The Company's directors are elected on a staggered term basis, with each class of directors being as nearly equal as possible, and standing for re-election once in each three-year period. At the Annual Meeting, the holders of the Class A Common Stock will elect twothree directors for three-year terms.terms and one director for a two-year term. Each of the Board's nominees has consented to be named in this proxy statement and to serve as a director if elected. John S. Johnson is not standing for re-election at the Annual Meeting. In addition, Howard B. Bernstein is retiring as a director as of the Annual Meeting date.
Unless a shareholder either indicates "withhold authority" on his proxy or indicates on his proxy that his shares should not be voted for certain nominees, it is intended that the persons named in the proxy will vote for the election as directors of the nominees listed below to serve until the expiration of their terms and thereafter until their successors shall have been duly elected and shall have qualified. Discretionary authority is also solicited to vote for the election of a substitute or substitutes for said nominees if any of them, for any reason presently unknown, cannot be a candidate for election.
The Board considered the following attributes in determining that each nominee and continuing director is qualified to serve as a director of the Company:
Mr. Nowling's 35 years of accounting and financial management experience, including his service in senior financial management positions at two publicly-traded technology companies for more than 25 years, and his educational accomplishments led the Board to believe that this individual should serve as a director of the Company. Mr. Nowling is currently Sr. Vice President and Corporate Controller and chief accountant for a $1.1$1.0 billion technology company. Mr. Nowling holds a B.S. degree in Economics (magna cum laude), from the University of Pennsylvania's Wharton School of Business and is a CPA in the State of New York.
Mr. Segall has an extensive background in mergers and acquisitions, including his experience as the Senior Managing Director and founder of Kidron Corporate Advisors LLC, a mergers and acquisitions corporate advisory boutique firm. Mr. Segall received an AB in History from Columbia University and a JD from New York University Law School. His financial and investment banking experience, his educational background and the fact that he is an attorney all led the Board to conclude that he should serve as a director of Bel.
Mr. Yeung is the founder and retired CEO of YEL Electronics Hong Kong Ltd., an electronic components distributor in China. Mr. Yeung's background in the operational aspects of the electronics industry, particularly in China where Bel has a significant amount of its manufacturing facilities, and his educational background which includes his receiving a BSEE degree from UCLA, led the Board to conclude that this individual should serve as a director of the Company.
Name and Age | | Officer Since | | Positions and Offices with the Company/Business Experience |
Daniel Bernstein, 6263 | | 1985 | | President, Chief Executive Officer and Director |
Colin Dunn, 7172 | | 1992 | | Vice President of Finance, Treasurer, and Secretary |
Dennis Ackerman, 5354 | | 2001 | | President of Bel Power Solutions (June 2014 to present); Vice President of Operations |
Raymond Cheung, 5960 | | 2007 | | Vice President Asia Operations |
Peter Bittner III, 4647 | | 2015 | | President of Bel Connectivity Solutions (May 2015 to present) |
DanielMr. Bernstein has served the Company as President since June 1992 and as Chief Executive Officer since May 2001. He previously served as Vice President (1985-1992) and Treasurer (1986-1992) and has served as a Director since 1986. He has occupied other positions with the Company since 1978. He is currently a director of Bel Fuse Inc., Cinch Connectors, Inc., Bel Transformer Inc., Bel Power Inc. and Bel Stewart GmbH.
ColinMr. Dunn joined the Company in 1991 as Finance Manager and in 1992 was named Vice President of Finance and Treasurer. He was appointed Secretary of the Company in May 2003. He is currently a director of Bel Fuse Ltd., Bel Fuse (Macao Commercial Offshore) Limited, Bel Stewart s.r.o., Cinch Connectors, Inc. and Cinch Connectors Ltd. Mr. Dunn is also a managing director of Bel Stewart GmbH and a managing director of TRP Connector B.V. Prior to joining the Company, Mr. Dunn was Vice President of Finance and Operations at Kentek Information Systems, Inc. from 1985 to 1991 and had previously held a series of senior management positions with Braintech Inc. and Weyerhaeuser Company. Mr. Dunn has an MBA degree from Yale University. As announced in a press release on February 17, 2017, Mr. Dunn will be retiring from the Company effective May 23, 2017.
DennisMr. Ackerman joined the Company in 1986 and has held the positions of Customer Service Manager, Sales Manager, Purchasing Manager and Operations Manager. In 2001, he was named Vice President of Operations and in June 2014, he was named President of Bel Power Solutions, Inc. In addition, Mr. Ackerman is currently a director of Dongguan Transpower Electric Products Company Limited. Mr. Ackerman has an MBA degree from Fairleigh Dickinson University.
RaymondMr. Cheung joined the Company in 1990 and has served as a Regional Sales Manager and most recently as Director of Sales for Asia. In October 2007, he was appointed Vice President Asia Operations. Mr. Cheung is currently a director of Bel Fuse (Macao Commercial Offshore) Limited and TRP Connector B.V. Prior to joining the Company, Mr. Cheung worked as a Design and Project Engineer at Astec Power Computer Products, and as a Technical Sales Manager at Asian Sources Magazine.
PeterMr. Bittner III began his career in 1991 at Stewart Connector Systems. He joined Insilco Technologies, Stewart Connector's parent company, in 1999, serving as Industry Marketing Manager. Following Insilco's acquisition by Bel in 2003, Mr. Bittner was named General Manager of Stewart Connector. Mr. Bittner assumed responsibility for the acquired businesses of Cinch Connectors, Gigacom Interconnect, Array Connector and Fibreco from their respective dates of acquisition. In May 2015, Mr. Bittner was named President of Bel Connectivity Solutions. He holds a Bachelor of Science degree in Business Management.
Beneficial Ownership of the Company's Stock
The following table sets forth certain information regarding the ownership of Bel's Class A Common Stock and Class B Common Stock as of March 22, 201628, 2017 by (a) each director and nominee; (b) the Company's Chief Executive Officer, Vice President of Finance and Treasurer, and our only three other executive officers for 20152016 whose compensation exceeded $100,000 (these five persons are referred to herein as the "Named Officers") and (c) all directors and executive officers as a group. Unless otherwise stated in the footnotes following the table, the nominees, directors and Named Officers listed in the table have sole power to vote and dispose of the shares which they beneficially owned as of March 22, 2016.28, 2017. The percentage for the Class A Common Stock represents the percent of the Class whose voting rights were not suspended. See "Vote Required; Shares Entitled to Vote; Principal Shareholders".
| Aggregate Number of Shares Beneficially Owned (1) |
| Class A Common Stock | | Class B Common Stock | |
| No. of Shares | Percent of Class Whose Voting Rights Were Not Suspended | | No. of Shares | Percent of Outstanding Shares | |
Daniel Bernstein(2) | 353,204 | 21.1 | | 134,038 | 1.4 | |
Howard B. Bernstein(3) | 140,000 | 8.4 | | 265,000 | 2.7 | |
Colin Dunn(4) | 2,637 | * | | 31,759 | * | |
Avi Eden(5) | -- | * | | 12,000 | * | |
Peter Gilbert(6) | 500 | * | | 16,000 | * | |
John S. Johnson(7) | 1,908 | * | | 20,208 | * | |
Robert H. Simandl(8) | 1,585 | * | | 16,755 | * | |
John F. Tweedy(9) | 250 | * | | 16,650 | * | |
Dennis Ackerman(10) | 853 | * | | 13,596 | * | |
Raymond Cheung(11) | 158 | * | | 18,825 | * | |
Mark Segall(12) | -- | * | | 4,000 | * | |
Norman Yeung(13) | -- | * | | 4,000 | * | |
Eric Nowling(14) | -- | * | | 4,000 | * | |
Peter Bittner III(15) | -- | * | | 6,500 | * | |
All directors, nominees and executive officers as a group (14 persons)(16) | 501,095
| 29.9
| | 563,331
| 5.7 | |
| Aggregate Number of Shares Beneficially Owned (1) |
| Class A Common Stock | | Class B Common Stock | |
| No. of Shares | Percent of Class Whose Voting Rights Were Not Suspended | | No. of Shares | Percent of Outstanding Shares | |
Daniel Bernstein(2) | 353,204 | 21.1 | | 143,038 | 1.4 | |
Avi Eden(3) | -- | * | | 12,000 | * | |
Peter Gilbert(4) | 500 | * | | 16,000 | * | |
Eric Nowling(5) | -- | * | | 4,000 | * | |
Mark Segall(6) | -- | * | | 8,000 | * | |
Robert H. Simandl(7) | 1,585 | * | | 16,755 | * | |
John F. Tweedy(8) | 250 | * | | 16,650 | * | |
Vincent Vellucci(9) | -- | * | | 4,000 | * | |
Norman Yeung(10) | -- | * | | 4,000 | * | |
Colin Dunn(11) | 2,637 | * | | 31,759 | * | |
Dennis Ackerman(12) | 853 | * | | 21,095 | * | |
Raymond Cheung(13) | 158 | * | | 28,825 | * | |
Peter Bittner III(14) | -- | * | | 13,161 | * | |
All directors, nominees and executive officers as a group (13 persons)(15) | 359,187
| 21.4
| | 319,284
| 3.2 | |
(1) | As of March 22, 2016,28, 2017, there were 2,174,912 and 9,701,9779,846,502 shares of Class A Common Stock and Class B Common Stock outstanding, respectively. A total of 1,673,4441,671,312 shares of Class A Common Stock are entitled to vote at the Annual Meeting (the voting rights of one shareholder owning an aggregate of 501,468503,600 shares of Class A Common Stock have been suspended). |
(2) | The shares of Class A Common Stock beneficially owned by DanielMr. Bernstein include 1,583 shares allocated to Mr. Bernstein in the Company's 401(k) Plan over which he has voting but no investment power. The shares of Class B Common Stock beneficially owned by Daniel Bernstein include 59,052 shares owned by a family limited liability company of which Mr. Bernstein and his children are members, 55,939 shares owned by a trust in which Mr. Bernstein is a beneficiary, 10,047 shares allocated to Mr. Bernstein in the Company's 401(k) Plan over which he has no voting or investment power and 9,00018,000 shares of restricted stock. |
(3) | The shares of Class B Common Stock beneficially owned by Howard B. BernsteinMr. Eden include 5,0004,000 shares of restricted stock. Mr. Bernstein is retiring as a director as of the Annual Meeting date. |
(4) | The shares of Class B Common Stock beneficially owned by Mr. Gilbert include 1,250 shares held of record by Mr. Gilbert's wife and 4,000 shares of restricted stock. |
(5) | The shares of Class B Common Stock beneficially owned by Mr. Nowling include 3,000 shares of restricted stock. |
(6) | The shares of Class B Common Stock beneficially owned by Mr. Segall include 5,000 shares of restricted stock. |
(7) | The shares of Class A Common Stock beneficially owned by ColinMr. Simandl include 1,200 shares held of record by Mr. Simandl's wife. The shares of Class B Common Stock beneficially owned by Mr. Simandl include 3,600 shares held of record by Mr. Simandl's wife and 4,000 shares of restricted stock. |
(8) | The shares of Class B Common Stock beneficially owned by Mr. Tweedy include 4,000 shares of restricted stock. |
(9) | The shares of Class B Common Stock beneficially owned by Mr. Vellucci consist of 4,000 shares of restricted stock. |
(10) | The shares of Class B Common Stock beneficially owned by Mr. Yeung include 3,000 shares of restricted stock. |
(11) | The shares of Class A Common Stock beneficially owned by Mr. Dunn include 887 shares allocated to him in the Company's 401(k) Plan over which he has voting but no investment power. The shares of Class B Common Stock beneficially owned by Mr. Dunn include 5,259 shares allocated to him in the Company's 401(k) Plan over which he has no voting or investment power and 7,500 shares of restricted stock. |
(5) | The shares of Class B Common Stock beneficially owned by Avi Eden include 5,000 shares of restricted stock. |
(6) | The shares of Class B Common Stock beneficially owned by Peter Gilbert include 1,250 shares held of record by Mr. Gilbert's wife and 5,000 shares of restricted stock. |
(7) | The shares of Class A Common Stock beneficially owned by John S. Johnson include 155 shares held by Mr. Johnson as custodian for his grandchildren. The shares of Class B Common Stock beneficially owned by Mr. Johnson include 1,944 shares held by Mr. Johnson as custodian for his grandchildren and 5,000 shares of restricted stock. Mr. Johnson is not standing for re-election at the Annual Meeting. |
(8) | The shares of Class A Common Stock beneficially owned by Robert H. Simandl include 1,200 shares held of record by Mr. Simandl's wife. The shares of Class B Common Stock beneficially owned by Mr. Simandl include 3,600 shares held of record by Mr. Simandl's wife and 5,000 shares of restricted stock. |
(9) | The shares of Class B Common Stock beneficially owned by John F. Tweedy include 5,000 shares of restricted stock. |
(10)(12) | The 853 shares of Class A Common Stock beneficially owned by DennisMr. Ackerman are allocated to him in the Company's 401(k) Plan; he has voting but no investment power with respect to these shares. The shares of Class B Common Stock owned by Mr. Ackerman include 6,0966,095 shares allocated to him in the Company's 401(k) Plan over which he has no voting or investment power and 7,50015,000 shares of restricted stock. |
(11)(13) | The 158 shares of Class A Common Stock beneficially owned by RaymondMr. Cheung are allocated to him in the Far East Retirement Plan (as described under "Other Non-Performance Benefit Plans" within the Executive Compensation section of this Proxy Statement); he has voting but no investment power with respect to these shares. The shares of Class B Common Stock beneficially owned by Mr. Cheung include 825 shares allocated to him in the Far East Retirement Plan over which he has no voting or investment power and 4,500 shares of restricted stock. |
(12) | The shares of Class B Common Stock beneficially owned by Mark Segall include 2,000 shares of restricted stock. |
(13) | The shares of Class B Common Stock beneficially owned by Norman Yeung consist of 4,00013,000 shares of restricted stock. |
(14) | The shares of Class B Common Stock beneficially owned by Eric Nowling consist of 4,000Mr. Bittner include 1,661 shares allocated to him in the Company's 401(k) Plan over which he has no voting or investment power and 11,500 shares of restricted stock. |
(15) | The shares of Class B Common Stock beneficially owned by Peter Bittner III consist of 3,000 shares of restricted stock. |
(16) | Includes 3,481 and 22,22723,888 shares of Class A Common Stock and Class B Common Stock, respectively, allocated in the Company's 401(k) Plan and Far East Retirement Plan over which such persons have with respect to the Class A Common Stock, voting but no investment power, and with respect to the Class B Common Stock, no voting or investment power. The Class B Common Stock also includes 71,50093,500 restricted shares. |
* | Shares constitute less than one percent of the shares of Class A Common Stock or Class B Common Stock outstanding. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors, executive officers and greater than ten percent beneficial owners to file with the Securities and Exchange Commission certain reports regarding such persons' ownership of the Company's securities. Directors, officers and greater than ten percent beneficial owners are required by applicable regulations to furnish Bel with copies of all Section 16(a) forms they file. Based solely upon a review of the copies of the forms or information furnished to Bel, the Company believes that all 20152016 filing requirements applicable to its directors, officers and greater than ten percent beneficial owners were satisfied on a timely basis.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
General
This Compensation Discussion and Analysis ("CD&A") explains the material elements of our executive compensation program by describing the following:
· | the objectives of the issuer's compensation programs; |
· | the conduct that the compensation programs are designed to reward; |
· | the elements of the compensation program; |
· | the rationale for each of the elements of the compensation program; |
· | how the issuer determines the amount (and, where applicable, the formula) for each element of the compensation program; and |
· | how each element and the issuer's decisions regarding that element fit into the issuer's overall compensation objectives and affect decisions regarding other elements of the compensation program. |
Overview
We are engaged in a very competitive industry worldwide, with relatively low barriers to competitive entry in the electronic products market. Just as stock prices in our industry tend to be volatile, our customers' demand for our products varies significantly from year to year. We have only limited visibility as to future customer requirements. For this reason, we have found it necessary to keep our overhead relatively low so that we can operate effectively even when demand for our products weakens. In the area of compensation, we seek to control salaries as best we can and focus our incentives on other elements that can vary from year to year with our performance. Our goal is to compensate our Named Officers at levels that will enable us to retain their services while retaining control over our overhead.
Our performance-based elements of compensation are salary, bonuses and long-term stock incentive compensation. Other non-performance elements of compensation consist of retirement benefits, certain other plan benefits and certain perquisites. In order to effectively control overhead costs in times of volatile product demand, our executive compensation philosophy is to limit annual increases in base salaries and to supplement the overall compensation package with annual bonuses in amounts that are primarily dependent upon the Company's financial performance for the period.
We compete in our industry on the basis of product performance, quality, reliability, depth of product line, customer service, technological innovation, design, delivery time and price. Our compensation structure is intended to reward and incentivize the types of performance which improve our ability to excel in these areas, as well as performance which enhances our overall financial stability and global presence.
Compensation Elements
Salary
We pay salaries to our Named Officers in order to provide a base compensation to them for their day-to-day responsibilities in managing our business. We do not rely upon consultants to set our salaries, to establish salary ranges or to provide advice regarding other compensation matters, nor do we engage in any benchmarking activities. The Company views base salary simply as a fixed component of overall compensation, with a large variable portion being derived from annual bonuses as described below.
In terms of overall compensation, our Chief Executive Officer receives salary recommendations from our U.S. management team and our Far East management team. Our Chief Executive Officer then formulates his own recommendations which he presents to our Compensation Committee. Our Chief Executive Officer does not participate in the deliberations regarding his own salary, but does participate in discussions regarding salary levels for our other Named Officers. Salary levels are typically reviewed in December, and adjusted from time to time after taking into account overall Company performance as well as team performance. During 2013 and 2014, the Compensation Committee did not implement any salary increase for the Chief Executive Officer and the Chief Executive Officer did not recommend base salary increases to the Compensation Committee for the other Named Officers. The base salaries in place for the Named Officers during each of 2013 and 2014 were as follows:
Daniel Bernstein | | $ | 300,000 | |
Colin Dunn | | $ | 225,000 | |
Dennis Ackerman | | $ | 215,000 | |
Raymond Cheung | | $ | 200,000 | |
Daniel Bernstein | | $ | 300,000 | |
Colin Dunn | | $ | 225,000 | |
Dennis Ackerman | | $ | 215,000 | |
Raymond Cheung | | $ | 200,000 | |
In December 2014, the Compensation Committee implemented a base salary increase for the Chief Executive Officer and the Chief Executive Officer recommended base salary increases to the Compensation Committee for the other Named Officers. The Compensation Committee implemented a salary increase for the Chief Executive Officer and approved the proposed base salaries for the four other Named Officers effective January 1, 2015 as set forth below. There were no further base salary increases implemented for the Chief Executive Officer or the other Named Officers during 2016.
Daniel Bernstein | | $ | 400,000 | |
Colin Dunn | | $ | 310,000 | |
Dennis Ackerman | | $ | 300,000 | |
Raymond Cheung | | $ | 250,000 | |
Peter Bittner III* | | $ | 200,000 | |
Daniel Bernstein | | $ | 400,000 | |
Colin Dunn | | $ | 310,000 | |
Dennis Ackerman | | $ | 300,000 | |
Raymond Cheung | | $ | 250,000 | |
Peter Bittner III* | | $ | 200,000 | |
* Mr. Bittner became a Named Officer in May 2015
Bonus
Bel has a Company-performance based bonus plan that a broad base of associates participate in. Financial results are monitored on a quarterly basis by the Chief Executive Officer, the Vice President of Finance, the President of Bel Power Solutions and the President of Bel Connectivity Solutions. Management utilizes net income as the financial measure in evaluating the Company's performance as compared to prior quarters. Based on the quarterly review, a bonus accrual may be established by the Compensation Committee based on recommendations from the Chief Executive Officer, the Vice President of Finance, the President of Bel Power Solutions and the President of Bel Connectivity Solutions. At the end of each year in which a bonus accrual has been established, the Compensation Committee receives recommendations from the Chief Executive Officer with respect to the payment of specific bonuses to specific individuals, based upon the overall size of that year's bonus pool as well as individuals' respective participation in achieving team objectives throughout the year. The decision to grant bonuses is ultimately made by the Company's Compensation Committee. The target bonus payment for Bel's key executives (including the Named Officers, in addition to other key executives) is 4-6 months of their annual salary; however, this varies dependent upon the bonus pool established during the year and may vary by individual based on extenuating circumstances.
During each of the past three years, an overall bonus pool was allocated among executives, management, and technical and administrative employees of the Company based on number of weeks pay, in accordance with their respective contributions to our corporate performance. In 2016, of a total bonus pool of $4.6 million, $1,179,232 was allocated to our Named Officers and reflected forty-two weeks' pay for each Named Officer. In 2015, of a total bonus pool of $2.6 million, $673,847 was allocated to our Named Officers and reflected twenty-four weeks pay for each Named Officer. In 2014, of a total bonus pool of $4.0 million, $578,461 was allocated to our Named Officers and reflected thirty-two weeks pay for each Named Officer. In 2013, of a total bonus pool of $4.0 million, $863,077 was allocated to our Named Officers and reflected fifty-two weeks pay for Mr. Bernstein, Mr. Dunn and Mr. Ackerman and thirty-two weeks pay for Mr. Cheung.
Long-Term Stock Incentive Compensation
Our 2011 Equity Compensation Program, as approved by our shareholders at the 2011 Annual Meeting, permits us to issue four types of non-cash awards based on our Class B Common Stock: restricted stock grants, incentive stock options, non-qualified stock options and stock appreciation rights. For the past several years, we relied upon restricted stock awards as our primary form of long-term stock incentive compensation.
On May 17, 2016, we granted shares or restricted stock to several of our associates, including Mr. Bittner, who was granted 10,000 shares of restricted stock. On November 4, 2013,15, 2016, we granted restricted shares to several of our associates, including fourthree of our Named Officers. In 2013,Officers: 12,000 shares of restricted stock were granted to Mr. Bernstein and 10,000 shares of restricted stock were granted to each of Mr. DunnAckerman and Mr. Ackerman and 6,000 shares of restricted stock were granted to Mr. Cheung. On May 16, 2012, we granted restricted shares to several of our associates, including Mr. Bittner who was granted 6,000 shares of restricted stock. The shares awarded are earned in 25% increments on the second, third, fourth and fifth anniversaries of the grant date, provided the employee has remained employed by the Company through such anniversary dates; otherwise the unearned shares are forfeited. We did not grant any restricted stock awards to any of our Named Officers during 2014 or 2015. While our 2011 Equity Compensation Program does not preclude the grant of restricted shares on an annual basis, the Compensation Committee concluded that given the structure and amount of the restricted stock awards previously made, there was no need to grant additional restricted stock awards to the Named Officers during 2014 or 2015.
Generally, our experience has been to consider restricted stock awards at the May and Octoberquarterly director meetings, as opposed to granting options and stock awards throughout the year. By making our grant determinations at specific times each year, we avoid even an appearance of coordinating grants with release dates of material information not previously disclosed to the public.
Our 2011 Equity Compensation Program is designed to help attract and retain superior individuals for positions of substantial responsibility within our Company and to provide these persons with an additional incentive to contribute to the success of our Company, all of which we expect will result in increased shareholder value. Restricted stock grants are awards of actual shares of our common stock, without any initial cost to the associate, but subject to a vesting restriction. The shares cannot be sold or transferred until the restriction ends and the shares become "vested." Shares not vested are forfeited back to us if it becomes impossible to meet the condition for ending the restriction. Restricted stock grants offer the opportunity to obtain shares of our common stock without payment to us, provided the condition to ending the restriction is met. We award restricted stock grants because we believe that they aid in retaining our key executives, who are positioned to benefit from an increase in share value.
Retirement Benefits
We have designed our Supplemental Executive Retirement Plan, or "SERP", to provide a limited number of our key management and highly compensatedother key associates with supplemental retirement and death benefits. Each of our Named Officers is a participant in the SERP. Participants in the SERP are selected by our Compensation Committee based upon recommendations from our Chief Executive Officer. We believe that this benefit incentivizes key associates to remain with us on a career-long basis and engenders loyalty to our Company.
Benefits available under the SERP vary depending upon when and how a participant terminates employment with us. If a participant retires on his normal retirement date (65 years old, 20 years of service, and five years of participation in the SERP), his or her normal retirement benefit under the SERP would be annual payments equal to 40% of his or her average base compensation -- using compensation from the highest five consecutive calendar years of SERP participation -- payable in monthly installments for the remainder of his or her life. If a participant retires early (55 years old, 20 years of service, and five years of participation in the SERP), his or her early retirement benefit would be an amount (i) calculated as if his or her early retirement date were in fact such participant's normal retirement date, (ii) multiplied by a fraction, the numerator being the actual years of service the participant has with us and the denominator being the years of service the participant would have had if he or she had retired at his or her normal retirement date, and (iii) actuarially reduced to reflect the early retirement date. If a participant dies prior to receiving 120 monthly payments under the SERP, his or her beneficiary is entitled to continue receiving benefits for the shorter of (i) the time necessary to complete 120 monthly payments or (ii) 60 months. If a participant dies while employed by us, his or her beneficiary will receive, as a survivor benefit, an annual amount equal to (i) 100% of the participant's annual base salary at the date of death for one year, and (ii) 50% of the participant's annual base salary at the date of death for each of the following four years, each payable in monthly installments. Our SERP also provides for disability benefits, and a forfeiture of benefits if a participant terminates employment for reasons other than those contemplated under the SERP.
In the event of a "change in control" (as defined in the SERP), each participant who is employed by us at the time of the change in control will be entitled to a normal retirement benefit commencing immediately following termination of employment (or in the case of certain participants who are "specified employees" for purposes of Section 409A of the Code (discussed below), six months after termination of employment). The normal retirement benefit payable under these circumstances will be the actuarial equivalent of the benefit that would commence upon the date that the participant would have attained his or her normal retirement date if he or she had not terminated employment. Further, each participant's average base compensation will be deemed to be equal to his or her annual base compensation in effect prior to the change in control. If we have established a trust to accumulate assets from which to pay SERP benefits, then we will fully fund the trust in connection with a change in control in order to ensure that there will be sufficient assets set aside to pay all SERP benefits. A "change in control" for purposes of the SERP includes a merger or consolidation with another corporation whereby our shareholders do not own a majority of the surviving or successor entity, an acquisition of 50% or more of our voting securities by one person or a group of persons acting together, a sale of all or substantially all of our assets to any person, our dissolution or liquidation or if the members of our incumbent Board of Directors (or their successors, if approved by them) cease for any reason to constitute at least two-thirds of the members of our Board.
As of December 31, 2015,2016, Mr. Dunn was eligible for normal retirement under the SERP. Had he retired on December 31, 2015,2016, Mr. Dunn would have been eligible for a monthly benefit under the SERP in the amount of $7,500 payable for life. As of December 31, 2015,2016, Mr. Bernstein and Mr. Cheung were eligible for early retirement under the SERP. Had each retired on December 31, 2015,2016, Mr. Bernstein would have been eligible for a monthly benefit under the SERP in the amount of $8,523$9,000 payable for life and Mr. Cheung would have been eligible for a monthly benefit under the SERP in the amount of $4,420$4,747 payable for life. Had each of our Named Officers terminated employment on December 31, 20152016 in connection with a change in control, they would have been entitled under the SERP to a monthly benefit for life as follows: Mr. Bernstein, $9,214;$9,474; Mr. Dunn, $7,500; Mr. Ackerman, $5,231;$5,359; Mr. Cheung, $5,626;$5,779; and Mr. Bittner, $4,058.$4,137. The present value of those change in control benefits for the Named Officers, using the actuarial assumptions used for our financial reporting purposes, would be as follows: Mr. Bernstein, $1,684,876;$1,658,909; Mr. Dunn, $1,112,819;$1,058,572; Mr. Ackerman, $1,106,358;$1,104,046; Mr. Cheung, $1,086,954;$1,074,397; and Mr. Bittner, $934,940.$942,773.
Other Non-Performance Benefit Plans
Our Named Officers are eligible to participate, as are all our associates who meet service requirements under the several plans, in the following types of non-performance benefit plans:
Our associates, including our Named Officers, are entitled to participate in either our domestic 401(k) plan or our Far East Retirement Plan.
· | Our associates, including our Named Officers, are entitled to participate in either our domestic 401(k) plan or our Far East Retirement Plan. Pursuant to our domestic 401(k) plan, we make matching contributions of pre-tax elective deferral contributions made by associates. The Company amended its domestic 401(k) plan effective January 1, 2012. During 2013, 2014, 2015 and 2015, under the new plan design,2016, the Company matched 100% of the first 1% of compensation contributed by participants and 50% of the next 5% of compensation contributed by participants. Compensation of participants in excess of statutory limits for tax-qualified plans ($265,000 in 2015)2016) is disregarded for purposes of determining contributions by participants and matching contributions. Matching contributions during 2016 were made in cash since 2012. Ourand invested at the direction of participants among various investment funds offered under the plan, none of which included Company stock. Effective for matching contributions made for years after 2016, the domestic 401(k) plan provides for matching contributions to be invested in shares of our Class A Common Stock, though participants who have three or more years of service will be able to divest their Class A Common Stock and reinvest in other investment alternatives offered under the plan. The trustees of the domestic 401(k) plan adopted a "10b5-1 plan," in accordance with guidelines specified by Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, to make open market purchase of shares of our Class A Common Stock with such matching contributions. For years prior to 2012, our matching contributions under the domestic 401(k) plan were made in shares of our Class B Common Stock for years prior to 2012. Stock. |
· | The Far East Retirement Plan is a defined contribution mandatory provident fund arrangement established pursuant to Hong Kong law. Subject to certain minimum and maximum levels under Hong Kong law, five percent of a participant's salary must be contributed to the Far East Retirement Plan. We match amounts contributed to the Far East Retirement Plan. Our current match equals 7% of an associate's base salary. Under the Far East Retirement Plan, our matching amounts are currently made partly in shares of our Class B Common Stock - approximately 10% of our contribution - and partly in cash - approximately 90% of our contribution. Mr. Cheung is the only Named Officer who participates in the Far East Retirement Plan. |
· | We maintain medical and dental health insurance plans for our associates on a non-discriminatory basis. Except for union associates covered by union programs, associates in the U.S. contribute approximately 20% of the premiums related to our medical and dental insurance plans. We also provide life insurance for all U.S. associates. |
We believe that the insurance plans we offer are important components of our comprehensive benefit package, which should induce associates to remain with us. We believe that our domestic 401(k) plan and our Far East Retirement Plan induce our associates to save for future retirement needs, and we encourage this by matching individual plan contributions, as described above, by participating associates.
Perquisites
In 2015,2016, we provided our Chief Executive Officer with a housing allowance for six weeks in San Diego, California. Mr. Bernstein's presence in San Diego enables him to be more proximate to our largest customers, major design centers and our marketing and sales groups. We also provide him with an automobile in New Jersey that we maintain for his use throughout the year. We also pay an automobile allowance to our other Named Officers. Other than these benefits, the perquisites to our Named Officers are nominal.
Severance
The Company has a written severance pay plan that applies to all of our full-time, non-union U.S. associates. The written plan formalizes an approach that we had been taking on an informal basis for the past several years. The purposes of the plan are to reward the loyalty of our associates in the context of a Sale of the Business, a phrase that is defined in the severance pay plan, and to assure that we are capable of retaining our associates in the event that we pursue a Sale of the Business. Under the plan, which was amended and restated during 2016, a "Sale of the Business"covered associate is definedgenerally eligible for severance benefits if his or her employment is involuntarily terminated without cause. Prior to mean the occurrence of any of the following events:
· | the acquisition of beneficial ownership of more than 50% of our voting stock or of all or substantially all of our assets; or |
· | the consummation of a merger, consolidation or other combination of our company with or into another entity, subject to certain exceptions; or |
· | if the members of our incumbent Board of Directors (or their successors, if approved by them) cease for any reason to constitute at least two-thirds of the members of our Board. |
Provided that certain disqualifying events do not occur, severance payments will be made underits amendment and restatement, the plan if a participant is terminated involuntarily within 24 months after a Sale of the Business (provided that the participant does not accept employment with the acquirerprovided severance only in connection with such Salea termination of employment incident to certain changes in control of the Business), the participant resigns for reasons permitted under the plan within 24 months afterCompany. Severance pay is payable in a Salelump sum and is based on an eligible associate's years of the Business or if the participant is not offered "comparable employment" (as defined) with the acquirer.
The severance pay plan contains a schedule by which payment levels are determined based onservice, including in certain cases years of service with us. The schedule provides for three weeksan entity acquired by the Company. Severance is subject to the individual's execution of compensation for each of the first two years worked with us,a release agreement. Severance is equal to two weeks of compensationbase pay for each of the next thirteen years of service, and three weeks of compensation for each additional year of service, with an upper limita minimum of four weeks' and a maximum of 52 weeks of compensation. weeks' severance. An eligible employee is also eligible for Company-paid health coverage for one month.
If the plan were to be triggeredour Named Officers had been involuntarily terminated without cause as of December 31, 2015, our Named Officers2016, they would behave been entitled to receive the following severance payments:
Daniel Bernstein | | $ | 400,000 | |
Colin Dunn | | $ | 310,000 | |
Dennis Ackerman | | $ | 300,000 | |
Raymond Cheung | | $ | 250,000 | |
Peter Bittner III | | $ | 169,231 | |
pay under the plan:
Daniel Bernstein | | $ | 400,000 | |
Colin Dunn | | $ | 310,000 | |
Dennis Ackerman | | $ | 300,000 | |
Raymond Cheung | | $ | 250,000 | |
Peter Bittner III | | $ | 200,000 | |
Notwithstanding the foregoing, if applicable law requires the payment of severance amounts in excess of the amounts set forth in the severance pay plan, then the affected employees would be paid the amounts required by applicable law in lieu of the amounts set forth in the severance pay plan.
Compliance with Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code denies a deduction to any publicly-held corporation for compensation paid to certain "covered employees" in a taxable year to the extent that compensation exceeds $1,000,000 for a covered employee. Certain performance-based compensation that has been approved by our shareholders is not subject to this limitation. As a result, stock options granted under our 2011 Equity Compensation Program and our prior stock option plans are not subject to the limitations of Section 162(m). However, restricted stock awards granted under our 2011 Equity Compensation Program, or previously under our 2002 Equity Compensation Program, generally will not be treated as performance-based compensation. Restricted stock award grants made to date have not been at levels that, together with other compensation, approached the $1,000,000 limit. Also, since we retain discretion over any bonuses we may grant, those bonuses also will not qualify for the exemption for performance-based compensation. The Compensation Committee intends to provideWe consider the impact of Section 162(m) on our executive compensation, in a manner thatbut will be fully deductible for federal income tax purposes, so long as that objective is consistent with overall business and compensation objectives. However, we reserve the right to use our judgment to authorize compensation payments that do not comply with the exemptions in Section 162(m) when we believe that such payments are appropriate and in the best interests of our shareholders, after taking into consideration changing business conditions or the executive officer's performance.
shareholders.
Summary of Cash and Certain Other Compensation
The following table sets forth, for the years ended December 31, 2016, 2015 2014 and 2013,2014, a summary of the compensation earned by our Chief Executive Officer, Vice President of Finance and our three other executive officers serving at December 31, 20152016 with total compensation in excess of $100,000. In this proxy statement, we refer to these executive officers as the "Named Officers". Mr. Bittner became a Named Officer during 2015 and, in accordance with Securities and Exchange Commission rules, his compensation for years prior to 2015 is not shown in the following table.
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
Daniel Bernstein, President and Chief Executive Officer | 2015 2014 2013 | 400,000 300,000 300,000 | 184,615 184,615 300,000 | - - 254,160
| 78,822 439,551 19,631 | 21,385 23,146 17,016 | 684,822 947,312 890,807 |
Colin Dunn, Vice President, Treasurer and Secretary | 2015 2014 2013 | 310,000 225,000 225,000 | 143,077 138,462 225,000 | - - 211,800
| (59,799) 182,326 (38,847) | 12,075 11,611 9,231 | 405,353 557,399 632,184 |
Dennis Ackerman, President of Bel Power Solutions | 2015 2014 2013 | 300,000 215,000 215,000 | 138,462 132,308 215,000 | - - 211,800 | 20,310 212,771 (18,204) | 12,075 9,821 7,708 | 470,847 569,900 631,304 |
Raymond Cheung, Vice President Asia Operations | 2015 2014 2013 | 250,000 200,000 200,000 | 115,385 123,077 123,077 | - - 127,080
| 33,842 243,925 1,042 | 22,335 22,919 19,504 | 421,562 589,921 470,703 |
Peter Bittner III, President of Bel Connectivity Solutions | 2015 | 200,000 | 92,308 | - | 20,735 | 9,000 | 322,043 |
-16-
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
Daniel Bernstein, President and Chief Executive Officer | 2016 2015 2014 | 400,000 400,000 300,000 | 323,077 184,615 184,615 | 349,200 - -
| 67,973 78,822 439,551 | 20,545 21,385 23,146 | 1,160,795 684,822 947,312 |
Colin Dunn(1), Vice President, Treasurer and Secretary | 2016 2015 2014 | 310,000 310,000 225,000 | 250,385 143,077 138,462 | - - -
| (48,261) (59,799) 182,326 | 19,775 12,075 11,611 | 531,899 405,353 557,399 |
Dennis Ackerman, President of Bel Power Solutions | 2016 2015 2014 | 300,000 300,000 215,000 | 242,308 138,462 132,308 | 291,000 - - | 47,162 20,310 212,771 | 19,775 12,075 9,821 | 900,245 470,847 569,900 |
Raymond Cheung, Vice President Asia Operations | 2016 2015 2014 | 250,000 250,000 200,000 | 201,923 115,385 123,077 | 291,000 - -
| 53,517 33,842 243,925 | 22,956 22,335 22,919 | 819,396 421,562 589,921 |
Peter Bittner III, President of Bel Connectivity Solutions | 2016 2015 | 200,000 200,000 | 161,539 92,308 | 171,100 - | 40,803 20,735 | 18,255 9,000 | 591,697 322,043 |
(1) | As announced on February 17, 2017, Mr. Dunn will be retiring effective at the 2017 Annual Meeting of Shareholders on May 23, 2017 and Mr. Craig Brosious will be assuming his role as of that same date. |
We accrued the bonuses set forth in the table above for 2016, 2015 2014 and 20132014 in our consolidated statements of operations for the years ended December 31, 2016, 2015 2014 and 2013,2014, respectively, but such bonuses were not paid until the following year.
In the table above, when we refer to changes in pension values, we are referring to the aggregate change in the present value of the Named Officer's accumulated benefit under our SERP from the measurement date used for preparing our 20142015 year-end financial statements to the measurement date used for preparing our 20152016 year-end financial statements.
In the table above, when we refer to amounts under Stock Awards, we are referring to the aggregate grant date fair value in accordance with FASB ASC Topic 718. The stock awards cover the following shares and vest as follows:
· | Mr. Bernstein was granted 12,000 restricted shares of Class B Common Stock on November 4, 2013. A total of 3,000 shares vested on November 4, 2015. The remaining15, 2016. These restricted shares vest as follows: 3,000 shares vest as of November 4, 2016,15, 2019; 3,000 shares vest as of November 4, 201715, 2020; 3,000 shares vest as of November 15, 2021; and 3,000 shares vest as of November 4, 2018. |
· | Mr. Dunn was granted 10,000 restricted shares of Class B Common Stock on November 4, 2013. A total of 2,500 shares vested on November 4, 2015. The remaining restricted shares vest as follows: 2,500 shares vest as of November 4, 2016, 2,500 shares vest as of November 4, 2017 and 2,500 shares vest as of November 4, 2018.15, 2022. |
· | Mr. Ackerman was granted 10,000 restricted shares of Class B Common Stock on November 4, 2013. A total of 2,500 shares vested on November 4, 2015. The remaining15, 2016. These restricted shares vest as follows: 2,500 shares vest as of November 4, 2016,15, 2019; 2,500 shares vest as of November 4, 201715, 2020; 2,500 shares vest as of November 15, 2021; and 2,500 shares vest as of November 4, 2018.15, 2022. |
· | Mr. Cheung was granted 6,00010,000 restricted shares of Class B Common Stock on November 4, 2013. A total of 1,500 shares vested on November 4, 2015. The remaining15, 2016. These restricted shares vest as follows: 1,5002,500 shares vest as of November 4, 2016, 1,50015, 2019; 2,500 shares vest as of November 4, 2017 and 1,50015, 2020; 2,500 shares vest as of November 4, 2018.15, 2021; and 2,500 shares vest as of November 15, 2022. |
· | Mr. Bittner was granted 6,00010,000 restricted shares of Class B Common Stock on May 16, 2012. A total of 1,500 shares vested on May 16, 2014, and another 1,500 shares vested on May 16, 2015. The remaining17, 2016. These restricted shares vest as follows: 1,5002,500 shares vest as of May 16, 2016 and 1,50017, 2018; 2,500 shares vest as of May 16, 2017.17, 2019; 2,500 shares vest as of May 17, 2020; and 2,500 shares vest as of May 17, 2021. |
In the table above, "all other compensation" for 20152016 consists of the following:
· | for Mr. Bernstein: (i) an employer matching contribution made to his 401(k) account of $9,275, (ii) $3,360$2,520 in dividends that we paid with respect to the restricted shares noted above, (iii) $3,500, the cost to us of providing Mr. Bernstein with an automobile in New Jersey and maintaining that automobile, and (iv) $5,250, the cost to us of providing Mr. Bernstein with living quarters for a six-week period while he worked from our facility in San Diego, California. |
· | for Mr. Dunn: (i) an employer matching contribution made to his 401(k) account of $9,275, and (ii) $2,800$2,100 in dividends that we paid with respect to the restricted shares noted above.above, and (iii) $8,400 related to automobile expenses. |
· | for Mr. Ackerman: (i) an employer matching contribution made to his 401(k) account of $9,275, and (ii) $2,800$2,100 in dividends that we paid with respect to the restricted shares noted above.above, and (iii) $8,400 related to automobile expenses. |
· | for Mr. Cheung: (i) a contribution to his Far East Retirement Plan account of $17,500, an amount in excess of Mr. Cheung's 20152016 pre-tax elective deferral contributions (included under "Salary"), (ii) $1,680$1,260 in dividends that we paid with respect to the restricted shares noted above and (iii) $3,155$4,196 related to automobile expenses. |
· | for Mr. Bittner: (i) an employer matching contribution made to his 401(k) account of $7,950 and$7,825, (ii) $1,050$2,030 in dividends that we paid with respect to the restricted shares noted above.above, and (iii) $8,400 related to automobile expenses. |
Restricted Stock Awards
We are authorized to grant restricted stock awards under our 2011 Equity Compensation Program. Prior to its expiration date on April 4, 2012, we were also authorized to grant restricted stock awards under our 2002 Equity Compensation Program. Participants have the right to vote (if applicable) and receive dividends on their restricted shares. Restrictions lapse in 25% increments commencing two years (or in the case of the November 2016 grants noted below, three years) after the grant date. There were noThe table below provides information with respect to restricted stock awards granted to our Named Officers in 2015.during 2016.
Stock Awards Granted During 2016
Name (a) | Grant Date (b) | Number of Shares or Units of Stock (#) (i) | Grant Date Fair Value of Stock Awards ($) (l) |
Daniel Bernstein | 11/15/16 | 12,000 | 349,200 |
Dennis Ackerman | 11/15/16 | 10,000 | 291,000 |
Raymond Cheung | 11/15/16 | 10,000 | 291,000 |
Peter Bittner III | 5/17/16 | 10,000 | 171,100 |
The following table sets forth, for each of the Named Officers, information regarding stock awards outstanding at December 31, 2015.2016. Each of the stock awards referred to in the table below were granted pursuant to our 2011 Equity Compensation Program. The vesting dates applicable to each stock award are set forth in footnotes that follow the columnar explanations below the table. None of our Named Officers had any stock options outstanding as of December 31, 2015.2016.
Stock Awards Outstanding at December 31, 20152016
Name (a) | Number of Shares or Units of Stock That Have Not Vested (#) (b) | Market Value of Shares or Units of Stock That Have Not Vested ($) (c) |
Daniel Bernstein | 18,000 | 556,200 |
Colin Dunn | 5,000 | 154,500 |
Dennis Ackerman | 15,000 | 463,500 |
Raymond Cheung | 13,000 | 401,700 |
Peter Bittner III | 11,500 | 355,350 |
Name (a) | Number of Shares or Units of Stock That Have Not Vested (#) (b) | Market Value of Shares or Units of Stock That Have Not Vested ($) (c) |
Daniel Bernstein | 9,000 | 155,610 |
Colin Dunn | 7,500 | 129,675 |
Dennis Ackerman | 7,500 | 129,675 |
Raymond Cheung | 4,500 | 77,805 |
Peter Bittner III | 3,000 | 51,870 |
In the table above, we are disclosing:
· | in column (b), the number of shares of our Class B Common Stock covered by stock awards granted under our 2011 Equity Compensation Programs that were not vested or earned as of December 31, 2015;2016; and |
· | in column (c), the aggregate market value or payout value as of December 31, 20152016 of the stock awards referenced in column (b). |
In the table above, the vesting dates for the Named Officers' stock awards are as follows:
· | As of December 31, 2015,2016, Mr. Bernstein had 9,00018,000 restricted shares of Class B Common Stock, vesting as follows: 3,000 shares vest as of November 4, 2016;2017; 3,000 shares vest as of November 4, 2017;2018; 3,000 shares vest as of November 15, 2019; 3,000 shares vest as of November 15, 2020; 3,000 shares vest as of November 15, 2021; and 3,000 shares vest as of November 4, 2018.15, 2022. |
· | As of December 31, 2015,2016, Mr. Dunn had 7,5005,000 restricted shares of Class B Common Stock, vesting as follows: 2,500 shares vest as of November 4, 2016; 2,500 shares vest as of November 4, 2017; and 2,500 shares vest as of November 4, 2018. |
· | As of December 31, 2015,2016, Mr. Ackerman had 7,50015,000 restricted shares of Class B Common Stock, vesting as follows: 2,500 shares vest as of November 4, 2016;2017; 2,500 shares vest as of November 4, 2017;2018; 2,500 shares vest as of November 15, 2019; 2,500 shares vest as of November 15, 2020; 2,500 shares vest as of November 15, 2021; and 2,500 shares vest as of November 4, 2018.15, 2022. |
· | As of December 31, 2015,2016, Mr. Cheung had 4,50013,000 restricted shares of Class B Common Stock, vesting as follows: 1,500 shares vest as of November 4, 2016;2017; 1,500 shares vest as of November 4, 2017; and 1,5002018; 2,500 shares vest as of November 4, 2018.15, 2019; 2,500 shares vest as of November 15, 2020; 2,500 shares vest as of November 15, 2021; and 2,500 shares vest as of November 15, 2022. |
· | As of December 31, 2015,2016, Mr. Bittner had 3,00011,500 restricted shares of Class B Common Stock vesting as follows: 1,500 shares vest as of May 16, 2016 and 1,5002017; 2,500 shares vest as of May 16, 2017.17, 2018; 2,500 shares vest as of May 17, 2019; 2,500 shares vest as of May 17, 2020; and 2,500 shares vest as of May 17, 2021. |
In calculating market values in the table above, we have multiplied the closing market price of our Class B Common Stock on the last trading day in 20152016 of $17.29$30.90 by the applicable number of shares of Class B Common Stock underlying the Named Officers' unvested stock awards.
The following table sets forth, for each of the Named Officers, information regarding stock awards that vested during 2015.2016. The "value realized on vesting" represents the number of shares of Class B Common Stock set forth in column (d) multiplied by the market price of our Class B Common Stock on the date on which the Named Officer's stock award vested.
Stock Awards Vested During 20152016
Name (a) | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e) |
Daniel Bernstein | 3,000 | 76,500 |
Colin Dunn | 2,500 | 63,750 |
Dennis Ackerman | 2,500 | 63,750 |
Raymond Cheung | 1,500 | 38,250 |
Peter Bittner III | 1,500 | 26,115 |
Name (a) | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e) |
Daniel Bernstein | 3,000 | 57,900 |
Colin Dunn | 2,500 | 48,250 |
Dennis Ackerman | 2,500 | 48,250 |
Raymond Cheung | 1,500 | 28,950 |
Peter Bittner III | 1,500 | 33,630 |
Equity Compensation Plan Information
The following table provides information as of December 31, 20152016 with respect to shares of Class A and Class B Common Stock that may be issued under our 2011 Equity Compensation Program which has been approved by the Company's shareholders.
Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) |
Equity Compensation Plans Approved by Security Holders: 2011 Equity Compensation Program | Class A: 0 Class B: 0 | Class A: $ 0 Class B: $ 0 | Class A: 0 Class B: 750,600599,800 |
Equity Compensation Plans Not Approved by Security Holders | - | - | - |
TOTAL | Class A: 0 Class B: 0 | Class A: $ 0 Class B: $ 0 | Class A: 0 Class B: 750,600599,800 |
Retirement Plan Benefits
The following table sets forth, for each of the Named Officers, information regarding the benefits payable under each of our plans that provides for payments or other benefits at, following, or in connection with such Named Officer's retirement. The following table does not provide information regarding tax-qualified defined contribution plans or nonqualified defined contribution plans.
Name (a) | Plan Name (b) | Number of Years of Credited Service (#) (c) | Present Value of Accumulated Benefit ($) (d) | Payments During Last Fiscal Year ($) (e) |
Daniel Bernstein | Supplemental Executive Retirement Plan | 38 | 1,478,461 | 0 |
Colin Dunn | Supplemental Executive Retirement Plan | 25 | 993,649 | 0 |
Dennis Ackerman | Supplemental Executive Retirement Plan | 30 | 577,299 | 0 |
Raymond Cheung | Supplemental Executive Retirement Plan | 23 | 762,327 | 0 |
Peter Bittner III | Supplemental Executive Retirement Plan | 20 | 233,906 | 0 |
Name (a) | Plan Name (b) | Number of Years of Credited Service (#) (c) | Present Value of Accumulated Benefit ($) (d) | Payments During Last Fiscal Year ($) (e) |
Daniel Bernstein | Supplemental Executive Retirement Plan | 37 | 1,410,488 | 0 |
Colin Dunn | Supplemental Executive Retirement Plan | 24 | 1,041,910 | 0 |
Dennis Ackerman | Supplemental Executive Retirement Plan | 29 | 530,137 | 0 |
Raymond Cheung | Supplemental Executive Retirement Plan | 22 | 708,810 | 0 |
Peter Bittner III | Supplemental Executive Retirement Plan | 19 | 193,103 | 0 |
In the table above:
· | we have determined the years of credited service based on the same measurement date that we used in preparing our audited financial statements for the year ended December 31, 2015;2016; we refer to that date as the "Plan Measurement Date"; |
· | when we use the phrase "present value of accumulated benefit", we are referring to the actuarial present value of the Named Officer's accumulated benefits under our Supplemental Executive Retirement Plan, calculated as of the Plan Measurement Date; and |
· | column (e) refers to the dollar amount of any payments and benefits actually paid or otherwise provided to the Named Officer during 20152016 under the SERP. For a description of the SERP, see "Compensation Discussion and Analysis - Compensation Elements - Retirement Benefits". |
BOARD OF DIRECTORS
Director Compensation
The following table sets forth certain information regarding the compensation we paid to our directors, other than Daniel Bernstein, during 2015.
Name (a) | Fees Earned or Paid in Cash ($) (b) | Stock Awards ($) (c) | All Other Compensation ($) (g) | Total ($) (j) |
Howard B. Bernstein | 19,000 | 92,200 | 980 | 112,180 |
Avi Eden | 18,500 | 92,200 | 60,980 | 171,680 |
Peter Gilbert | 34,000 | 92,200 | 980 | 127,180 |
John S. Johnson | 29,000 | 92,200 | 980 | 122,180 |
Robert H. Simandl | 19,000 | 92,200 | 27,980 | 139,180 |
John F. Tweedy | 34,000 | 92,200 | 980 | 127,180 |
Mark B. Segall | 19,000 | - | 700 | 19,700 |
Norman Yeung | 19,000 | - | 1,120 | 20,120 |
Eric Nowling | 29,000 | - | 1,120 | 30,120 |
2016.
Name (a) | Fees Earned or Paid in Cash ($) (b) | Stock Awards ($) (c) | All Other Compensation ($) (g) | Total ($) (j) |
Howard B. Bernstein(1) | 8,500 | - | 700 | 9,200 |
Avi Eden | 25,500 | - | 31,260 | 56,760 |
Peter Gilbert | 39,500 | - | 1,260 | 40,760 |
John S. Johnson(1) | 15,250 | - | 700 | 15,950 |
Robert H. Simandl | 25,500 | - | 28,260 | 53,760 |
John F. Tweedy | 40,500 | - | 1,260 | 41,760 |
Mark B. Segall | 25,500 | 68,440 | 980 | 94,920 |
Norman Yeung | 24,500 | - | 1,050 | 25,550 |
Eric Nowling | 35,500 | - | 1,050 | 36,550 |
Vincent Vellucci(2) | 4,000 | 116,400 | 25,000 | 145,400 |
(1) | Mr. Bernstein and Mr. Johnson both retired from the Board of Directors effective May 17, 2016. Howard Bernstein died in March 2017. |
(2) | Mr. Vellucci was appointed to the Board of Directors effective October 26, 2016. |
With respect to compensation of our non-employee directors:
· | When we refer to "Fees Earned or Paid in Cash", we are referring to all cash fees that we paid or were accrued in 2015,2016, including annual retainer fees, committee fees and meeting fees; in 2015,prior to July 26, 2016, our non-employee directors received an annual retainer of $15,000, plus $1,000 for each Board meeting they attended in person and $750 for each non-audit or non-succession committee meeting they attended in person. Effective July 26, 2016, our non-employee directors received an annual retainer of $24,000, plus $1,500 for each Board meeting they attended in person and $1,000 for each non-audit or non-succession committee meeting they attended in person. For the full year of 2016, Audit Committee members received $2,500 for each meeting they attended in person.person and Succession committeeCommittee members received $1,250 for each meeting they attended in person. |
· | When we refer to "Amounts Underamounts under "Stock Awards", we are referring to the aggregate grant date fair value in accordance with FASB ASC Topic 718. Each of Mr. Bernstein, Mr. Eden, Mr. Gilbert, Mr. Johnson, Mr. Simandl and Mr. TweedySegall was granted 4,000 shares of restricted stock on May 19, 2015.17, 2016 and Mr. Vellucci was granted 4,000 shares of restricted stock on November 15, 2016. Such shares of restricted stock vest as described below. |
· | At December 31, 2015, each2016, our directors as of such date (other than Daniel Bernstein) owned the directors noted above (with the exceptionfollowing number of Mr. Segall, Mr. Yeung and Mr. Nowling) had 5,000 shares of restricted stock, outstanding, which will vest as follows:described below: Mr. Eden, Mr. Gilbert, Mr. Simandl and Mr. Tweedy each owned a total of 4,000 shares, of which 1,000 shares vest as of May 17, 2016 (related to a grant on May 17, 2011), 1,000 shares vest as of May 19, 2017, 1,000 shares vest as ofon May 19, 2018, 1,000 shares vest as ofon May 19, 2019 and 1,000 shares vest as ofon May 19, 2020. |
· | At December 31, 2015,2020; Mr. Segall had 2,000owned a total of 5,000 shares, of restricted stock outstanding, which will vest as follows: 1,000 shares vest as ofon May 16, 20162017, 1,000 shares vest on May 17, 2018, 1,000 shares vest on May 17, 2019, 1,000 shares vest on May 17, 2020 and 1,000 shares vest as ofon May 16, 2017. |
· | At December 31, 2015,17, 2021; Mr. Yeung and Mr. Nowling had 4,000each owned a total of 3,000 shares, of restricted stock outstanding, which will vest as follows: 1,000 shares vest as of July 29, 2016, 1,000 shares vest as ofon July 29, 2017, 1,000 shares vest as ofon July 29, 2018 and 1,000 shares vest as ofon July 29, 2019.2019; and Mr. Vellucci owned a total of 4,000 shares, of which 1,000 shares vest on November 15, 2018, 1,000 shares vest on November 15, 2019, 1,000 shares vest on November 15, 2020 and 1,000 shares vest on November 15, 2021. |
· | "All other compensation" consists of the following: |
§For Avi Eden: consulting fees paid to Mr. Eden ($60,000) with respect to advice rendered regarding corporate development issues.issues during 2016 in the amount of $30,000, and dividends on his shares of restricted stock in the amount of $1,260. |
§For Robert H. Simandl: fees paid to Mr. Simandl's law firm for services rendered and disbursements incurred on our behalf during 2015 ($27,000).2016 in the amount of $27,000, and dividends on his shares of restricted stock in the amount of $1,260. |
§Each director (with the exception of Mr. Segall, Mr. Yeung and Mr. Nowling) was paid $980, Mr. Segall was paid $700 andFor each of Mr. YeungGilbert and Mr. Nowling were paid $1,120 during 2015 related toTweedy: dividends on theirhis shares of restricted stock.stock in the amount of $1,260. §For each of Mr. Nowling and Mr. Yeung: dividends on his shares of restricted stock in the amount of $1,050. §For Mr. Segall: dividends on his shares of restricted stock in the amount of $980. §For each of former directors Mr. Bernstein and Mr. Johnson: dividends on his shares of restricted stock in the amount of $700. §For Mr. Vellucci: consulting fees paid to Mr. Vellucci in the amount of $25,000 pursuant to a consulting agreement which terminated when he was appointed a director of the Company. |
In 2015,2016, directors who were executive officers of the Company did not receive directors' fees. In 2015,2016, directors of the Company's foreign subsidiaries did not receive a retainer or meeting fees.
The Board of Directors; Committees of the Board
Since the adoption of the Sarbanes-Oxley Act in July 2002, there has been a growing public and regulatory focus on the independence of directors. NASDAQ has adopted amendments to its definition of independence. Additional requirements relating to independence are imposed by the Sarbanes-Oxley Act with respect to members of the Audit Committee. As noted below, the Board has determined that the members of the Audit Committee satisfy all such definitions of independence. The Board has also determined that the following members of the Board satisfy the NASDAQ definition of independence: Howard Bernstein, Peter Gilbert, John S. Johnson, John F. Tweedy, Mark B. Segall, Robert Simandl, Avi Eden, Norman Yeung, Eric Nowling and Eric Nowling.Vincent Vellucci. The Board concluded that while Mr. Simandl is compensated for certain legal services that he provides to the Company and Mr. Eden is compensated for certain business development consulting services that they providehe provides to the Company, the fees paid to these individuals in 20152016 ($60,00030,000 to Mr. Eden and $27,000 to Mr. Simandl) were not of a magnitude that such fees would impair Mr. Simandl's or Mr. Eden's independence. In considering the independence of Mr. Simandl and Mr. Eden, the Board also took note of the willingness of these individuals to express their views without concern for economic repercussions. Mr. Vellucci's consulting agreement with the Company terminated when he was appointed as a director, and he no longer receives any consulting fees from the Company.
The Company's Board of Directors holds a regular meeting immediately before the Annual Meeting of Shareholders and meets regularlyquarterly throughout the year. During 2015,2016, the Board held fivefour meetings.
Bel's Board has an Executive Committee, a Compensation Committee, an Audit Committee, a Nominating Committee and a Succession Committee. The Executive Committee is composed of Daniel Bernstein, Robert H. Simandl and John F. Tweedy; the Audit Committee is composed of Peter Gilbert, John S. Johnson, Eric Nowling and John F. Tweedy; the Nominating Committee is composed of Howard Bernstein, Robert H. Simandl and John F. Tweedy; the Succession Committee is composed of Peter Gilbert and John F. Tweedy; and the Compensation Committee is composed of Peter Gilbert John S. Johnson and Mark Segall.
The function of the Executive Committee is to act in the place of the Board when the Board cannot be convened.
The Compensation Committee is charged with the responsibility of administering the Company's employee benefit plans, reviews the compensation of Bel's executive officers and establishes general compensation policies.
The Audit Committee reviews significant audit and accounting principles, policies and practices, and meets with the Company's independent auditors. The Board of Directors has determined that each of John S. Johnson and Eric Nowling constitutes an "audit committee financial expert", as such term is defined by the Securities and Exchange Commission ("SEC"). As noted above, Mr. Johnson and Mr. Nowling -- as well as the other members of the Audit Committee -- have been determined to be "independent" within the meaning of SEC and NASDAQ regulations.
The Nominating Committee is responsible for nominating candidates for election to the Company's Board of Directors.
The Board has a Succession Committee, comprised of Peter Gilbert and John F. Tweedy, whose purpose is to develop a succession plan for Bel's senior executives. The committee implemented a plan to identify and prepare individuals for positions and responsibilities they would need to assume either in the case of an emergency or under an orderly transition. The Succession Committee has identified and presented to the Board current members of Bel's management team that have the qualifications to fill the position of Chief Executive Officer. These candidates will be working with the current Chief Executive Officer, as well as other members of the Board, to become knowledgeable about all aspects of the position. The committee has also made recommendations with regard to the configuration of the Board in the event the current Chief Executive Officer is no longer able to hold his position on the Board.
During 2015,2016, the Executive Committee held no meetings, the Audit Committee held eight meetings, the Compensation Committee held two meetings,one meeting, the Nominating Committee held one meeting and the Succession Committee held four meetings. Each Director attended at least 75% of the aggregate of the Board and committee meetings on which he served in 2015.2016.
For a description of services provided to the Company by Robert H. Simandl and Avi Eden during 2015,2016, see "Transactions with Related Parties."
Board Leadership Structure and Role in Risk Oversight
Our President, Daniel Bernstein, also serves as Chief Executive Officer of the Company. Additionally, Peter Gilbert serves as the independent Lead Director. Among other things, the Lead Director convenes and chairs regular and special executive sessions of the independent directors and serves as liaison between the independent directors and our President/Chief Executive Officer. We believe that our leadership structure allows the Board to have better control of the direction of management, while still retaining independent oversight.
The Board's role in our risk oversight process includes receiving regular reports from members of management on areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic risks. The full Board or the appropriate committee receives these reports from management to enable it to understand our risk identification, risk management and risk mitigation strategies. When a committee receives the report, the chairman of the relevant committee reports on the discussion to the full Board at the next Board meeting. This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.
Nominating Committee Matters
Nominating Committee Charter. The Board has adopted a Nominating Committee charter to govern its Nominating Committee. A copy of the charter is set forth on the Company's website, www.belfuse.com, under the Investor Information tab.
Independence of Nominating Committee Members. All members of the Nominating Committee of the Board of Directors have been determined to be "independent directors" pursuant to the definition contained in Rule 4200(a)(15) of the National Association of Securities Dealers' Marketplace Rules.
Procedures for Considering Nominations Made by Shareholders. The Nominating Committee's charter describes procedures for nominations to be submitted by shareholders and other third-parties, other than candidates who have previously served on the Board or who are recommended by the Board. The charter states that a nomination must be delivered to the Secretary of the Company at the principal executive offices of the Company not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the close of business on the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. The public announcement of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving of a notice as described above. The charter requires a nomination notice to set forth as to each person whom the proponent proposes to nominate for election as a director: (a) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and (b) information that will enable the Nominating Committee to determine whether the candidate or candidates satisfy the criteria established pursuant to the charter for director candidates.
QualificationsQualifications.. The charter describes the minimum qualifications for nominees and the qualities or skills that are necessary for directors to possess. Each nominee:
· | must satisfy any legal requirements applicable to members of the Board; |
· | must have business or professional experience that will enable such nominee to provide useful input to the Board in its deliberations; |
· | must have a reputation for honesty and ethical conduct; |
· | must have a working knowledge of the types of responsibilities expected of members of the board of directors of a public company; and |
· | must have experience, either as a member of the board of directors of another public or private company or in another capacity, that demonstrates the nominee's capacity to serve in a fiduciary position. |
Identification and Evaluation of Candidates for the Board.Board. Candidates to serve on the Board will be identified from all available sources, including recommendations made by shareholders. The Nominating Committee's charter provides that there will be no differences in the manner in which the Nominating Committee evaluates nominees recommended by shareholders and nominees recommended by the Committee or management, except that no specific process shall be mandated with respect to the nomination of any individuals who have previously served on the Board. The evaluation process for individuals other than existing Board members will include:
· | a review of the information provided to the Nominating Committee by the proponent; |
· | a review of reference letters from at least two sources determined to be reputable by the Nominating Committee; and |
· | a personal interview of the candidate, together with a review of such other information as the Nominating Committee shall determine to be relevant. |
Third-Party Recommendations. In connection with the 20162017 Annual Meeting, the Nominating Committee did not receive any nominations from any shareholder or group of shareholders which owned more than 5% of the Company's Class A Common Stock or Class B Common Stock for at least one year.
Audit Committee Matters
Audit Committee Charter. The Audit Committee performed its duties during 20152016 under a written charter approved by the Board of Directors. A copy of the charter is set forth on the Company's website, www.belfuse.com, under the Investors & Governance tab.
Independence of Audit Committee Members. The Class A and Class B Common Stock are listed on the NASDAQ Global Select Market and the Company is governed by the listing standards applicable thereto. All members of the Audit Committee of the Board of Directors have been determined to be "independent directors" pursuant to the definition contained in Rule 4200(a)(15) of the National Association of Securities Dealers' Marketplace Rules and under the SEC's Rule 10A-3.
Audit Committee Report. In connection with the preparation and filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2015:2016:
(1) | the Audit Committee reviewed and discussed the audited financial statements with the Company's management; |
(2) | the Audit Committee discussed with the Company's independent auditors the matters required to be discussed by Statement of Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board, or PCAOB, in Rule 3200T; |
(3) | the Audit Committee received the written disclosures and the letter from the Company's independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountants' communications with the Audit Committee concerning independence, and discussed with the Company's independent accountants their independence; and |
(4) | based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the 20152016 Annual Report on Form 10-K. |
By: The Audit Committee of the Board of Directors
Peter Gilbert
John S. Johnson
Eric Nowling
John F. Tweedy
Compensation Committee Report
The Compensation Committee has reviewed and discussed the information provided under the caption "Compensation Discussion and Analysis" set forth above. Based on that review and those discussions, the Compensation Committee recommended to our Board that such "Compensation Discussion and Analysis" be included in this proxy statement.
By: The Compensation Committee of the Board of Directors
Peter Gilbert
John S. Johnson
Mark Segall
Transactions with Related Parties
Mr. Simandl, a director of the Company, served as the Company's Secretary through May 2003. Mr. Simandl and his predecessor firms have served as general counsel to the Company for more than the past five years. Fees received by Mr. Simandl's firm from the Company during 20152016 are disclosed in the Director Compensation table. The Company will retain Mr. Simandl in 2016.
Mr. Eden, a director of the Company, served as a special consultant to the Company on matters related to acquisitions during 2015.2016. Fees received by Mr. Eden from the Company during 20152016 are disclosed in the Director Compensation table. The Company expects Mr. Eden to continue in this role in 2016.2017.
The Audit Committee of the Board of Directors monitors the Company's related party transactions and must approve in advance any new related party transactions. On a quarterly basis, the Audit Committee makes inquiry of management's Disclosure Committee to determine whether any of the members of that committee are aware of any new related party transactions. Management's Disclosure Committee did not report any new related party transactions to the Audit Committee during 2015.2016.
Other Compensation Committee Matters
Charter. Charter. Our Board of Directors has defined the duties of its Compensation Committee in a charter. A copy of the Compensation Committee's charter is included on the Company's website, www.belfuse.com, under the Investor Information tab.
Authority, Processes and ProceduresProcedures. . Our Compensation Committee is responsible for administering our employee benefit plans, for establishing the compensation of our Chief Executive Officer and for determining the compensation of our other executive officers. Our Compensation Committee also establishes policies and monitors compensation for our associates in general. While the Compensation Committee may, and does in fact, delegate authority with respect to the compensation of associates in general, the Compensation Committee retains overall supervisory responsibility for associate compensation. With respect to executive compensation, the Compensation Committee receives recommendations and information from our Chief Executive Officer regarding issues relevant to determinations made by the Compensation Committee. Our Chief Executive Officer participates in Compensation Committee deliberations regarding the compensation of other executive officers, but does not participate in deliberations regarding his own compensation.compensation.
Consultants.We typically do not involve consultants in establishing the compensation of our associates or directors, other than attorneys who assist us in the drafting of benefit plans and comparable arrangements.
Shareholder Communication with the Board
The Board of Directors has established a procedure that enables shareholders to communicate in writing with members of the Board. Any such communication should be addressed to the Company's Secretary and should be sent to such individual c/o Bel Fuse Inc., 206 Van Vorst Street, Jersey City, New Jersey 07302. Any such communication must state, in a conspicuous manner, that it is intended for distribution to the entire Board of Directors. Shareholders may also communicate with the Board by directing communications through the Corporate Secretary by following instructions on the Company's website. Under the procedures established by the Board, upon the receipt of such a communication, the Company's Secretary will send a copy of such communication to each member of the Board, identifying it as a communication received from a shareholder. Absent unusual circumstances, at the next regularly scheduled meeting of the Board held more than two days after such communication has been distributed, the Board will consider the substance of any such communication.
Board members are encouraged, but not required by any specific Board policy, to attend the Company's annual meeting of shareholders. AllSix of the ten members of the Board attended the Company's 20152016 annual meeting of shareholders.
PROPOSAL 2
RATIFICATION OF THE DESIGNATION OF DELOITTE & TOUCHE LLP TO AUDIT BEL'S
BOOKS AND ACCOUNTS FOR 20162017
The Audit Committee has selected Deloitte & Touche LLP to audit Bel's books and accounts for the year ending December 31, 20162017 and will offer a resolution at the meeting for shareholders to ratify the designation. Although shareholder ratification is not required, the designation of Deloitte & Touche LLP is being submitted for ratification at the 20162017 Annual Meeting of Shareholders because it is perceived to be a matter of good corporate governance practice to submit this issue for ratification by shareholders. Ultimately, the Audit Committee retains full discretion and will make all determinations with respect to the appointment of Bel's independent registered public accounting firm.
The Board of Directors recommends a vote FOR Proposal 2.
PROPOSAL 3
ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Board of Directors has approved the compensation of our Named Officers as described in this proxy statement under "Compensation Discussion and Analysis" and "Executive Compensation" (see pages 11 to 20). The Board has decided, consistent with the vote of our shareholders at the 20122011 Annual Meeting, to hold a non-binding advisory vote, commonly known as a "Say on Pay""Say-on-Pay" vote, on an annual basis. This vote gives you the opportunity to express your views on our executive compensation. Because your vote is advisory, it will not be binding upon the Compensation Committee. However, the Compensation Committee will take the outcome of the vote into account when making future executive compensation decisions.
Our compensation program is designed to motivate our executive officers to enhance long-term stockholder value and to attract and retain the highest quality executive and key employee talent available. We believe our executive compensation is aligned with increasing the value of our common stock and promoting our key strategies, values and long term financial and operational objectives.
The Board of Directors believes that the compensation of our executive officers is appropriate and recommends a vote FOR the following advisory resolution:
"RESOLVED,"RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED."
PROPOSAL 4
ADVISORY VOTE ON FREQUENCY OF SAY-ON-PAY VOTES
As described in Proposal No. 3 above, our shareholders are being provided the opportunity to cast an advisory vote to approve our executive compensation. The advisory vote on executive compensation described in Proposal No. 3 above is referred to as a "Say-on-Pay" vote. This Proposal No. 4 affords you the opportunity to cast an advisory vote on how often we should include a Say-on-Pay vote in our proxy materials in the future, and is often referred to as a "Say-on-Frequency" vote. As indicated under Proposal No. 3, since 2011, we have held a non-binding Say-on-Pay vote annually. We are required under applicable SEC rules to hold a Say-on-Frequency vote every six years. Under this Proposal No. 4, shareholders may vote to have the Say-on-Pay vote every year, every two years or every three years.
As with Proposal No. 3, your vote on this Proposal No. 4 is advisory and, therefore, nonbinding. However, we value your opinions, and we will consider the outcome of the Say-on-Frequency vote in making future determinations about the frequency of our Say-on-Pay votes.
We believe that Say-on-Pay votes should continue to be conducted every year so that shareholders may annually express their views on our executive compensation program. Our Compensation Committee, which administers our executive compensation program, values the opinions expressed by shareholders in these votes, and even though non-binding, will continue to consider the outcome of these votes in making its decisions on executive compensation.
The Board of Directors believes an advisory vote on our executive officer compensation should continue to occur annually and recommends a vote FOR the following resolution:
"RESOLVED, that future annual shareholders' advisory votes regarding the compensation paid to the Company's named executive officers is APPROVED."
OTHER MATTERS
Relationship With Independent Public Accountants
Deloitte & Touche LLP, independent certified public accountants, has been selected by the Board of Directors to audit and report on Bel's financial statements for the year ending December 31, 2016.2017.
Deloitte & Touche LLP began auditing Bel in 1983. A representative of Deloitte & Touche LLP is expected to be present at the Annual Meeting and will have an opportunity to make a statement if he so desires. The representative is expected to be available to respond to appropriate questions from shareholders.
Audit Fees and Related Matters
In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the Audit Committee's charter, all audit and audit-related work and all non-audit work performed by the Company's independent accountants, Deloitte & Touche LLP, are approved in advance by the Audit Committee, including the proposed fees for such work. The Audit Committee is informed of each service actually rendered.
Audit Fees. Audit fees billed or expected to be billed to the Company by Deloitte & Touche LLP for the audit of the financial statements and audit of the effectiveness of our internal control over financial reporting included in the Company's Annual Reports on Form 10-K, and reviews of the financial statements, included in the Company's Quarterly Reports on Form 10-Q, for the years ended December 31, 2016 and 2015 totaled $3,307,119 and 2014 totaled $3,161,057 and $3,306,964 respectively.
Audit-Related Fees. For the yearyears ended December 31, 2016 and 2015, the Company was not billed by Deloitte & Touche LLP for any audit-related services (defined as services which are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported under the caption "Audit Fees" above). The Company was billed $2,749,277 by Deloitte & Touche LLP during the year ended December 31, 2014 in connection with the audit of the carve-out financial statements for the three years ended December 31, 2013 of the Power-One Power Solutions business acquired by the Company in June 2014 from ABB Ltd.
Tax Fees. The Company was billed $549,985$641,405 and $805,112$549,985 by Deloitte Tax LLP (an affiliate of Deloitte & Touche LLP) for the years ended December 31, 20152016 and 2014,2015, respectively, for tax services, principally representing advice regarding the preparation of income tax returns and acquisition-related due diligence.
All Other Fees. For the years ended December 31, 20152016 and 2014,2015, the Company was not billed by Deloitte & Touche LLP for services not covered in the three immediately preceding paragraphs.
Other Matters. The Audit Committee of the Board of Directors has considered whether the provision of Audit-Related Fees, Tax Fees and All Other Fees are compatible with maintaining the independence of the Company's principal accountant.
Applicable law and regulations provide an exemption that permits certain services to be provided by the Company's outside auditors even if they are not pre-approved. The Company has not relied on this exemption at any time since the Sarbanes-Oxley Act was enacted.
Miscellaneous
At the time that this proxy statement was mailed to shareholders, management was not aware that any matter would be presented for action at the Annual Meeting other than the election of directors, the ratification of the designation of Deloitte & Touche LLP to audit Bel's books and accounts for 2016, and2017, approval, on an advisory basis, of our executive compensation, and a vote, on an advisory basis, on how often the Company will conduct an advisory vote on executive compensation. If other matters properly come before the Annual Meeting, it is intended that the shares represented by proxies will be voted with respect to those matters in accordance with the best judgment of the persons voting them.
By Order of the Board of Directors
Colin Dunn, Secretary
Dated: April 5, 201611, 2017
A copy of the Company's Annual Report for the year ended December 31, 2015,2016, including financial statements, accompanies this proxy statement. The Annual Report is not to be regarded as proxy soliciting material or as a communication by means of which any solicitation is to be made.
A copy of the Company's Annual Report on Form 10-K for the year ended December 31, 2015,2016, filed with the Securities and Exchange Commission, is available (excluding exhibits) without cost to shareholders upon written request made to Mr. Jerry Kimmel, Bel Fuse Inc., 206 Van Vorst Street, Jersey City, New Jersey 07302.
PROXY
BEL FUSE INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS,
MAY 17, 201623, 2017
The undersigned hereby appoints Robert H. Simandl and Colin Dunn, and each of them, attorneys and proxies, with power of substitution in each of them, to vote for and on behalf of the undersigned at the annual meeting of the shareholders of the Company to be held on May 17, 2016,23, 2017, and at any adjournment thereof, upon matters properly coming before the meeting, as set forth in the related Notice of Meeting and Proxy Statement, both of which have been received by the undersigned. Without otherwise limiting the general authorization given hereby, said attorneys and proxies are instructed to vote as follows on the reverse side:follows:
(Continued, and to be marked, dated and signed, on the other side)
| FOR the nominees listed below (except as marked to the contrary below) | WITHHOLD AUTHORITY to vote for the nominees listed below | | | | | Please mark your votes like this | x |
Election of the Board’s nominees for Director.Director for the terms described in the Proxy Statement. (The Board of Directors recommends a vote “FOR”.)
| o | o | | 3. With respect to the approval, on an advisory basis, of the executive compensation of Bel's named executive officers as described in the proxy statement: | FOR o | AGAINST o | ABSTAIN o |
NOMINEES: 1. Daniel BernsteinAvi Eden 2. Peter Gilbert Robert H. Simandl 3. Norman Yeung 4. Vincent Vellucci INSTRUCTION: To withhold authority to vote for any individual nominee listed above, write the nominee’s name in the space provided below. | | 4. With respect to the vote, on an advisory basis, on how often to conduct the advisory vote on executive compensation. | EVERY YEAR o | EVERY TWO YEARS o | EVERY THREE YEARS o | ABSTAIN o |
| | 5. Upon all such other matters as may properly come before the meeting and/or any adjournment or adjournments thereof, as they in their sole discretion may determine. The Board of Directors is not aware of any such other matters. |
2.With respect to the ratification of the designation of Deloitte and Touche LLP to audit Bel's books and accounts for 2017: | | | | ABSTAIN o | |
| | UNLESS OTHERWISE SPECIFIED IN THE SQUARES OR SPACE PROVIDED IN THIS PROXY, THIS PROXY WILL BE VOTED “FOR” THE BOARD’S NOMINEES, AND “FOR” PROPOSALS 2 AND 3.3 AND, WITH RESPECT TO PROPOSAL 4, FOR "EVERY YEAR". |
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2.With respect to the ratification of the designation of Deloitte and Touche LLP to audit Bel's books and accounts for 2016:
| FOR
o
| AGAINST
o
| ABSTAIN
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| | | | | | PROXY NUMBER: | | |
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Signature __________________________________________ Signature _________________________________________________________________________________________ | Date ___________________, 2016.________________, 2017. |
Note:Please sign this proxy and return it promptly whether or not you expect to attend the meeting. You may nevertheless vote in person if you attend. Please sign exactly as name appears hereon. When shares are held by joint owners, bothGive full title if an Attorney, Executor, Administrator, Trustee, Guardian, etc. For an account in the name of two or more persons, each should sign. When signing at attorney, executor, administrator, trustee, guardian,sign, or corporate officer, please give title as such.if one signs, he should attach evidence of his authority. |