to vote the
shares. Even if you plan to attend the annual meeting, we
recommend that you also submit your proxy or voting instruction
form as described below so that your vote will be counted if you
later decide not to attend the meeting.
Molex is incorporated under Delaware law, which specifically
permits electronically transmitted proxies, provided that each
such proxy contains or is submitted with information from which
the inspector of election can determine that such proxy was
authorized by the stockholder. (Delaware General Corporation
Law, Section 212(c).) The electronic voting procedures
provided for the annual meeting are designed to authenticate
each stockholder by use of a control number to allow
stockholders to vote their shares and confirm that their
instructions have been properly recorded.
If you submit a proxy and do not specify how you want your
shares to be voted, your shares will be voted by the named proxy
holders (i) “For” the election of all of the
director nominees and (ii) “For” the ratification
of the selection of Ernst & Young LLP as our
independent auditors for the year ending June 30, 2010.
In their discretion, the named proxy holders are authorized to
vote on any other matters that may properly come before the
annual meeting and at any postponements or adjournments thereof.
The Board of Directors knows of no other items of business that
will be presented for consideration at the annual meeting other
than those described in this Proxy Statement. In addition, no
stockholder proposal or nomination was received by the
applicable deadlines, so no such matters may be brought to a
vote at the annual meeting.
If you vote by proxy, you may revoke that proxy at any time
before it is voted at the annual meeting. Stockholders of record
may revoke a proxy by sending to our Secretary, at 2222
Wellington Court, Lisle, Illinois 60532, a written notice of
revocation or a duly executed proxy bearing a later date or by
attending the annual meeting in person and voting in person. If
your shares are held in the name of a bank, broker or other
holder of record, you may change your vote by submitting new
voting instructions to your bank, broker or other holder of
record.
You are entitled to attend the annual meeting only if you were a
Molex stockholder as of the close of business on
September 8, 2009 or hold a valid proxy for the annual
meeting. You should be prepared to present photo identification
for admittance. In addition, if you are a stockholder of record,
your ownership as of the record date will be verified prior to
admittance into the meeting. If you are not a stockholder of
record but hold shares through a broker, trustee, or nominee,
you must provide proof of beneficial ownership as of the record
date, such as an account statement or similar evidence of
ownership. If you do not provide photo identification and comply
with the other procedures outlined above, you will not be
admitted. Cameras, recording equipment, electronic devices,
large bags, briefcases or packages will not be permitted in the
annual meeting. For directions to the annual meeting, please
call 630.527.4447.
Table of Contents
We have three classes of common stock: Common Stock, par value
$.05 per share (“Common Stock”), Class A Common
Stock, par value $.05 per share (“Class A Common
Stock”), and Class B Common Stock, par value $.05 per
share (“Class B Common Stock”).
The holders of Common Stock and Class B Common Stock are
entitled to one vote per share upon each matter submitted to the
vote of the stockholders and, subject to the conditions
summarized below, vote separately as a class as to all matters
except the election of directors. With respect to the election
of directors, the holders of Common Stock and Class B
Common Stock vote together as a class. As of the record date,
Frederick A. Krehbiel, John H. Krehbiel, Jr. and Fred L.
Krehbiel control the vote of approximately 96% of Class B
Common Stock. As a result, regardless of the vote of any other
Molex stockholder, they generally have control over the vote
relating to all matters other than the election of directors,
including Item 2, the ratification of the selection of
Molex’s independent auditors.
The right of Class B Common Stock holders to vote
separately as a class is subject to applicable law and exists
for so long as at least 50% of the authorized shares of the
Class B Common Stock are outstanding. As of
September 8, 2009, more than 50% of the authorized shares
of Class B Common Stock were outstanding.
The holders of Class A Common Stock have the same
liquidation rights and the same rights and preferences regarding
dividends as the holders of Common Stock or Class B Common
Stock. However, the holders of Class A Common Stock have no
voting rights except as otherwise required by law or under
certain circumstances. For example, under Delaware law, any
amendments to our Certificate of Incorporation changing the
number of authorized shares of any class, changing the par value
of the shares of any class, or altering or changing the powers,
preferences, or special rights of the shares of any class so as
to adversely affect them, including Class A Common Stock,
would require the separate approval of the class so affected, as
well as the approval of all classes entitled to vote thereon,
voting together.
Class A Common Stock would automatically convert into
Common Stock on a share-for-share basis any time upon the good
faith determination by the Board of Directors that either of the
following events has occurred: (i) the aggregate number of
outstanding shares of Common Stock and Class B Common Stock
together is less than 10% of the aggregate number of outstanding
shares of Common Stock, Class B Common Stock and
Class A Common Stock together; or (ii) any person or
group, other than one or more members of the Krehbiel family, as
defined in our Certificate of Incorporation, becomes or is the
beneficial owner of a majority of the outstanding shares of
Common Stock.
As of the close of business on September 8, 2009 there were
outstanding:
95,560,076 shares of Common Stock
77,989,270 shares of Class A Common Stock
94,255 shares of Class B Common Stock
A majority of the outstanding shares of each of Common Stock and
Class B Common Stock entitled to vote will constitute a
quorum at the meeting.
Table of Contents
All votes will be tabulated by the inspector of election
appointed for the annual meeting, who will separately tabulate
affirmative and negative votes, abstentions and broker
non-votes. Shares held by persons attending the annual meeting
but not voting, shares represented by proxies that reflect
abstentions as to a particular proposal and broker non-votes
will be counted as present for purposes of determining a quorum.
Our directors are elected by a plurality of the votes cast by
the holders of Common Stock and Class B Common Stock voting
together as a class. This means the director nominees who
receive the largest number of properly cast “for”
votes will be elected as directors. Abstentions and withheld
votes will have no effect on the result of the votes on the
election of directors.
All other proposals must be approved separately by a majority of
the shares of Common Stock voting as a class and the majority of
the shares of Class B Common Stock voting as a class.
Abstentions will have the same effect as votes against the
proposal.
If you are a stockholder of record and do not submit your vote
by proxy or vote in person at the annual meeting, your shares
will not be voted. However, if you hold shares beneficially in
street name, the result may be different. If you do not return
the voting instruction form, your broker, trustee or nominee may
vote your shares in certain circumstances and on certain
proposals. The NASDAQ Global Select Market (“NASDAQ”)
rules permit brokers to vote their clients’ shares in their
own discretion on the election of directors and on Item 2
if they have not received instructions from their clients. When
a broker votes a client’s shares on some but not all of the
proposals at a meeting, the missing votes are referred to as
“broker non-votes.” Those shares will be included in
determining the presence of a quorum at the meeting, but are not
considered “present” for purposes of voting on
non-discretionary matters.
All expenses for soliciting proxies will be paid by Molex, which
has retained Georgeson Inc. (“Georgeson”), 199 Water
Street, 26th Floor, New York, New York 10038, to aid in the
solicitation of proxies, for fees of approximately $8,500, plus
additional expenses of approximately $1,000. Proxies may be
solicited by personal interview, mail and telephone. Georgeson
has contacted brokerage houses, other custodians and nominees to
ask whether other persons are the beneficial owners of the
shares they hold in street name and, if that is the case, will
supply additional copies of the proxy materials for distribution
to such beneficial owners. Molex will reimburse such parties for
their reasonable expenses for sending proxy materials to the
beneficial owners of the shares. In addition, solicitation of
proxies may be supplemented by telephone, facsimile, electronic
mail or personal solicitation by our directors, officers or
employees. No additional compensation will be paid to directors,
officers or employees for such services.
We will announce preliminary voting results at the annual
meeting and report final results in our quarterly report on
Form 10-Q
for the quarter ended December 31, 2009 (available at
www.sec.gov and www.molex.com).
A list of stockholders entitled to vote at the annual meeting
will be available for examination by any stockholder for any
purpose relevant to the annual meeting during ordinary business
hours at our offices at 2222 Wellington Court, Lisle, Illinois
60532, for ten days prior to the annual meeting, and also at the
annual meeting.
Table of Contents
ITEM 1
Our Board of Directors is divided into three classes, each class
consisting, as nearly as possible, of one-third of the total
number of directors, with members of each class serving for a
three-year term. Vacancies on the Board may be filled only by
persons elected by the Board to fill a vacancy (including a
vacancy created by an increase in the size of the Board). A
director elected by the Board to fill a vacancy (including a
vacancy created by an increase in the size of the Board) will
serve for the remainder of the full term of the class of
directors in which the vacancy occurred and until such
director’s successor is elected and qualified, or until
such director’s earlier death, resignation or removal.
Each share of Common Stock and Class B Common Stock is
entitled to one vote for each of the five director nominees. It
is the intention of the named proxy holders to vote the proxies
received by them for the election of the five nominees named
below unless authorization to do so is withheld. If any nominee
should become unavailable for election prior to the annual
meeting, an event that currently is not anticipated by the Board
of Directors, the proxies will be voted for the election of a
substitute nominee proposed by the Board unless the Board
chooses to reduce the number of directors serving on the Board.
Each person nominated for election has agreed to serve if
elected, and the Board has no reason to believe that any nominee
will be unable to serve.
Based upon the recommendation of the Corporate Governance and
Nominating Committee, Michelle L. Collins, Fred L. Krehbiel,
David L. Landsittel, Joe W. Laymon and James S. Metcalf are all
nominees for reelection to the Board. If elected, each nominee
would serve until the 2012 annual meeting of stockholders. Our
newest director, Dr. Anirudh Dhebar, was initially
suggested as a candidate by the Chief Executive Officer and
Co-Chairmen. Dr. Dhebar met the Corporate Governance and
Nominating Committee’s candidate criteria, was interviewed,
selected and recommended by the Corporate Governance and
Nominating Committee and approved by the Board. Dr. Dhebar
was named a director by the Board effective August 7, 2009
and will stand for election at the 2010 annual meeting.
Set forth below is biographical information for each nominee and
for all other directors. Frederick A. Krehbiel and John H.
Krehbiel, Jr., are brothers and Fred L. Krehbiel is the son
of John H. Krehbiel, Jr., (collectively, the “Krehbiel
Family”). The Krehbiel Family may be considered
“control persons” of Molex. Other than the Krehbiel
Family, no director or executive officer has any family
relationship with any other director or executive officer.
Michelle L. Collins, age 49, has served as a director of
Molex since 2003. Ms. Collins has been President of Cambium
LLC, a business and financial advisory firm, and Advisory Board
Member of Svoboda Capital Partners LLC since 2007.
Ms. Collins was a co-founder of Svoboda Collins LLC, a
private equity firm, where she served as Managing Director from
1998 to 2007. From 1992 to 1997, Ms. Collins was a
principal at William Blair & Company, LLC.
Ms. Collins is a director of Columbia Acorn Fund, Wanger
Advisors Trusts and Bucyrus International, Inc.
Fred L. Krehbiel, age 44, has served as a director of Molex
since 1993. Since 1988, he has served in various engineering,
marketing and managerial positions with Molex. Mr. Krehbiel
is Senior Vice President, Technology Innovation; from July 2007
through August 2009 he was Vice President, Product Development
and Commercialization for Molex’s Global Commercial
Products Division; from 2003 to 2007, he was President,
Connector Products Division (Americas), and from 2002 to 2003,
he served as President, Automotive Division (Americas).
Table of Contents
David L. Landsittel, age 69, has served as a director of
Molex since 2005. Mr. Landsittel is Chairman of COSO, a
private sector organization that provides guidance to business
enterprises and others on internal controls, enterprise risk
management and fraud deterrence. He previously served as
Chairman of the Auditing Standards Board of the American
Institute of Certified Public Accountants. From 1963 to 1997,
Mr. Landsittel served as an auditor in various positions
with Arthur Andersen LLP. Mr. Landsittel is a Trustee of
Burnham Investors Trust.
Joe W. Laymon, age 56, has served as a director of Molex
since 2002. He resigned from the Board in 2006 and was
re-elected in January 2008. Mr. Laymon has been Corporate
Vice President of Human Resources at Chevron Corporation since
March 2008. Prior to that, Mr. Laymon was Group Vice
President of Corporate Human Resources and Labor Affairs of Ford
Motor Company from 2004 to 2008. From 2000 to 2004 he was
Executive Director of Human Resources of Ford.
James S. Metcalf, age 51, has served as a director of Molex
since September 2007. Since 2006, he has been the President and
Chief Operating Officer of USG Corporation, a leading
manufacturer and distributor of building materials and products
used in certain industrial processes. Mr. Metcalf joined
USG in 1980 and has held numerous executive positions including
Executive Vice President and President, Building Systems from
2002 to 2006; President and Chief Executive Officer, L&W
Supply from 2000 to 2002; and Executive Vice President and Chief
Operating Officer, L&W Supply from 1999 to 2000.
Mr. Metcalf is a director of USG.
YOUR BOARD OF
DIRECTORS RECOMMENDS A VOTE “FOR” EACH NAMED
NOMINEE
Michael J. Birck, age 71, has served as a director of Molex
since 1995. He is the co-founder of Tellabs, Inc., a
telecommunications equipment company. He has been Chairman of
Tellabs since 2000. He was the Chief Executive Officer of
Tellabs from 2002 to 2004, and Chief Executive Officer and
President from 1975 to 2000.
Anirudh Dhebar, age 58, has served as a director of Molex
since August 2009. Dr. Dhebar has been a professor of
marketing at Babson College since 1997, and prior to joining the
faculty at Babson College, he was on the faculty at the Harvard
Business School
(1983-1995)
and the Sloan School of Management at the Massachusetts
Institute of Technology
(1995-1997).
Frederick A. Krehbiel, age 68, has served as a director of
Molex since 1972. Mr. Krehbiel has been Co-Chairman of the
Board since 1999. From 1988 to 1999 he served as Vice Chairman
and Chief Executive Officer, and as Chairman from 1993 to 1999.
From 1999 to 2001 he served as Co-Chief Executive Officer and as
Chief Executive Officer from 2004 to 2005. Mr. Krehbiel is
a director of Tellabs, Inc.
Table of Contents
Martin P. Slark, age 54, has served as a director of Molex
since 2000. Mr. Slark has been Vice Chairman and Chief
Executive Officer since 2005. From 2001 to 2005, he served as
President and Chief Operating Officer. From 1999 to 2001, he
served as Executive Vice President. Mr. Slark is a director
of Hub Group, Inc. and Liberty Mutual.
Edgar D. Jannotta, age 78, has served as a director of
Molex since 1986. Mr. Jannotta has been Chairman of William
Blair & Company LLC, an international investment
banking firm, since 2001. He has served in numerous capacities
at William Blair since 1965, including Senior Director, Senior
Partner and Managing Partner. Mr. Jannotta is a director of
Aon Corporation.
John H. Krehbiel, Jr., age 72, has served as a
director of Molex since 1966. Mr. Krehbiel has been
Co-Chairman of the Board since 1999. From 1999 to 2001, he
served as Co-Chief Executive Officer. From 1996 to 1999, he
served as Chief Operating Officer, and from 1975 to 1999, he
served as President.
Donald G. Lubin, age 75, has served as a director of Molex
since 1994. Mr. Lubin is a partner of the law firm
Sonnenschein Nath & Rosenthal LLP. He has been a
partner since 1964 and was Chairman from 1990 to 1996.
Robert J. Potter, age 76, has served as a director of Molex
since 1981. Dr. Potter has been President and Chief
Executive Officer of R.J. Potter Company, a business consulting
firm, since 1990. From 1987 to 1990, Dr. Potter was
President and Chief Executive Officer of Datapoint Corporation,
a leader in network-based data processing. Dr. Potter is a
director of Zebra Technologies Corporation.
CORPORATE
GOVERNANCE
The Board of Directors has assessed the independence of the
directors in light of the published listing standards of NASDAQ
and the more stringent Independence Standards established by the
Board, which are described below and can also be found on our
website, www.molex.com, on the Investors page under
Corporate Governance. Under these standards, the Board has
determined that the following directors are independent: Michael
J. Birck, Michelle L. Collins, Anirudh Dhebar, Edgar D.
Jannotta, David L. Landsittel, Joe W. Laymon, James S. Metcalf
and Robert J. Potter. Donald G. Lubin has determined that he is
not independent in light of his longstanding role as a legal
advisor to Molex and the Krehbiel Family, and the Board agrees
with Mr. Lubin’s determination.
The NASDAQ rules have objective tests and a subjective test for
determining who is an “independent director.” Under
the objective tests, a director cannot be considered independent
if the director (i) is an employee of the Company or
(ii) is a partner in, or an executive officer of, an entity
to which the Company made, or from which the Company received,
payments in the current or any of the past three fiscal years
that exceed 5% of the recipient’s consolidated gross
revenue for that year.
Table of Contents
The subjective test states that an independent director must be
a person who lacks a relationship that, in the opinion of the
Board, would interfere with the exercise of independent judgment
in carrying out the responsibilities of a director.
In addition to the Board-level standards for director
independence, the directors who serve on the Audit Committee
each must satisfy standards established by the SEC providing
that to qualify as “independent” for the purposes of
membership on that committee, members of audit committees may
not accept directly or indirectly any consulting, advisory, or
other compensatory fee from the company other than their
director compensation and must not be an affiliated person.
Under the additional Independence Standards established by the
Board, a director cannot be affiliated with a business
organization that either paid or received payments to or from us
during any one of the past three fiscal years that exceed the
greater of 2% of the recipient’s gross revenues for that
year or $200,000.
In assessing independence, the Board reviewed transactions and
relationships of the directors based on information provided by
each director, our records and publicly available information.
The relationships and transactions reviewed by the Board
included the following:
The Board of Directors held eight meetings during FY09, and all
of the directors attended at least 75% of the total number of
meetings of the Board and committees on which they served,
except for Mr. Birck, who attended 70% of such meetings.
The Board expects all directors to attend the annual meeting of
stockholders, barring unforeseen circumstances. All then-members
of the Board were present at the 2008 annual meeting of
stockholders. The non-employee directors meet in executive
session without management present following each regularly
scheduled Board meeting. The Chairman of the Corporate
Governance and Nominating Committee presides at these executive
sessions.
The Board has a standing Audit Committee, Compensation
Committee, Corporate Governance and Nominating Committee,
Technology Committee, and Executive Committee. The charters of
these committees are posted on our website,
www.molex.com, on the Investors page under Corporate
Governance. In addition, the Board has established a Stock
Option Plan Committee comprised of Frederick A. Krehbiel, John
H. Krehbiel, Jr., and Martin P. Slark.
The Audit Committee consists of Mr. Landsittel (Chair),
Ms. Collins and Dr. Potter. The Board has determined
that each of the members of the Audit Committee is independent
under the listing
Table of Contents
standards of NASDAQ, and that Mr. Landsittel is an
“audit committee financial expert” as defined by SEC
regulations. All members of the Audit Committee meet the NASDAQ
composition requirements, including the requirements regarding
financial literacy and financial sophistication. The functions
of the Audit Committee are described under “Audit Committee
Report.” During FY09, the Audit Committee met eight times.
The Compensation Committee consists of Mr. Laymon (Chair)
and Messrs. Landsittel and Metcalf. The Board has
determined that each of the members of the Compensation
Committee is independent under the listing standards of NASDAQ.
The Compensation Committee is responsible for establishing
executive compensation policies and overseeing executive
compensation practices. The roles and responsibilities of the
Compensation Committee, management and the compensation
consultants are described in greater detail under
“Compensation Discussion and Analysis.” The
Compensation Committee is authorized to delegate
responsibilities to subcommittees when appropriate but has not
done so. During FY09, the Compensation Committee met six times.
The Corporate Governance and Nominating Committee consists of
Mr. Jannotta (Chair), Mr. Birck and Ms. Collins.
The Board has determined that each of the members of the
Corporate Governance Committee is independent under the listing
standards of NASDAQ. The Corporate Governance Committee oversees
the corporate governance and Board membership matters and
monitors the independence of the Board. The Corporate Governance
Committee also determines Board membership qualifications,
selects, evaluates and recommends to the Board nominees for
election to the Board, and reviews the performance of the Board.
During FY09, the Corporate Governance Committee met twice.
The Technology Committee consists of Dr. Potter (Chair),
Mr. Birck and Fred L. Krehbiel. The Technology Committee
reviews and monitors the execution of the Company’s
technology strategies and its technology competitiveness. In
addition, the Technology Committee reviews and discusses
significant emerging technology issues, trends and opportunities
that may affect the Company, its business and strategy. The
Technology Committee was formed on April 24, 2009 and held
no meetings in FY09.
The Executive Committee consists of Frederick A. Krehbiel
(Co-Chair), John H. Krehbiel, Jr. (Co-Chair), and
Messrs. Birck, Jannotta and Slark. The Executive Committee
has all the powers and authority of the Board in the management
of the business and affairs, except with respect to certain
enumerated matters including Board composition and compensation,
changes to our charter documents, or any other matter expressly
prohibited by law or our charter documents. Pursuant to its
charter, the Executive Committee has appointed a subcommittee
consisting of Frederick A. Krehbiel, John H. Krehbiel, Jr.,
and Martin P. Slark to act in certain prescribed and specific
areas. During FY09 the Executive Committee did not meet, but its
subcommittee acted several times by unanimous written consent.
The Board of Directors, at the recommendation of the Corporate
Governance and Nominating Committee, has adopted certain
principles relating to corporate governance matters.
The Corporate Governance and Nominating Committee maintains,
with the approval of the Board, certain criteria and procedures
relating to the identification, evaluation and selection of
candidates to serve on the Board. The minimum criteria sought by
the Board for candidates as directors are described in the
Board’s “Criteria for Membership on the Board of
Directors.” In addition, the Corporate Governance and
Nominating Committee has established “Procedures for
Identifying and Evaluating Candidates for Director.” These
documents are included in this Proxy Statement as
Appendix I and Appendix II,
respectively, and posted on our website, www.molex.com,
on the Investors
Table of Contents
page under Corporate Governance. The Corporate Governance and
Nominating Committee will consider candidates recommended by
stockholders provided that appropriate notice is given.
In recognition of the increasing demands of board service, the
Board has limited the number of public company boards on which
our directors and executive officers may serve as follows:
(i) non-employee directors are limited to service on three
other public company boards; (ii) the Chief Executive
Officer and Chief Operating Officer are limited to service on
two other public company boards; and (iii) all other
executive officers (other than the Co-Chairmen) are limited to
service on one other public company board.
When a director’s principal occupation or business
association changes substantially during his or her tenure as a
director, that director is required to tender his or her
resignation for consideration by the Board. The Board will
determine whether any action should be taken with respect to the
resignation.
Our annual meetings provide an opportunity each year for
stockholders to ask questions of, or otherwise communicate
directly with, members of the Board on appropriate matters. In
addition, stockholders may communicate in writing with any
particular director, any committee of the Board, or the
directors as a group by following the “Procedures for
Stockholder Communications with Directors” included in this
Proxy Statement as Appendix III and posted on our
website, www.molex.com, on the Investors page under
Corporate Governance.
We use a combination of cash and stock-based incentives to
attract and retain qualified candidates to serve on the Board.
In setting director compensation, we consider the significant
amount of time that directors expend to fulfill their duties,
the skill level required of the members of the Board and
competitive practices among peer companies. Employee directors
do not receive additional compensation for their service on the
Board.
Each non-employee director receives (i) an annual retainer
of $60,000; (ii) $3,000 for each board meeting attended;
and (iii) $2,000 for each committee meeting attended. The
non-employee director chairs of the committees receive higher
meeting fees in view of their increased responsibilities: the
chair of each of the Compensation, Corporate Governance and
Nominating, and Technology Committees is paid $3,000 for each
committee meeting attended, and the chair of the Audit Committee
is paid $4,000 for each committee meeting attended. In addition,
non-employee directors are reimbursed for all reasonable travel
and out-of-pocket expenses associated with attending Board and
committee meetings and continuing education seminars. In
connection with our restructuring and other compensation program
reductions, the directors reduced their annual retainer by 20%
to $48,000, effective April 1, 2009. We plan to reinstate
the $60,000 annual retainer effective October 1, 2009.
Each non-employee director receives an annual automatic
non-discretionary stock option grant under the 2008 Molex Stock
Incentive Plan. The options are granted on the date of the
annual meeting of stockholders with an exercise price equal to
the closing price of the Class A Common Stock on the grant
date. Each option vests ratably over four years commencing on
the first anniversary of the grant date and expires five years
from the grant date. Beginning with the 2009 annual meeting,
Table of Contents
options will expire ten years from the grant date. The number of
shares underlying the option is 500 multiplied by the number of
years of service or fraction thereof. The number of shares
underlying a stock option grant cannot exceed 5,000 shares
or $150,000 in value, whichever is less.
The stock ownership guidelines for non-employee directors
require them to own 500 shares (and/or stock units) of
Molex stock within three years of commencement of service and
1,000 shares (and/or stock units) of Molex stock within six
years of commencement of service. As of September 8, 2009,
each non-employee director had met, or was on track to meet, the
stock ownership guidelines.
Our non-employee directors are eligible to participate in the
Molex 2005 Outside Directors’ Deferred Compensation Plan,
under which they may elect on a yearly basis to defer all or a
portion of the following year’s director’s fees. A
non-employee director may elect to have the deferred fees
(i) accrue interest during each calendar quarter at a rate
equal to the average six-month Treasury Bill rate in effect at
the beginning of each calendar quarter (an “interest
account”), or (ii) converted to stock units at the
closing price of Common Stock on the date the fees would
otherwise be paid (a “stock account”). Upon a
director’s termination of service as a director (or
age 591/2
if later) or the director’s death or disability, the
accumulated amount in the director’s interest account is
distributed in cash, and the stock units in the director’s
stock account are distributed in an equal number of shares of
Common Stock. We impute dividends on each stock unit that is
credited to a director’s stock account, and the imputed
dividends are converted into additional stock units on the basis
of the market value of the Common Stock on the dividend payment
date. The number of outstanding stock units (including dividend
units) is included in the “Security Ownership of Directors
and Executive Officers” table. All distributions will be
made in a single lump sum payment, except that a participant may
elect to receive amounts distributed in annual installments over
a period of up to ten years on account of his or her separation
from service after attaining
age 591/2.
The following table sets forth summary information concerning
compensation for each of our non-employee directors for FY09.
Information about compensation for employee directors who are
not Named Executive Officers (“NEOs”) can be found
under “Transactions with Related Persons.”
Table of Contents
SECURITY
OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of Molex
stock beneficially owned by each director, the NEOs, and all
directors and executive officers as a group as of
September 1, 2009. The Class A Common Stock is
reported for informational purposes.
Table of Contents
We have stock ownership guidelines for executive officers to
ensure that our officers (including the NEOs) have a meaningful
stake in the equity of the Company and to further align the
interest of the officers with the long-term interest of our
stockholders. The guidelines require the Chief Executive Officer
to own Molex stock equal in value to at least three times his
annual base salary, and each other executive officer to own
Molex stock equal in value to at least two times his or her
annual base salary. A new executive officer is given five years
to meet these guidelines. We make exceptions to these guidelines
for an executive officer expected to retire within three years
or for economic hardship. As of September 8, 2009, each
executive officer had met, or was on track to meet, the stock
ownership guidelines.
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires Molex’s directors and certain of its
officers to file reports of their ownership of Molex stock and
of changes in such ownership with the SEC. SEC regulations also
require us to identify in this Proxy Statement any person
subject to this requirement who failed to file any such report
on a timely basis. Based on our review of the reports we have
received or assisted in preparing, we believe that all of our
directors and officers complied with all of the reporting
requirements applicable to them with respect to transactions
during FY09.
Table of Contents
The following table sets forth information regarding beneficial
ownership of the stockholders of more than 5% (other than
directors and executive officers) of the outstanding Molex stock
as of December 31, 2008, unless otherwise indicated in the
Schedule 13G. Class A Common Stock is included in the
table for informational purposes.
Table of Contents
The Audit Committee has selected Ernst & Young LLP
(“E&Y”) as Molex’s independent auditors for
the fiscal year ending June 30, 2010, and has further
directed that the Board submit the selection of independent
auditors for ratification by the stockholders at the annual
meeting. A representative of E&Y is expected to be present
at the annual meeting, will have an opportunity to make a
statement if he or she so desires, and will be available to
respond to questions.
Stockholder ratification of the selection of E&Y as
Molex’s independent auditors is not required by the Bylaws
or otherwise, but the Board believes that as a matter of
corporate practice the selection of E&Y should be submitted
to Molex’s stockholders for ratification. If the
stockholders do not ratify the selection, the Audit Committee
will consider whether or not to retain E&Y. Even if the
selection is ratified, the Audit Committee in its discretion may
direct the appointment of a different independent auditor at any
time during the year if the Audit Committee determines that such
a change would be in the best interests of Molex and its
stockholders.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
ITEM 2
AUDIT
MATTERS
The Audit Committee assists the Board of Directors by providing
oversight on the following matters relating to Molex’s
financial reporting:
Molex’s management is responsible for preparing the
financial statements, establishing and maintaining the system of
internal controls, and assessing the effectiveness of
Molex’s internal control over financial reporting. E&Y
is responsible for auditing the annual financial statements and
expressing opinions on the conformity of the financial
statements with U.S. generally accepted accounting
principles and on the effectiveness of Molex’s internal
control over financial reporting based on its audit.
In fulfilling its oversight responsibilities, the Audit
Committee reviewed and discussed with management and E&Y
the audited financial statements for the fiscal year ended
June 30, 2009 and the reasonableness of significant
estimates and judgments made in preparing the financial
statements, as well as the clarity of the disclosures in the
financial statements. The Audit Committee also discussed, with
management and separately with E&Y, in executive sessions
their evaluations of Molex’s internal control over
financial reporting and the overall quality of Molex’s
financial reporting.
The Audit Committee discussed with E&Y those matters
required to be discussed by Statement on Auditing Standards
No. 61, as amended (AICPA, Professional Standards,
Vol. 1. AU Section 380), as adopted by the Public Company
Accounting Oversight Board in Rule 3200T. In addition,
E&Y has provided the Audit Committee with the written
disclosures and the letter required by applicable
Table of Contents
requirements of the Public Company Accounting Oversight Board
regarding the independent auditor’s communications with the
Audit Committee concerning independence, and the Audit Committee
and E&Y have discussed the auditors’ independence from
Molex and its management, including the matters in those written
disclosures. The Audit Committee also considered the non-audit
services provided by E&Y and the fees and costs billed and
expected to be billed by E&Y for those services. All of the
non-audit services provided by E&Y have been approved by
the Audit Committee in accordance with its pre-approval policy.
When approving the retention of E&Y for these non-audit
services, the Audit Committee has considered whether the
retention of E&Y for these non-audit services is compatible
with maintaining auditor independence.
In reliance on the reviews and discussions with management and
E&Y referred to above, the Audit Committee recommended to
the Board of Directors, and the Board approved, the inclusion of
the audited financial statements in Molex’s Annual Report
on
Form 10-K
for the fiscal year ended June 30, 2009 for filing with the
SEC. The Audit Committee also approved the selection of E&Y
as Molex’s independent auditors for the fiscal year ending
June 30, 2010.
The Audit Committee
David L. Landsittel, Chairman Michelle L. Collins Robert J. Potter
The following table presents fees for professional audit
services rendered by Molex’s independent auditors,
Ernst & Young, for the audit of Molex’s annual
financial statements for FY09 and FY08, and fees billed for
other services rendered by the independent auditors during those
periods.
Consistent with SEC policies regarding auditor independence, the
Audit Committee has responsibility for appointing, setting
compensation for and overseeing the work of the independent
auditors. In recognition of this responsibility, the Audit
Committee has established a policy to pre-approve all audit and
permissible non-audit services provided by the independent
auditors.
Management submits to the Audit Committee a list of services and
related fees expected to be rendered during that year within
each of four categories of services: audit services,
audit-related services, tax services and all other services.
Prior to engagement, the Audit Committee pre-approves services
within each category and the fees for each category are
budgeted. The Audit Committee requires the independent auditors
and management to report actual fees versus the budget
Table of Contents
periodically throughout the year by category of service.
Pursuant to the policy, all services provided by the independent
auditors were pre-approved by the Audit Committee.
During the year, circumstances may arise when it may become
necessary to engage the independent auditors for additional
services not contemplated in the original pre-approval
categories. In those instances, the Audit Committee requires
specific pre-approval before engaging the independent auditors.
The Audit Committee may delegate pre-approval authority to the
Chairman of the Audit Committee. The Chairman reports any
pre-approval decisions to the Audit Committee at its next
scheduled meeting.
We believe that the performance and contributions of our
executive officers are critical to the overall success of Molex.
To attract, retain and motivate our executives to accomplish our
business strategies, we have implemented executive compensation
programs providing executives with the opportunity to earn
compensation comparable to that paid by companies with which we
compete for top talent and that reward strong performance and
creation of stockholder value.
The overall objectives of our executive compensation program are
to attract world-class executive talent, retain key leaders,
reward short- and long-term performance, and align
executives’ long-term interests with those of our
stockholders. We focus on the following core principles in
structuring an effective compensation program that meets our
stated objectives:
The Compensation Committee (the “Committee”) is
responsible for establishing executive compensation policies and
overseeing executive compensation practices. The Committee is
composed entirely of outside, non-employee directors within the
meanings of Section 162(m) of the Internal Revenue Code and
SEC regulations, and each member is independent under the NASDAQ
rules. The Committee has the authority to retain a compensation
consultant to assist in the evaluation of executive officer
compensation and benefits and approve the consultant’s fees
and other retention terms. The Committee has engaged The Delves
Group to provide advice regarding best practices in executive
compensation and compensation trends, and to assist the
Committee in its decision-making. The Delves Group’s sole
engagement for Molex is as compensation consultant to the
Committee. Each year the Committee reviews and considers
competitive market data along with the individual
responsibilities and performance of each executive and internal
pay comparisons when setting annual pay opportunities. Annually,
the Committee uses tally sheets for each executive officer
showing all
Table of Contents
elements of total direct compensation (base salary, target
bonus, and long-term stock incentives), as well as outstanding
equity awards and projected payments upon termination.
Recommendations on the CEO’s compensation arrangements are
made by the Co-Chairmen of the Board, and the CEO’s pay is
set by the Committee during an executive session based on the
Committee’s assessment of the CEO’s individual
performance, the financial and operating performance of Molex,
the recommendations of the Co-Chairmen, competitive market data,
and the advice of The Delves Group. The CEO presents his
assessment of the performance of the other executive officers,
Messrs. McCarthy, Johnson, Brock, Fleischhacker, Hirokawa
and Nauman, and makes general recommendations to the Committee
concerning the compensation of such officers. Management
presents specific recommendations to the Committee on the annual
incentive plan structure, long-term incentive compensation
strategy, target competitive position of executive compensation
and target total direct compensation for each executive officer,
including base salary adjustments, target incentive bonus and
equity grants. These recommendations are developed in
consultation with the CEO and accompanied by competitive market
data. The Committee considers management’s recommendations
based on each executive’s individual responsibility,
performance, and overall contribution, competitive market data
and the advice of The Delves Group, and then determines the
compensation arrangements for these individuals.
In determining the design and the level of each element of
compensation, we undertake a thorough review of competitive
market information. Management has retained the compensation
consulting firm Watson Wyatt to develop competitive market
information and assist it in making recommendations to the
Committee with respect to the composition of the peer group of
companies. The Delves Group reviews the composition of the peer
group with the Committee. Watson Wyatt also assists management
in making recommendations to the Committee with respect to total
compensation levels for our executive officers, and the mix and
design of incentive compensation. The companies in the peer
group are representative of the types of companies with which we
compete for executive talent and are broadly comparable to us in
terms of industry, global operations, revenue, size and market
capitalization. The peer group is reviewed regularly and
adjustments are made as necessary to ensure that the peer group
continues to be relevant. Each element of an executive
officer’s total direct compensation (base salary, target
bonus, total cash, and long-term stock incentives) and the
executive’s total direct compensation is compared and
benchmarked to similar positions at peer companies.
The peer group used to establish compensation at the beginning
of FY09 in August 2008, which was the same as for FY08, was
comprised of the following companies:
In connection with equity grants awarded in April 2009,
management worked with Watson Wyatt (with review by the Delves
Group) to reassess the peer group. Because of the volatility in
revenue and the market in general in the last quarter of 2008
and first quarter of 2009, the peer group was broadened to
include two additional companies, Agilent Technologies and
Itron, Inc.
The peer group company compensation data that is presented to
the Committee is supplemented with compensation data from
broader, general industry surveys provided by Watson Wyatt. In
addition, Watson Wyatt prepares long term incentive survey
information from three survey sources. With respect to the
executive compensation market data for the August 2008
compensation decisions, the following surveys were used:
2007/2008 Watson Wyatt Top Management Survey, 2007 Mercer
Executive Compensation Survey and 2007 Radford Executive
Compensation Survey. In connection
Table of Contents
with the equity grants awarded in April 2009, Watson Wyatt
provided general industry trend analysis data from 48 Fortune
500 companies in a broad spectrum of industries, as well as
the following surveys: Watson Wyatt Long Term Incentive Survey,
Towers Perrin Long Term Incentive Data and Mercer Long Term
Incentive Multiples. The general industry data and survey
information are intended to help the Committee gain an
understanding of a broad industry perspective on executive pay
norms and trends and avoid over reliance on a smaller sampling
of companies.
Our executive compensation program is composed primarily of
three elements: base salary, annual cash incentives and
long-term equity incentives. Each of these elements plays an
important role in balancing executive rewards over short- and
long-term periods, based on our program objectives.
Although we have no formal policy for a specific allocation
between current and long-term compensation or between cash and
non-cash compensation, the Committee has established a pay mix
for executive officers that balances performance-based pay with
retention-based equity awards. Executive compensation is divided
between current and long-term compensation, and cash and
non-cash compensation, to generally reflect market practice and
to provide executive officers with attractive levels of pay
while encouraging officers to remain with us for the long term.
The base salary of an executive takes into account the
executive’s performance, responsibilities, experience and
internal equity. We target base salaries between the
50th and 75th percentiles of our peer group with the
expectation that successful performance over time will position
pay at or above the 75th percentile. In any given year,
actual individual salaries may range above or below the
75th percentile based on a variety of factors, including
position level, executive experience relative to industry peers,
tenure, individual performance, future potential and leadership
qualities.
Annual cash incentives are provided under the Molex Annual
Incentive Plan (the “AIP”) to reward executives both
for Molex’s performance toward meeting corporate growth
objectives and the executives’ performance toward meeting
their individual objectives. This is a short-term annual
incentive paid in cash pursuant to arrangements that cover all
executive officers and provide that an incentive will be paid
upon the achievement of two performance metrics: a quantitative
performance measure, which makes up 80%, and performance against
previously defined individual goals, which makes up the
remaining 20%. The quantitative performance measure must be met
in order for any payout to be earned. In other words, no matter
how well an executive performed against individual goals, if the
quantitative performance goal is not met then no cash incentive
will be paid out. The Committee selects the performance measure
at the beginning of each fiscal year. The annual cash incentive
is targeted at the median of the peer group, and depending on
Molex and individual performance, actual bonuses can vary widely.
Individual performance goals are established by the Committee
and the CEO at the beginning of each fiscal year. These
individual performance goals may be based on a variety of
factors, including internal budget goals, investor expectations,
peer company results, prior year Molex performance, upcoming
fiscal year business plans and strategic initiatives, and may
exclude specified items that are not reflective of the
performance of the ongoing business. Each officer’s
performance against individual goals is assessed at the end of
the fiscal year.
For FY09, the Committee determined that incentives would be paid
out upon the achievement of any incremental improvement in
operating income (before restructuring charges) as compared to
FY08, with target incentives set at 15% growth in operating
income and maximum incentives set at 30% growth in operating
income. Operating income is equal to gross profit less selling,
general and
Table of Contents
administrative expense. The target and maximum award
opportunities as a percent of base salary for our NEOs are as
follows:
The Committee has approved a redesign of the annual cash
incentive program for FY10 to strengthen the program and better
support a pay-for-performance culture by incorporating
divisional and business unit components into the plan, and
developing an improved methodology to set performance goals that
are reasonably achievable and allow for target payout when
expectations are met. Payouts under the plan will be determined
by considering a mix of corporate, divisional
and/or
business unit performance and performance against individual
goals.
The short-term incentive program for FY10 will measure
performance and payout incentives on a six-month basis beginning
January 2010, rather than the previous
12-month
basis, set goals twice each year effective July 1 and January 1
and make payouts after the close of each six-month period.
Period-over-period growth in operating income will continue to
be the performance metric. Threshold, target and maximum goals
for operating income growth will be set for each performance
period and such goals will be used to determine payouts.
Positive operating income for the company as a whole will be a
basic requirement for the payment of any incentive at any level
(i.e., division
and/or
business unit).
The Committee awards a combination of stock option awards and
restricted stock awards to focus executive officers on long-term
value creation through positive business and financial
performance. Equity awards help to align the interests of our
executive officers with those of our stockholders. Executive
officers receive stock options that provide them with the right
to buy a fixed number of shares of Class A Common Stock at
the closing price of the stock on the grant date. Generally,
options vest ratably over four years beginning on the first
anniversary of the grant date. Restricted stock awards of
Class A Common Stock are granted at no cost to the
executive officer. Generally, restricted stock awards vest
ratably over four years beginning on the first anniversary of
the grant date. The vesting of stock options and restricted
stock awards is accelerated upon the death, total disability or
qualified retirement of an executive officer. While options only
have value to the recipients if the price of the Class A
Common Stock appreciates after the options are granted and carry
more risk and upside potential, restricted stock provides
greater certainty of executive stock ownership.
The Committee determines the aggregate and relative number of
stock options and shares of restricted stock granted by an
assessment of the overall value of the long-term incentive
opportunity and its value relative to peer company comparisons.
We believe that equity awards, more than any other element of
compensation, provide our executive officers with incentives to
improve the performance of Molex over the long term. This
performance incentive, combined with the fact that equity awards
allow us to retain valuable executive talent and align the
interests of our executives with those of stockholders, is why
the Committee has historically provided equity awards that are
at the
75th percentile
or higher of our peer group.
Long-Term Incentive Grant Practices. Under
equity grant procedures approved by the Committee and the Board
as of May 11, 2007, all long-term incentive grants for
executive officers are approved by the Committee, and routine
annual grants occur on August 15 (or the next trading day if
Table of Contents
markets are closed on August 15). All long-term equity grants to
non-executive employees are approved by a Stock Option Plan
Committee comprised of Frederick A. Krehbiel, John H.
Krehbiel, Jr., and Martin P. Slark, and routine annual
grants for these employees occur on February 1 (or the next
trading day if markets are closed on February 1).
The Committee and the Board approved an exception to the equity
grant procedures in FY09 and annual equity grants were made to
all employees, including executive officers other than the CEO,
COO and CFO, in April 2009. This was done for two reasons:
(1) our stockholders approved in October 2008 a new omnibus
stock plan pursuant to which grants can be made to directors,
executive officers and employees, and this plan replaced the
separate plans we previously maintained and made it unnecessary
for us to use different grant dates for executive officers and
employees; and (2) in January 2009, management decided to
consolidate five product divisions into three product divisions
and these consolidations with the reductions in force that we
implemented in response to the downturn in our business required
us to defer our February 1 grant. In consultation with the CEO,
the Committee deferred consideration of grants to the CEO, COO
and CFO until its August 2009 meeting. At the Committee’s
August 2009 meeting, the Committee reviewed an analysis of
long-term incentives prepared by Watson Wyatt and approved
equity grants to the CEO, COO and CFO. Going forward, all grants
to employees, including executive officers, will be made as of
October 1 to align the grants with our performance management
program, and the equity grant procedures have been amended by
the Committee and the Board accordingly.
At the beginning of FY09, the Committee selected year-over-year
growth in incremental operating income as the performance
measure for the FY09 annual cash incentive. At the same time,
the Committee approved individual performance goals for the CEO,
and the Committee and the CEO approved performance goals for the
other executive officers. The CEO’s individual performance
goal areas for FY09 included year-over-year improvement in
operating results focusing on cost savings and gross margins,
meeting project milestones, increased interaction with all
stakeholder groups, including employees, customers and
stockholders, talent development and effective succession
planning, and revenue growth through acquisitions, strategic
alliances and new initiatives. The individual performance goal
areas for the other executives related to financial, operational
and business achievements. Also in August 2008, the Committee
approved salary increases for the NEOs for FY09 ranging from
2.5% to 5.8% effective September 1, 2008, based on an
evaluation of the performance of the CEO by the Committee and
the Co-Chairmen, and an evaluation of the other executive
officers by the Committee and the CEO. In response to the
business downturn caused by the global economic recession, we
reduced salaries and benefits globally in February 2009. Our CEO
and COO each took a 20% pay reduction and all other executive
officers took a 10% pay reduction. We plan to reinstate salaries
effective October 1, 2009, but will not consider merit
increases until October 2010. See the “Summary Compensation
Table.”
In August 2009, the Committee and the Co-Chairman, Frederick A.
Krehbiel, conducted an evaluation of the performance of the CEO,
and the Committee and the CEO conducted an evaluation of the
performance of the other executive officers during FY09 against
pre-established Company and individual goals. Because the
operating income goals were not met, annual cash incentives were
not earned by our executive officers.
In order to provide competitive total compensation, we offer
qualified profit sharing and 401(k) defined contribution plans.
U.S. executive officers participate in these plans on the
same terms as other salaried employees. The ability of executive
officers to participate fully in these plans is limited under
IRS and ERISA requirements. As is commonly the case among our
peer group, we offer to executive officers a nonqualified
counterpart to the profit sharing plan that is not subject to
these limitations. Additionally, we offer a nonqualified
deferred compensation plan, supplemental life
Table of Contents
insurance, supplemental travel/accident insurance and the
opportunity to purchase supplemental life insurance coverage.
We do not currently offer special employment agreements,
severance agreements, or change in control agreements to any
executive officer. Our only such arrangement, which applies to
all employees with equity compensation awards, is accelerated
vesting of equity. As the Committee annually reassesses the
effectiveness of the executive compensation program, it also
assesses the merits of offering these types of arrangements for
executives. The Committee may decide to offer these types of
benefits in the future.
We do not offer pension benefits to our executive officers. On a
case-by-case
basis, the Committee has approved individual retirement
packages, in addition to the retirement benefits generally
available under other employee benefit plans, to retiring
executive officers based on years of service and contributions
to Molex.
The Molex Incorporated Profit Sharing and Retirement Plan (the
“Profit Sharing Plan”) is a defined contribution plan
under which we make discretionary annual contributions of a
fixed percentage of eligible compensation to a
participant’s account. We make contributions to the Profit
Sharing Plan for executive officers on the same terms as
applicable to all participating employees. During FY09, we made
a contribution equal to 3% of eligible compensation to all
eligible employees, including the U.S. executive officers.
U.S. executive officers may also participate in the Molex
Incorporated Employees 401(k) Plan, a defined contribution plan.
Under this plan, each executive officer may contribute a maximum
of 25% of eligible pay on a pre-tax basis up to the IRS limit.
We match the contributions of executive officers on the same
terms as are applicable to all participating
employees – up to 1% of an employee’s
contributions.
Mr. Brock participates in the Molex Group Personal
Pension Plan, a defined contribution retirement savings plan
under which employee and company contributions are based upon
the participant’s age, service and salary. Participating
employees contribute between 2% and 5% of their salary and if
the employee participates at these minimum levels, the Company
makes a contribution between 4.5% and 11.5% of salary.
Mr. Hirokawa participates in the Japanese national
retirement plan and the Molex-Japan Directors Retirement Trust,
a defined contribution plan under which the Company makes
discretionary annual contributions to eligible executive
directors of Molex Japan. See “Company Contributions.”
The Molex Supplemental Executive Retirement Plan (the
“SERP”) is a nonqualified defined contribution plan
available to all participants in the Profit Sharing Plan who are
affected by the IRS contribution limits. Additional information
about the Profit-Sharing Plan and the SERP can be found under
“Nonqualified Deferred Compensation.”
The Molex Executive Deferred Compensation Plan permits
participants to defer all or a portion of their base salary and
bonus during the plan year. Additional information about this
plan can be found under “Nonqualified Deferred
Compensation.”
We provide certain perquisites to our executive officers. We are
selective in our use of perquisites, utilizing perquisites that
are generally modest in value; these perquisites may include car
allowances or leased cars, financial planning and counseling,
executive physical medical examinations
Table of Contents
and other customary executive perquisites. The Committee has
adopted a perquisite pre-approval policy under which certain
perquisites and maximum amounts for such perquisites have been
pre-approved by the Committee. The Committee has delegated
authority to the CEO to approve such perquisites for other
executive officers. The Committee must separately approve
perquisites not specified as included in the policy or amounts
that exceed the specified amounts.
Under the Company’s Annual Incentive Plan, the Board may
require reimbursement of bonuses paid to a named executive
officer where (i) the payment was predicated in whole or in
part upon the achievement of certain financial results that were
subsequently the subject of a material restatement; (ii) in
the Board’s view the named executive officer engaged in
fraud or misconduct that caused the need for the restatement;
and (iii) a lower bonus would have been made to the named
executive officer based upon the restated financial results. The
Board may also seek reimbursement of bonuses paid to any named
executive officer in other circumstances involving fraud or
misconduct if such fraud or misconduct caused substantial harm
to Molex even in the absence of a restatement of Molex’s
financial statements.
Under the Company’s equity plans, awards will be forfeited
if (i) the participant engages in competitive activities
during employment or within one year after termination of
employment; (ii) the participant solicits employees to work
for another organization during employment or within two years
after termination of employment; or (iii) the
participant’s employment is terminated for cause, as
defined for purposes of the equity plans. Participants must also
reimburse the Company for amounts paid in settlement of awards
earned or accrued within 24 months of a restatement of
Molex’s financial statements in certain circumstances.
Section 162(m) of the Internal Revenue Code generally
limits the tax deductibility of compensation paid by a public
company to its CEO and certain other highly compensated
executive officers who are in office at the end of the fiscal
year to $1 million per officer in the year the compensation
becomes taxable to the executive. There is an exception to the
limit on deductibility for performance-based compensation that
meets certain requirements.
It is the Committee’s intention to provide annual incentive
awards and stock options that are qualified and fully deductible
by the Company under Section 162(m). However, when
warranted due to competitive or other factors, the Committee may
decide in certain circumstances to provide incentive and other
compensation that exceeds the $1 million limitation set
forth in Section 162(m). The time-vested restricted stock
units granted by the Committee in FY09 and prior years will not
be treated as performance-based compensation under
Section 162(m).
The Compensation Committee has reviewed and discussed the
foregoing Compensation Discussion and Analysis with management.
Based on this review and discussion, the Compensation Committee
has recommended to the full Board of Directors that the
Compensation Discussion and Analysis be included in this Proxy
Statement for filing with the SEC.
Compensation Committee
Joe W. Laymon, Chairman
David L. Landsittel
James S. Metcalf
Table of Contents
EXECUTIVE
COMPENSATION
The following table sets forth information regarding the
compensation for each of our NEOs for FY09. In accordance with
the SEC’s rules, FY08 and FY07 compensation is not
presented for Messrs. Hirokawa and Brock because they were
not NEOs in those years.
Table of Contents
The following table sets forth amounts for other compensation
provided to the NEOs in FY09 included in the “All Other
Compensation” column of the “Summary Compensation
Table.”
The following table sets forth amounts for perquisites provided
to the NEOs in FY09 included in the “Perquisites”
column of the “All Other Compensation” table. The
amounts included in the table reflect the actual cost to Molex
for providing these perquisites.
The following table sets forth amounts included in the
“Company Contributions to Defined Contribution Plans”
column of the “All Other Compensation” table for FY09
as follows: (i) Molex matching contributions to the Molex
Incorporated 401(k) Savings Plan; (ii) Molex contributions
to the Profit Sharing Plan; (iii) Molex contributions to
the SERP; and (iv) Molex contributions to
non-U.S. retirement
plans. This table does not include contributions made by each of
the NEOs to these plans.
Table of Contents
Fiscal Year 2009
Grants of Plan-Based Awards
The following table provides information on the estimated
possible payouts under the Annual Incentive Plan for FY09, based
on certain assumptions about the achievement of performance
objectives for Molex and the individual NEOs at various levels.
Since Molex’s operating performance incentive thresholds
were not met in FY09, the NEOs did not receive a payout. The
table also provides information on stock awards and stock
options to acquire shares of Class A Common Stock granted
in FY09 to each of the NEOs. There can be no assurance that the
amounts in the “Grant Date Fair Value of Stock and Option
Award” column will ever be realized.
Annual Incentive Awards. The annual incentive
awards are further described under “Compensation Discussion
and Analysis.” The awards are granted under the Molex
Incorporated Annual Incentive Plan, which was approved by
stockholders at the 2008 annual meeting. The purpose of the AIP
is to enhance stockholder value and promote the attainment of
our significant business objectives by basing a portion of an
employee’s annual cash compensation on the achievement of
specific performance goals. All of our executive officers and
other key employees are eligible to participate in the AIP. The
AIP is administered by the Compensation Committee with respect
to executive officers and by the CEO with respect to other key
employees. The CEO determines the other key employees who are
eligible to participate in the AIP. The Compensation Committee
determines which participants will be treated as “covered
employees” for purposes of Section 162(m) of the
Internal Revenue Code.
Table of Contents
As it relates to awards for executive officers, each year the
Compensation Committee (i) establishes one or more
performance measures; (ii) sets the annual performance goal
with respect to such performance measure for the Company, a
business unit or an individual; (iii) establishes the
weighting to be given to the performance measure and performance
goal; and (iv) designates whether an award will be a
Section 162(m) Award. As it relates to awards for other key
employees, each year the CEO makes the same determinations as
described above except he will not be designating
Section 162(m) Awards.
The Compensation Committee
and/or the
CEO determine the amount available for payment of annual
incentives in any year or any other measurement period. The
aggregate maximum amount that may be paid to any one participant
during any fiscal year with respect to all awards under the AIP
is $10,000,000.
Restricted Stock and Stock Options. The
restricted stock and stock option programs are further described
under “Compensation Discussion and Analysis.” The
restricted stock and stock option awards are granted under the
2008 Molex Stock Incentive Plan (the “SIP”), which was
approved by stockholders at the 2008 annual meeting. The purpose
of the SIP is to optimize our profitability and growth through
stock incentives that are consistent with our goals and that
link and align the personal interests of directors, officers and
employees to those of our stockholders. The SIP also enables us
to attract, motivate, and retain directors, officers and
employees who make significant contributions to our success and
to allow such individuals to share in our success. The plan is
intended to meet the requirements of Section 162(m) of the
Internal Revenue Code by qualifying certain awards as
performance-based compensation. The SIP is administered by the
Compensation Committee and the Stock Option Plan Committee. The
Compensation Committee is responsible for administering awards
to executive officers.
Table of Contents
Outstanding
Equity Awards at 2009 Fiscal Year-End
The following table sets forth summary information regarding the
outstanding stock options and restricted stock awards at
June 30, 2009 held by each of our NEOs. Unless otherwise
noted, option awards and stock awards are for the acquisition of
shares of Class A Common Stock and vest ratably over four
years commencing on the first anniversary of the grant date.
Table of Contents
This table summarizes the vesting of stock awards for each of
the NEOs for FY09. No stock options were exercised by the NEOs
in FY09.
Profit Sharing and Retirement Plan. The Profit
Sharing Plan is a defined contribution plan under which we make
discretionary annual contributions equal to the percentage of
each eligible participant’s compensation that we determine
for the year. The NEOs participate in the Profit Sharing Plan on
the same terms as are applicable to other employees. During
FY09, we made a contribution equal to 3% of eligible
compensation to U.S. eligible employees, including the
NEOs. Eligible compensation includes base salary and bonuses
subject to a dollar limit set by the IRS. For calendar years
2008 and 2009 the IRS limit was $230,000 and $245,000,
respectively. In addition, several other IRS limits apply to
contributions to the Profit Sharing Plan. Amounts that we could
not contribute to the Profit Sharing Plan because of these
limits were contributed to the SERP to restore the intended
benefit of the Profit Sharing Plan.
Participants may elect to invest the amounts that we contribute
in a variety of mutual funds, including managed income, bond,
fixed income, large-, mid-, and small-cap equity funds,
international equity funds and lifestyle funds. Earnings/(Loss)
on such investments were in the range of (40.61)% to 2.93%
during calendar year 2008 and (5.55)% to 18.24% for the first
six months of calendar year 2009. Molex stock is not an
investment option, and “above market” crediting rates
are not offered. A participant may transfer investments among
the various investment alternatives on a daily basis. Amounts
that we contribute commence vesting on a participant’s
second anniversary of employment. At that time, amounts vest in
20% annual increments and become fully vested on the
participant’s sixth anniversary of employment. In addition,
a participant will become fully vested upon attaining
age 65 or becoming disabled while in our employ, regardless
of his or her years of employment or if they retire at
age 591/2
with 15 years of service. Vested amounts are distributed to
a participant upon separation from service.
2005 Molex Supplemental Executive Retirement
Plan. The SERP is a nonqualified defined
contribution plan available to participants in the Profit
Sharing Plan who are affected by the IRS contribution limits. As
noted above, we contribute to the SERP on behalf of each
participant an amount equal to the contributions we could not
make to the Profit Sharing Plan on such participant’s
behalf due to IRS contribution limits. Each participant may
elect to invest the amounts that we contribute on his or her
behalf in a variety of mutual funds, including money market,
bond, fixed income, large-, mid-, and small-cap equity funds,
international equity funds and lifestyle funds. Earnings/(Loss)
on such investments were generally in the same ranges as for the
Profit Sharing Plan, (40.61)% to 3.76% during calendar year 2008
and (5.55)% to 18.24% for the first six months of calendar year
2009. Molex stock is not an investment option, and “above
market” crediting rates are
Table of Contents
not offered. A participant may transfer investments among the
various investment alternatives on a daily basis.
Amounts that we contribute under the SERP vest in accordance
with the same vesting schedule used by the Profit Sharing Plan.
Vested amounts are distributed to a participant (or, in the
event of the participant’s death, the participant’s
beneficiary) upon the earlier of separation from service, death
or disability. Participants may elect to receive their
distributions in either a single lump sum payment or five annual
installments. However, if distribution is due to separation from
service prior to attaining
age 591/2
or death, payment will be made in a single sum payment,
regardless of the participant’s election. To the extent
permitted under Section 409A of the Internal Revenue Code,
distributions may be accelerated in the event of an
unforeseeable emergency. Distributions to an NEO on account of
separation from service cannot begin earlier than six months
after separation from service.
The table below provides information for each NEO for FY09:
(i) the dollar amount of aggregate contributions made by us
on behalf of a NEO to the SERP; (ii) the dollar amount of
aggregate interest or other earnings accrued on the NEO’s
account in the SERP; (iii) the aggregate dollar amount of
all withdrawals by and distributions to the NEO, and
(iv) the dollar amount of total balance of the NEO’s
SERP account as of June 30, 2009. Participants do not make
contributions to the SERP.
Molex Executive Deferred Compensation
Plan. The Molex Executive Deferred Compensation
Plan permits participants to defer all or a portion of their
base salary and incentive during the calendar year (fiscal year,
in the case of incentives). Each participant may elect to invest
his or her deferrals in a variety of mutual funds, including
money market, bond, fixed income, large-, mid-, and small-cap
equity funds, international equity funds and lifestyle funds.
Molex stock is not an investment option, and “above
market” crediting rates are not offered. The investment
performance is reported under “Profit Sharing and
Retirement Plan.” Participants may transfer investments
among the various investment alternatives on a daily basis.
Participants make separate elections each year regarding the
amount to defer, the deferral period, and the method of
distribution at the end of the deferral period. Generally, a
participant’s deferrals (adjusted for investment gain or
loss) will be distributed to the participant (or, in the case of
the participant’s death, the participant’s
beneficiary) upon the earlier of the participant’s
separation from service, death or disability. However, a
participant can elect to have his our her deferrals (adjusted
for investment gain or loss) for a particular year distributed
after a specified period of time, which must be at least two
years after the beginning of the year to which they relate. An
election for such in-service distribution will be effective only
if the participant remains employed until the specified
distribution date. Participants who separate from service prior
to the specified distribution date must begin receiving payments
after separation from service even if the specified deferral
period has not expired.
All distributions will be made in a single sum payment, except
that a participant may elect to receive amounts distributed on
account of his or her separation from service after attaining
age 591/2
or disability in five annual installments. To the extent
permitted under Section 409A of the Internal Revenue Code,
distributions may be accelerated in the event of an
unforeseeable emergency. Distributions to executive officers
cannot begin earlier than six months after separation from
service.
Table of Contents
Currently, none of the NEOs participate in the deferred
compensation plan.
As nonqualified defined contribution plans, benefits under the
SERP and the deferred compensation plan are considered to be our
obligations, payable from our general assets. To assist us in
accumulating the funds necessary to pay these benefits, we have
established a grantor trust to which we contribute participant
deferrals. Benefits will be paid from this trust, to the extent
it has sufficient assets, and from us, to the extent the trust
does not have sufficient assets.
We do not currently provide executive officers with pension
benefits or employment, severance or change in control
agreements. On a
case-by-case
basis, the Compensation Committee has approved individual
retirement packages to retiring executive officers based on
years of service and contribution to Molex.
Under our equity compensation plans, outstanding and unvested
stock options will become fully vested and exercisable, and
outstanding and unvested restricted stock will become fully
vested and be distributed upon a participant’s death,
disability, retirement, or involuntary termination. In addition,
the awards will vest upon a change in control irrespective of a
termination of employment. In the event of a change in control
where the Company ceases to have publicly traded equity
securities, after the consummation of the change in control, if
no replacement awards are issued in lieu of outstanding awards
under the equity plans, then the plans and all outstanding
awards granted under the plans will terminate, and the Company
(or successor) will pay the participants an amount for their
outstanding awards determined using the
change-in-control
price. These provisions apply to all employees who participate
in the Company’s equity plans. The outstanding equity
awards held by the NEOs as of June 30, 2009 are described
above under “Outstanding Equity Awards at 2009 Fiscal
Year-End.”
We have estimated the amount of incremental compensation for
each of Messrs. Slark, Johnson, McCarthy, Hirokawa and
Brock would receive due to accelerated vesting of outstanding
restricted stock awards upon termination of the officer’s
employment in the event of the officer’s death, disability,
retirement or involuntary termination, or upon a change of
control irrespective of a termination of employment, as follows:
Mr. Slark, $2,561,437; Mr. Johnson, $952,675;
Mr. McCarthy, $1,060,525; Mr. Hirokawa, $1,595,274;
and Mr. Brock, $1,420,025. These amounts assume that the
termination of employment or change in control was effective as
of June 30, 2009 and that the price of Class A Common
Stock on which the calculations are made was the closing price
of $14.38 on that date. There is no value reflected for
acceleration of stock options as of June 30, 2009 for
Messrs. Slark, Johnson and McCarthy because the exercise
prices of all unvested stock options held by these officers are
greater than the closing price of our Class A Common Stock
on June 30, 2009. We have estimated the value for the
acceleration of stock options as of June 30, 2009 for
Messrs. Hirokawa and Brock at $116,000 and $40,840,
respectively. The amounts shown above are estimates of the
incremental compensation these officers would receive upon such
terminations or a change of control. The actual amounts to be
received can only be determined at the time of the
officer’s termination of employment or at the time of a
change in control.
An “involuntary termination” is defined for purposes
of the Company’s equity plans to mean the Company’s or
a subsidiary’s termination of a participant’s
employment pursuant to a planned employee reduction plan if:
Table of Contents
A “change in control” is defined for purposes of the
Company’s equity plans to mean:
In addition, as described in greater detail below under
“Transactions with Related Persons,” we have
agreements with each of Frederick A. Krehbiel and John H.
Krehbiel, Jr., pursuant to which we have agreed that if
either of them dies while employed, we will pay his wife, if she
survives him, $125,000 per year for the remainder of her life.
The Audit Committee adopted a written policy governing the
review and approval of related person transactions. The policy
requires that certain transactions with “related
persons” be approved
and/or
ratified by the Audit Committee. The transactions covered by
this policy include any transaction in which we are a
participant, the amount involved exceeds $120,000, and any
related person has a direct or indirect material interest. In
accordance with SEC regulations, the term “related
person” refers to stockholders of more than 5%, directors
(and nominees for director), executive officers and their family
members.
The policy provides standing pre-approval for certain types of
transactions that the Audit Committee has determined do not pose
a significant risk of a conflict of interest, either because a
related person would not have a material interest in a
transaction of that type or other characteristics of the
transaction eliminate the risk of a conflict of interest.
Standing pre-approval applies to the following:
Also, our employment of an immediate family member of one of our
directors or executive officers is not subject to the policy
unless the family member’s total compensation (salary,
bonus,
Table of Contents
perquisites and value of equity awards) exceeds $120,000
and/or the
family member is appointed an officer.
We engage in transactions, arrangements and relationships with
many other entities, including financial institutions and
professional organizations, in the course of ordinary business
activities.
Some of our directors, executive officers, greater than 5% stockholders and their immediate family members may be directors, officers, partners, employees or stockholders of these entities. We carry out transactions with these firms on customary terms, and, in many instances, our directors and executive officers may not have knowledge of them. For example, please see the discussion on page 10 regarding payments made to or received from companies that employ certain of our non-employee directors. Except to the extent set forth below, to our knowledge, since July 1, 2008 no director, executive officer, greater than 5% stockholder or any of their immediate family members has had a material interest in any of our ongoing business transactions or relationships.
On February 1, 1991, each of Frederick A. Krehbiel and John
H. Krehbiel, Jr., entered into an agreement pursuant to
which we agreed that if either of them dies while employed, we
will pay his wife, if she survives him, $125,000 per year for
the remainder of her life. Starting with January 1, 1992
the annual amount is automatically adjusted every January 1 to
reflect an increase (or decrease) in the Consumer Price Index
for the preceding calendar year at the rate of said increase or
decrease. Each agreement terminates in the event that employment
terminates for any reason other than death. As of March 31,
2009, we had accrued $73,000 for Frederick A. Krehbiel’s
arrangement and $158,000 for John H. Krehbiel, Jr.’s
arrangement. These amounts are included in the table below under
“All Other Compensation.”
Frederick A. Krehbiel, Fred L. Krehbiel, and John H.
Krehbiel, Jr. are members of the Board and are also
employees. During FY09, they were paid
and/or
earned the following amounts:
On September 2, 2008 and April 24, 2009, Fred L.
Krehbiel was granted 1,000 and 6,000 shares of restricted
stock, respectively. On August 15, 2008 and April 24,
2009, he received stock options to purchase 15,000 and
18,000 shares of Class A Common Stock, respectively.
The stock options vest ratably over four years commencing on the
first anniversary of the grant date; the August 15, 2008
grant expires five years following the grant date and the
April 24, 2009 grant expires ten years following the grant
date. There were no equity grants to Frederick A. Krehbiel or
John H. Krehbiel, Jr., during FY09. Frederick A. Krehbiel,
Fred L. Krehbiel and John H. Krehbiel, Jr., are all
eligible to participate in our compensation, benefit and health
and welfare plans generally to the same extent as all other
Molex employees.
Table of Contents
On October 31, 2008, Molex purchased 2,000,000 shares
of Common Stock from Frederick A. Krehbiel at a price per share
of $13.33, a discount from the closing price on the date of
purchase. Molex made this purchase from Mr. Krehbiel
pursuant to its stock repurchase program.
OTHER
MATTERS
There are two different procedures by which stockholders may
present proper proposals for action at our annual meetings of
stockholders. The first procedure is provided by the rules of
the SEC and the second by our Bylaws.
Pursuant to
Rule 14a-8
under the Securities Exchange Act of 1934, to be eligible for
inclusion in the proxy statement for our 2010 annual meeting,
your proposal must be received by us no later than May 14,
2010, and must otherwise comply with
Rule 14a-8.
While the Board will consider stockholder proposals, it reserves
the right to omit from our proxy statement stockholder proposals
that it is not required to include.
Our Bylaws permit stockholders of record to propose business to
be considered at an annual meeting without being included in our
proxy statement. Such business must be a proper matter for
stockholder action, and the stockholder proposing it must comply
with the applicable notice provisions of our Bylaws. Consistent
with our Bylaws, the Corporate Governance and Nominating
Committee has adopted “Procedures for Stockholders
Submitting Nominating Recommendations,” a copy of which is
included in this Proxy Statement as Appendix IV and on our
website, www.molex.com, on the Investors page under
Corporate Governance. Stockholders who desire to nominate a
candidate for election to the Board must follow these
procedures. As to any other business that a stockholder proposes
to bring before an annual meeting, other than nominations, the
Bylaws provide that a stockholder’s notice must include a
brief description of the business desired to be brought before
the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of the
stockholder making the proposal.
In order to propose a nomination or some other item of business
for the 2010 annual meeting under our Bylaws that is not
submitted for inclusion in our proxy statement under
Rule 14a-8,
you must notify us in writing and such notice must be delivered
to the Secretary no earlier than August 1, 2010, and no
later than August 31, 2010. If, however, the date of the 2010
annual meeting is more than 30 days before or more than
60 days after the first anniversary of the 2009 annual
meeting, then notice must be delivered not earlier than
90 days before the 2010 annual meeting and not later than
60 days before the 2010 annual meeting or the tenth day
following the day on which public announcement of the date of
the 2010 annual meeting is first made. You may write to our
Secretary at 2222 Wellington Court, Lisle, Illinois 60532, to
deliver the notices discussed above and to request a copy of the
relevant Bylaw provisions regarding the requirements for making
stockholder proposals.
We have adopted a Code of Business Conduct and Ethics for
directors, officers and employees, and a Code of Ethics for
Senior Financial Management. The full text of these codes can be
found on our website at www.molex.com. We intend to post
any amendments to or waivers from these codes on our website.
The 2009 Annual Report on
Form 10-K
(including exhibits), as amended, which we refer to as our
“Form 10-K,”
is available by accessing the Company’s website at
www.molex.com or the SEC’s website at
www.sec.gov. Stockholders may request a free copy of our
Form 10-K
by contacting
Table of Contents
Investor Relations at
(630) 527-4447.
We will furnish any exhibit to our
Form 10-K
if specifically requested to do so.
The SEC allows us to send a single proxy statement and annual
report to two or more stockholders who share the same address,
subject to certain conditions. This practice is known as
householding. If your household receives multiple copies of our
proxy statements and annual reports and you wish to receive only
one copy, please call your bank or broker or contact Investor
Relations by telephone at
(630) 527-4447
or by mail at 2222 Wellington Court, Lisle, Illinois 60532.
Conversely, if your household receives only one copy of our
proxy statements and annual reports and you would prefer to
receive separate copies for each account, please call your bank
or broker or contact Investor Relations by telephone or mail as
described above and ask to have your accounts removed from the
householding program.
Table of Contents
APPENDIX I
MOLEX
INCORPORATED
Personal characteristics to be sought in candidates for the
Board:
Table of Contents
APPENDIX II
MOLEX
INCORPORATED
The Company is of the view that the continuing service of
qualified incumbents promotes stability and continuity in the
boardroom, contributing to the Board’s ability to work as a
collective body, while giving the Company the benefit of the
familiarity and insight into the Company’s affairs that its
directors have accumulated during their tenure. Accordingly, the
process of the Committee for identifying nominees shall reflect
the Company’s practice of re-nominating incumbent directors
who continue to satisfy the Committee’s criteria for
membership on the Board, whom the Committee believes continue to
make important contributions to the Board and who consent to
continue their service on the Board.
In view of the foregoing, the Committee will observe the
following procedures in identifying and evaluating candidates
for election to the Company’s Board of Directors
Table of Contents
Table of Contents
APPENDIX III
MOLEX
INCORPORATED
It is Molex’s policy to facilitate communications of
stockholders with the Board of Directors and its Committees
subject to the following conditions:
Table of Contents
APPENDIX IV
MOLEX
INCORPORATED
PROCEDURES FOR
STOCKHOLDERS SUBMITTING NOMINATING RECOMMENDATIONS
The Nominating and Corporate Governance Committee (Committee)
will accept for consideration submissions from stockholders of
recommendations for the nomination of directors subject to the
following terms and conditions:
All stockholders nominating recommendations must be in writing,
addressed to the Secretary at 2222 Wellington Court, Lisle,
IL 60532. Submissions must be made by mail, courier or personal
delivery.
E-mailed
submissions will not be considered.
A nominating recommendation must be accompanied by the following
information concerning each recommending stockholder:
A nominating recommendation must be accompanied by the following
information concerning the proposed nominee:
The nominating recommendation must describe all relationships
between the proposed nominee and the recommending stockholder
and any agreements or understandings between the recommending
stockholder and the nominee regarding the nomination.
The nominating recommendation shall describe all relationships
between the proposed nominee and any of Molex’s
competitors, customers, suppliers or other persons with special
interests regarding Molex.
Table of Contents
The recommending stockholder must furnish a statement supporting
its view that the proposed nominee possesses the minimum
qualifications prescribed by the Committee for nominees, and
briefly describing the contributions that the nominee would be
expected to make to the Board.
The recommending stockholder must state whether, in the view of
the stockholder, the nominee, if elected, would represent all
stockholders and not serve for the purpose of advancing or
favoring any particular stockholder or other Molex constituency.
A stockholder (or group of stockholders) wishing to submit a
nominating recommendation for an annual meeting of stockholders
must ensure that it is received by Molex, as provided above, not
less than 60 days nor more than 90 days prior to the
first anniversary of the preceding year’s annual meeting of
stockholders. In the event that the date of the annual meeting
of stockholders for the current year is more than 30 days
following the first anniversary date of the annual meeting of
stockholders for the prior year, the submission of a
recommendation will be considered timely if it is submitted a
reasonable time in advance of the mailing of Molex’s proxy
statement for the annual meeting of stockholders for the current
year.
If a recommendation is submitted by a group of two or more
stockholders, the information regarding recommending
stockholders must be submitted with respect to each stockholder
in the group.
Acceptance of a recommendation for consideration does not imply
that the Committee will interview or nominate the recommended
candidate.
Table of Contents
MOLEX INCORPORATED 2222 WELLINGTON COURT LISLE, IL 60532-1682 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 October 29, 2009. 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. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by Molex Incorporated in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. 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 October 29, 2009. Have your proxy card in hand when you call and then follow the instructions. 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 Molex Incorporated, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
01) Michelle L. Collins
02) Fred L. Krehbiel 03) David L. Landsittel 04) Joe W. Laymon 05) James S. Metcalf
Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report/Form 10-K are available at www.proxyvote.com. M17069-P84854
MOLEX INCORPORATED
2222 Wellington Court, Lisle, Illinois 60532
Annual Meeting of Stockholders — October 30, 2009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Molex Incorporated, a Delaware corporation, hereby acknowledges
receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement and hereby appoints
Frederick A. Krehbiel, John H. Krehbiel, Jr., and Martin P. Slark and each or any of them (the
“Proxies”), as proxies and attorneys-in-fact, each with full power of substitution, on behalf of
and in the name of the undersigned, to represent the undersigned at the Annual Meeting to be held
October 30, 2009 at 10:00 a.m., Central time, at Molex’s corporate headquarters, and at any
adjournments or postponements thereof, and to vote all of the shares of Common Stock (or Class B
Common Stock) of Molex held of record by the undersigned as of the close of business on September
8, 2009, which the undersigned would be entitled to vote if personally present at the Annual
Meeting with all the powers the undersigned would possess, on all matters set forth on the reverse
side.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF
ALL NOMINEES FOR DIRECTORS, AND “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP.
The Proxies, in their discretion, are further authorized to vote (i) for the election of a
person to the Board of Directors if any nominee herein becomes unavailable to serve or for good
cause will not serve, and (ii) in their best judgment on any other matters that may properly come
before the Annual Meeting.
PLEASE VOTE, DATE AND SIGN THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
(Please complete and sign reverse side)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||
