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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement.
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2)).
[X] Definitive Proxy Statement.
[ ] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to Section 240.14A-11(c) or Section 240.14a-12
Plexus Corp.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS
FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB
CONTROL NUMBER.
SEC 1913 (11-01)
(PLEXUS CORP LOGO)
PLEXUS CORP.
55 JEWELERS PARK DRIVE
P.O. BOX 156
NEENAH, WISCONSIN 54957-0156
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
ON FEBRUARY 11, 2004
To the Shareholders of Plexus Corp.:
Plexus Corp. will hold the annual meeting of its shareholders in the KC
Theater at the Fox Cities Performing Arts Center, located at 400 West College
Avenue, Appleton, Wisconsin, on Wednesday, February 11, 2004 at 10:00 a.m., for
the following purposes:
(1) To elect seven directors to serve until the next annual meeting and
until their successors have been duly elected.
(2) To ratify the selection of PricewaterhouseCoopers LLP as Plexus'
independent auditors.
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Plexus' shareholders of record on its books at the close of business on
December 12, 2003 will be entitled to vote at the meeting or any adjournment of
the meeting.
We call your attention to the proxy statement accompanying this notice for
a more complete statement about the matters to be acted upon at the meeting.
By order of the Board of Directors
/s/ Joseph D. Kaufman
------------------------------------
Joseph D. Kaufman
Senior Vice President, Secretary
and Chief Legal Officer
Neenah, Wisconsin
December 26, 2003
PLEASE INDICATE YOUR VOTING DIRECTIONS, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU LATER FIND THAT YOU WILL BE
PRESENT AT THE MEETING OR FOR ANY OTHER REASON DESIRE TO REVOKE YOUR PROXY, YOU
MAY DO SO AT ANY TIME BEFORE IT IS VOTED.
Plexus shareholders who own their shares in "street name" through their
brokerage accounts may also communicate their vote to the brokerage firm and its
service provider electronically or by telephone. If you wish to do so, you can
link to instructions at www.proxyvote.com, or you may also follow any
instructions provided by the brokers with their separate voting form.
PROXY STATEMENT
PLEXUS CORP.
55 JEWELERS PARK DRIVE
P.O. BOX 156
NEENAH, WISCONSIN 54957-0156
* * * * * * *
SOLICITATION AND VOTING
The board of directors of Plexus Corp. is soliciting proxies for the annual
meeting of shareholders on Wednesday, February 11, 2004 at the KC Theater, Fox
Cities Performing Arts Center, 400 West College Avenue, Appleton, Wisconsin, and
is furnishing this proxy statement in connection with that solicitation. Shares
which are represented by properly executed proxies received by Plexus will be
voted at the meeting and any adjournment thereof in accordance with the terms of
such proxies, unless revoked. Proxies may be revoked at any time prior to the
voting thereof either by written notice filed with the secretary or acting
secretary of the meeting or by oral notice to the presiding officer during the
meeting.
Shareholders of record at the close of business on December 12, 2003 will
be entitled to one vote on each matter presented for each share so held. On that
date there were 42,678,101 shares of Plexus common stock outstanding. Any
shareholder entitled to vote may vote either in person or by duly authorized
proxy. Representation of a majority of the outstanding shares will constitute a
quorum at the meeting. Abstentions and shares which are the subject of broker
non-votes will be counted for the purpose of determining whether a quorum exists
at the meeting. Shares represented at a meeting for any purpose are counted in
the quorum for all matters to be considered at the meeting. The voted proxies
will be tabulated by the persons appointed as inspectors of election.
Directors are elected by a plurality of the votes cast by the holders of
Plexus common stock entitled to vote at the election at a meeting at which a
quorum is present. "Plurality" means that the individuals who receive the
highest number of votes are elected as directors, up to the number of directors
to be chosen at the meeting. Any votes attempted to be cast "against" a
candidate are not given legal effect and are not counted as votes cast in the
election of directors. Therefore, any shares which are not voted, whether by
withheld authority, broker non-vote or otherwise, have no effect in the election
of directors except to the extent that the failure to vote for any individual
results in another individual receiving a relatively larger number of votes.
Ratification of PricewaterhouseCoopers LLP as Plexus' independent
accountants will be determined by a majority of the shares voting on that
matter. Therefore, abstentions and broker non-votes will not affect the vote,
except insofar as they reduce the number of shares which are voted.
Shareholders who own shares as part of Plexus' 401(k) Savings Plan and/or
the Plexus Employee Stock Purchase Plan will receive a separate proxy for the
purpose of voting their shares held in each account. Shares held by the Savings
Plan for which designations are not received will be voted by the Savings Plan's
trustee at its discretion, as provided in the Savings Plan. Shares held in
accounts under the Purchase Plan will only be voted if designations are
received.
Plexus will pay the expenses in connection with the solicitation of
proxies. Upon request, Plexus will reimburse brokers, dealers, banks and voting
trustees, or their nominees, for reasonable expenses incurred in forwarding
copies of the proxy material and annual report to the beneficial owners of
shares which such persons hold of record. Solicitation of proxies will be
principally by mail. Proxies may also be solicited in person, or by telephone,
telegraph or fax, by officers and regular employees of Plexus who will not be
separately compensated for those services.
This proxy material is being mailed to Plexus shareholders commencing on or
about January 5, 2004.
-1-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table presents certain information as of December 12, 2003
regarding the beneficial ownership of the Plexus common stock held by each
director or nominee for director, each executive officer appearing in the
Summary Compensation Table, all directors and executive officers as a group, and
each known 5%-or-greater shareholder of Plexus.
SHARES PERCENTAGE
BENEFICIALLY OF SHARES
NAME OWNED (1) OUTSTANDING
------------------------------------------------ ------------ -----------
Stephen P. Cortinovis 2,000 *
David J. Drury 14,000 *
Dean A. Foate 251,573 *
John L. Nussbaum 386,136 *
Thomas J. Prosser 73,686 *
Charles M. Strother 8,000 *
Jan K. VerHagen 16,000 *
F. Gordon Bitter 14,833 *
Michael J. McGuire 4,000 *
Paul L. Ehlers 110,781 *
J. Robert Kronser 113,591 *
All executive officers and directors
as a group (18 persons) 1,308,568 3.0%
Thomas B. Sabol (2) 116,667 *
T. Rowe Price Associates, Inc. (3) 3,024,460 7.1%
Mellon Financial Corporation (4) 2,543,203 6.0%
----------
* Less than 1%
(1) The specified persons have sole voting and sole dispositive powers as to
all shares, except as otherwise indicated. The amounts include shares
subject to options granted under Plexus' option plans, which are
exercisable within 60 days. The options include those held by Mr. Drury
(12,000), Mr. Foate (211,667), Mr. Nussbaum (123,001), Mr. Prosser
(33,000), Dr. Strother (3,000), Mr. VerHagen (9,000), Mr. Bitter (8,333),
Mr. McGuire (4,000), Mr. Ehlers (89,895), Mr. Kronser (111,169), all
officers and directors as a group (870,665), and Mr. Sabol (121,667).
(2) Mr. Sabol is a former executive officer of Plexus.
(3) T. Rowe Price Associates, Inc. ("Price") has filed a report on Schedule 13G
dated February 14, 2003, reporting that it beneficially owned 3,024,460
shares of common stock at December 31, 2002. Price reported that it had
sole dispositive power as to all of such shares, and sole voting power as
to 734,300 shares. The address of Price, an investment advisor, is 100 East
Pratt Street, Baltimore, Maryland 21202.
(4) Mellon Financial Corporation, its subsidiary Mellon Bank N.A. and various
subsidiaries and affiliates (together, "Mellon") have filed a report on
Schedule 13G dated January 15, 2003, reporting that they beneficially owned
2,543,203 shares of common stock at December 31, 2002. The amount includes:
sole voting power as to 2,123,693 shares; shared voting power as to 392,300
shares; sole dispositive power as to 2,147,413 shares; and shared
dispositive power as to 395,790 shares. Of the shares reported,
approximately 1.2 million were held at September 30, 2003 in Mellon Bank's
capacity as trustee of the Plexus Savings Plan; Mellon disclaims beneficial
ownership of those shares which have been allocated to individuals'
accounts. Mellon's address is One Mellon Center, Pittsburgh, Pennsylvania
15258.
-2-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Plexus'
officers and directors, and persons who beneficially own more than 10% of
Plexus' common stock, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. These "insiders" are required by SEC
regulation to furnish Plexus with copies of all Section 16(a) forms they file.
All publicly held companies are required to disclose the names of any
insiders who fail to make any such filing on a timely basis within the preceding
fiscal year, and the number of delinquent filings and transactions, based solely
on a review of the copies of the Section 16(a) forms furnished to Plexus, or
written representations that no such forms were required. On the basis of
filings and representations received by Plexus, except that Mr. Cortinovis filed
one late report relating to one purchase transaction, Plexus believes that
during fiscal 2003 Plexus' insiders have complied with all Section 16(a) filing
requirements applicable to them.
ELECTION OF DIRECTORS
In accordance with Plexus' bylaws, the board of directors has determined
that there shall be seven directors elected at the annual meeting of
shareholders to serve until their successors are duly elected and qualified. The
persons who are nominated as directors and for whom proxies will be voted are
named below, unless a shareholder specifies otherwise. If any of the nominees
should decline or be unable to act as a director, which eventuality is not
foreseen, the proxies will be voted with discretionary authority for a
substitute nominee designated by the board of directors. Plexus' bylaws
authorize up to nine directors. The Plexus board may expand the board up to that
number and elect directors to fill empty seats, including those created by an
expansion, between shareholders' meetings.
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE AND BUSINESS EXPERIENCE(1) SINCE
------------ -------------------------- --------
Stephen P. Cortinovis, 53 (2) Partner, Bridley Capital Partners Limited (U.K. private equity group) 2003
since 2001; previously President-Europe of Emerson Electric Co. (5)
David J. Drury, 55 (2)(3) President of Poblocki & Sons LLC (exterior and interior sign systems) 1998
since 1999; previously, an independent consultant and other executive
positions (6)
Dean A. Foate, 45 President and Chief Executive Officer of Plexus since 2002; previously, 2000
Chief Operating Officer from 2001 to 2002, Executive Vice President
from 1999 to 2002, and President of Plexus Technology Group, Inc. prior
thereto
John L. Nussbaum, 61 Chairman of Plexus; previously, Chief Executive Officer of Plexus from 1980
2001 to 2002 and its President and Chief Operating Officer prior thereto
Thomas J. Prosser, 67 (2)(3)(4) Chairman of the Board of Menasha Corporation (paper and plastic 1987
products manufacturer) since 1998; previously, Senior Vice President of
Robert W. Baird & Co., Incorporated (brokerage and financial services)
Charles M. Strother, MD, 63 (3)(4) Physician; Professor at Baylor College of Medicine since 2002; 2002
previously, Professor of Radiology, Neurology and Neurosurgery,
University of Wisconsin-Madison
Jan K. VerHagen, 66 (2)(4) Retired; previously, Senior Vice President of Corporate Projects of 1999
Emerson Electric Co. from 1999 to 2001, and Vice Chairman of United
Dominion Industries (diversified manufacturing) prior thereto (7)
----------
(1) Unless otherwise noted, all directors have been employed in their principal
occupation listed above for the past five years or more.
-3-
(2) Member of the Audit Committee. See "Corporate Governance" below for more
information about the Audit Committee.
(3) Member of the Compensation and Leadership Development Committee. See
"Corporate Governance" below for more information about the Compensation
and Leadership Development Committee.
(4) Member of the Nominating and Corporate Governance Committee. See "Corporate
Governance" below for more information about the Nominating and Corporate
Governance Committee.
(5) Also a director of Instituform Technologies, Inc. (developer of trenchless
technology for underground pipes).
(6) Also a director of Journal Communications, Inc. (media holding company).
(7) Also a director of Wolverine Tube, Inc. (manufacturer of tubing and related
products) and Flow International Corp. (manufacturer of high pressure water
products).
CORPORATE GOVERNANCE
The board of directors held five meetings during fiscal 2003. As part of
these meetings, non-management directors regularly meet without management
present. All directors other than Messrs. Foate and Nussbaum are independent
under Nasdaq Stock Market rules. Each director attended at least 75% of the
total of the number of meetings of the board and the number of meetings of all
committees of the board on which such director served during the year.
The Audit Committee met four times in fiscal 2003. Mr. Drury, the chair of
the Audit Committee, also regularly consulted on behalf of the Audit Committee
with the independent auditors about Plexus' periodic public financial
disclosures. Mr. Drury is a certified public accountant who practiced from 1971
to 1989 with the firm PricewaterhouseCoopers LLP. As a consequence of factors
which include his educational background, his experience with a public
accounting firm, and his subsequent experience as a chief financial officer, a
chief executive officer and in other executive positions, the board of directors
has determined that Mr. Drury is an "audit committee financial expert" for
purposes of Securities and Exchange Commission rules. Mr. Drury is, along with
the other members of the Audit Committee, "independent" of Plexus for purposes
of those rules. See also "Report of the Audit Committee."
The Compensation and Leadership Development Committee held three meetings
during fiscal 2003. The Compensation and Leadership Development Committee,
consisting solely of "independent" directors, considers and makes
recommendations to the board of directors with respect to executive officers'
salaries and bonuses, reviews, approves and administers compensation plans, and
awards stock options. The Committee is also responsible for reviewing Plexus'
leadership structure and executive succession plan. See also "Executive
Compensation--Compensation Committee Interlocks and Insider Participation."
The Nominating and Corporate Governance Committee met twice in fiscal 2003.
The Nominating and Corporate Governance Committee considers Board performance
and nominees for director positions and also evaluates and oversees corporate
governance and related issues. All of the members of the Nominating and
Corporate Governance Committee are currently independent directors. The
Committee has generally identified nominees based upon suggestions by outside
directors, management members and/or shareholders, and has evaluated those
persons on its own. Plexus' corporate board member selection criteria include:
integrity; high level of education and/or business experience; broad-based
business acumen; understanding of Plexus' business and industry; strategic
thinking and willingness to share ideas; network of contacts; and diversity of
experiences, expertise and backgrounds among board members. The Committee has
used these criteria to evaluate potential nominees. The Committee does not
evaluate proposed nominees differently depending upon who has made the proposal.
Plexus has not to date paid any third party fee to assist in this process.
The Nominating and Corporate Governance Committee will consider proposed
nominees whose names are submitted to it by shareholders; however, it does not
have a formal process for that consideration. The Committee has not to date
adopted a formal process because it believes that the informal consideration
process has been adequate given the historically small number of those
proposals. The Committee intends to review periodically whether a more formal
policy should be adopted. If a shareholder wishes to suggest a proposed name for
Committee consideration, the name of that nominee and related personal
information should be forwarded to the Nominating and Corporate Governance
Committee, in care of the corporate Secretary, at least six months before the
next annual meeting to assure time for meaningful consideration by the
Committee. See also "Shareholder
-4-
Proposals and Notices" for bylaw requirements for nominations. Plexus has not
rejected any candidates put forward by significant security holders.
Although Plexus has not to date developed formal processes by which
shareholders may communicate directly to directors, it believes that the
informal process, in which any communication sent to the board in care of the
Chief Executive Officer, corporate Secretary or another corporate officer is
forwarded to the board, has served the board's and its shareholders' needs.
There is no screening process, and all shareholder communications which are
received by officers for the board's attention are forwarded to the board. In
view of recently adopted SEC disclosure requirements relating to this issue, the
Nominating and Corporate Governance Committee may consider development of more
specific procedures. Until any other procedures are developed and posted on
Plexus' corporate website, any communications to the board of directors should
be sent to it in care of Plexus' corporate Secretary.
Plexus encourages all of its directors to attend the annual meeting of
shareholders. Plexus generally holds a board meeting coincident with the annual
shareholder meeting to minimize director travel obligations and facilitate their
attendance at the shareholders' meeting. All directors attended the 2003 annual
meeting of shareholders.
Plexus regularly reviews and augments its corporate governance practices
and procedures. In particular, and as part of its corporate governance
practices, Plexus has adopted a code of ethics and charters for its board
committees. Plexus will be responding to and complying with related SEC and
Nasdaq Stock Market proposals as they are finalized, adopted and become
effective. Plexus has posted copies of its Code of Conduct and Business Ethics,
the committee charters for its Audit, Compensation and Leadership Development
and Nominating and Corporate Governance Committees, director selection criteria
and other corporate governance documents on its website, at www.plexus.com,
under the link titled "Investors" then "Corporate Governance." As further
matters are documented, or if those documents (including the committee charters
and the Code of Conduct and Business Ethics) are changed, waivers from the Code
of Conduct and Business Ethics are granted, or new procedures are adopted, those
new documents, changes and/or waivers will be posted on Plexus' corporate
website at that address.
DIRECTORS' COMPENSATION
Each Plexus director who is not a full-time Plexus officer or employee (all
directors other than Mr. Foate) received an annual director's fee of $20,000
plus meeting fees of $2,000 for each board meeting attended in person ($1,000 if
attended other than in person), and an additional $1,000 for each committee
meeting attended in person ($500 if other than in person). Each committee chair
receives an additional $2,000 annually for service as a committee chair, and the
chairman of the Audit Committee receives an additional $500 for each conference
call held with the independent public auditors regarding Plexus' financial
disclosures.
For fiscal 2004, each director who is not a Plexus officer or employee is
entitled in each fiscal year to receive an option for 6,000 shares of common
stock, at the market value on the date of grant, under Plexus' 1995 Directors'
Stock Option Plan (the "Directors' Plan"). The Directors' Plan was approved by
Plexus shareholders in 1995. Options are fully vested upon grant, may be
exercised after a minimum six month holding period, and must be exercised prior
to the earlier of ten years after grant or one year after the person ceases to
be a director. Under certain circumstances, options may be transferred to family
members. In 2002, the amount of annual grants was adjusted, as contemplated by
the Directors' Plan, to reflect one of the two Plexus 2-for-1 stock splits which
had occurred after the adoption of the Directors' Plan. In 2003, the
Compensation and Leadership Development Committee, also as contemplated by the
Directors' Plan's adjustment provisions, further adjusted future annual awards
from 3,000 shares to 6,000 shares, to reflect a second 2-for-1 stock split.
While the Committee had previously deferred this action, it determined that the
further adjustment was necessary to help Plexus attract new directors as some
current directors near retirement age, particularly in view of the increasing
duties of directors of public companies. The Committee also determined that the
adjustment would fairly reflect the increased duties of currently serving
non-employee directors.
In accordance with the Directors' Plan, each of the then-serving
non-employee directors received a fiscal 2003 option for 3,000 Plexus shares,
exercisable at $8.975 per share, on January 30, 2003 (which was deferred in that
fiscal year to coincide with employee grants). The fiscal 2004 options, for
6,000 Plexus shares each, were granted on December 1, 2003, at $18.125 per
share.
-5-
Compensation of Current and Former Executive Officers who Serve on the Board
See "Executive Compensation" for Mr. Foate's compensation as an executive
officer of Plexus generally, and "Executive Compensation - Special Retirement
Arrangements" for his supplemental retirement arrangements.
Mr. Nussbaum is a former executive officer of Plexus. When he retired as
Chief Executive Officer on July 1, 2002, he ceased being considered an executive
officer or employee of Plexus at that time. However, as a consequence of his
many years of service as an executive officer of Plexus, he continues to be
compensated under deferred compensation arrangements which were put in place
during his service as executive officer.
In 1996, the Compensation Committee established special retirement
arrangements for Mr. Nussbaum, and for two other executive officers and
directors who subsequently retired. Those arrangements were to both reward past
service and maintain an additional incentive for those officers' continued
performance on behalf of Plexus. The related supplemental retirement agreement
for Mr. Nussbaum is designed to provide specified retirement and death benefits
to him in addition to those provided under the 401(k) Savings Plan. Plexus'
original commitment was to annually contribute a fixed dollar amount (originally
$90,921 for Mr. Nussbaum) for each year until age 65 if he remained in Plexus'
employ. Effective for fiscal 2000, under an amended arrangement, Plexus'
obligation to make contributions for Mr. Nussbaum was increased to $296,420 per
year, but only until age 60. However, in fiscal 2002, Plexus contributed a
one-time final amount of $743,578 due to Mr. Nussbaum's retirement. Mr. Nussbaum
received his first payment under the special retirement arrangements, of $60,231
for a partial year during fiscal 2002, and received $257,354 for fiscal 2003.
Payments will be adjusted upward by 4% annually.
The contributions for Mr. Nussbaum are invested in a life insurance policy
acquired by Plexus on his life. The supplemental retirement agreement provides
for a 15-year annual installment payment stream to Mr. Nussbaum, which payments
commenced at retirement. Lump sum payments based on policy cash values become
due if at any time after a change in control Plexus' consolidated tangible net
worth drops below $35 million, or if the ratio of Plexus' consolidated total
debt to consolidated tangible net worth becomes greater than 2.5 to 1. To the
extent that any of the payments constitute excess parachute payments subjecting
the participant to an excise tax, the agreement provides for an additional
payment (the "gross-up payment") to be made by Plexus to the participant so that
after the payment of all taxes imposed on the gross-up payment, the participant
retains an amount of the gross-up payment equal to the excise tax imposed. If
Mr. Nussbaum dies prior to receiving all of the 15-year annual installment
payments, certain death benefit payments become due.
Mr. Nussbaum also receives $72,000 per year and receives health and other
welfare benefits, in addition to the above retirement payments and his regular
board fees, for his service as Plexus' non-executive Chairman of the Board.
Because Mr. Nussbaum continues to serve Plexus as a director, the stock
options which were granted to him while he was a Plexus executive officer will
continue to vest. Since his retirement, however, Mr. Nussbaum has only been
eligible to receive additional options in his capacity as a non-employee
director.
-6-
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the total
compensation of Plexus' chief executive officer and its four other highest
compensated executive officers, for fiscal 2003 and the preceding two fiscal
years, as well as the compensation of one former executive officer who resigned
from the Company in August 2003.
Annual Compensation (1) Awards
------------------------------------------ ----------
Securities
Other Underlying All Other
Name and Fiscal Compensa- Options/ Compensation
Principal Position Year Salary ($) Bonus ($) tion ($)(2) SARs #(3) ($)(4)
------------------ ------ ---------- --------- ----------- ---------- ------------
Dean A. Foate, 2003 $440,505 -- -- 120,000 $ 18,219
President and Chief 2002 299,955 -- $ 13,500 100,000 18,781
Executive Officer (5) 2001 246,396 -- 13,500 30,000 17,750
F. Gordon Bitter 2003 $250,038 -- $ 42,273 40,000 $ 13,500
Vice President and Chief
Financial Officer (6)
Paul L. Ehlers, 2003 $238,885 -- -- 38,000 $ 18,570
Senior Vice President 2002 203,729 -- $ 13,500 12,000 17,575
2001 210,977 -- 13,500 14,000 17,010
Michael J. McGuire, 2003 $237,598 -- $ 28,547 25,000 $ 13,500
Vice President-Worldwide
Sales and Marketing (7)
J. Robert Kronser, 2003 $230,681 -- -- 27,000 $ 17,878
Executive Vice President 2002 212,647 -- $ 13,500 9,000 17,810
and Chief Technology and 2001 210,977 -- 13,500 19,000 17,138
Strategy Officer
Thomas B. Sabol, 2003 $342,621 -- -- 55,000 $ 19,250
Executive Vice President, 2002 $245,244 -- $ 13,500 70,000 17,884
Chief Operating Officer (8) 2001 228,850 -- 13,500 20,000 17,616
(1) While the named individuals received perquisites or other personal benefits
in the years shown, in accordance with SEC regulations, the value of these
benefits are not shown unless they exceeded, in the aggregate, the lesser
of $50,000 or 10% of the individual's salary and bonus in any years.
(2) For years prior to fiscal 2003, represents premiums paid or accrued under
the split-dollar life insurance payments, as discussed under "Special
Deferred Compensation Arrangements." For fiscal 2003, represents moving,
temporary living, travel and other relocation-related expenses (including
reimbursement for tax effects) paid to or on behalf of Messrs. Bitter and
McGuire as part of the arrangements pursuant to which they were hired by
Plexus. Because of the timing of certain events (such as the sales of the
officers' former residences) and Plexus' fiscal year end, there will be
additional relocation-related expenses included in fiscal 2004.
(3) Represents the number of shares for which options were granted under
Plexus' 1998 Stock Option Plan (the "Option Plan"). No SARs have been
granted. Options granted in fiscal 2001 and 2002 are "out of the money"
because their exercise prices are higher than the market price at the date
of this proxy statement.
(4) Includes, for fiscal 2003: Plexus' contributions to the accounts of Messrs.
Foate, Ehlers, Kronser and Sabol in the Savings Plan of $4,719, $5,070,
$4,378 and $5,750, respectively; and Plexus' contributions to accounts of
each named executive officer under their Executive Deferred Compensation
Plan of $13,500, as discussed under "Special Deferred Compensation
Arrangements".
-7-
(5) Mr. Foate became President and Chief Executive Officer in July 2002, upon
Mr. Nussbaum's retirement from those positions, after having been promoted
to Chief Operating Officer in March 2001.
(6) Mr. Bitter began service to Plexus as its Chief Financial Officer in
October 2002.
(7) Mr. McGuire began service with Plexus as its Vice President-Worldwide Sales
and Marketing in December 2002.
(8) Mr. Sabol was promoted to Executive Vice President and Chief Operating
Officer in July 2002. He resigned as an executive officer of Plexus in
August 2003. The amounts shown on the table for fiscal 2003 represents
salary paid to him prior to that date, and contractual payments made to him
after that date.
STOCK OPTIONS
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to options granted
to the five executive officers and the other person named in the Summary
Compensation table concerning options granted in fiscal 2003.
Individual Grants(1)
---------------------------------------------------------
% of Potential
Number of Total Realized Value at
Securities Options/ Assumed Annual
Underlying SARs Rates of Stock Price
Options/ Granted To Appreciation
SARs Employees Exercise or for Option Term (2)(3)
Granted in Fiscal Base Price Expiration ----------------------------
Name (1)(#) Year ($/sh) Date 5% 10%
---------------- ---------- ---------- ----------- ---------- ---------- ----------
Dean Foate 75,000 6.65% $ 8.98 1/30/13 $ 423,325 $1,072,788
Dean Foate 45,000 3.99% $ 14.02 8/14/13 666,471 1,688,969
Gordon Bitter 15,000 1.33% $ 11.05 10/31/12 104,239 264,163
Gordon Bitter 10,000 0.89% $ 8.98 1/30/13 56,443 143,038
Gordon Bitter 15,000 1.33% $ 14.02 8/14/13 222,157 562,990
Paul Ehlers 18,000 1.60% $ 8.98 1/30/13 101,598 257,469
Paul Ehlers 20,000 1.77% $ 14.02 8/14/13 296,209 750,653
Michael McGuire 12,000 1.06% $ 12.53 12/9/12 94,561 239,635
Michael McGuire 13,500 1.20% $ 14.02 8/14/13 199,941 506,691
Robert Kronser 13,500 1.20% $ 8.98 1/30/13 76,198 193,102
Robert Kronser 13,500 1.20% $ 14.02 8/14/13 199,941 506,691
Thomas Sabol (3) 30,000 2.66% $ 8.98 (3) -- --
Thomas Sabol (3) 25,000 2.22% $ 14.02 (3) -- --
(1) No SARs have been granted; all grants reflect stock options under the
Option Plan. Options may, under certain circumstances, be transferred to
family members or related trusts.
(2) Assumes the stated appreciation from the date of grant.
(3) Because Mr. Sabol has ceased serving as an executive officer in August
2003, these options will not vest and therefore have no potential realized
value going forward.
Plexus has not repriced any stock options during the fiscal years reported
in this proxy statement. It is Plexus' current intention to not reprice stock
options irrespective of whether plan documents would otherwise permit that
action.
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AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES
The following table sets forth information with respect to the five
executive officers and the other person named in the Summary Compensation Table
concerning the exercise of options in fiscal 2003 and the number and value of
options outstanding at September 30, 2003.
Number of Value of
Securities Underlying Unexercised In-the-
Shares Unexercised Options/ Money Options/SARs
Acquired on Value SARs at FY-End (#)(2) At FY-End ($)(3)
Name Exercise (#) Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------ -------------- ------------------------- -------------------------
Dean Foate 10,000 $121,931 178,333/196,667 $848,725/$561,000
Gordon Bitter -- -- 0/40,000 0/155,875
Paul Ehlers -- -- 71,895/50,667 339,968/148,670
Michael McGuire -- -- 0/25,500 0/56,708
Robert Kronser -- -- 106,668/39,334 512,033/109,215
Thomas Sabol 60,000 $611,770 111,666/108,333 247,976/235,075
(1) Represents the difference between the exercise price and the average of the
high and low sales price on the date of exercise.
(2) Represents options granted under the Option Plan. No SARs have been
granted.
(3) Represents the difference between the exercise price and the $15.54 closing
price of Plexus common stock reported on the Nasdaq Stock Market on
September 30, 2003, the last day of the fiscal year.
CHANGE IN CONTROL ARRANGEMENTS
Plexus has entered into Change in Control Agreements with Messrs. Foate,
Bitter, Ehlers, McGuire and Kronser, and its other executive officers. Under the
terms of these agreements, which were amended and restated in 2003, if there is
a change in control of Plexus, as defined in the agreement, the executive
officers' authorities, duties and responsibilities shall remain at least
commensurate in all material respects with those prior to the change in control.
Their compensation and benefits may not be reduced, or location of employment
changed, as a result of the change in control.
In the event that any covered officer is terminated other than for cause,
death or disability, or an executive terminates his employment with good reason,
Plexus is obligated to pay the executive officer, in a cash lump sum, an amount
equal to approximately three times the executive's base salary plus targeted
bonus payments, and to continue certain benefits. The agreements further provide
for payment of additional amounts which may be necessary to "gross up" the
amounts due such employee in the event of the imposition of an excise tax upon
the payments. The agreements do not preclude termination of the officer, or
require payment of any benefit, if there has not been a change in control of
Plexus, nor does it limit the ability of Plexus to terminate these persons for
cause.
SPECIAL DEFERRED COMPENSATION ARRANGEMENTS
During fiscal 2000, the Compensation and Leadership Development Committee
also established additional deferred compensation mechanisms for several
executive officers and other key employees, including Messrs. Foate, Bitter,
Ehlers, McGuire and Kronser, and had such an agreement with Mr. Sabol. As part
of those arrangements, the Committee established the Plexus Corp. Executive
Deferred Compensation Plan. Under this plan, a covered executive may elect to
defer some or all of his or her compensation through the plan, and Plexus may
credit the participant's account with a discretionary employer contribution.
Participants are entitled to payment of deferred amounts and any earnings which
may be credited thereon upon termination or retirement from Plexus.
Plexus had also entered into split-dollar life insurance agreements with
various executive officers and key employees, including Messrs. Foate, Ehlers,
Kronser and Sabol. Under those agreements, Plexus had paid a minimum premium of
$13,500 per policy, and such additional premiums as it would determine. Upon the
death of
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the covered employee, Plexus had an interest in the proceeds of the policy equal
to the premiums paid. The balance, if any, of the policy proceeds were to be
paid to the employee's beneficiary. Plexus' rights were secured by a related
assignment of employee's life insurance policy as collateral. Upon an earlier
termination of employment, or Plexus' determination to terminate the agreement,
the agreement provided that the employee could obtain unencumbered ownership of
the policy by paying Plexus the lesser of premiums paid or the cash surrender
value, or Plexus could withdraw from the policy an amount equal to the premiums
it has paid and then release its interest in the policy permitting unencumbered
ownership of the policy by the employee. Plexus terminated those split dollar
arrangements as a result of changes in law which were effective in July 2002.
In fiscal 2003 Plexus modified the Executive Deferred Compensation Plan by
terminating the split-dollar life insurance program, which had been the funding
mechanism for the company contribution portion of the plan, and replaced it with
a rabbi trust arrangement. This new arrangement allows investment of deferred
compensation held on behalf of the participants into individual accounts and,
within these accounts, into one or more designated mutual funds or investments.
These investment choices do not include Plexus stock.
The cash value proceeds which were received upon the surrender of the
split-dollar life insurance policies attributable to each plan participant were
reinvested into the new rabbi trust arrangements established for the plan
participants. The provisions of the plan continued to allow the participants the
opportunity to defer any or all of their compensation into the plan. In
addition, plan provisions allow for a discretionary Plexus contribution of up to
$13,500 per participant per year. Employee deferrals to the plan for fiscal year
2003 totaled $190,487. A discretionary company contribution of $13,500 to each
participant was also made in September 2003 to each participant's account.
COMPENSATION AND LEADERSHIP DEVELOPMENT COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation and Leadership Development Committee of the Plexus board
of directors sets general compensation policies for Plexus. The Committee makes
the primary decisions with respect to compensation of the Chairman, the Chief
Executive Officer and the Chief Operating Officer (if any) of Plexus. Decisions
on compensation for other Plexus officers are recommended by the CEO and the COO
(if any). Plexus' other compensation programs, such as the Savings Plan and the
Option Plans, are either originated or approved by the Committee; the Committee
grants stock options under the Option Plans.
Plexus' policy, to which the Committee adheres, is to fairly compensate
individuals for their contributions to Plexus, but also to provide value to
Plexus' shareholders and to consider the ability of Plexus to fund any
compensation decisions, plans or programs. The Committee believes that fair
compensation packages are necessary to attract and retain qualified executive
officers. To be effective in attracting and retaining competent individuals,
compensation packages must balance both short-term and long-term considerations,
as well as provide incentives to individuals based upon the performance of
Plexus. In the most recent determinations, the Committee considered the
weaknesses in Plexus' markets, the negative effect on sales and profitability
and the steps taken to respond to those challenges. The Committee has not
recently retained outside consultants, or relied in a significant fashion upon
outside market surveys specifically commissioned by Plexus. However, the
Committee reviews published survey information. In late 2002, the Committee
engaged outside consultants to assist it in evaluating executive officer
compensation for 2003 salary determinations. Based upon the Committee's review
(including the report of the outside consultants), the Committee determined that
officers were paid less than comparable officers in similar-sized companies.
However, given the economic conditions affecting Plexus at that time, the
Committee determined not to award pay raises to officers during fiscal 2003,
except in the case of changed duties and responsibilities and except for the
elimination of the 10% reduction which is described below.
In determining CEO compensation, the Committee reviewed numerous factors,
although most of these factors are not subject to quantification or specific
weight. The primary factors reviewed, in no particular order, are: the
importance of the individual's contribution to Plexus' strategic planning and
long-term success; special projects and tasks undertaken by the individual
during the preceding year; acquisition-related activities and efforts; and
performance of Plexus' sales and earnings. In addition, the Committee also
reviewed a sampling, which it believed to be representative, of compensation
paid by other companies in Plexus' geographic area, comparable companies in the
electronics manufacturing services industry and numerous published surveys. The
group of companies reviewed did not coincide with the more extensive list of
companies in the Nasdaq electronics components sector used in the
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following performance graph. Plexus has generally used a March/April annual
review cycle in recent years for its employees, including key executives. New
salaries generally become effective around the time of the review and thus
affect two fiscal years. In fiscal 2003, the Committee determined to grant
options earlier than normal in January to assist with employee morale and
retention at a time when Plexus had announced a plant closure and reductions in
force. Similarly, the Committee also granted additional options to selected
individuals in August 2003 to assist in the recruiting and retention of key
personnel.
During fiscal 2003, Mr. Foate was the chief executive officer for the
entire fiscal year. Compensation determinations for Mr. Foate in April 2002 were
made before his assumption of the chief executive officer position. His prior
year salary determinations were made at the time he assumed the position of
chief operating officer, when his salary was increased to $300,000. Mr. Foate
subsequently accepted a 10% salary reduction effective October 1, 2001, which
was the same reduction which was applied to all executive officers. In the April
2002 review, the Committee again reviewed the then-available economic
information referred to above and considered other non-quantifiable factors as
to Mr. Foate's performance. The Committee determined to not change his salary,
or the salary of other executive officers, except in the case of changed duties.
In connection with Mr. Foate's assumption of chief executive officer duties
and responsibilities effective July 1, 2002, the Committee determined that it
would be appropriate to adjust his compensation substantially to reflect those
added duties and responsibilities. The Committee therefore increased his base
salary by 50% to $450,000, which after the effect of the continuing 10%
reduction from the base salary resulted in an actual salary of $405,000. In
December 2002, the 10% salary reduction which had been applied to all executive
officers was ended, as a result of the determination that executive officers
ought again receive their full compensation, especially in view of the efforts
being made to address Plexus' operating results.
In May 2003, the Committee again reviewed Mr. Foate's salary. In view of
the economic circumstances of the Corporation and the end to the 10% salary
reduction, the Committee determined to retain $450,000 as Mr. Foate's annual
salary.
The Committee previously determined it would be in Plexus' best interest to
provide its executive officers with a performance-based incentive beyond that
contained in the Option Plan. Such a bonus arrangement would further motivate
officers to improve performance, and provide specific non-stock market based
criteria to evaluate performance. Until fiscal 2003, bonuses were determined by
reference to earnings per share, sales growth, and individual performance; the
three factors were weighted equally. The possible ranges of bonus, if targets
were met, were from 10% to 100% of base salary for executive officers, which
amounts are chosen in advance by the Committee and may vary from person to
person, and year to year.
Because of corporate cost-containment measures, and the uncertain economic
and financial conditions in early fiscal 2003, the Committee decided to suspend
the formulaic bonus plan for fiscal 2003, and did not set performance goals.
Therefore, no fiscal 2003 bonus could be earned automatically based on achieving
numerical goals, and any bonus that ultimately would be paid would be
discretionary in nature. Because of Plexus' financial performance during fiscal
2003, the Committee decided that no bonuses would be paid to any executive
officer, including the chief executive officer.
On a going forward basis, the Committee determined that it would be
appropriate to implement again a target-driven bonus program. However, revisions
were made in the base program for determining the bonus. Under the new bonus
program, bonuses may only be earned in the event Plexus does not incur a net
loss excluding unusual charges. The exact amount of the bonus will be determined
based upon the degree to which Plexus' revenues and/or return on average capital
employed meet or exceed targets set for the fiscal year. In addition, up to 20%
of an individual's bonus may be determined by the degree to which that
individual meets personal objectives. If personal objectives are met, and both
financial metrics achieve a set maximum level, bonuses may be up to 200% of a
targeted bonus amount. The new bonus program is in effect for fiscal 2004.
The Committee believes that the Option Plan provides participants with a
long-term incentive to increase the overall value of Plexus by providing them
with a stake in the value of its common stock on a long-term basis. The
Committee also wished to recognize Mr. Foate's significantly increased
responsibilities. As a result of the factors discussed above, the Committee made
two general grants of options in fiscal 2003. Consistent with this approach, the
Committee granted to Mr. Foate options for an aggregate of 120,000 shares in
fiscal 2003, options for
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100,000 shares in fiscal 2002 and for 30,000 shares in fiscal 2001. The award
levels reflect the Committee's determination to increase the reliance upon stock
options as a component of compensation, to reflect diminished cash compensation
(including prior pay reductions and freezes), and also to reflect Mr. Foate's
increased duties.
The Plexus 2000 Employee Stock Purchase Plan also permits executive
officers, as other employees, to purchase shares of Plexus common stock at a
price equal to 85% of the lower of the high and low trading price on the day at
the beginning or at the end of six month periods. Compensation information does
not include the value of any purchases by the individuals who chose to
participate, since the broad-based plan is open to most employees. The Committee
also believes that the Savings Plan provides an additional possibility for
stock-based incentives. Although employees, including the CEO, may choose from a
variety of investment funds for their contributions under the Savings Plan; the
Plexus Stock Fund is one alternative.
The factors used to determine other executive officers' compensation are
essentially the same as those used for the CEO. As with the CEO, Messrs. Ehlers,
Kronser and Sabol, and other executive officers, were considered for salary
increases, although salaries were generally frozen except for certain raises in
the case of increases in duties. In April 2002, executive officers' salaries
remained frozen, although Mr. Sabol's was increased in July 2002 by 40% to
reflect the substantial increase in his duties at that time and another
officer's was increased 16% in September 2002, also as a result of changes in
duties. The prior 10% salary reduction ended in December 2002. Similar to the
determination for the chief executive officer, the salaries of other executive
officers remained unchanged in spring 2003, although some individuals
subsequently had increases in salary to reflect additional duties assigned to
them. Determinations for Messrs. Bitter and McGuire were somewhat different, as
a consequence of each of them having joined Plexus during the fiscal year. Their
compensation levels were the consequence of pre-employment negotiations; their
base salaries were not subsequently adjusted in fiscal 2003.
For fiscal 2004, as a result of the Committee determinations (the same as
for the chief executive officer), executive officers will be eligible to
participate in the new 2004 bonus program described above. However, executive
officers did not receive any bonus under the prior Bonus Plan or otherwise, in
fiscal 2003.
The Committee also approved stock option awards during fiscal 2003 for the
executive officers of Plexus, which awards varied from 4,500 to 30,000 shares in
the January grants and 4,500 to 25,000 shares in the separate August grants.
Therefore, the total number of options granted to other executive officers
varied from 9,000 to 55,000 in fiscal 2003. The Committee's determinations of
option grants varied by individual, depending upon the Committee's view of the
adequacy of the particular officer's compensation compared to that officer's
performance and duties, especially when those duties significantly changed or
increased since the last salary increase, and expected changes in circumstances
in the coming year. Plexus has also entered into amended supplemental retirement
arrangements with the executive officers, as described above. The Committee bore
in mind the costs of these arrangements and the expected benefits under them in
making its compensation decisions relating to the affected executive officers.
The Committee believes that it is highly unlikely that the compensation of
any executive officer, including the CEO, will exceed $1 million in any fiscal
year unless it is the consequence of the exercise of stock options. Therefore,
except with respect to the Option Plan and the Employee Stock Purchase Plan, it
has not taken any action with respect to the provisions of Section 162 of the
Internal Revenue Code which limits the deductibility of compensation to certain
executive officers of over $1 million in any fiscal year. Because of the
shareholders' approval of the Option Plan and the Employee Stock Purchase Plan,
the Committee believes that any compensation income under them would not be
subject to the Internal Revenue Code's deduction limitation.
Members of the Compensation and Leadership Development Committee:
Thomas J. Prosser, Chair David J. Drury
Charles M. Strother
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All Compensation and Leadership Development Committee members are
independent, outside directors. No Plexus insiders are members of the
Compensation and Leadership Development Committee. None of the directors who are
Committee members are employees of Plexus, have ever been employed by Plexus or
any of its subsidiaries, and have other reportable relationships with Plexus.
PERFORMANCE GRAPH
The following graph compares the cumulative total return on Plexus common
stock with the Nasdaq Stock Market Index for U.S. Companies and the Nasdaq Stock
Market Index for Electronics Components Companies, both of which include Plexus.
The values on the graph show the relative performance of an investment of $100
made on September 30, 1998, in Plexus common stock and in each of the indices.
COMPARISON OF CUMULATIVE TOTAL RETURN
[graph]
1998 1999 2000 2001 2002 2003
---- ---- ---- ---- ---- ----
Plexus 100 158 728 243 96 160
Nasdaq-US 100 163 217 89 70 106
Nasdaq-Electronics 100 203 357 101 67 130
CERTAIN TRANSACTIONS
Plexus has a policy that transactions with its executive officers and
directors must be on a basis that is fair and reasonable to the corporation, in
accordance with Plexus' Code of Conduct and Business Ethics and other policies,
and be approved by either a disinterested majority of the board of directors or
by the Audit Committee.
From time to time, Plexus executive officers and directors are prohibited
from selling Plexus stock because of the existence or potential existence of
material non-public information. Mr. Sabol, a former executive officer, had
intended to sell Plexus' shares during one of these time periods to finance a
real estate purchase. Because Plexus' activities prohibited him from making a
sale, Plexus loaned Mr. Sabol $260,000 on March 13, 2000. The loan was repayable
upon demand, bore interest at $250 per month, and was secured by Plexus shares.
The loan was originally for a maximum period of eight months, but was extended
to become a demand note by mutual agreement in fiscal 2001. Interest accrued
monthly. The maximum amount due in fiscal 2002 was $263,500. Mr. Sabol repaid
the loan in full in December, 2002. Due to the nature of this transaction, while
Plexus believes that it was fair to
-13-
Plexus, it is not a type of transaction that would have been offered to a third
party, or likely would have been offered to Mr. Sabol by a third party. Because
of subsequent changes in the law, Plexus will no longer make similar loans to
its executive officers.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the board of directors, which was established in
accordance with Section 3(a)(58)(A) of the Securities Exchange Act, as amended,
oversees and monitors the participation of Plexus' management and independent
auditors throughout the financial reporting process, and approves the hiring and
retention of and fees paid to the independent auditors. The Audit Committee also
generally reviews other transactions between the corporation and interested
parties which may involve a conflict of interest. No member of the Audit
Committee is employed or has any other material relationship with Plexus. The
members are "independent" as defined in Rule 4200(a)(15) of the NASD listing
standards for the Nasdaq Stock Market and relevant SEC rules. The Plexus board
of directors has adopted a written charter for the Audit Committee, which was
amended and restated in 2003, and is attached to the proxy statement as an
exhibit.
In connection with its function to oversee and monitor the financial
reporting process of Plexus, the Committee has done the following:
o reviewed and discussed the audited financial statements for the fiscal
year ended September 30, 2003 with Plexus management;
o discussed with PricewaterhouseCoopers LLP, Plexus' independent
auditors, those matters which are required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU Section 380);
and
o received the written disclosure and the letter from
PricewaterhouseCoopers LLP required by Independence Standards board
Standard No. 1 (Independence Discussion with Audit Committees) and has
discussed with PricewaterhouseCoopers LLP its independence.
Based on the foregoing, the Committee recommended to the board of directors
that the audited financial statements be included in Plexus' annual report on
Form 10-K for the fiscal year ended September 30, 2003.
Members of the Audit Committee: David J. Drury, Chairman Stephen P. Cortinovis
Thomas J. Prosser Jan K. VerHagen
AUDITORS
The Audit Committee intends to reappoint the firm of PricewaterhouseCoopers
LLP as independent auditors to audit the financial statements of Plexus for
fiscal 2004. Representatives of PricewaterhouseCoopers LLP are expected to be
present at the annual meeting of shareholders to respond to questions and make a
statement if they desire to do so.
FEES AND SERVICES
Fees (including reimbursements for out-of-pocket expenses) paid to
PricewaterhouseCoopers LLP for services in fiscal 2003 and 2002 were as follows:
2003 2002
-------- --------
Audit fees: $486,300 $398,504
Audit-related fees: 131,005 54,000
Tax fees: 220,778 783,519
All other fees: -- --
The above amounts relate to services provided in the indicated fiscal years,
irrespective of when they were billed. Audit-related fees consisted primarily of
retirement and benefit plan audits, consultation concerning accounting and
financial reporting and review of Plexus' internal controls. Tax services
consisted primarily of compliance and other tax advice regarding special Plexus
projects. Due to changes in rules governing the disclosures, the fiscal
-14-
2002 information differs from prior presentations; it is presented this year on
a basis consistent with the fiscal 2003 information. The Audit Committee
considered the compatibility of non-audit services by PricewaterhouseCoopers LLP
with the maintenance of that firm's independence.
The Audit Committee generally approves all engagements of the independent
auditor in advance, including approval of the related fees. The Audit Committee
approves an annual budget (and may from time to time approve amendments), which
specifies projects and the approved levels of fees for each. To the extent that
items are not covered in the annual budget or fees exceed the budget, management
must have them approved by the Committee or, if necessary between Committee
meetings, by the Committee chairman on behalf of the Committee. Projects of the
types approved for which fees total less than $10,000 in each case may be
approved by management, subject to review and approval by the Committee at its
next meeting. There were no services in fiscal 2003 that were not approved in
advance by the Committee under this policy. Services in fiscal 2002 were engaged
prior to the development of the current Committee prior approval requirements.
SHAREHOLDER PROPOSALS AND NOTICES
Shareholder proposals must be received by Plexus no later than September 7,
2004 in order to be considered for inclusion in next year's annual meeting proxy
statement. In addition, the Plexus bylaws provide that any proposal for action,
or nomination to the board of directors, proposed other than by the board of
directors must be received by Plexus in writing, together with specified
accompanying information, at least 70 days prior to an annual meeting in order
for such action to be considered at the meeting. The 2005 annual meeting of
shareholders is tentatively scheduled for February 9, 2005, and any notice of
intent to consider other questions and/or nominees, and related information,
must therefore be received by December 1, 2004. The purpose of the bylaw is to
assure adequate notice of, and information regarding, any such matter as to
which shareholder action may be sought. The persons holding proxies may vote in
their discretion on any matter as to which notice is not received by that date.
By order of the Board of Directors
/s/ Joseph D. Kaufman
----------------------------------------
Joseph D. Kaufman
Senior Vice President, Secretary and
Chief Legal Officer
Neenah, Wisconsin
December 26, 2003
A COPY (WITHOUT EXHIBITS) OF PLEXUS' ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003,
WAS INCLUDED IN PLEXUS' 2003 ANNUAL REPORT TO SHAREHOLDERS, WHICH ACCOMPANIES
THIS PROXY STATEMENT. AN ADDITIONAL COPY WILL BE PROVIDED WITHOUT CHARGE TO EACH
RECORD OR BENEFICIAL OWNER OF SHARES OF PLEXUS' COMMON STOCK AS OF DECEMBER 12,
2003, ON THE WRITTEN REQUEST OF SUCH PERSON DIRECTED TO: KRISTIAN TALVATIE,
INVESTOR RELATIONS DEPARTMENT, PLEXUS CORP., 55 JEWELERS PARK DRIVE, P.O. BOX
156, NEENAH, WISCONSIN 54957-0156. IN ADDITION, COPIES ARE AVAILABLE ON PLEXUS'
WEBSITE AT WWW.PLEXUS.COM, FOLLOWING THE LINKS AT "INVESTORS," THEN "SEC
FILINGS," THEN "PLEXUS' SEC REPORTS."
To save printing and mailing costs, in some cases only one annual report
and/or proxy statement will be delivered to multiple security holders sharing an
address unless Plexus has received contrary instructions from one or more of
those security holders. Upon written or oral request, we will promptly deliver a
separate copy of the annual report or proxy statement, as applicable, to any
security holder at a shared address to which a single copy of the document was
delivered. You may request additional copies by written request to the address
set forth in the paragraph above or by contacting Mr. Talvatie at (920)
722-3451. You may also contact Mr. Talvatie at that address or telephone number
if you wish to receive a separate annual report and/or proxy statement in the
future, or if you share an address with another security holder and wish for
delivery of only a single copy of the annual report and/or proxy statement if
you are currently receiving multiple copies.
-15-
EXHIBIT A
PLEXUS CORP.
AUDIT COMMITTEE CHARTER
The Board of Directors of Plexus Corp. hereby adopts this Charter for the Audit
Committee of the Plexus Board. The Audit Committee shall have the authority,
responsibility and duties which are specified below.
COMPOSITION
The Audit Committee shall have three or more independent directors, at least one
of whom shall be qualified and designated as a "financial expert" as defined by
Sarbanes-Oxley. The Committee members shall meet all other independence and
experience requirements of the Securities and Exchange Commission and the NASDAQ
Stock Market. The Board of Directors shall appoint one member of the Audit
Committee as the Committee Chairman.
AUTHORITY
The Audit Committee is authorized to review, prior to submission to the SEC or
release to the public, the financial statements and earnings releases prepared
by management, to oversee the annual financial audit of the Company, and to
review any other activity of the Company in connection therewith that they deem
appropriate. All employees are directed to cooperate as required by members of
the Committee. The Committee is solely empowered to appoint, determine funding
for, and oversee persons having special competence, such as independent
accountants, counsel, auditors or other advisors, if and as necessary to assist
the Committee in fulfilling its responsibility. The Committee shall not be
required to seek Company approval for such decisions.
RESPONSIBILITY
The Audit Committee shall be responsible for communicating with the Directors,
the independent accountants, and management, regarding their duties as they
relate to financial accounting, reporting and controls. The Committee shall
assist the Board in fulfilling its fiduciary responsibilities as to Plexus'
accounting policies and reporting practices, and the sufficiency of auditing
relating thereto. The Committee is to be the Board's principal agent in assuring
the independence of the independent accountants, the integrity of management,
and the adequacy of disclosures to shareholders. However, the opportunity for
the independent accountants to meet with the entire Board as needed or desired
is not to be restricted.
MEETINGS
The Audit Committee is to meet at least four times per year, and as many other
times as that Committee deems necessary. The Chairman may call a meeting at any
time he or she believes it is necessary or appropriate.
ATTENDANCE
At least a majority of the members of the Audit Committee are to be present at
all meetings, either in person or by telephone. As necessary or desirable, the
Chairman may request that members of management and/or representatives of the
independent accountants be present at meetings.
MINUTES
The Committee shall arrange for minutes of each meeting to be prepared and sent
to all Committee members. If Plexus' corporate Secretary has not taken the
minutes, they should be sent to him or her for permanent filing with the minute
books.
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GENERAL DUTIES
1. Inform management and the independent accountants that the independent
accountants and the Committee may communicate with each other at all
times.
2. Review with management, the independent accountants, and internal
auditors, Plexus' general policies and procedures to reasonably assure
the adequacy of internal accounting and financial reporting controls.
3. Have familiarity with the accounting and reporting principles and
practices that are applied by Plexus in preparing its financial
statements, as well as its established standards of corporate conduct
and performance, and deviations therefrom.
4. Establish procedures for the receipt, retention, and treatment of
complaints received regarding accounting, internal accounting
controls, or auditing matters. Ensure that such complaints are treated
confidentially and anonymously. The Committee should ascertain that
the appropriate measures are taken to correct such matters, and should
inform the Board and the complainant, if feasible, of such corrective
actions.
5. Review internal policies regarding risk management and risk
assessment.
6. Set clear hiring policies for employees and former employees of the
independent accountants consistent with restrictions imposed by
Sarbanes-Oxley.
7. Recommend to the Board of Directors any appropriate extensions or
changes in the duties of the Committee and/or changes to this Charter.
REPORTING DUTIES
8. Provide any reports or summaries that may be required for the annual
report to shareholders Proxy Statement and/or Form 10-K.
9. Update the Board of Directors, through minutes and presentations as
may be necessary or appropriate, of significant developments in the
course of performing the duties set forth herein.
DUTIES PERTAINING TO THE INDEPENDENT ACCOUNTANTS
10. Determine whether or not to retain the current independent
accountants, make hiring decisions with respect to new independent
accountants, and report to the Board of Directors regarding the basis
for such decisions.
11. Pre-approve all audit and permissible non-audit services. Review the
scope and extent of non-audit services that may be provided by the
independent accountants in relation to the objectivity needed from the
independent accountants in the audit.
12. Perform an annual review of the scope and general extent of the
independent accountants' audit examination, including their engagement
letter.
13. Review and approve the independent auditors' fees, and annually have
Management summarize such fees for Committee review. The Committee's
review should entail an understanding from the independent accountants
of the factors considered in determining the audit scope.
14. At least annually, obtain and review a report provided by the
independent accounting firm describing its internal quality control
procedures, any material issues raised by the most recent internal
quality control review or governmental/professional investigation of
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the firm, and detailing all relationships between the independent
accounting firm and the Company.
15. Review with management and the independent accountants, upon
completion of their audit, the financial results for the year.
16. Evaluate the cooperation received by the independent accountants
during their audit examination, including their access to all
requested records, data and information. Inquire of the independent
accountants whether there have been any disagreements with management
which, if not satisfactorily resolved, would have caused them to issue
a nonstandard report on the financial statements.
17. Discuss with the independent accountants the quality of Plexus'
financial and accounting personnel, and any relevant recommendations
which the independent accountants may have, including those in their
"letter of comments and recommendations".
18. Review with management, the independent accountants, and internal
auditors the scope and quality of internal controls in effect, as well
as management's responses with respect to the independent accountants'
comment letter.
19. Obtain management comments on the responsiveness of the independent
accountants to Plexus' needs.
DUTIES PERTAINING TO PLEXUS' INTERNAL AUDITORS
20. Review at least annually the internal auditors' staffing, budget and
responsibilities.
21. Review the audit plans, audit scope, and results of the internal
auditors' work. Assess the performance of the internal auditors in
executing these plans and meeting their objectives.
22. Meet with the independent accountants and internal auditors in
separate executive sessions to discuss any matters which the Committee
or these groups believe should be discussed privately.
23. Conduct an appropriate review of related party transactions within
Plexus on an ongoing basis and review potential conflict of interest
situations or questions where appropriate.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the financial statements are complete and accurate and are in
accordance with generally accepted accounting principles. This is the
responsibility of management and audit attestation of the independent auditors.
It is also not the duty of the Audit Committee to resolve disagreements, if any,
between management and the independent auditor.
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ANNUAL MEETING OF SHAREHOLDERS OF
PLEXUS CORP.
FEBRUARY 11, 2004
PLEASE DATE, SIGN AND MAIL
YOUR PROXY CARD IN THE
ENVELOPE PROVIDED AS SOON
AS POSSIBLE.
Please detach along perforated line and mail in the envelope provided.
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(1) Election of Directors:
[ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY [ ] FOR ALL EXCEPT
FOR ALL NOMINEES (See instructions below)
Nominees: o Stephen P. Cortinovis, o David J. Drury, o Dean A. Foate,
o John L. Nussbaum, o Thomas J. Prosser, o Charles M. Strother,
o Jan K. VerHagen
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here: ?
(2) Ratification of PricewaterhouseCoopers as Independent Auditors:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion on such other matters as may properly come before the
meeting or any adjournment thereof;
all as set out in the Notice and Proxy Statement relating to the annual meeting,
receipt of which is hereby acknowledged.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder(s). If you do not provide a direction, this proxy
will be voted "FOR" each of the nominees for director who are listed in Proposal
(1) and "FOR" Proposal (2).
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To change the address on your account, please
check the box at right and indicate your new
address in the address space above. Please [ ]
note that changes to the registered name(s)
on the account may not be submitted via this
method.
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Signature of Shareholder Date
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Signature of Shareholder Date
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NOTE: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as
such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
PLEXUS CORP.
PROXY FOR 2004 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John L. Nussbaum, Dean A. Foate and Joseph D.
Kaufman, and any of them, proxies, with full power of substitution, to vote all
shares of stock which the undersigned is entitled to vote at the annual meeting
of shareholders of Plexus Corp. to be held in the KC Theater at the Fox Cities
Performing Arts Center, located at 400 West College Avenue, Appleton, Wisconsin,
on Wednesday, February 11, 2003 at 10:00 a.m. Central Time, or at any
adjournment thereof, as follows, hereby revoking any proxy previously given:
(Continued and to be signed on reverse side)