SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Under Rule 14a-12
HUNT CORPORATION
- -----------------------------------------------------------------------------
(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)(1) 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:
___________________________________________________________________________
[GRAPHIC OMITTED]
HUNT CORPORATION
-----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held on April 18, 2001
-----------------------
To Our Shareholders:
The Annual Meeting of Shareholders of Hunt Corporation will be held at
10:00 o'clock a.m. on April 18, 2001, on the 50th Floor, Furness Forum, Bell
Atlantic Tower, 1717 Arch Street, Philadelphia, Pennsylvania, for the following
purposes:
1. To elect three directors to serve for a three-year term;
2. To vote on a proposal to ratify the appointment of independent
accountants; and
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on February 16,
2001, as the record date for the determination of shareholders entitled to
notice of, and to vote at, the meeting and any adjournments thereof.
All shareholders are cordially invited to attend the meeting in person.
However, whether or not you plan to attend, please promptly sign, date and mail
the enclosed proxy card in the enclosed return envelope which requires no
postage if mailed in the United States. Returning your proxy card does not
deprive you of your right to attend the meeting and vote your shares in person.
By order of the Board of Directors,
WILLIAM E. CHANDLER, Secretary
March 2, 2001
HUNT CORPORATION
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
-----------------------
PROXY STATEMENT
-----------------------
This proxy statement, which is being sent to shareholders on or about
March 14, 2001, is furnished in connection with the solicitation of proxies by
the Board of Directors of Hunt Corporation (the "Company") for use at the
forthcoming Annual Meeting of Shareholders (the "Meeting") to be held on April
18, 2001, and at any adjournments thereof.
At the close of business on February 16, 2001, the record date for
determination of shareholders entitled to notice of, and to vote at, the
meeting, there were outstanding an aggregate of 8,886,099 of the Company's
Common Shares.
Voting and Revocability of Proxies
Each Common Share outstanding on the record date is entitled to one vote
on all matters to come before the Meeting, except that shareholders have the
right to cumulate their votes in the election of directors. This means that
shareholders may multiply the number of votes to which they are entitled by the
number of directors to be elected, and the whole number of such votes may be
cast for one nominee or distributed among any two or more nominees. If you wish
to cumulate your votes in this manner, you must clearly indicate on your proxy
card your desire to cumulate and how many votes you wish to cast for each
nominee.
A majority of the Common Shares entitled to vote at the Meeting,
represented in person or by proxy, constitutes a quorum. In the election of
directors, assuming a quorum is present, the three nominees receiving the
highest number of votes cast at the Meeting will be elected. The affirmative
vote of a majority of the votes cast at the meeting is required for approval of
Proposal 2, assuming a quorum is present. Abstentions, the withholding of a
vote, or the specific direction not to cast any vote on a specific matter, such
as broker non-votes, will not constitute the casting of a vote on such matter.
Your proxy may be revoked at any time prior to its exercise by giving
written notice to the Secretary of the Company, by presenting a duly executed
proxy bearing a later date or by voting in person at the Meeting, but your mere
attendance at the Meeting will not revoke your proxy. Your proxy, when properly
executed, will be voted in accordance with the specific instructions indicated
on your proxy card. Unless contrary instructions are given, your proxy will be
voted FOR the election of the three nominees for director, as provided under
"Election of Directors" below (in equal amounts or cumulatively, as the persons
voting the proxies may determine); FOR ratification of the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
2001 fiscal year; and, to the extent permitted by the rules of the Securities
and Exchange Commission (the "SEC"), in accordance with the judgment of the
persons voting the proxies upon such other matters as may come before the
Meeting and any adjournments. In the latter regard, the Company intends to
avail itself, until further notice, of the provisions of Rule 14a-4(c)(i) which
grants the persons voting the proxies discretionary authority to vote on any
shareholder proposals presented at an Annual Meeting of which the Company has
not received notice at least 45 days before the anniversary of the date (March
8, 2000) on which the Company first mailed its proxy materials for the previous
year's Annual Meeting. The Company has received no such notice with respect to
the 2001 Annual Meeting. (See also "Additional Information -- Shareholder
Proposals" below.)
1
1. ELECTION OF DIRECTORS
The Restated Articles of Incorporation and By-laws of the Company presently
provide that the number of directors shall be eleven, to be divided into three
classes as nearly equal in number as possible. Roderic H. Ross, a director of
the Company since 1978, is retiring from the Board of Directors (the "Board") at
the expiration of his present term (i.e., on the date of the Meeting) in
accordance with the Company's director retirement policy. In connection with his
retirement, the Board has amended the Company's By-laws, effective on the date
of the Meeting, to reduce the number of authorized directors from eleven to ten
and, in order to make the number of directors in each of the three classes of
directors as equal as possible, the Board has nominated Victoria B. Vallely, who
is currently a member of the class whose terms expire at the 2002 Annual
Meeting, to stand for reelection for a three-year term at the 2001 Annual
Meeting. Therefore, if Mrs. Vallely is reelected at the 2001 Annual Meeting, she
will become a member, along with the other two nominees, of the class of
directors whose terms expire at the 2004 Annual Meeting. If she is not so
reelected, she will continue to serve as a director in the class of directors
whose terms expire in 2002.
Accordingly, the Board has nominated, and recommends the election of, the
following three persons to serve as directors of the Company until the 2004
Annual Meeting or until their successors are elected and have qualified:
William F. Hamilton, Ph.D. Victoria B. Vallely Mary R. (Nina) Henderson
All the nominees are presently serving as directors of the Company, having
previously been elected by the shareholders of the Company. Although the Board
has no reason to believe any of the nominees will be unable to serve, if such
should occur, your proxy will be voted (unless marked to the contrary) for such
person or persons, if any, as shall be recommended by the Board. However, your
proxy will not be voted for the election of more than three directors.
The following table sets forth, as of February 1, 2001, certain
information with respect to each nominee for election as a director and each
director whose term of office will continue after the Meeting:
Present
Name, Age and Director Term
Occupation(1) Since Expires
------------- ---------- --------
Donald D. Belcher, 62 1997 2002
Chairman and Chief Executive Officer of Banta Corporation,
a printing and supply chain management company.
Ursula M. Burns, 42
Corporate Senior Vice President, Corporate Strategic Services 1999 2003
(since 2000) of Xerox Corporation, a document company.
Previously, Senior Vice President, Worldwide Manufacturing
and Supply Chain (1999); Vice President and General Manager,
Departmental Business Unit (1997 -- 1999); and Vice President
and General Manager, Workgroup Copier Business Unit (1995 --
1997) of Xerox Corporation.
Jack Farber, 67 1970 2003
Chairman of the Board (and President until June 1999) of
CSS Industries, Inc., a consumer products company.
William F. Hamilton, Ph.D., 61 1986 2001
Landau Professor of Management and Technology, The
Wharton School of the University of Pennsylvania. Director
of Neose Technologies, Inc., Marlton Technologies, Inc. and
Digital Lightwave, Inc.
2
Present
Name, Age and Director Term
Occupation(1) Since Expires
------------- ---------- --------
Mary R. (Nina) Henderson, 50 1991 2001
Former Corporate Vice President, Global Core Business
Development of Bestfoods (until December 31, 2000), an
international food company. Formerly Corporate Vice President
and President, Bestfoods Grocery (1997-1999) and President,
CPC Specialty Markets Group (1993-1997). Director of AXA
Financial, Inc., The Equitable Life Assurance Society of the
United States, and Pactiv Corporation (formerly Tenneco
Packaging, Inc.).
Gordon A. MacInnes, 59(2) 1970 2003
President and Chief Executive Officer, New Jersey Institute
for School Innovation (since January 1999); Author and former
New Jersey State Senator (1994-1998). Chairman of the Board
of the Company (1995-1996).
Robert H. Rock, D.B.A., 50 1989 2002
President of MLR Holdings, L.L.C., a publishing company
which produces business publications, executive conferences
and community newspapers. Director of Alberto-Culver
Company and Quaker Chemical Co.
Donald L. Thompson, 59
Chairman, President and Chief Executive Officer of the 1996 2003
Company (since 1996). Previously, Group Vice President of
the Office Products Business (1993-96) of Avery Dennison
Corporation, an office products company.
Malcolm J. Thompson, Ph.D., 55
President and Chief Executive Officer of Novalux, Inc., a 1998 2002
fiber optics communications systems company. Previously
President and Chief Executive Officer, dpiX Inc., a Xerox
New Enterprise Company, a digital imaging company
(1996-99) and Chief Technologist of Xerox PARC (1981-1996).
Director of Photon Dynamics Inc.
Victoria B. Vallely, 50(2) 1976 2002
Manager, Bartol Family Partnership, an investment
partnership.
- ------------
(1) Except as otherwise noted, the named individuals have had the occupations
indicated (other than directorships) for at least five years.
(2) Mr. MacInnes is married to Ms. Vallely's sister. Both Mrs. MacInnes and Ms.
Vallely are daughters of the late George E. Bartol III, a former Chairman
of the Board, Chief Executive Officer and principal shareholder of the
Company.
Information Concerning Meetings and Certain Committees
The Board held five formal meetings during fiscal 2000. The Company has
standing Audit, Compensation, and Nominating Committees of its Board. The Audit
Committee members currently are Messrs. Farber, Hamilton and MacInnes. This
Committee makes recommendations to the Board concerning the engagement,
retention and discharge of independent accountants; reviews with members of the
Company's management and internal auditors and with the Company's independent
accountants the plans and results of the auditing engagement, the Company's
financial statements and the adequacy of the Company's system of internal
accounting controls; and directs any investigations into matters within the
scope of the foregoing duties. During fiscal 2000, the Audit Committee met five
times. (See "Additional Information -- Audit Committee Report" herein and the
Audit Committee Charter attached as an appendix to this proxy statement.) The
Compensation Committee currently is composed of Messrs. Rock and Ross and Ms.
Henderson. This Committee establishes the salaries of executive officers and
makes recommendations to the Board regarding the adoption, extension, amendment
and termination of compensation plans in which officers or directors may
participate. It also exercises administrative powers pursuant to certain of
those plans. The Compensation Committee held four formal meetings during fiscal
2000. The members of the
3
Nominating Committee currently are Messrs. Belcher, MacInnes and Rock and Ms.
Vallely. The primary purpose of this Committee, which held no meetings during
fiscal 2000, is to identify and recommend to the Board qualified individuals to
serve as directors of the Company. The Nominating Committee has not determined
whether it will consider nominees recommended by shareholders.
The Board also has an Executive Committee whose current members are
Messrs. MacInnes, Farber, Rock and D. L. Thompson. The Executive Committee
generally is empowered, subject to certain limitations, to exercise the
authority of the Board between Board meetings. The Board also, from time to
time, appoints special committees for specific purposes.
During fiscal 2000, all directors attended in person or by conference
telephone at least 75% of the aggregate of the total number of meetings of the
Board and committees of the Board on which they served.
Compensation of Directors
The non-employee directors of the Company participate in the Company's
1997 Non-Employee Director Compensation Plan. Pursuant to this plan, the
Company pays annual directors' fees of $5,000 in cash and $12,000 in grants of
Common Shares, plus cash of $1,000 for each Board meeting and $1,000 ($1,250
for committee chairpersons) for each committee meeting attended, to each of its
non-employee directors. In addition, the plan provides for annual grants to
each non-employee director of non-qualified stock options to purchase up to
2,000 Common Shares at the fair market value of such shares on the date of
grant, such options to vest after two years (subject to possible acceleration)
and to extend for ten years (subject to possible earlier termination). During
fiscal 2000, options to purchase 2,000 Common Shares were granted pursuant to
this plan to each of the ten non-employee directors at an exercise price of
$10.125 per share. The exercise prices of options outstanding under this plan
range from $23.22 to $9.16. As of February 1, 2001, no such options had been
exercised. In addition, the Company reimburses directors for certain expenses
incurred in attending Board and committee meetings. From time to time, the
Company also compensates non-officer directors for special services but did not
do so in fiscal 2000.
The non-officer directors also participate in the 1994 Non-Employee
Directors' Stock Option Plan which provides for one-time automatic grants of
non-qualified options to purchase 5,000 Common Shares (at a per share price
equal to the fair market value of a Common Share on the grant date of the
option) on January 26, 1994 to each of the non-employee directors in office at
that time, and to subsequent non-employee directors at the time of their
election to the Board. Options granted under this plan extend for a term of ten
years from the grant date (subject to earlier termination in certain
circumstances) and become exercisable at the rate of 20% per year over five
years from the grant date (subject to acceleration in certain circumstances).
The options outstanding under this plan have exercise prices ranging from
$18.6875 per share to $10.5625 per share. As of February 1, 2001, an aggregate
of 3,000 options had been exercised under this plan.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP ("PwC") served as the Company's
independent accountants for fiscal 2000 and has been selected by the Board to
serve in the same capacity for fiscal 2001. The shareholders will be asked to
ratify this appointment at the Meeting.
PwC Fees
Audit Fees. During fiscal 2000, the Company paid or accrued approximately
$425,000 for professional services rendered by PwC in connection with their
audit of the Company's annual consolidated financial statements for fiscal
2000, and with their quarterly reviews of the Company's condensed, consolidated
financial statements included in the Company's Forms 10-Q for that year.
Financial Information Systems Design and Implementation Fees. There were
no professional services rendered by PwC to the Company in fiscal 2000 relating
to financial information systems design and implementation.
4
All Other Fees. The Company paid or accrued approximately $201,000 for all
other services rendered by PwC during fiscal 2000, including audits of employee
benefit plans. (See "Additional Information -- Audit Committee Report" below.)
A representative of PwC is expected to be present at the Meeting and will
be available to respond to appropriate questions. The representative will also
have the opportunity to make a statement if he or she desires to do so.
3. OTHER MATTERS
The Board knows of no matters to be presented for action at the Annual
Meeting, other than those set forth in the attached Notice and customary
procedural matters. However, if any other matters should properly come before
the Meeting or any adjournments thereof, the proxies solicited hereby will be
voted on such matters, to the extent permitted by the rules of the SEC, in
accordance with the judgment of the persons voting such proxies.
ADDITIONAL INFORMATION
Common Share Ownership by Certain Beneficial Owners and Management
The following table sets forth, as of February 1, 2001, certain
information concerning the beneficial ownership of Common Shares by: (i) each
person who is known by the Company to be the beneficial owner of more than 5%
of such shares, (ii) each director and nominee for director of the Company,
(iii) each of the executive officers of the Company named in the Summary
Compensation table appearing later in this proxy statement, and (iv) all
directors and executive officers of the Company as a group. Such information
generally is based upon information provided to the Company by such persons.
Common Shares Percent
Name of Beneficial Owner Beneficially Owned(1) of Class(1)
------------------------ ----------------------- ------------
Richard J. Bove Esq. ....................................... 2,069,766(2) 23.3
Bove & Associates
2000 Market Street, 6th Floor
Philadelphia, PA 19103
Dimensional Fund Advisors Inc. ............................. 875,200(3) 9.9
1299 Ocean Ave., 11th Floor
Santa Monica, CA 09401
Reed Conner & Birdwell, Inc. ............................... 744,914(3) 8.4
11111 Santa Monica Blvd., Ste. 1700
Los Angeles, CA 90025
Paradigm Capital Management ................................ 508,900(3) 5.7
410 Park Ave., Ste. 163
New York, NY 10022
Donald D. Belcher, director ................................ 11,590(4) *
Ursula M. Burns, director .................................. 3,806(4) *
Jack Farber, director ...................................... 25,750(4) *
William F. Hamilton, director .............................. 15,290(4)(5) *
Mary R. (Nina) Henderson, director ......................... 12,190(4) *
Gordon A. MacInnes, director ............................... 599,506(4)(6) 6.7
Robert H. Rock, director ................................... 12,090(4) *
Roderic H. Ross, director .................................. 20,265(4) *
Donald L. Thompson, director and executive officer ......... 289,783(7) 3.2
Malcolm J. Thompson, director .............................. 5,227(4) *
Victoria B. Vallely, director .............................. 110,523(4)(8) 1.2
John W. Carney, executive officer .......................... 75,174(9) *
William E. Chandler, executive officer ..................... 149,029(10) 1.7
James P. Machut, executive officer ......................... 11,701(11) *
W. Ernest Precious, executive officer ...................... 113,295(12) 1.3
All current directors and executive officers as a group
(17 persons) .............................................. 1,537,560(13) 16.1
- ------------
*Less than 1%
5
(1) Except as otherwise indicated, the beneficial ownership of Common Shares
reflected in this proxy statement is based upon sole voting and dispositive
power with respect to such shares. Further, for the purposes of computing
beneficial ownership and the percent of class of an individual, Common
Shares which the individual has the right, upon exercise of options and in
certain other circumstances, to acquire within 60 days, are deemed to be
outstanding and beneficially owned by the individual.
(2) Represents shares held by Mr. Bove as successor and sole trustee under four
separate irrevocable trusts established by the late George E. Bartol III (a
former Chairman of the Board, Chief Executive Officer and principal
shareholder of the Company) for the benefit of Mr. Bartol's four adult
daughters.
(3) According to information set forth in its Schedule 13D or Schedule 13G
filed with the SEC, this entity is a registered investment adviser.
(4) Includes for the following named individuals, the following number of
shares which he or she has the right to acquire by exercise of stock
options under the non-employee director stock option and compensation
plans: each of Messrs. Farber, Hamilton, MacInnes, Rock and Ross, Ms.
Henderson and Mrs. Vallely -- 8,000 shares; Mr. Belcher -- 6,000 shares;
Dr. M. L. Thompson -- 2,000 shares, and Ms. Burns -- 1,000 shares.
(5) Includes 3,500 shares held jointly with his wife.
(6) Includes 532,293 shares as to which Mr. MacInnes has shared voting and
dispositive power as co-trustee (with Katherine B. Stenson-Lunt) of an
irrevocable trust established by the late George E. Bartol III for the
benefit of his grandchildren, and 49,686 shares held by Mr. MacInnes as
custodian for his children. Does not include 159,840 shares beneficially
owned by Mr. MacInnes' wife, the beneficial ownership of which shares is
disclaimed by Mr. MacInnes. Mrs. Stenson-Lunt and Mrs. MacInnes are
daughters of the late George E. Bartol III.
(7) Includes 282,783 shares which Mr. Thompson has the right to acquire by
exercise of stock options.
(8) Includes 19,224 shares held jointly with her husband. Does not include an
aggregate of 44,057 shares held by her husband as trustee or custodian for
their children, the beneficial ownership of which shares is disclaimed by
Ms. Vallely.
(9) Includes 66,750 shares which Mr. Carney has the right to acquire by
exercise of stock options. Does not include 9,000 shares held for his
account in the Supplemental Executive Benefits Plan.
(10) Includes 83,545 shares which Mr. Chandler has the right to acquire by
exercise of stock options.
(11) Includes 10,600 shares which Mr. Machut has the right to acquire by
exercise of stock options.
(12) Includes 92,417 shares which Mr. Precious has the right to acquire by
exercise of stock options. Does not include 12,000 shares held for his
account in the Supplemental Executive Benefits Plan.
(13) Includes an aggregate of 680,285 shares which certain directors and
current executive officers have the right to acquire by exercise of stock
options. Does not include shares which are excluded in the notes above.
6
Audit Committee Report
Fiscal 2000
The Audit Committee of the Board of Directors (the "Committee") makes
recommendations to the Board concerning the engagement, retention, and
discharge of independent accountants; reviews with members of the Company's
management and internal auditors and with the Company's independent accountants
the plans and results of the auditing engagement, the Company's financial
statements, and the adequacy of the Company's system of internal accounting
controls; and directs any investigations into matters within the scope of the
foregoing duties. The Committee is composed of three non-employee directors,
who have been determined by the Board to be independent and, collectively, to
possess the financial literacy and experience required by New York Stock
Exchange rules. The Committee operates under a written Audit Committee Charter
adopted by the Board, a copy of which is attached as an appendix to this proxy
statement.
Management is responsible for the preparation, integrity, and objectivity
of the Company's financial statements, and the Company's independent
accountants are responsible for auditing those financial statements. The
Committee's responsibility is to oversee these processes. However, the
Committee is not providing any expert or special assurance as to the Company's
financial statements or any professional certification as to the independent
accountants' work.
In this context, the Committee held five meetings during fiscal 2000 and,
among other things:
o Reviewed and discussed the fiscal 2000 audited financial statements as
well as other matters with the Company's management, internal auditors,
and its independent accountants, PwC.
o Discussed with the Company's independent accountants matters required to
be discussed under generally accepted auditing standards, including,
among other things, matters related to the conduct of the audit of the
Company's consolidated financial statements and the matters required to
be discussed by Statement on Auditing Standards No. 61, as amended.
o Discussed with the Company's independent accountants their independence
from the Company and received from the independent accountants the
written disclosures and the letter required by Independence Standards
Board Standard No. 1. When considering PwC's independence, the Committee
considered whether their provision of services to the Company beyond
those rendered in connection with their audit and review of the Company's
financial statements was compatible with maintaining their independence.
The Committee also reviewed, among other things, the amount of fees paid
to PwC for audit and non-audit services.
Based on these reviews, meetings, discussions, and reports, and subject to
the limitations on the Committee's role and responsibilities referred to above
and as outlined in the Audit Committee Charter, the Committee recommended to
the Board that the Company's audited consolidated financial statements for
fiscal 2000 be included in the Company's Annual Report on Form 10-K filed with
the SEC. The Committee has also recommended the selection of the Company's
independent accountants, and based on that recommendation, the Board has
selected PwC as the Company's independent accountants for fiscal 2001, subject
to shareholder ratification.
February 16, 2001 Audit Committee:
Jack Farber, Chairman
William F. Hamilton
Gordon A. MacInnes
7
Executive Compensation
Compensation Committee Fiscal 2000 Report on Executive Compensation
The Company's Compensation Committee (the "Committee") is composed of
three outside directors, none of whom has ever been an employee of the Company
or any of its subsidiaries. The Committee makes recommendations to the full
Board regarding the adoption, extension, amendment, and termination of the
Company's compensation plans and also administers certain of these plans. The
Committee also reviews in conjunction with the Company's Chairman, President
and Chief Executive Officer (the "CEO") the performance of other executive
officers and establishes the salaries of the CEO and other executive officers
(subject to the terms of any employment agreements). The Committee has provided
the following report on executive compensation:
The Committee has been guided by the following executive compensation
philosophy of the Company:
1. Align the interests of shareholders and management through a
compensation program that provides a substantial proportion of executive
officers' total compensation in the form of Company shares and options.
2. Make a significant portion of total compensation for executive
officers contingent upon the attainment of demanding performance goals that
support growth in the Company's share value over time.
3. Balance the objectives of short-term earnings increases and
investment in the long-term financial health of the Company with an
incentive compensation program that rewards improved profit performance
with annual cash bonuses and stimulates a long-term perspective through the
granting of options to purchase Common Shares of the Company.
4. Enable the Company to attract and retain superior management by
providing a very competitive total compensation package.
Executive compensation consists primarily of three components: base
salary, incentive compensation, and stock options/stock grants.
Base Salary
The Company's policy generally has been to set base salaries for each
executive officer position at a level up to the fiftieth percentile when
compared to compensation survey data available for equivalent positions with
other industrial, bonus-paying employers. If performance objectives for annual
incentive and long-term goals are met, total direct compensation may reach the
seventy-fifth percentile of compensation for equivalent positions with other
industrial employers of comparable size. The Company uses compensation studies,
surveys and outside consultants to monitor the Company's competitive executive
compensation position and to recommend salary ranges and compensation changes
to the Committee. These studies may include but are not limited to the peer
group of companies used for the Shareholder Return Performance Graph herein.
The performance reviews of the executive officers other than the CEO are
conducted by the CEO, and the results of such reviews are reported to the
Committee by the CEO. The performance of the CEO is reviewed by the Committee
and the Board. The Committee adjusts executive officers' salaries with input
from the CEO based on the quality of their individual performance and the
relationship of their salary to their established salary range. Merit increases
in the form of a one-time payment (as distinct from the annual bonuses) are
granted under certain circumstances; however, no such merit increases were
granted during fiscal 2000.
The base salary of the CEO presently is set at $472,500 per year, subject
to adjustment, by his employment agreement. Adjustments to the base salary of
the CEO are governed by the same factors as other executive officers but also
specifically take into account the Company's current financial performance (as
measured by earnings, balance sheet strength, and overall financial
8
soundness) and the extent to which the CEO is successful in establishing a
vision and strategic plan for the Company and implementing that plan over time.
The Committee also considers the CEO's leadership in setting high standards for
financial performance, motivating management colleagues, and representing the
Company and its values to internal and external constituencies. These factors
are largely subjective in nature and are not specifically weighted.
Incentive Compensation
The Company's incentive compensation program as in effect during fiscal
2000 had only an annual component. Under the annual program, bonuses are based
on achievement of a specific corporate earnings per share threshold which is
established by the Committee with reference to the Company's prior year's
results and management's budget for the 2000 fiscal year, achievement of
specific business unit revenue and operating margin, and achievement of certain
objectives for each individual executive. The maximum potential annual bonus
award for executive officers, including the CEO, for fiscal 2000 is up to 70% of
base salary. However, no annual bonus was earned by or paid to the executive
officers for fiscal 2000.
Stock Options/Stock Grants
The Company's 1993 Stock Option and Stock Grant Plan provides for grants
by the Compensation Committee of incentive and/or non-qualified stock options,
as well as grants of stock, to executive officers and others, thus tying a
portion of executive compensation directly to the performance of the Company
stock. The exercise price of the stock options under the Plan (and predecessor
option plans) may not be less than 100% of the fair market value of the
Company's stock on the date of grant. Stock options become exercisable at least
one year (usual practice has been two years) from the date of grant, subject to
possible acceleration in certain circumstances, and usually expire ten years
following the date of grant. Executive officers typically have been granted
stock options each year for a number of shares, the market value of which
shares on the date of grant has been in a range of 75% to 125% of the executive
officer's base salary. However, in fiscal 1997, the Committee granted three
years' worth of options to executive officers, other than the CEO, (which were
intended to be largely in lieu of grants to them during the next three fiscal
years), in order to compensate the executive officers for their efforts related
to the Company's restructuring and as part of the Committee's intention to have
a greater portion of executive officers' total compensation be based on stock
options. The CEO received options in fiscal 1998 and 1997 pursuant to his
employment agreement. In fiscal 2000, the Committee resumed granting options,
as reflected in the Option/SAR Grants in Fiscal 2000 table below.
The amendment to the CEO's Employment Agreement described in footnote (3)
to the Aggregate Option/SAR Exercises in Fiscal 2000 and Fiscal Year-End
Option/SAR Values table below, which essentially replaced the CEO's phantom
stock/SARs with a capped deferred cash account, was entered into at the request
of the Compensation Committee in order to avoid a potential adverse accounting
impact on the Company's future earnings which the CEO's phantom stock/SARs
might have had.
The Compensation Committee is mindful of the potential impact upon the
Company of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), which prohibits public companies from deducting certain executive
remuneration in excess of $1,000,000. While reserving the right of the Company
to offer such compensation arrangements as may be from time-to-time necessary
to attract and retain top-quality management, the Compensation Committee
intends generally to structure such arrangements, where feasible, so as to
minimize or eliminate the impact of the limitations of Section 162(m) of the
Code.
February 16, 2001 Compensation Committee:
Robert H. Rock, Chairman
Mary R. (Nina) Henderson
Roderic H. Ross
9
Summary Compensation Table
The following table sets forth certain information concerning the annual
and long-term compensation paid or accrued to or for: (i) the Company's Chief
Executive Officer and (ii) the Company's four most highly compensated other
executive officers whose total annual salary and bonus exceeded $100,000
(collectively, the "Named Officers") for services rendered to the Company and
its subsidiaries during fiscal years 2000, 1999 and 1998:
Long-Term Compensation
---------------------------
Annual Compensation Awards
------------------------------------------ ---------------------------
Other Securities All Other
Annual Restricted Underlying Compen-
Name and Bonus Compen- Stock Options/ sation
Principal Position Year Salary (1) sation Awards SARs (2) (3)
- --------------------------------------- ------ --------- --------- --------- ------------ ------------ ----------
($) ($) ($) ($) (#) ($)
--------- --------- --------- ------------ ------------ ----------
Donald L. Thompson 2000 472,500 -- -- -- 205,000 9,858
Chairman of the Board, 1999 450,000 -- -- -- -- 7,637
President and Chief Executive Officer 1998 453,462 -- -- -- 45,283 10,478
William E. Chandler 2000 236,477 -- -- -- 19,300 4,542
Senior Vice President, Finance; 1999 225,216 25,000 -- -- -- 4,014
Chief Financial Officer and Secretary 1998 218,537 -- -- -- -- 5,641
W. Ernest Precious 2000 215,359 -- -- -- 15,000 3,784
Executive Vice President, 1999 215,359 21,967 -- -- -- 3,882
Corporate Development 1998 217,016 -- -- -- -- 5,532
John W. Carney 2000 190,000 -- -- -- 16,300 3,150
Vice President, 1999 190,000 19,000 -- -- -- 2,978
Chief Administrative Officer 1998 174,636 -- -- -- -- 3,500
James P. Machut(4) 2000 195,300 -- -- -- 16,000 3,447
Vice President, Operations 1999 186,000 18,600 -- -- -- 3,102
Supply Chain Logistics Worldwide 1998 161,325 -- -- -- -- 3,115
- ------------
(1) Represents annual bonuses awarded under the Company's Incentive
Compensation Program for the respective fiscal years, unless otherwise
indicated. No bonus was earned under that program in fiscal 2000, 1999,
and 1998. However, the Board authorized a discretionary special cash award
for fiscal 1999 payable to employees and executive officers, other than
Mr. Thompson, in recognition of the substantial progress of the Company's
business in fiscal 1999.
(2) Represents shares underlying stock options granted during the indicated
year unless otherwise indicated.
(3) Includes contributions made by the Company under its 401(k) Savings Plan,
its Supplemental Executive Benefits Plan (see "Pension Plans" below) and
premiums paid by the Company for group term life insurance coverage,
unless otherwise indicated. Does not include contributions made by the
Company with respect to the Pension Plan.
(4) Mr. Machut was elected an executive officer of the Company in December
1999.
10
Stock Option/SAR Grants, Exercises and Holdings
The following tables set forth certain information concerning stock
options granted to and exercised by the Named Officers during fiscal 2000 and
unexercised stock options held by them at the end of fiscal 2000. No SARs were
granted in fiscal 2000.
Option/SAR Grants in Fiscal 2000
Individual Grants
- ------------------------------------------------------------------------------------------------------------------------
Number of Percentage of Option
Shares Total Options Exercise Market Grant
Underlying Granted to or Base Price at Date
Options Employees in Price Grant Date Expiration Value(2)
Name Granted(1) Fiscal 2000 ($/sh) ($/sh) Date(1) ($)
- ------------------------------------------------------------------------------------------------------------------------
Donald L. Thompson .......... 175,000(3) 36% 9.688 9.688 6/28/10 314,983
Donald L. Thompson .......... 30,000 6% 8.750 8.750 12/16/09 55,917
William E. Chandler ......... 19,300 4% 8.750 8.750 12/16/09 35,973
W. Ernest Precious .......... 15,000 3% 8.750 8.750 12/16/09 27,959
John W. Carney .............. 16,300 3% 8.750 8.750 12/16/09 30,382
James P. Machut ............. 16,000 3% 8.750 8.750 12/16/09 29,822
- ------------
(1) All options were granted at fair market value under the Company's 1993
Stock Option and Stock Grant Plan. The option for 175,000 shares was
granted to Mr. Thompson on June 28, 2000 and becomes exercisable one year
from the date of grant. All the other options reflected in this table were
granted on December 16, 1999 and become exercisable two years from the
date of grant. All options are subject to possible acceleration and early
termination in certain circumstances.
(2) Based on the modified Black-Scholes extended binomial option valuation
model adapted for use in valuing executive stock options. The estimated
value under this model assumes: (i) an expected option term equal to the
vesting period plus two years, which represents the assumed average period
from grant date of option to their exercise date, (ii) an interest rate
that represents the interest rate on a U.S. Treasury bond with a maturity
date corresponding to that of the adjusted option term, (iii) volatility
calculated using monthly stock prices for the three years prior to the
grant date, and (iv) dividends at a rate of 4.5% based on the average
dividends paid over the ten-year period prior to the grant date. The
actual value, if any, an executive may realize will depend on the excess
of the stock price over the exercise price on the date the option is
exercised, so that there is no assurance the value realized will be at or
near the value estimated by the model.
(3) See "Compensation Committee Fiscal 2000 Report - Stock Options/Stock Grants"
for further information concerning the stock option grant to Mr. Thompson.
11
Aggregate Option/SAR Exercises in Fiscal 2000
and Fiscal Year-End Option/SAR Values
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Shares Options/SARs at FY-End at FY-End(2)
Acquired on Value ------------------------------- ------------------------------
Exercise(1) Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------------------
Donald L. Thompson .......... -- (3) -- -- -- --
Donald L. Thompson .......... -- -- 282,783 205,000 -- --
William E. Chandler ......... -- -- 83,545 19,300 -- --
W. Ernest Precious .......... -- -- 92,417 15,000 -- --
John W. Carney .............. -- -- 66,760 16,300 -- --
James P. Machut ............. -- -- 10,600 16,000 -- --
- ------------
(1) The information presented in this table is with respect to options, unless
otherwise noted. All options reflected in this table were granted at fair
market value under the Company's 1983 or 1993 Stock Option and Stock Grant
Plans.
(2) The value of options is calculated by subtracting the exercise price from
the fair market value of the securities underlying the options at December
3, 2000.
(3) On June 1, 1996 175,000 shares of phantom stock/SARs were granted to Mr.
Thompson pursuant to the terms of his employment agreement. These phantom
shares/SARs vested at the rate of 25% per year commencing December 1,
1996. The fair market value of the 43,750 shares of phantom stock/SARs
that vested on December 1, 1999 (which was during fiscal 2000) was
$352,756 on that date, at which point the phantom shares/SARs were fully
vested. On June 28, 2000, the Company amended Mr. Thompson's agreement to
replace the phantom stock/SARs with a deferred cash account with an
opening balance equal to the closing value of Mr. Thompson's phantom stock
account on June 28, 2000, which was the fair market value of a share of
the Company's common stock on such date ($9.6875), multiplied by 175,000,
the number of Mr. Thompson's phantom shares/SARs. Prior to Mr. Thompson's
termination of employment, the amount in this deferred cash account will
be decreased by $175,000 for each $1.00 decline in the price of the
Company's common stock below the $9.6875 stock value at June 28, 2000 and
will be subsequently increased by $175,000 for each $1.00 increase in the
price of the Company's common stock up to, but not in excess of, the
$9.6875 stock value. Thus, the amount of Mr. Thompson's deferred cash
account is effectively capped at the value of his phantom shares/SARs at
June 28, 2000. Mr. Thompson will, however, continue to be credited with
dividend amounts as if he were still credited with the 175,000 phantom
shares/SARs. Also on June 28, 2000 Mr. Thompson was granted an option to
purchase 175,000 shares as reflected in the Stock Option/SAR Grants in
Fiscal 2000 table above.
12
Pension Plans
The following table sets forth the estimated annual retirement benefits
payable under the Company's Pension Plan and the retirement benefits portion of
the Supplemental Executive Benefits Plan (the "Supplemental Plan") to
participants in both Plans, assuming they retired at age 65 in fiscal 2001 with
the indicated levels of compensation and years of benefit service:
Years of Service
-----------------------------------------------------------------------------------------
Remun-
eration 10 15 20 25 30 35 40 or More
- ----------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
$100,000 $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 55,000 $ 60,000 $ 60,000
150,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 82,500 $ 90,000 $ 90,000
200,000 $ 40,000 $ 60,000 $ 80,000 $100,000 $110,000 $120,000 $120,000
250,000 $ 50,000 $ 75,000 $100,000 $125,000 $137,500 $150,000 $150,000
300,000 $ 60,000 $ 90,000 $120,000 $150,000 $165,000 $180,000 $180,000
350,000 $ 70,000 $105,000 $140,000 $175,000 $192,500 $210,000 $210,000
400,000 $ 80,000 $120,000 $160,000 $200,000 $220,000 $240,000 $240,000
450,000 $ 90,000 $135,000 $180,000 $225,000 $247,500 $270,000 $270,000
500,000 $100,000 $150,000 $200,000 $250,000 $275,000 $300,000 $300,000
550,000 $110,000 $165,000 $220,000 $275,000 $302,500 $330,000 $330,000
600,000 $120,000 $180,000 $240,000 $300,000 $330,000 $360,000 $360,000
650,000 $130,000 $195,000 $260,000 $325,000 $357,500 $390,000 $390,000
700,000 $140,000 $210,000 $280,000 $350,000 $385,000 $420,000 $420,000
750,000 $150,000 $225,000 $300,000 $375,000 $412,500 $450,000 $450,000
800,000 $160,000 $240,000 $320,000 $400,000 $440,000 $480,000 $480,000
- ------------
(1) Benefits shall be paid under the Supplemental Plan to the extent not
payable under the Pension Plan.
As used in the above table, the term, "Remuneration" means covered
compensation (as defined below) averaged over a participant's highest five
consecutive calendar years out of the last ten calendar years of employment, or
if the participant has been employed fewer than 5 years, the average over the
total months of employment. Covered compensation essentially means wages or
salary, bonus, salary reductions elected under the Company's Savings Plans, and
any cash awards under the Company's 1988 Long-Term Incentive Compensation Plan
(which terminated in 1996), except that, for the purposes of determining
Remuneration under the Pension Plan, but not the Supplemental Plan, only
covered compensation not in excess of limitations imposed by the Internal
Revenue Code ($170,000 for the Plan year which began October 1, 2000) may be
taken into account. The covered compensation of the Named Officers for fiscal
2000 was as follows: Mr. Thompson -- $479,458; Mr. Chandler -- $240,367; Mr.
Precious -- $218,590; Mr. Carney -- $192,850; and Mr. Machut -- $198,487.
The approximate present years of benefit service for the Named Officers
are as follows: Mr. Thompson -- 5 years; Mr. Chandler -- 8 years; Mr. Precious
- -- 23 years; Mr. Carney -- 16 years; and Mr. Machut -- 8 years. For purposes of
calculating benefits, a participant may not be credited with more than 40 years
of service under the Pension Plan or 35 years of service under the retirement
benefits portion of the Supplemental Plan.
Retirement benefits shown in the above table have been computed on a
single-life annuity basis and are not subject to any deduction for Social
Security or other offset amount.
The Pension Plan generally covers employees (including executive officers
but excluding certain non-resident aliens) who are not covered by a collective
bargaining agreement. The Supplemental Plan provides supplemental benefits only
to executive officers and other officers. The Supplemental Plan has an elective
salary deferral feature with a Company matching contribution of 25% of an
officer's elective deferral but not to exceed 6% of the officer's compensation.
The Company made matching contributions to this portion of the Supplemental
Plan for the Named Officers of $20,115 in fiscal 2000. In addition, the Company
makes basic contributions equal to the amount that would have been contributed
under the Hunt Corporation Savings Plan but for the $170,000 limit previously
discussed. In fiscal 2000, this amount totaled $4,666 for all the Named
Officers.
13
Employment and Severance Agreements and Arrangements
In connection with his hiring as Chairman, President and Chief Executive
Officer by the Company in 1996, Donald L. Thompson and the Company entered into
an employment agreement for an initial term ending May 31, 1998 and continuing
thereafter from year to year until Mr. Thompson reaches the age of 65 or until
earlier terminated by either party. The agreement provided for an initial annual
base salary of $450,000 (subject to periodic review and possible increase by the
Compensation Committee), plus an annual incentive bonus under the Company's
incentive compensation program of up to a maximum of 70% of base salary.
Pursuant to the agreement, Mr. Thompson was granted at the time his employment
commenced: (i) stock options under the Company's 1993 Stock Option and Stock
Grant Plan for 175,000 Common Shares, and (ii) 175,000 shares of phantom
stock/SARs. He also is entitled to receive additional annual option grants of a
value of up to 21/2% of his base salary under some circumstances. The agreement
further entitles him to participate in most of the Company's benefit plans and
programs for executives. (See the Summary Compensation, the Stock Option/SAR
Grants in Fiscal 2000 and the Option/SAR Exercises in Fiscal 2000 tables and
notes thereto above for further information concerning Mr. Thompson's
compensation and benefits and the amendment of his agreement in fiscal 2000.)
In the event of termination of his employment with the Company, Mr.
Thompson's entitlement to severance compensation and benefits varies depending
upon the circumstances and timing of such termination. If his employment were
terminated by reason of his death or disability, by the Company without cause,
or by him because of a material reduction in his authority or duties, he would
be entitled under the agreement to continuation of his base salary, bonus and
benefits for periods of from six months to two years following termination of
employment, and there would be acceleration of the vesting of certain of his
benefits. Should there be a change in control of the Company (as defined in the
agreement) and a termination of his employment within two years thereafter, his
entitlement to severance compensation and benefits under the agreement would be
essentially as provided in the change in control agreements with other
executive officers discussed in the following paragraph, except that: (i) his
severance allowance generally would be equal to 2.99 times his recent annual
cash compensation; and (ii) his life and health insurance plans and certain
other benefits would continue for up to three years.
Since 1990 the Company has had change in control agreements with executive
officers, as well as with other officers and certain key employees. These
agreements currently extend through December 31, 2004. Under the agreements
with executive officers, in the event of a change in control (as defined in the
agreements) of the Company, the agreements would become effective and would
provide for the executive officers' continued employment by the Company,
generally for a period of two years following the change in control and
generally at not less than their recent compensation and benefit levels. If
within such two-year period an executive officer's employment is terminated by
the Company without cause or if such executive officer resigns in certain
specified circumstances, then the executive officer generally is entitled to
the payment of a severance allowance equal to approximately twice his or her
recent annual cash compensation level (including cash amounts earned under
incentive compensation plans) and to the continuation of life and health
insurance plans and certain other benefits for up to two years following such
termination of employment. Mr. Thompson does not have a separate change in
control agreement, but his employment agreement contains similar provisions, as
described in the preceding paragraph.
The Company also currently has a severance policy covering executive
officers and certain other officers. Under this plan, executive officers who
are not covered by employment agreements may be entitled, subject to certain
conditions, to continue to receive their base salaries, plus medical, life
insurance and certain other benefits, for varying periods up to 24 months
following termination of their employment with the Company other than by reason
of voluntary resignation, retirement, death, disability or cause. However, to
the extent termination benefits under the change in control agreements
described above are payable to an executive officer, such benefits reduce any
salary continuation benefits to which the executive officer would be entitled
under this severance plan.
14
Certain Fiscal 2001 Stock Option and Grant Activity
In January of fiscal 2001, the Compensation Committee approved a retention
and incentive program for the Company's six executive officers (other than
Donald L. Thompson, the Chairman, President and Chief Executive Officer) and
for two other non-executive officers of the Company. Pursuant to this program,
the Committee made an aggregate of 199,311 stock grants under the Company's
1993 Stock Option and Stock Grant Plan, of which 82,639 grants were to the
Named Officers (other than Mr. Thompson) and 149,380 grants were to all
executive officers as a group (six in number). The stock grants vest in five
years, subject to earlier vesting if specified profit before taxes levels are
attained by the Company, and in certain other circumstances, including a change
in control of the Company. Further, the change in control agreements of the
participants were amended, primarily to provide for lump sum rather than
installment payouts of compensation in the event of covered terminations of
their employment following a change in control of the Company. The participants
also agreed to return to the Company an aggregate of 454,000 stock options with
exercise prices of $18.625 per share expiring in April 2007, of which options
365,000 were returned by the Named Officers (other than Mr. Thompson) and the
remainder by one other executive officer. The mean price of the Company's
shares on the New York Stock Exchange on the date of the stock grants was
$5.065 per share. The Compensation Committee and the full Board believe that
this retention and incentive program was and is essential in order to help
retain and provide incentive to the executive and other officer participants
who are important to the Company's continuing efforts to improve its
performance and increase shareholder value.
15
Shareholder Return Performance Graph
The following graph and chart provide an indicator of cumulative total
shareholder returns for the Company as compared with the Russell 2000 Index
("the Russell 2000") and a Peer Group Index.(1)
[GRAPHIC OMITTED]
Cumulative Total Return
----------------------------------------------------------------------------------
12/1/95 11/29/96 11/28/97 11/27/98 11/28/99 12/3/00
HUNT CORPORATION $100.00 $121.32 $150.95 $ 92.20 $ 64.44 $ 31.85
RUSSELL 2000 $100.00 $115.18 $143.22 $135.16 $156.32 $157.54
PEER GROUP $100.00 $104.15 $118.83 $118.93 $ 95.09 $ 52.85
- ------------
The above graph and chart assume that the value of the investment in Hunt
Corporation, the Russell 2000 Index companies and the Peer Group Index
companies was $100 on December 1, 1995, and that all dividends were reinvested.
The performance as reported above provides no assurances that this performance
will continue in the future.
The closing price of a common share of the Company on the New York Stock
Exchange on December 3, 2000 was $4.06. On March 2, 2001, such closing price
was $7.10.
- ------------
(1) The Peer Group is comprised of A. T. Cross Company; Dixon Ticonderoga
Company; Paris Corporation; Fibermark, Inc.; General Binding Corporation;
Nashua Corporation and Workflow Management, Inc. Two companies previously
included in the Peer Group, American Business Products, Inc. and Pentech
International, Inc., have been deleted from the Peer Group because they
have been acquired by other companies, and their stock is no longer
traded. Although none of the companies in the Peer Group is directly
comparable with the Company in terms of all businesses engaged in, there
are similarities in respect to certain products offered, specific lines of
business and/or channels of distribution. For purposes of the Peer Group
Index, companies have been weighted based upon their relative market
capitalizations as of the beginning of each period for which a return is
indicated.
16
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, as well as persons beneficially
owning more than 10% of the Company's Common Shares and certain other holders
of such shares (collectively, "Covered Persons"), to file with the SEC and the
New York Stock Exchange, within specified time periods, initial reports of
ownership, and subsequent reports of changes in ownership, of Common Shares and
other equity securities of the Company.
Based solely upon the Company's review of copies of such reports furnished
to it and upon representations of Covered Persons that no other reports were
required, to the Company's knowledge all of the Section 16(a) reports required
to be filed by Covered Persons were filed on a timely basis in fiscal 2000,
except as follows: James P. Machut inadvertently was late in filing a Form 3
indicating his initial ownership of Common Shares when he was elected an
executive officer of the Company.
Solicitation of Proxies
The cost of soliciting the proxies will be paid by the Company. Directors,
officers and employees of the Company may solicit proxies in person, or by
mail, telephone or telegraph, but no such person will be specially compensated
for such services. The Company will request banks, brokers and other nominees
to forward proxy materials to beneficial owners of stock held of record by them
and will reimburse them for their reasonable out-of-pocket expenses in so
doing.
Shareholder Proposals
In order to be eligible for inclusion in the Company's proxy materials for
the 2002 Annual Meeting, shareholders' proposals to take action at such meeting
must comply with applicable SEC rules and regulations, must be directed to the
Secretary of the Company at its offices set forth on page 1 of this proxy
statement, and must be received by the Company not later than November 15,
2001.
In addition, the Company's By-laws require that in order for a shareholder
of the Company to nominate a person or persons for election as a director of
the Company and/or to make other proposals for action at any annual or special
meeting of shareholders, specified advance written notice of such nomination or
proposal must be given by such shareholder to the Secretary of the Company.
Generally, such advance notice must be received by the Company, in the case of
an Annual Meeting, not later than the close of business on the 90th calendar
day, nor earlier than the close of business on the 120th day, prior to the
anniversary date of the previous year's Annual Meeting. However, in the case of
the 2001 Annual Meeting only, such notice must have been received by February
15, 2001. The Company has received no such advance notices with respect to the
2001 Annual Meeting.
Miscellaneous
This proxy statement is being sent to shareholders enclosed in a document
which also contains a letter to shareholders from the Chairman, President and
Chief Executive Officer of the Company, the Company's 2000 Annual Report on
Form 10-K, and certain other shareholder information. The letter to
shareholders, the Form 10-K and the other shareholder information, together,
constitute the Company's Annual Report to Shareholders and are not to be
regarded as proxy solicitation material.
The Company, upon request, will furnish to record and beneficial holders
of its Common Shares, free of charge, a copy of its Annual Report on Form 10-K
(including financial statements and schedules but without exhibits) for fiscal
2000. Copies of exhibits to the Form 10-K also will be furnished upon request
and the payment of a reasonable fee. All requests should be directed to the
Secretary of the Company at the offices of the Company set forth on page 1 of
this proxy statement.
By order of the Board of Directors,
WILLIAM E. CHANDLER, Secretary
March 2, 2001
17
APPENDIX
HUNT CORPORATION
Audit Committee Charter
Purpose
The primary purpose of the Audit Committee (the "Committee") is to assist
the Board of Directors (the "Board") of Hunt Corporation (the "Company") in
fulfilling its responsibility to oversee management's conduct of the Company's
financial reporting process, including the Company's systems of internal
account and financial controls, the internal audit function and the annual
independent audit of the Company's financial statements, and of Company's legal
compliance with the Company's Code of Conduct and other ethics programs and
policies as may be established by management and/or the Board. The Committee
also shall assist the Board in such other matters as may be appropriately
delegated to the Committee by the Board from time to time.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention and shall have full access to
all books, records, facilities and personnel of the Company and the power to
retain outside counsel, auditors or other experts to assist the Committee in
fulfilling its role. The Board and the Committee are in place to represent the
Company's shareholders; accordingly, the independent auditors are ultimately
accountable to the Board and the Committee.
The Committee shall review the adequacy of its charter on an annual basis.
Composition
The Committee shall consist of not less than three members of the Board,
and the Committee's composition shall comply with the applicable rules and
requirements of the Securities and Exchange Commission (the "SEC") and the New
York Stock Exchange (the "NYSE") relating to audit committees.
Accordingly, within the time frames mandated by the applicable rules and
requirements of the SEC and NYSE, all of the members of the Committee shall be
directors:
1. who have no relationship that may interfere with the exercise of their
independence from management and the Company; and
2. who are financially literate or who become financially literate within a
reasonable period of time after appointment to the Committee. In addition,
at least one member of the Committee shall have accounting or related
financial management expertise.
Responsibilities and Processes
The Committee's role is one of oversight. The Committee and the Board
recognize that the Company's management is responsible for preparing the
Company's financial statements and that the independent auditors are
responsible for auditing those financial statements. Additionally, the
Committee and the Board recognize that the Company's financial management,
including the Company's internal audit staff, as well as the independent
auditors, have more time and knowledge and more detailed information concerning
the Company than do Committee members. Consequently, in carrying out its
oversight responsibilities, the Committee is not providing any expert or
special assurance as to the Company's financial statements or any professional
certificate as to the independent auditors' work.
The following shall be the common recurring activities of the Committee in
carrying out its oversight function. These activities are set forth as a guide,
with the understanding that the Committee may diverge from this guide as it
considers appropriate given the circumstances.
o The Committee generally shall endeavor to help set the overall "tone" for
quality financial reporting, sound business risk practices and ethical
behavior by the Company.
18
o The Committee shall review with management and the independent auditors
prior to release to the public the audited financial statements to be
included in the Company's annual report on Form 10-K (or in the annual
report to shareholders if distributed prior to the filing of Form 10-K),
and shall review and consider with the independent auditors the results
of their audit and the matters required to be discussed by Statement of
Auditing Standards ("SAS") No. 61.
o As a whole, or through the Committee chair, the Committee shall review
with management and the independent auditors prior to release to the
public the Company's interim financial results to be included in the
Company's quarterly reports on Form 1O-Q, and shall review and consider
with the independent auditors the matters required to be discussed by SAS
No. 71.
o The Committee shall review with management, the internal auditors and the
independent auditors the quality and adequacy of the Company's internal
controls and the quality, adequacy and degree of aggressiveness or
conservatism of the accounting principles and estimates used or proposed
to be used by the Company.
o The Committee shall: request from the independent auditors annually a
formal written statement delineating all relationships between such
auditors and the Company consistent with Independence Standards Board
Standard No. 1; discuss with the independent auditors any such disclosed
relationships and their impact on the independent auditors' independence;
and recommend that the Board take appropriate action in response to the
independent auditors' report to satisfy itself of the independent
auditors' independence.
o The Committee shall review with the independent auditors the scope of
their annual audit and their fees for audit and non-audit services.
o The Committee (and the Board) shall have the ultimate authority and
responsibility to select (or nominate for shareholder approval), evaluate
and, where appropriate, replace the independent auditors.
o The Committee shall review with management, the internal auditors and the
independent auditors the effectiveness of the Company's internal audit
function, including the adequacy of the Internal Audit Department's
staffing, the degree of its independence and its access to and
cooperation from the highest levels of management in the performance of
its duties.
o The Committee shall prepare or cause to be prepared for inclusion in the
Company's proxy statements the Audit Committee report when and as
required by applicable SEC rules.
o The Committee shall report to the Board periodically concerning the
material activities of the Committee.
19
Please sign, date and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
HUNT CORPORATION
April 18, 2001
Please Detach and Mail in the Envelope Provided
A /X/ Please mark your
votes as in this
example.
AUTHORITY GRANTED
to vote for all nominees
(except as marked to the AUTHORITY
contrary below) WITHHELD
(1) ELECTION OF / / / /
DIRECTORS
If you wish to withhold authority to vote for one or more but less than all of
the nominees named at right, or to cumulate your votes for any such nominee(s),
so indicate on the line provided below.
_______________________________________________________________________________
Nominees:
William F. Hamilton, Ph.D.
Mary R. (Nina) Henderson
Victoria B. Vallely
(2) Ratification of the appointment of PricewaterhouseCoopers LLP as the
independent accountants of the Company for fiscal 2001;
FOR AGAINST ABSTAIN
/ / / / / /
(3) and, to the extent permitted by the Rules of the Securities and Exchange
Commission, upon such other matters as may properly come before the meeting
and any adjournments thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned. If no contrary direction is made, this proxy will be
voted FOR the nominees listed in Item 1 at left (in equal amounts or
cumulatively, as the proxies may determine) or, if any such nominee(s) should be
unable to serve, for such other person(s) as may be recommended by the Board of
Directors; FOR the proposal set forth in Item 2 and in accordance with the
proxies' best judgment upon other matters properly coming before the meeting and
any adjournments thereof.
Signature__________________________________ DATED_______________ , 2001
Signature__________________________________ DATED_______________ , 2001
(Signature if held jointly)
Note: Please date and sign exactly as your name appears herein. In case of
joint holders, each should sign. If the signer is a corporation or
partnership, sign in full the corporate or partnership name by an
authorized officer or partner. When signing as attorney, executor,
trustee, officer, partner, etc. give full title.
HUNT CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS - APRIL 18, 2001
The undersigned hereby appoint(s) Donald L. Thompson and William E.
Chandler, or either of them, with full power of substitution, proxies to vote,
as designated on the reverse side of this proxy card, all the Common Shares of
Hunt Corporation held of record by the undersigned on February 16, 2001, at the
Annual Meeting of Shareholders to be held on April 18, 2001, and at any
adjournments thereof.
(Continued, and to be dated and signed, on other side)