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] HUNT
Notice of
2002 Annual
Meeting
and Proxy
Statement
[graphic] HUNT
HUNT CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held on April 17, 2002
------------------------
To Our Shareholders:
The Annual Meeting of Shareholders of Hunt Corporation will be held at ten
o'clock a.m. on April 17, 2002, 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 amend the Company's Restated Articles of
Incorporation to provide that Subchapter E - Control Transactions - of the
Pennsylvania Business Corporation Law shall not be applicable to the
Company;
3. To vote on a proposal to ratify the appointment of independent
accountants; and
4. 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 15, 2002
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,
DENNIS S. PIZZICA, Secretary
March 1, 2002
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, 2002, 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
17, 2002, and at any adjournments thereof.
At the close of business on February 15, 2002, the record date for
determination of shareholders entitled to notice of, and to vote at, the
meeting, there were outstanding an aggregate of 8,903,975 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
Proposals 2 and 3, 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 approval of the amendment of the Restated
Articles of Incorporation to provide that Subchapter E - Control Transactions -
of the Pennsylvania Business Corporation Law shall not be applicable to the
Company; FOR ratification of the appointment of PricewaterhouseCoopers LLP as
the Company's independent accountants for the 2002 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 thereof.
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 proposals the Company has not received notice at
least 90 days prior to the anniversary date (April 18, 2001) of the previous
year's Annual Meeting. The Company has received no such notice with respect to
any such shareholder proposals to be presented at the 2002 Annual Meeting. (See
also "Additional Information - Shareholder Proposals" appearing later in this
proxy statement.)
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 ten, to be divided into three
classes as nearly equal in number as possible. The Board of Directors (the
"Board") has nominated and recommends the election of the following three
persons to serve as directors of the Company until the 2005 Annual Meeting or
until their successors are elected and have qualified:
Donald D. Belcher Bradley P. Johnson Robert H. Rock
All of the nominees are presently serving as directors of the Company,
Messrs. Belcher and Rock having previously been elected by the shareholders of
the Company, and Mr. Johnson having been elected a director by the Board on
February 13, 2002 to fill the vacancy created by the retirement of Malcolm J.
Thompson, a director of the Company since 1998, on December 19, 2001. 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, 2002, 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, 63 1997 2002
Chairman and Chief Executive Officer of Banta
Corporation, a printing and supply chain management
company
Ursula M. Burns, 43 1999 2003
Corporate Senior Vice President and President, Document
Solutions Group of Xerox Corporation, a document
company. Previously, Senior Vice President, Corporate
Strategic Services (April 2000-October 2001); Senior
Vice President, Worldwide Manufacturing and Supply Chain
Services (January 1999-April 2000); and Vice President
and General Manager, Departmental Business Unit (January
1997-January 1999) of Xerox Corporation.
Jack Farber, 68 1970 2003
Chairman of the Board (and President until June 1999) of
CSS Industries, Inc., a consumer products company.
William F. Hamilton, Ph.D., 62 1986 2004
Landau Professor of Management and Technology, The
Wharton School of the University of Pennsylvania.
Director of Neose Technologies, Inc., and Digital
Lightwave, Inc.
Mary R. (Nina) Henderson, 51 1991 2004
Consultant to J.P. Morgan Partners, LLC, a global
private equity organization. Formerly, Corporate Vice
President, Core Business Development, Bestfoods, an
international food company (through December 2000); and
Corporate Vice President and President, Bestfoods
Grocery (1997-1999). Director of AXA Financial, Inc.,
The Equitable Life Assurance Society of the United
States, Pactiv Corporation, and The "Shell" Transport
and Trading Company, p.l.c.
Bradley P. Johnson, 40 2002 2002
President and Chief Operating Officer of the Company
since December 2001. Previously, Senior Vice President/
General Manager of Hunt Products (January 2001-November
2001); Vice President/General Manager of Hunt Products
(June 2000-December 2000); Vice President/General
Manager of Consumer Products (May 1999-May 2000); and
General Manager of the Infant Feeding Business Unit at
H. J. Heinz Company (1997-1999).
2
Present
Name, Age and Director Term
Occupation(1) Since Expires
------------- -------- -------
Gordon A. MacInnes, 60(2) 1970 2003
President and Chief Executive Officer of Citizens for
Better Schools (1999-2001); Author and former New Jersey
State Senator (1994-1998).
Robert H. Rock, D.B.A., 51 1989 2002
President of MLR Holdings, L.L.C., a publishing company
which produces business publications, executive
conferences, and community newspapers, and Chairman of
Metroweek Corporation, publisher of the City Paper.
Director of Alberto-Culver Company, Quaker Chemical Co.,
Advanta Corporation, and Penn Mutual Life Insurance
Company.
Donald L. Thompson, 60 1996 2003
Chairman and Chief Executive Officer of the Company.
Victoria B. Vallely, 51(2) 1976 2004
Manager, Bartol Family Partnerships, 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 eight formal meetings during fiscal 2001. 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 2001, the Audit
Committee met five times. (See "Additional Information - Audit Committee
Report" herein and the recently amended Audit Committee Charter attached as an
Appendix to this proxy statement.) The Compensation Committee currently is
composed of Ms. Burns, Ms. Henderson, and Mr. Rock. 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 seven formal meetings during fiscal 2001. The members of the
Nominating Committee currently are Messrs. Belcher, MacInnes, and Rock and Ms.
Vallely. The primary purpose of this Committee, which held one meeting during
fiscal 2001, 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 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 2001, all directors attended in person or by conference
telephone at least 75% of the total number of meetings of the Board and
committees of the Board on which they served, with the exceptions of Messrs.
Belcher and Farber, who attended 73% and 70% of such meetings, respectively.
3
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 to each of its non-employee directors 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. In addition, this 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
in certain circumstances) and to extend for ten years (subject to possible
earlier termination in certain circumstances). During fiscal 2001, options to
purchase 2,000 Common Shares were granted pursuant to this plan to each of the
nine non-employee directors at an exercise price of $6.11 per share. The
exercise prices of options outstanding under this plan range from $6.11 to
$23.22. As of February 1, 2002, 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 2001.
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
$10.5625 per share to $18.6875 per share. As of February 1, 2002, an aggregate
of 3,000 options had been exercised under this plan.
2. AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
In February 2002, the Company's Board adopted, subject to shareholder
approval, an amendment to the Company's Restated Articles of Incorporation.
This amendment would provide that Subchapter E - Control Transactions (which
we refer to herein as "Subchapter E") of the Pennsylvania Business Corporation
Law of 1988, as amended (the "Pennsylvania BCL"), will not be applicable to
the Company. Subchapter E, which is summarized below, is one of a number of
so-called anti-takeover laws which Pennsylvania enacted during the 1980's to
afford corporations incorporated in Pennsylvania and their shareholders
protection against certain types of takeovers and acquisitions of control by
third parties. However, Subchapter E permits Pennsylvania corporations to
elect not to be governed by its provisions by amending their articles of
incorporation to so provide, and over the years many Pennsylvania corporations
have elected not to be governed by Subchapter E. The Board believes that
Subchapter E unduly limits the Company's flexibility in pursuing certain
possible strategic directions, and thus, is not in the best interests of the
Company and its shareholders. ACCORDINGLY, THE BOARD RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF
INCORPORATION ELECTING NOT TO BE SUBJECT TO SUBCHAPTER E.
Summary of Subchapter E.
Subchapter E (15 Pa. C.S. ss.ss.2541-2548) provides that, subject to certain
grandfathering and other exceptions, if a person or entity or a group of
persons or entities acting together (which the statute refers to as a
"controlling person or group") acquires voting power over shares of a
publicly-traded Pennsylvania corporation (as the Company is) that would
entitle the controlling person or group to cast at least 20% of the votes that
all shareholders of the corporation would be entitled to cast in an election
of directors of the corporation (the acquisition of such voting power being
hereinafter referred to as a "control transaction"), then: (i) prompt notice
of such control transaction must be given by the controlling person or group
to all other holders of voting shares of the corporation; and (ii) any such
holders who object to the control transaction and comply with specified
procedures may demand that the controlling person or group purchase such
objecting holders' voting shares for their "fair value."
4
The minimum value that such objecting holders are entitled to receive from
the controlling person or group under Subchapter E is the highest price paid
per share by the controlling person or group within the 90-day period ending
on the date of the control transaction. If objecting holders believe the fair
value of their voting shares is higher than this minimum amount, they are
entitled to have the fair value of their voting shares determined by an
appraiser appointed by the court. Any appraiser so appointed is required to
determine the fair value of each voting share as of the date of the control
transaction, taking into account all relevant factors, including an increment
representing a proportion of any value payable for acquisition of control of
the corporation (sometimes referred to as a control premium). The appraisal
costs are to be borne by the controlling person or group, and the appraised
fair value, plus interest, must then be paid by the controlling person or
group to those holders who demanded the appraised fair value in return for
their voting shares.
Reasons for the Proposed Amendment to the Company's Articles of Incorporation.
Subchapter E is intended to offer Pennsylvania corporations some protection
against possible coercive or unfair takeovers. However, the Board has
concluded that Subchapter E unduly limits the Company's flexibility in
pursuing various possible strategic directions, and therefore, is not in the
best interests of the Company and its shareholders.
In the performance of their duties as directors of the Company, the members
of the Board in the past have reviewed and evaluated, and are continuing to
review and evaluate, various possible strategies that the Company might pursue
to enhance shareholder value. Such possible strategies range from growing the
Company, through internal development, joint ventures and/or acquisitions, to
selling all or a part of the Company. The sale of the Company's commercial
Graphics Products in October 2001 was itself a strategic move to simplify the
Company, focus its product offerings, substantially reduce its cost base, and
thus, expand the range of potential strategic options available to it.
Pursuing certain types of potential strategic directions could involve
entering into transactions which might be deemed to be control transactions
within the meaning of Subchapter E. For example, should the Company wish to
acquire all of or an interest in another company through the issuance of a
significant number of the Company's Common Shares or to have an institutional
investor or other investment entity or group acquire a significant Common
Share position in the Company, if either of the above two possible types of
transactions would result in any person or group acquiring voting power over
20% or more of the Common Shares of the Company, the transaction would be a
control transaction, and such person or group would be a control person or
group subject to Subchapter E. Accordingly, all the other holders of Common
Shares of the Company would be entitled to demand that the control person or
group purchase their Common Shares for fair value. It is unlikely that such a
potential seller of a business to the Company or such a potential investor in
the Company would agree to enter into the control transaction and run the risk
that the other holders would exercise this right. Similarly, the possibility
that Subchapter E could be triggered, giving holders of Common Shares the
right to demand the appraised fair value of their shares, and the uncertainty
of what that fair value ultimately would be determined by an appraiser to be,
could pose obstacles to, or even be a deterrent to, certain types of friendly
acquisitions of the Company.
Unfortunately, unlike a number of other anti-takeover laws adopted by
Pennsylvania and other states, Subchapter E does not exempt from its
provisions control transactions which have been approved prior to their
consummation by the directors of a corporation. Thus, Subchapter E might
effectively prevent the Company from entering into certain types of
transactions even though the Board may have determined that they could benefit
the Company and its shareholders. It is for this reason that many other
publicly-traded Pennsylvania corporations have elected not to have the
provisions of Subchapter E be applicable to them.
Certain Other Considerations.
Approval of the proposed amendment to the Company's Restated Articles of
Incorporation to make Subchapter E inapplicable to the Company would permit
control transactions, as defined under "Summary of Subchapter E" above, to
take place without entitling other holders of the Company's Common Shares to
demand that they receive fair value for their shares as provided in Subchapter
E. Of course, it also would remove whatever deterrent effect that Subchapter E
might have on possible changes of control and unfair or coercive takeovers of
5
the Company. However, even if Subchapter E were no longer applicable to the
Company, other provisions of the Company's Restated Articles of Incorporation
and By-laws and of the Pennsylvania BCL could have the effect of delaying or
discouraging, to some extent, certain takeovers or changes in control of the
Company. For example, the Company's Restated Articles of Incorporation and/or
By-laws contain provisions which: (i) provide for cumulative voting in the
election of directors, classify the Board into three classes of directors and
contain limitations on shareholders' rights to remove directors, making it
more difficult for a potential acquirer to gain control of the Board; (ii)
permit the Board to issue, without shareholder approval, "blank check"
preferred stock with such rights and preferences as the Board may determine;
and (iii) prohibit the Company, with some exceptions, from entering into
certain types of transactions, including a merger with, or sale of all or
substantially all of the assets of the Company to, a "Related Person" unless
approved by the holders of at least 70% of the outstanding Common Shares or by
a majority of the directors who were elected before the person, entity or
group became a Related Person. A Related Person, for this purpose, means a
person, entity or group beneficially owning 5% or more of the outstanding
Common Shares. Similarly, Subchapter F - Business Combinations - of the
Pennsylvania BCL, which would continue to apply to the Company, would impose
certain Board approval, shareholder approval and "fair price" requirements on
certain mergers or business combinations with a person, entity or group
beneficially owning 20% or more of the outstanding Common Shares.
The four daughters of the late George E. Bartol III (who was a former
Chairman of the Board, Chief Executive Officer, and principal shareholder of
the Company), their spouses and children and trusts for their benefit hold
substantial amounts of Common Shares which holdings, if added together, would
substantially exceed the 20% threshold in Subchapter E. (See "Additional
Information - Common Share Ownership by Certain Beneficial Owners and
Management" appearing later in this proxy statement for information concerning
the beneficial ownership of Common Shares by certain of the trusts for the
benefit of the Bartol family and by those members of the Bartol family or
their spouses who are directors of the Company.) Although the Bartol family
holdings of Common Shares date back many years and do not trigger the
provisions of Subchapter E, the amendment of the Company's Restated Articles
of Incorporation electing not to be governed by Subchapter E could be of
benefit to members of the Bartol family and related trusts in that it would
make it easier for them, if they so desired, to sell their holdings of Common
Shares to a buyer or group of buyers, possibly on terms which would not be
available to other shareholders, since such buyer or buyers would not have to
offer to purchase all other outstanding Common Shares for fair value, as
required by Subchapter E.
The Board has considered the advantages of the Company's ceasing to be
subject to Subchapter E, as well as the possible protections which retaining
Subchapter E might provide and has concluded, for the reasons discussed above,
that the increased flexibility in pursuing possible strategic options that the
Company would gain by electing not to be subject to Subchapter E is in the
best interests of the Company and its shareholders and outweighs the possible
protections which retaining Subchapter E might afford. Going forward, if it
deems it appropriate, the Board may consider adopting other measures which
would provide the Company with some additional protection against unfair or
coercive takeovers, including, possibly, a shareholders' rights plan, or
"poison pill," to replace the Company's Rights Plan which terminated on
December 31, 2000. As of the date of this proxy statement, the Board has not
approved any specific transaction which would constitute a control transaction
within the meaning of Subchapter E, but as previously indicated, the Board
continues to review and evaluate various strategic options.
AS INDICATED ABOVE, THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
AMENDMENT OF THE RESTATED ARTICLES OF INCORPORATION ELECTING NOT TO BE SUBJECT
TO SUBCHAPTER E. However, the Board also reserves the right, in its sole
discretion, to terminate the amendment at any time before the amendment has
been filed in the Pennsylvania Department of State and becomes effective,
although the Board currently has no intention of terminating the amendment if
it is approved by the Company's shareholders.
6
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP ("PwC") served as the Company's
independent accountants for fiscal 2001 and has been selected by the Board to
serve in the same capacity for fiscal 2002. The shareholders will be asked to
ratify this appointment at the Meeting.
PwC Fees
Audit Fees. During fiscal 2001, the Company paid or accrued approximately
$628,000 for professional services rendered by PwC in connection with their
audit of the Company's annual consolidated financial statements for fiscal
2001, and with their quarterly reviews of the Company's condensed,
consolidated financial statements included in the Company's Forms 10-Q for
that year. Approximately $167,000 of this amount was related to services
rendered in connection with the Company's 2001 sale of its commercial Graphics
Products business.
Financial Information Systems Design and Implementation Fees. There were no
professional services rendered by PwC to the Company in fiscal 2001 relating
to financial information systems design and implementation.
All Other Fees. The Company paid or accrued approximately $361,000 for all
other services rendered by PwC during fiscal 2001, including actuarial and
special tax services, and 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.
4. 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, 2002, 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 of
Name of Beneficial Owner Beneficially Owned(1) Class(1)
------------------------ --------------------- ----------
Richard J. Bove, Esq. ................................................ 2,069,766(2) 23.2
Bove & Associates
2000 Market Street, 6th Floor
Philadelphia, PA 19103
Dimensional Fund Advisors, Inc. ...................................... 858,700(3) 9.6
1299 Ocean Avenue,
11th Floor
Santa Monica, CA 09401
Reed Conner & Birdwell, Inc. ......................................... 625,056(3) 7.0
11111 Santa Monica Boulevard, Suite 1700
Los Angeles, CA 90025
7
Common Shares Percent of
Name of Beneficial Owner Beneficially Owned(1) Class(1)
------------------------ --------------------- ----------
Paradigm Capital Management .......................................... 471,900(3) 5.3
410 Park Avenue, Suite 163
New York, NY 10022
Dalton, Greiner, Hartman, Maher & Co. ................................ 480,500(3) 5.4
565 Fifth Avenue, Suite 2101
New York, NY 10017
Donald D. Belcher, director .......................................... 16,471(4) *
Ursula M. Burns, director ............................................ 8,687(4) *
Jack Farber, director ................................................ 29,631(4) *
William F. Hamilton, director ........................................ 15,303(4) *
Mary R. (Nina) Henderson, director ................................... 16,071(4) *
Bradley P. Johnson, director and executive officer ................... 50,000(5) *
Gordon A. MacInnes, director ......................................... 603,387(4)(6) 6.8
Robert H. Rock, director ............................................. 15,971(4) *
Donald L. Thompson, director and executive officer ................... 494,783(7) 5.3
Victoria B. Vallely, director ........................................ 114,404(4)(8) 1.3
John W. Carney, executive officer .................................... 82,041(9) *
William E. Chandler, executive officer ............................... 168,329(10) 1.9
James P. Machut, executive officer ................................... 27,725(11) *
W. Ernest Precious, former executive officer ......................... 20,428 *
All current directors and executive officers as a group
(15 persons) ....................... ................................ 1,728,572(12) 17.7
- ---------------
*Less than 1%
(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,
vesting of stock grants, and in certain other circumstances, to acquire
within 60 days, are deemed to be outstanding and beneficially owned by the
person.
(2) Represents shares held by Mr. Bove as 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), one trust for the benefit of each 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 individual, 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, and Rock, Ms. Henderson and Mrs.
Vallely -- 10,000 shares; Mr. Belcher -- 9,000 shares; and Ms. Burns -
4,000 shares.
(5) Represents shares which Mr. Johnson has the right to acquire by exercise of
stock options.
(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 487,783 shares which Mr. Thompson has the right to acquire by
exercise of stock options.
8
(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 77,627 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 Company's Supplemental Executive Benefits Plan.
(10) Includes 102,845 shares which Mr. Chandler has the right to acquire by
exercise of stock options.
(11) Includes 26,600 shares which Mr. Machut has the right to acquire by
exercise of stock options.
(12) Includes an aggregate of 880,035 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.
9
Audit Committee Report
Fiscal 2001
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 and approved by the Board. The Charter is reviewed
at least annually by the Committee, and at the recommendation of the
Committee, the Charter was recently amended by the Board. A copy of the
amended Charter 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 2001 and
among other things:
o Reviewed and discussed the fiscal 2001 audited financial statements and
accounting principles, as well as other matters with the Company's
management, internal auditors, and its independent accountants, PwC.
o Discussed with PwC 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 2001 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 2002, subject
to shareholder ratification.
February 13, 2002 Audit Committee:
Jack Farber, Chairman
William F. Hamilton
Gordon A. MacInnes
10
Executive Compensation
Compensation Committee Fiscal 2001 Report on Executive Compensation
and Report on Repricing of Options
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 Donald L. Thompson, the Company's Chairman
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 interest 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 option/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 2001.
The base salary of the CEO was originally set by his 1996 employment
agreement at a minimum of $450,000 per year, subject to possible upward
adjustment. The CEO base salary subsequently was raised to $472,500 per year
in fiscal 2000, but the CEO received no increase in fiscal 2001. Adjustments
to the base salary of the CEO have been and 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 soundness) and the extent to which the
CEO has been successful in establishing a vision and strategic plan for the
Company and implementing that plan over time. The Committee also considers the
CEO's
11
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.
At the end of fiscal 2001, the Company and Donald L. Thompson entered into
an agreement providing for Mr. Thompson to relinquish his Chief Executive
Officer position around mid-year 2002 and to step down as Chairman around the
end of fiscal 2002, and for his compensation and benefits during the remainder
of his term of employment with the Company and his severance compensation and
benefits thereafter. See "Employment and Severance Agreements and
Arrangements" later in this proxy statement. The Committee recommended, and
the Board approved, this agreement as part of a planned implementation of an
orderly executive leadership transition to a smaller executive management
structure more in keeping with the reduced size and complexity of the
Company's business following the sale of its commercial Graphics Products
business in October 2001.
Incentive Compensation
The Company's cash incentive compensation program as in effect during fiscal
2001 had only an annual component. Under the annual program, cash bonuses are
based on achievement of a specific corporate earnings per share threshold
which was established by the Committee with reference to the Company's prior
year's results and management's budget for the 2001 fiscal year, achievement
of specific business unit revenue and operating margin, and achievement of
certain objectives for each individual executive. The maximum potential annual
cash bonus award for executive officers, including the CEO, for fiscal 2001
was up to 100% of base salary. However, no annual cash bonus was earned by or
paid to the CEO or any of the executive officers for fiscal 2001.
Stock Options/Stock Grants
The Company's 1993 Stock Option and Stock Grant Plan (the "1993 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. Stocks 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. In fiscal 2001, the Committee elected to
grant options to only one executive officer (Mr. Johnson), as reflected in the
"Option/SAR Grants in Fiscal 2001" table appearing later in this proxy
statement. The Committee resumed granting options to executive officers
generally in early fiscal 2002.
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.
Report on Repricing of Options and Retention and Incentive Program
As previously reported in the Company's proxy statement for its 2001 Annual
Meeting, the Compensation Committee in early fiscal 2001 approved a retention
and incentive program for the Company's then six executive officers (other
than Donald L. Thompson, the CEO) and for two other non-executive officers.
Pursuant to this program, the Committee made a total of 149,380 stock grants,
of which 82,639 stock grants were made to the five
12
"Named Officers" (other than the CEO) listed in the Summary Compensation Table
which follows this Compensation Committee Report. The numbers and values of
the stock grants received by each such Named Officer are set forth in the
"Restricted Stock Awards" column of that Table and note 3 thereto. These 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 specified terminations of their employment following a change in
control of the Company.
Four of the Named Officers receiving the stock grants, Messrs. Chandler,
Carney, Machut, and Precious, also agreed to return to the Company for
cancellation an aggregate of 365,000 stock options with exercise prices of
$18.625 per share expiring in April 2007. 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 numbers of stock options returned by such Named Officers
(as well as information concerning the numbers of stock grants received, and
stock options returned, by other executive officers) is set forth under "Ten-
Year Option Repricings" appearing later in this proxy statement. This
Repricing of Options Report and the Ten-Year Option Repricings information is
included in this proxy statement because the making of these stock grants to
such Named Officers and other executive officers, coupled with the return
(cancellation) of stock options by them, may constitute a "repricing of
options" under SEC proxy disclosure regulations, even though there was no
actual amendment or adjustment to the price of the returned options or other
options held by such persons.
The Compensation Committee believed at the time the retention and incentive
program was approved that it was essential in order to provide incentive to
the executive and other officer participants who were important to the
Company's efforts to improve its performance and increase shareholder value.
February 19, 2002 Compensation Committee:
Robert H. Rock, Chairman
Ursula M. Burns
Mary R. (Nina) Henderson
13
Summary Compensation Table
The following table sets forth certain information concerning the annual and
long-term compensation paid or accrued to: (i) the Company's Chief Executive
Officer and (ii) the Company's four most highly compensated other executive
officers and one former executive officer whose total annual salary and bonus
exceeded $100,000 (collectively, the "Named Officers") for services rendered
to the Company and its subsidiaries during fiscal years 2001, 2000, and 1999:
Annual Compensation Long-Term Compensation Awards
---------------------------------- ------------------------------------
Other Securities All Other
Annual Restricted Underlying Compen-
Name and Bonus Compen- Stock Options/ sation
Principal Position(1) Year Salary (2) sation Awards(3) SARs(4) (5)
- --------------------------------------------------- ---- ------- ------ ------- ---------- ---------- ---------
($) ($) ($) ($) (#) ($)
-------------------------------------------------------------------
Donald L. Thompson 2001 472,500 - - - - 1,382,958(6)
Chairman, President and 2000 472,500 - - - 205,000 9,858
Chief Executive Officer 1999 450,000 - - - - 7,637
William E. Chandler 2001 242,207 - 82,292(7) 113,919 - 248,160(8)
Senior Vice President, 2000 236,477 - - - 19,300 4,542
Finance; Chief Financial 1999 225,216 25,000 - - - 4,014
Officer and Secretary
Bradley P. Johnson 2001 255,431 - - 241,638 20,000 3,794
Senior Vice President 2000 215,577 - 69,011(9) - 20,000 3,755
1999 120,577 25,000 14,894(9) 30,000 1,762
John W. Carney 2001 190,731 - - 91,529 - 3,231
Vice President, 2000 190,000 - - - 16,300 3,150
Chief Administrative Officer 1999 190,000 19,000 - - - 2,978
James P. Machut 2001 211,825 - - 94,082 - 218,449(8)
Vice President, Operations/ 2000 195,300 - - - 16,000 3,447
Supply Chain Logistics 1999 186,000 18,600 - - - 3,102
W. Ernest Precious 2001 216,188 - - 103,749 - 223,408(10)
Former Executive Vice 2000 215,359 - - - 15,000 3,784
President 1999 215,359 21,967 - - - 3,882
- ---------------
(1) The positions indicated are those held by the Named Officers for most or
all of fiscal 2001. As part of an orderly leadership transition to a
smaller executive management structure more in keeping with the reduced
size and complexity of the Company's business following the sale of its
commercial Graphics Products business in October 2001, a number of changes
in positions of the Named Officers have been or are being made. See notes
6, 8, and 10 below. Dennis S. Pizzica, Vice President and Treasurer of the
Company, assumed Mr. Chandler's positions as Chief Financial Officer and
Secretary, effective March 1, 2002.
(2) Represents annual bonuses awarded under the Company's annual Incentive
Compensation Program for the respective fiscal years, unless otherwise
indicated. No bonus was earned under that program in fiscal 2001, 2000, and
1999. 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 successful implementation of the Company's
restructuring plan in fiscal 1999.
(3) Represents the value of stock grants for Common Shares awarded under the
1993 Stock Option and Stock Grant Plan based upon the market price per
Common Share on the date of grant of $4.88. Stock grants were awarded on
January 2, 2001 to the following executive officers for the following
amounts of Common Shares: Mr. Chandler - 23,344; Mr. Johnson - 49,516; Mr.
Carney - 18,756; Mr. Machut - 19,279; and Mr. Precious - 21,260. The stock
grants, which require no payment by the recipient, 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, and earn dividends at the rate of the
Company's Common Shares. As of December 2, 2001, the stock grants of the
Named Officers were valued as follows: Mr. Chandler - $152,903; Mr. Johnson
- $324,330; Mr. Carney - $122,852; Mr. Machut - $126,277; and Mr. Precious
- $139,253.
14
(4) Represents shares underlying stock options granted during the specified
year unless otherwise indicated. See "Ten-Year Option/SAR Repricing" table
below.
(5) 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.
(6) Mr. Thompson plans to relinquish his Chief Executive Officer position
around mid-year 2002 and to continue as Chairman of the Board until around
the end of the fiscal year. The amount reflected for him under "All Other
Compensation" includes $1,372,159 accrued in fiscal 2001 in connection with
his separation arrangements. (See "Employment and Severance Agreements and
Arrangements" below.)
(7) Represents the fair market value of 12,000 shares distributed from the
Supplemental Executive Benefits Plan to Mr. Chandler.
(8) Messrs. Chandler and Machut separated from the Company as executive
officers effective March 1, 2002. The amounts reflected for them under "All
Other Compensation" include $243,571 and $214,830, respectively, accrued in
fiscal 2001 in connection with their respective separation arrangements.
(See "Employment and Severance Agreements and Arrangements" below.)
(9) Includes reimbursement for relocation and moving expenses.
(10) Mr. Precious separated from the Company as an executive officer effective
October 1, 2001. The amount reflected for him under "All Other
Compensation" includes amounts paid and accrued of $220,328 in connection
with his separation arrangements. (See "Employment and Severance
Agreements and Arrangements" below.)
15
Stock Option/SAR Grants, Exercises, and Holdings
The following tables set forth certain information concerning stock options
granted to and exercised by the Named Officers during fiscal 2001 and
unexercised stock options held by them at the end of fiscal 2001. No SARs were
granted in fiscal 2001.
Option/SAR Grants in Fiscal 2001
Individual Grants
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Percentage of Option
Shares Total Options Exercise Market Grant
Underlying Granted to or Base Price at Date
Options Employees in Price Grant Date Expiration Value (2)
Name Granted(1) Fiscal 2001 ($/sh) ($/sh) Date(1) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Donald L. Thompson ............................... - - - - - -
William E. Chandler .............................. - - - - - -
Bradley P. Johnson ............................... 20,000 9% $4.00 $4.00 12/20/10 12,536
John W. Carney ................................... - - - - - -
James P. Machut .................................. - - - - - -
W. Ernest Precious ............................... - - - - - -
- ---------------
(1) All options were granted at fair market value under the Company's 1993
Stock Option and Stock Grant Plan. All options reflected in this table were
granted on December 20, 2000 and become exercisable two years from the date
of grant. All options are subject to possible acceleration and early
termination in certain circumstances.
(2) Based on the modified Black-Scholes extended binomial option valuation
model adapted for use in valuing executive stock options. The estimated
value under this model assumes: (i) an expected option term equal to the
vesting period plus two years, which represents the assumed average period
from grant date of option to their exercise date, (ii) an interest rate
that represents the interest term on a U.S. Treasury bond with a maturity
date corresponding to that of the adjusted option term, (iii) volatility
calculated using monthly stock prices for the three years prior to the
grant date, and (iv) dividends at a rate of 9.95% based on the average
dividends paid over the ten-year period prior to the grant date. The actual
value, if any, an executive may realize will depend on the excess of the
stock price over the exercise price on the date the option is exercised.
Accordingly, there is no assurance the value realized will be at or near
the value estimated by the model.
16
Aggregate Option/SAR Exercises in Fiscal 2001
and Fiscal Year-End Option/SAR Values
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Shares Options/SARs at FY-End At FY-End(2)
Acquired on Value --------------------------- ---------------------------
Name Exercise(1) Realized Exercisable Unexercisable Exercisable Unexercisable
(#) ($) (#) (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Donald L. Thompson ........................ - - 487,783 - - -
William E. Chandler ....................... - - 102,845 - - -
Bradley P. Johnson ........................ - - 50,000 20,000 - $51,000
John W. Carney ............................ - - 77,627 - - -
James P. Machut ........................... - - 26,600 - - -
W. Ernest Precious ........................ - - - - - -
- ---------------
(1) The information presented in this table is with respect to options, unless
otherwise noted. All options reflected in this table were granted at fair
market value under the Company's 1983 or 1993 Stock Option and Stock Grant
Plans.
(2) The value of options is calculated by subtracting the exercise price from
the fair market value of the Common Shares underlying the options at
December 2, 2001.
Repricing of Options/SARs
The following table sets forth certain information concerning what may be
deemed to be the repricing, under SEC proxy disclosure regulations, of stock
options held by executive officers of the Company. All such repricings
occurred in fiscal 2001, and to the best knowledge of the Company, there have
not been any other repricings of executives' options by the Company during its
last ten completed fiscal years.
Ten-Year Option/SAR Repricing(1)
Number of Length of
securities Original
underlying Market Price Exercise Option Term
options/SARs of Stock at Price at Time New Remaining at
Repriced or Time of of Repricing Exercise Date of
Amended Repricing or or Amendment Price Repricing or
Name Date (#) Amendment ($) ($) Amendment
- -----------------------------------------------------------------------------------------------------------------------------------
William E. Chandler ........................... 1/2/01 124,000 $4.88 $18.625 - 64 months
John W. Carney ................................ 1/2/01 89,000 $4.88 $18.625 - 64 months
James P. Machut ............................... 1/2/01 28,000 $4.88 $18.625 - 64 months
Eugene A. Stiefel ............................. 1/2/01 89,000 $4.88 $18.625 - 64 months
W. Ernest Precious ............................ 1/2/01 124,000 $4.88 $18.625 - 64 months
- ---------------
(1) The "repricing" reflected in the above table consisted of the making by the
Company to the named individuals of stock grants vesting in five years,
subject to earlier vesting in certain circumstances, and the relinquishment
(cancellation) by such individuals of the indicated number of stock options
held by them, all of which were granted under the Company's 1993 Stock
Option and Stock Grant Plan. See "Compensation Committee Fiscal 2001 Report
on Executive Compensation and Report on Repricing of Options" and note 3 to
the Summary Compensation Table appearing earlier in this proxy statement
for further information concerning this matter.
17
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 2002
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 $357,000 $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 $412,000 $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 five 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, 2001)
may be taken into account. The covered compensation of the Named Officers for
fiscal 2001 was as follows: Mr. Thompson - $480,174; Mr. Chandler - $246,031;
Mr. Carney - $193,661; Mr. Johnson - $259,225; Mr. Machut - $215,091; and Mr.
Precious - $218,714.
The approximate present years of benefit service for the Named Officers are
as follows: Mr. Thompson - 6 years; Mr. Chandler - 9 years; Mr. Carney - 17
years; Mr. Johnson - 3 years; Mr. Machut - 9 years; and Mr. Precious - 24
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 $21,084 in fiscal 2001. In
addition, the Company makes basic contributions equal
18
to the amount that would have been contributed under the Hunt Corporation
Savings Plan but for the $170,000 limit previously discussed. In fiscal 2001,
this amount totaled $4,796 for all of the Named Officers.
Employment and Severance Agreements and Arrangements
In connection with his hiring as Chairman 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 to continue thereafter
from year to year until Mr. Thompson reached 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 bonus under the Company's incentive
compensation program of up to a maximum of 100% of base salary. Pursuant to the
agreement, Mr. Thompson was granted at the time his employment commenced stock
options for 175,000 Common Shares, and 175,000 shares of phantom stock/ SARs. He
also is entitled to receive additional annual option grants of a value of up to
2 1/2% 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.
Mr. Thompson's agreement was amended during fiscal 2000 at the request of
the Compensation Committee in order to avoid a potential adverse accounting
impact which Mr. Thompson's phantom stock/SARs might have had on the Company's
future earnings. As a result of this amendment, his 175,000 phantom stock/SARs
(which were fully vested) were replaced by a deferred cash account with an
opening balance equal to the then value of his phantom stock/SARs, which was
the fair market value of a Common Share at the time of the fiscal 2000
amendment ($9.6875) multiplied by 175,000, the number of his phantom stock/
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 Shares below such $9.6875 stock value and
will be subsequently increased by $175,000 for each $1.00 increase in the
price of the Company's Common Shares up to, but not in excess of, such $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 the time of the
fiscal 2000 amendment. Mr. Thompson will, however, continue to be credited
with dividend amounts as if he were still credited with 175,000 phantom
shares/SARs. At the time of this amendment of Mr. Thompson's agreement, he
also was granted an option to purchase 175,000 Common Shares at fair market
value, which was $9.6875 per share.
As publicly announced by the Company, following the sale of its commercial
Graphics Products business in October 2001, the Company has embarked upon a
planned, orderly executive leadership transition to a smaller executive
management structure more in keeping with the reduced size and complexity of
the Company's remaining business. As part of this transition, the Company
entered into a transition and severance agreement providing for Mr. Thompson
to step down as Chief Executive Officer of the Company around mid-year 2002
and as Chairman around the end of fiscal 2002. This agreement (which amends
Mr. Thompson's employment agreement in certain respects) provides, among other
things, for payment of his base salary as severance for 30 months following
termination of his employment with the Company (the "Severance Period"); full
annual incentive pay, if earned, for fiscal 2001; payments for fiscal 2003 and
2004 equal to the average annual incentive pay, if any, received by him from
the Company with respect to fiscal years prior to fiscal 2003; and
continuation of certain benefits for the Severance Period.
The Company generally does not have formal employment agreements with its
executive officers. However, since 1990 the Company has had change in control
agreements with executive officers, as well as other officers and certain key
employees. Under the agreements currently in effect with executive officers, in
the event of a change in control (as defined in the agreements) of the Company,
occurring on or before December 31, 2004, 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. Under certain circumstances, a party to the change in control
agreement whose employment with the Company terminates prior to an actual change
in control also may be entitled to receive payments and benefits under the
agreement. During fiscal 2001, as part of the retention and incentive program
approved by the Compensation Committee, the change in control agreements of the
Named Officers
19
participating in the program were amended, primarily to provide for lump sum
rather than installment payouts of compensation in the event of specified
terminations of their employment following a change in control of the Company.
See "Compensation Committee Fiscal 2002 Report on Executive Committee and
Report on Repricing of Options" earlier in this proxy statement. Mr. Thompson
does not have a separate change in control agreement, but his employment
agreement contains provisions generally similar to those described above but
with a severance allowance equal to approximately three times his highest
annualized base salary and his average annual incentive compensation, and with
continuation of certain benefits for up to three years.
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 or 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.
Following the sale of the Company's commercial Graphics Products business to
Neschen AG in October 2001, W. Ernest Precious separated from the Company as
an executive officer of the Company and became President of Seal Graphics
Americas Corporation, Neschen's primary U.S. subsidiary. In recognition of his
contribution to the Company and generally consistent with the Company's
severance policy for executive officers, the Company awarded him severance
equal to one year's base salary.
Messrs. Chandler and Machut, who are separating from the Company also will
be receiving compensation and benefits generally consistent with the Company's
severance policy. See "Summary Compensation Table" and related notes appearing
earlier in this proxy statement.
The Company has an agreement with Mr. Johnson under which he is deemed to
have five years of benefit service and five years of vesting service under the
Pension Plan and Supplemental Executive Benefits Plan in the event of a change
in control of the Company prior to his normal pension vesting date. The
Company also has entered into a supplemental deferred compensation agreement
with Mr. Carney providing for enhancement of his pension benefit so that the
total qualified and nonqualified pension payable to him in the form of a joint
and 50% survivor annuity with his spouse will equal 60% of his average
compensation (as defined under the Supplemental Executive Benefits Plan) upon
his separation from service on or after the age of 62 or in the event of an
earlier change in control of the Company.
The stock grants and certain of the stock options held by the Named Officers
also vest in whole or in part in the event of a change in control of the
Company.
20
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
---------------------------------------------------------------
11/29/96 11/28/97 11/27/98 11/28/99 12/3/00 12/2/01
HUNT CORPORATION $100.00 $124.42 $ 76.00 $ 53.12 $ 25.85 $ 45.27
RUSSELL 2000 $100.00 $124.34 $117.34 $135.71 $136.78 $139.96
PEER GROUP $100.00 $114.09 $114.18 $ 91.30 $ 50.74 $ 42.86
- --------------------
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 November 29, 1996 and that all dividends were
reinvested. The performance as reported above provides no assurances that this
performance will continue in the future.
- --------------------
(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. 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.
21
The closing price of a Common Share of the Company on the New York Stock
Exchange on December 2, 2001 was $6.55. On March 1, 2002, such closing price
was $9.10.
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 reviews 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 2001,
except as follows: Bradley P. Johnson, director and executive officer of the
Company and John Fanelli III, Vice President and Chief Accounting Officer of
the Company, inadvertently were late in filing one Form 5 each with respect to
their receipt of stock option grants under the Company's 1993 Stock Option and
Stock Grant Plan.
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 expenses. 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 2003 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 2, 2002.
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. The Company has
received no such advance notices with respect to the 2002 Annual Meeting. The
deadline for giving the specified advance written notice of such a nomination
or proposal to be made at next year's Annual Meeting (the 2003 Annual Meeting)
is December 17, 2002.
Miscellaneous
This proxy statement is being sent to shareholders enclosed in a document
which also contains a letter to shareholders from the Chairman and Chief
Executive Officer of the Company, the Company's 2001 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
2001. 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,
DENNIS S. PIZZICA, Secretary
March 1, 2002
22
APPENDIX
HUNT CORPORATION
Audit Committee Charter
(As amended February 13, 2002)
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 the 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.
23
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 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 10-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 prior to release to the
public: (i) the Company's quarterly and annual press releases
reporting the Company's quarterly and annual financial results, as
well as any other Company press releases reporting actual or
anticipated financial results; and (ii) along with the Board, the
Chairman's and/or President's letter to shareholders to be included
in the Company's annual report to shareholders.
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
appropriateness of the accounting principles and estimates used or
proposed to be used by the Company.
o The Committee shall: (i) 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; (ii) discuss with the independent
auditors any such disclosed relationships and their impact on the
independent auditors' independence; and (iii) 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.
24
HUNT CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 17, 2002
- --------------------------------------------------------------------------------
The undersigned hereby appoint(s) Donald L. Thompson and Dennis S.
Pizzica, 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 15, 2002, at the
Annual Meeting of Shareholders to be held on April 17, 2002, and at any
adjournments thereof.
(Continued, and to be dated and signed, on other side)
Please sign, date and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
HUNT CORPORATION
April 17, 2002
Please Detach and Mail in the Envelope Provided
___
| | Please mark your
A | X | votes as in this
|___| example.
AUTHORITY GRANTED
to vote for all nominees
(except as marked to the AUTHORITY (2) Ratificaton of the amendment of the FOR AGAINST ABSTAIN
contrary below) WITHHELD Company's Articles of Incorporation ___ ___ ___
___ ___ Nominees: to provide that Subchapter E-Control | | | | | |
(1) ELECTION | | | | Donald D. Belcher Transactions - of the Pennsylvania |___| |___| |___|
OF |___| |___| Bradlely P. Johnson Business Corporation Law shall not
DIRECTORS Robert H. Rock be applicable to the Company;
If you wish to withhold authority (3) Ratification of the appointment of ___ ___ ___
to vote for one or more but less PricewaterhouseCoopers LLP as the | | | | | |
than all of the nominees named at independent accountants of the |___| |___| |___|
right, or to cumulate your votes Company for fiscal 2002;
for any such nominee(s), so indicate
on the line provided below. (4) 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 proposals set forth in Items
2 and 3; and in accordance with the proxies' best judgment upon
other matters properly coming before the meeting and any
adjournments thereof.
SIGNATURE__________________________ DATED_______________, 2002 SIGNATURE_______________________________ DATED________________, 2002
(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.