SCHEDULE 14A INFORMATION
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
THE MONARCH CEMENT COMPANY
(Name of Registrant as Specified In Its Charter)
______________________________________________________________________________
(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:
______________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________________________
5) Total fee paid:
______________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] 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:
______________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________________________
3) Filing Party:
______________________________________________________________________________
4) Date Filed:
______________________________________________________________________________
<Page>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
(April 10, 2002)
The annual meeting of the stockholders of The Monarch Cement Company,
a Kansas corporation will be held Wednesday, April 10, 2002, at 2:00 in the
afternoon of that day, at the Company's corporate offices, Humboldt, Kansas,
to consider and act upon the following:
1. The election of three directors to serve until the
annual meeting of the stockholders of the Company
in 2005;
2. Any other business which may properly come before
the meeting;
3. Adjourning the meeting from time to time.
The Board of Directors has fixed the close of business on February 15,
2002 as the record date for the determination of the stockholders entitled to
notice of and to vote at the meeting. Only stockholders of record at that
time will be entitled to vote at the meeting, or any adjournment thereof.
The Board of Directors of the Company solicits you to sign, date and
return the enclosed proxy. Your proxy may be revoked at any time before it
is exercised.
THE MONARCH CEMENT COMPANY
Lyndell G. Mosley, CPA
Assistant Secretary
Humboldt, Kansas
March 15, 2002
<Page>
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Walter H. Wulf, Jr., Robert M. Kissick and
Byron K. Radcliff as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote all of the shares of
Capital Stock and Class B Capital Stock of The Monarch Cement Company held of
record by the undersigned on February 15, 2002 at the annual meeting of
stockholders to be held on April 10, 2002, or any adjournment or adjournments
thereof, as fully and with the same effect as the undersigned might or could
do if personally present, with respect to the following business proposed by
the Company to be conducted at the meeting:
1. ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY to
below (except as marked vote for all
to the contrary below) [ ] nominees listed below [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST BELOW.)
David L. Deffner Gayle C. McMillen Richard N. Nixon
2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
A majority of said Proxies, or their substitutes, present and acting at
said meeting, or any adjournment thereof (or if only one be present and act,
that one) shall have and may exercise all of the powers of all of said
Proxies. This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ABOVE-NAMED NOMINEES. The undersigned hereby
ratifies and confirms all that said Proxies, or any of them or their
substitutes, may lawfully do or cause to be done by virtue hereof and
acknowledges receipt of the notice of said meeting and the Proxy Statement
accompanying it.
PLEASE SIGN EXACTLY AS NAME APPEARS.
When shares are held by joint
tenants, both should sign. When
signing as attorney, as executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
_____________________________
Signature
Dated_________________, 2002. _____________________________
Signature if held jointly
Please mark, sign, date and return this proxy promptly using the enclosed
envelope.
<Page>
THE MONARCH CEMENT COMPANY
P.O. Box 1000
Humboldt, Kansas 66748-0900
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
(2:00 p.m., April 10, 2002)
GENERAL INFORMATION
The enclosed proxy is being solicited on behalf of the Board of Directors
of The Monarch Cement Company and all expenses of the solicitation will be
borne by the Company. In addition to solicitation by mail, a number of
regular employees may solicit proxies in person or by telephone. The Company
does not expect to pay any compensation for the solicitation of proxies. The
proxy may be revoked at any time before it is exercised by giving written
notice to the Secretary of the Company. The enclosed proxy and this Proxy
Statement were first sent or given to the holders of Monarch stock on or about
March 15, 2002.
The record date with respect to this solicitation is February 15, 2002
and only holders of Capital Stock and/or Class B Capital Stock of the Company
as of the close of business on that date are entitled to vote, either in
person or by proxy, at the meeting. At the close of business on that date
2,311,056 shares of Capital Stock and 1,715,902 shares of Class B Capital
Stock were issued and outstanding. Holders of Capital Stock are entitled to
one vote per share standing in their names on the record date. Holders of
Class B Capital Stock are entitled to ten votes per share standing in their
names on the record date.
Directors are elected by a plurality (a number greater than those cast
for any other candidates) of the votes cast, in person or by proxy, by the
stockholders entitled to vote at the annual meeting for that purpose. The
affirmative vote of the holders of a majority of the votes of the Company's
stock entitled to vote at the annual meeting is required for the approval of
such other matters as properly may come before the annual meeting or any
adjournment thereof.
A stockholder entitled to vote in the election of directors can withhold
authority to vote for all nominees for director or can withhold authority to
vote for certain nominees for director. "Broker non-votes" occur when a
broker indicates that it lacks authority to vote on a matter in the absence of
instructions from the beneficial owner. Broker non-votes are treated as
shares of the Company's stock as to which voting power has been withheld by
the respective beneficial holders and, therefore, as shares not entitled to
vote on the proposal as to which there is the broker non-vote.
To the knowledge of the Company, there are no special arrangements or
understandings between any of the directors and officers other than each of
them acting solely in their capacity as such.
ELECTION OF DIRECTORS AND RELATED INFORMATION
The Board of Directors is divided into three classes. Class I is
comprised of three directors and Classes II and III are each comprised of four
directors. At each annual meeting of stockholders, one class of directors is
elected for a three-year term.
<Page>
The three directors to be elected at the forthcoming annual meeting of
stockholders will serve as directors in Class I of the Board of Directors.
Their term of office will commence upon election and will continue until the
2005 annual meeting of stockholders and until their successors are elected and
qualified.
The Board of Directors has selected the nominees for directors. Shares
represented by a proxy given pursuant to this solicitation will be voted in
favor of the nominees listed below. Each nominee is at present a member of
Class I of the Board of Directors. If any of such nominees should
unexpectedly become unavailable for election, the shares represented by the
proxy will be voted for such substituted nominee or nominees as the Board of
Directors may name. Each of the nominees hereinafter named has indicated his
willingness to serve if elected and it is not anticipated that any of them
will become unavailable for election. The names of the nominees are as
follows:
David L. Deffner Gayle C. McMillen Richard N. Nixon
The Board of Directors recommends that you vote FOR the election of each
of the three nominees named above as directors in Class I of the Board of
Directors.
<Page>
<Table>
Information Concerning Nominees for Election to Board of Directors
and Directors Continuing in Office
Family relationship
Present position Principal occupation Director Term between
Name Age with Company last five years since expires Directors and Officers
NOMINEES
C L A S S I:
David L. Deffner 51 Director Professor of Music, 1997 2005 None
American River College,
Sacramento, California
and Director of Music,
Davis Community Church
Davis, California
Gayle C. McMillen 52 Director Instrumental Music 1999 2005 None
Teacher, USD 305,
Salina, Kansas
Richard N. Nixon 60 Director Shareholder in law 1990 2005 None
firm of Stinson, Mag &
Fizzell, P.C.,
Kansas City, MO
DIRECTORS CONTINUING IN OFFICE
C L A S S II:
Byron J. Radcliff 45 Director Rancher 1976 2003 Son of Byron K. Radcliff,
Vice Chairman, Secretary, Treasurer
and Director
Michael R. Wachter 41 Director Civil Engineer and 1994 2003 None
Director of Operations,
Concrete Technology Corp.
a precast/prestressed
concrete producer)
Tacoma, Washington
Walter H. Wulf, Jr. 57 Chairman Position with Company 1971 2003 Father of Walter H. Wulf, III,
of the Board, Director
President and
Director
Walter H. Wulf,III 28 Director Area Service Manager, 2001 2003 Son of Walter H. Wulf, Jr.,
General Motors Corporation Chairman of the Board,
President and Director
</Table>
<Page>
<Table>
Information Concerning Nominees for Election to Board of Directors
and Directors Continuing in Office (continued)
Family relationship
Present position Principal occupation Director Term between
Name Age with Company last five years since expires Directors and Officers
DIRECTORS CONTINUING IN OFFICE (continued)
C L A S S III:
Jack R. Callahan 70 Director President, The Monarch 1980 2004 None
Cement Company, until
retirement on 10-31-97
Ronald E. Callaway 66 Director Transport truck driver, 1990 2004 None
Agricultural Carriers,
Inc., Wichita, Kansas
until retirement on
6-30-97
Robert M. Kissick 65 Vice President Chairman, Hydraulic 1972 2004 None
and Director Power Systems, Inc.
(manufacturer of
construction equipment)
N. Kansas City, Missouri
Byron K. Radcliff 64 Vice Chairman, Owner/Manager, 1960 2004 Father of Byron J.
Secretary, Radcliff Ranch(9000 acres) Radcliff, Director
Treasurer and Dexter, Kansas
Director
There is no arrangement or understanding between any director and any other person pursuant to which such director was
selected as a director
</Table>
<Page>
<Table>
INFORMATION CONCERNING EXECUTIVE OFFICERS
Term of Family Relationship
Present Position Office Principal Occupation between
Name Age with Company Began Last Five Years Directors and Officers
Walter H. Wulf, Jr. 57 Chairman of the Board 2001 Position with Father of Walter H. Wulf, III
President 1997 Company Director
Director 1971
*Robert M. Kissick 65 Vice President 1980 See page 4 of None
Director 1972 this Proxy
Statement
*Byron K. Radcliff 64 Vice Chairman of Board 2001 See page 4 of Father of Byron J. Radcliff,
Secretary 1999 this Proxy Director
Treasurer 1976 Statement
Director 1960
Lyndell G. Mosley 71 Chief Financial 1972 Position with None
Officer and Assistant Company
Secretary-Treasurer
Debra P. Roe 46 Principal Accounting 1998 Position with None
Officer and Assistant Company
Secretary-Treasurer
Rick E. Rush 49 Vice President 2001 Position with None
Company
____________________
* Not active in the daily affairs of the Company.
There is no arrangement or understanding between any executive officer and any other person pursuant to which any of
such executive officers have been selected to their respective positions.
</Table
<Page>
<Table>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth those known to the Company to be
beneficial owners of more than five percent of any class of the Company's
securities as of February 1, 2002:
Name and Address of Amount and Nature of Percent
Beneficial Owner Title of Class Beneficial Ownership of Class
Byron K. Radcliff Capital Stock 205,960 shares (a) 8.912%
P.O. Box 100 Class B Capital Stock 211,960 shares (b) 12.353%
Dexter, KS 67038
Walter H. Wulf, Jr. Capital Stock 173,102 shares (c) 7.490%
700 Wulf Drive Class B Capital Stock 177,942 shares (d) 10.370%
Humboldt, KS 66748
____________________
(a) Includes 200,515 shares owned individually; 2,495 shares owned jointly
with wife; and 2,950 shares owned by wife. Mr. Radcliff disclaims beneficial
ownership of the 2,950 shares owned by wife.
(b) Includes 207,715 shares owned individually; 2,495 shares owned jointly
with wife; and 1,750 shares owned by wife. Mr. Radcliff disclaims beneficial
ownership of the 1,750 shares owned by wife.
(c) Includes 8,310 shares held individually and 1,900 shares held by wife.
In addition, Walter H. Wulf, Jr. is successor trustee of 75,000 shares under
three trusts for the respective benefit of Walter H. Wulf, Jr. and his two
sisters; manager of 40,300 shares held in Walter H. Wulf Company, LLC for the
benefit of Walter H. Wulf, Jr., his two sisters and their children; trustee of
4,000 shares held in the Walter H. Wulf and May L. Wulf Charitable Foundation;
and manager of 43,592 shares held in the Wulf General, LLC for the benefit of
Mr. Wulf and his two sisters. Mr. Wulf disclaims beneficial ownership of
1,900 shares owned by wife and 50,000 shares held by him as successor trustee
under two trusts for the respective benefit of Mr. Wulf's two sisters.
(d) Includes 12,950 shares held individually; 500 shares held jointly with
wife; and 1,900 shares owned by wife. In addition, Walter H. Wulf, Jr. is
successor trustee of 75,000 shares under three trusts for the respective
benefit of Walter H. Wulf, Jr. and his two sisters and manager of 87,592
shares held in the Wulf General, LLC for the benefit of Mr. Wulf and his two
sisters. Mr. Wulf disclaims beneficial ownership of 1,900 shares owned by
wife and 50,000 shares held by him as successor trustee under two trusts for
the respective benefit of Mr. Wulf's two sisters.
</Table>
<Table>
The security ownership of management as of February 1, 2002 is as
follows:
Amount and Nature of
Beneficial Ownership
Percent of Ownership
Number of Shares Class B
Class B Capital Capital
Beneficial Owner Capital Stock Capital Stock Stock Stock
Jack R. Callahan - 1,000 (1) - .058%
Ronald E. Callaway 12,636 13,337 .547% .777%
David L. Deffner 17,462 17,463 .756% 1.018%
Robert M. Kissick 39,653 (2) 39,903 (3) 1.716% 2.325%
Gayle C. McMillen 11,220 (4) 11,220 (4) .485% .654%
Richard N. Nixon 5,000 1,000 .216% .058%
Byron J. Radcliff 2,750 (5) 1,250 (5) .119% .073%
Byron K. Radcliff 205,960 (6) 211,960 (7) 8.912% 12.353%
Michael R. Wachter 250 250 .011% .015%
Walter H. Wulf, Jr. 173,102 (8) 177,942 (9) 7.490% 10.370%
Walter H. Wulf, III 3,700 3,700 .160% .216%
Lyndell G. Mosley 51,513 (10) 15,561 2.229% .907%
Debra P. Roe 1,175 (11) 825 (11) .051% .048%
All directors and
officers as a group,
13 persons 524,421 495,411 22.692% 28.872%
___________________
Footnotes to Security Ownership of Certain Beneficial Owners and Management
( 1) Held jointly with spouse.
( 2) Includes 6,428 shares in trusts of which Robert M. Kissick is sole
trustee and 33,225 shares owned in wife's trust of which she is sole trustee.
Mr. Kissick disclaims beneficial ownership of 33,225 shares owned by wife's
trust.
( 3) Includes 6,428 shares in trusts of which Robert M. Kissick is sole
trustee and 33,475 shares owned in wife's trust of which she is sole trustee.
Mr. Kissick disclaims beneficial ownership of 33,475 shares owned by wife's
trust.
( 4) Held jointly with spouse.
( 5) Includes 250 shares owned by minor son of which Byron J. Radcliff is
custodian and as to which Mr. Radcliff disclaims beneficial ownership.
( 6) See Footnote (a) to preceding Table.
( 7) See Footnote (b) to preceding Table.
( 8) See Footnote (c) to preceding Table.
( 9) See Footnote (d) to preceding Table.
(10) Includes 18,213 shares held in a trust of which Lyndell G. Mosley is sole
trustee and 33,300 shares in wife=s trust of which she is sole trustee. Mr.
Mosley disclaims beneficial ownership of shares owned by wife's trust.
(11) Held jointly with spouse.
</Table>
EXECUTIVE COMPENSATION
The following table summarizes the total compensation of the Chief
Executive Officers and the Company's other executive officers whose total
compensation exceeded $100,000 for the fiscal year ended December 31, 2001, as
well as the total compensation paid to each such individual for the Company's
two previous fiscal years.
<Table>
SUMMARY COMPENSATION TABLE
Name and Annual Compensation
Principal Position Year (Salary) (Bonus)
Walter H. Wulf, Jr. 2001 $164,850 -0-
Chairman of the 2000 151,080 -0-
Board and President 1999 140,970 -0-
Lyndell G. Mosley 2001 $154,920 -0-
Chief Financial Officer 2000 146,985 -0-
and Assistant 1999 140,055 -0-
Secretary-Treasurer
Debra P. Roe 2001 $ 97,100 $5,000
Principal Accounting 2000 86,040 -0-
Officer and Assistant 1999 80,190 -0-
Secretary-Treasurer
Rick R. Rush 2001 $ 97,100 $5,000
Vice President 2000 86,040 -0-
1999 80,190 -0-
</Table>
The officers who are directors receive a monthly salary and do not receive
additional compensation for attending Board of Directors' meetings. All other
directors receive $1,150 for attending each board meeting. Also, all
directors are reimbursed for their actual travel expenses incurred in
attending board meetings. However, if it is necessary to hold more than one
board meeting on the same date, or if the board meeting takes more than one
day, only $1,150 is paid.
The Board of Directors held three meetings during 2001. Each director
attended at least 75% of the aggregate of the total number of meetings of the
Board of Directors and all committees of the Board on which he served during
2001, with the exception of Robert M. Kissick and Richard N. Nixon, who each
missed one Board of Directors' meeting. The Board of Directors does not have
a standing audit, compensation or nominating committee, or other committee
performing similar functions.
Richard N. Nixon, director, is an attorney and, during 2001, was a
shareholder in the law firm of Stinson, Mag and Fizzell, P.C., Kansas City,
Missouri. During 2001, the total legal fees and expenses paid by the Company
to Stinson, Mag and Fizzell, P.C. did not exceed five percent of such law
firm's gross revenues for 2001.
DEFINED BENEFIT RETIREMENT PLAN
The retirement plan available to salaried employees, including the persons
named in the Summary Compensation Table above, is a defined benefit plan which
provides for fixed benefits, after a specific number of years of service, for
the remainder of the employee's life. The monthly retirement benefits are
computed by multiplying the employee's years of service by one and six-tenths
percent (1.6%) and multiplying this result by 1/60th of the employee's last
sixty calendar months of earnings or the employee's highest five consecutive
calendar years of earnings out of the last ten calendar years of service,
whichever is greater; however, the maximum retirement benefit is limited to
fifty percent (50%) of the average monthly earnings used in computing
retirement benefits. For the year 2001, the maximum annual compensation for
determining retirement benefits is $170,000. The normal retirement age at
which retirement plan benefits become payable is age 65.
The following table sets forth the estimated annual aggregate retirement
benefits at normal retirement for various classifications of earnings and
years of service.
<Table>
PENSION PLAN TABLE
Average
5 Years Years of Service
Earnings 15 20 25 30 35
$100,000 $24,000 $32,000 $40,000 $48,000 $50,000
125,000 30,000 40,000 50,000 60,000 62,500
150,000 36,000 48,000 60,000 72,000 75,000
175,000 40,800 54,400 68,000 81,600 85,000
200,000 40,800 54,400 68,000 81,600 85,000
</Table>
The earnings used for the purpose of determining the retirement plan
benefits consists of annual compensation (salary) of the type disclosed in the
Summary Compensation Table above. Pension benefits under the retirement plan
are not subject to any deduction for social security benefits or other offset
amounts.
The persons named in the Summary Compensation Table above have the
following years of credited service for pension benefits under the retirement
plan: Mr. Mosley, 43 years; Mr. Wulf, 30 years; Ms. Roe, 25 years and Mr.
Rush, 13 years.
SEVERANCE PAY PLAN
On July 18, 1985 the Board of Directors of the Company adopted a
Severance Pay Plan for Salaried Employees (the "Plan"). The Plan is designed
to recognize the past service of long-standing salaried employees and reduce
their concerns, if any, if a change in control of the Company should occur.
The Plan provides that if employment of any "covered employee" is
terminated for any reason other than death or disability within 24 months
after a "change in control", such employee is entitled to receive severance
pay equal to the employee's monthly salary times the number of full years that
such employee has been employed by the Company. The amount of the severance
pay is subject to certain reductions where the employee is entitled to
certain retirement benefits under the Company's pension plan or where the
severance pay is not fully deductible by the Company for federal income tax
purposes. A "covered employee" is any full-time salaried employee who has
been employed for at least 10 years prior to the "change in control". A
"change in control" is any merger, consolidation or disposition of all or
substantially all of the assets of the Company or any acquisition by any
person or group of persons acting in concert who after such acquisition
would own more than 30% of the Company's outstanding voting stock. If there
had been a change in control and termination of employment on December 31,
2001, the following persons would have been entitled to receive severance pay
pursuant to the Plan as follows: Mr. Wulf, $421,500; Mr. Mosley, $281,328;
Ms. Roe, $195,000; and Mr. Rush, $101,400. The Plan also provides that any
covered employee who, at the time of termination, has been employed on a
full-time basis for 20 years or more, is entitled to receive the same life and
health insurance generally made available by the Company to retired employees.
The Plan may be amended or terminated by the affirmative vote of a least
two-thirds of the members of the full Board of Directors of the Company except
that no amendment or termination may adversely affect any right of a covered
employee who is employed by the Company at the time the Board of Directors has
knowledge of any change in control or a proposal for any change in control.
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION
There currently is no compensation committee of the Board of Directors
(or committee performing equivalent functions). Accordingly, the Board of
Directors itself is responsible for the establishment of the general
compensation policies of the Company and the specific compensation for
executive officers. In carrying out this responsibility, however, the Board
of Directors requests and considers the recommendations of the Executive
Committee of the Board of Directors (consisting of Jack R. Callahan, Robert M.
Kissick, Byron K. Radcliff and Walter H. Wulf, Jr.).
Executive Compensation Policy
The Board of Directors believes that the compensation of its executive
officers, including Mr. Wulf, the Company's President and Chief Executive
Officer (CEO), should be influenced by the Company's long-term profitability.
However, the Board does not attempt to establish a direct correlation between
the Company's profitability and executive compensation.
Executive Officer Compensation
Each year, including 2001, the Executive Committee of the Board of
Directors makes its recommendations to the Board of Directors as to the
salaries for the Company's executive officers. These recommendations are
based on a salary adjustment percentage which the committee establishes to
serve as a guideline in setting the compensation for all salaried employees
of the Company. The determination of this salary adjustment is based on the
Executive Committee's assessment of the change in the cost of living and of
the Company's long-term profitability. The application of the salary
adjustment percentage to the salaries of the Company's salaried employees
results generally in the Company's executive officers as a group, including
the CEO, receiving the same percentage increase as the other salaried
employees of the Company. A subjective determination as to whether the
individual salaried employee is performing satisfactorily is also made. In
April 2001, upon the recommendation of the Executive Committee, the Board of
Directors approved an overall increase in compensation of six percent. These
increases are reflective of, although not directly tied to, the Company's
continued good performance in 2000.
Chief Executive Officer Compensation
The compensation of the Company's CEO is established by the Board of
Directors in the same way as compensation is established for the Company's
other executive officers. As indicated in the above discussion, the increase
in the CEO's salary, and that of the other executive officers, largely is
determined by the application of the salary adjustment percentage selected by
the Executive Committee to the CEO's salary. A subjective determination as to
whether the individual salaried employee is performing satisfactorily is also
made.
THE BOARD OF DIRECTORS:
Jack R. Callahan Ronald E. Callaway
David L. Deffner Robert M. Kissick
Gayle C. McMillen Richard N. Nixon
Byron J. Radcliff Byron K. Radcliff
Michael R. Wachter Walter H. Wulf, III
Walter H. Wulf, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No officer who is not also a director, and no other person, participated
in deliberations of the Board of Directors concerning executive officer
compensation. The members of the Board of Directors who are also executive
officers have no interlocking relationships with any other entity which are
required by the rules of the Securities and Exchange Commission to be reported
in this Proxy Statement.
COMPANY PERFORMANCE
The following performance graph shows a five-year comparison of
cumulative total returns for the Company, the S&P 500 composite index and an
index of peer companies selected by the Company.
<Table>
Comparison of Five Year Cumulative Total Return
Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01
MONARCH CEMENT 100.00 147.97 153.90 144.43 131.11 145.39
S&P 500 Index 100.00 133.36 171.48 207.56 188.66 166.24
Peer Group 100.00 164.09 184.54 158.42 131.10 198.25
</Table>
<Table>
Annual Return Percentage
Years Ending
Dec-97 Dec-98 Dec-99 Dec-00 Dec-01
MONARCH CEMENT 47.97 4.01 -6.16 -9.22 10.89
S&P 500 Index 33.36 28.58 21.04 -9.10 -11.89
Peer Group 64.09 12.46 -14.15 -17.25 51.22
</Table>
The cumulative total return on investment for each of the periods for the
Company, the S&P 500 and the peer group is based on the stock price or
composite index at January 1, 1997. The performance graph assumes that the
value of an investment in the Company's capital stock and each index was $100
at January 1, 1997 and that all dividends were reinvested. The information
presented in the performance graph is historical in nature and is not intended
to represent or guarantee future returns.
The performance graph compares the performance of the Company with that
of the S&P 500 composite index and an index of peer companies in the Company's
industry in which the returns are weighted according to each company's market
capitalization. Companies in the peer group index are Lafarge North America
Inc., Lone Star Industries (acquired October 1999), Southdown Inc. (acquired
November 2000) and Texas Industries, Inc.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has used the services of Arthur Andersen LLP, Kansas City,
Missouri as its Independent Certified Public Accountants for the last 67
years. The independent certified public accountants for 2002 have not yet
been selected, although the Board of Directors intends to do so at its April
2002 meeting. It is anticipated that no representative of Arthur Andersen LLP
will be present at the annual meeting of the stockholders on April 10, 2002
and therefore they will not make a statement or be available to answer
questions which may arise. The Board of Directors does not have an audit
committee.
Audit Fees-Fees for services performed by Arthur Andersen LLP during 2001
relating to the audit of the Company's annual financial statements and the
reviews of the financial statements included in our Form 10-Q reports for that
year aggregated approximately $67,500.
Financial Information Systems Design and Implementation Fees-Fees for
professional services performed by Arthur Andersen LLP during 2001 in
connection with financial information systems design and implementation were
$0.
All Other Fees-Fees for all other services performed by Arthur Andersen LLP,
(audit of employee benefit plans) during 2001 aggregated approximately
$11,000. The Board of Directors has determined that the other services
provided by Arthur Andersen LLP do not impair their independence in auditing
the Company's financial statements.
DEADLINE FOR STOCKHOLDER PROPOSALS
No stockholder proposal will be included in the Company's proxy statement
and form of proxy relating to the annual meeting of stockholders to be held on
April 9, 2003 which is not received by the Company at P.O. Box 1000, Humboldt,
Kansas 66748-0900 on or before November 15, 2002.
Stockholders who intend to present a proposal at the 2003 annual meeting
without inclusion of such proposal in the proxy materials are required to
provide notice to us no later than January 29, 2003.
FINANCIAL STATEMENTS
The annual report of the Company containing financial statements for the
year ended December 31, 2001 is enclosed with the Proxy Statement.
OTHER BUSINESS
The proxy solicited confers discretionary authority with respect to the
voting of the shares represented thereby on any other business that may
properly come before the meeting. However, the Board of Directors has no
knowledge of any other business which will be presented at the meeting and
does not itself intend to present any such other business.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
generally requires the Company's directors and executive officers, and persons
who own more than 10% of a class of the Company's equity securities, to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership in the Company's capital stock and other
equity securities. Securities and Exchange Commission regulations require
directors, executive officers and greater than 10% shareholders to furnish the
Company with copies of all Section 16(a) reports they file. To the Company's
knowledge, based solely on review of copies of such reports and written
representations that no other reports were required, during the year ended
December 31, 2001, all Section 16(a) filing requirements applicable to its
directors, executive officers and greater than 10% shareholders were complied
with.