SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AMCOL INTERNATIONAL 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:
Common Stock, par value $.01 per share
(2) Aggregate number of securities to which transactions 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:
AMCOL INTERNATIONAL CORPORATION
One North Arlington
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 16, 2002
To Our Shareholders:
The annual meeting of shareholders of AMCOL International Corporation,
or AMCOL, will take place on Thursday, May 16, 2002, at 11:00 a.m., local time,
at the Wyndham Hotel, 400 Park Boulevard, Itasca, Illinois, for the following
purposes:
1. To elect four (4) directors, for a three-year term or until their
successors are elected and qualified.
2. To transact any other business which properly comes before the
annual meeting.
Only shareholders of record of AMCOL's common stock as of the close of
business on March 20, 2002 will be entitled to notice of and to vote at the
annual meeting and at any adjournments of the annual meeting.
The Board of Directors recommends that you vote "FOR" each of AMCOL's
nominees for director.
Whether or not you plan to attend the annual meeting, please complete,
sign, date and mail the proxy card in the enclosed self-addressed, postage-paid
envelope, or vote by telephone in accordance with the instructions provided.
Please do not submit a proxy card if you have voted by telephone. If you attend
the annual meeting, you may revoke your proxy and, if you wish, vote your shares
in person. Thank you for your interest and cooperation.
By Order of the Board of Directors,
Clarence O. Redman
Secretary
Arlington Heights, Illinois
April 9, 2002
AMCOL INTERNATIONAL CORPORATION
One North Arlington
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 16, 2002
INTRODUCTION
We are furnishing this proxy statement to you in connection with the
solicitation of proxies by the Board of Directors of AMCOL International
Corporation, or AMCOL, for use at our annual meeting of shareholders to be held
on Thursday, May 16, 2002, at 11:00 a.m., Central Daylight Savings Time, at the
Wyndham Hotel, 400 Park Boulevard, Itasca, Illinois, and at any adjournment of
the annual meeting. This proxy statement and the accompanying proxy card are
first being mailed or delivered to shareholders of AMCOL on or about April 9,
2002.
At the annual meeting, you will be asked to consider and vote upon the
following matters:
1. The election of four (4) directors for a three-year term or until their
successors are elected and qualified.
2. Any other business which properly comes before the annual meeting.
The Board of Directors recommends that you vote "FOR" each of AMCOL's
nominees for director.
Whether or not you plan to attend the annual meeting, please complete,
sign, date and mail the proxy card in the enclosed self-addressed, postage-paid
envelope, or vote by telephone in accordance with the instructions provided.
Please do not submit a proxy card if you have voted by telephone. If you attend
the annual meeting, you may revoke your proxy and, if you wish, vote your shares
in person.
The date of this proxy statement is April 9, 2002.
THE ANNUAL MEETING
General
This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of AMCOL for use at the annual meeting to
be held on Thursday, May 16, 2002, at 11:00 a.m., Central Daylight Savings Time,
at the Wyndham Hotel, 400 Park Boulevard, Itasca, Illinois, and at any
adjournment of the annual meeting.
Record Date
The Board of Directors has fixed the close of business on March 20, 2002,
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the annual meeting or any adjournment. Accordingly, only holders
of record of AMCOL's common stock at the close of business on the record date
will be entitled to vote at the annual meeting, either by proxy, or telephone or
in person. As of the record date, there were 28,605,033 shares of AMCOL's common
stock issued and outstanding. Each share of AMCOL's common stock entitles the
holder to one vote.
Purpose of the Annual Meeting; Recommendation of the Board of Directors
At the annual meeting, AMCOL's shareholders will be asked to consider and
vote upon the following matters:
. the election of four directors; and
. any other business which properly comes before the annual meeting.
The Board of Directors recommends that you vote "FOR" each of AMCOL's
nominees for director.
Proxies; Vote Required
Under Delaware law, the election of the four directors must be approved by
the holders of a majority of the shares of AMCOL's common stock represented at
the annual meeting.
-2-
All properly executed proxies received by AMCOL prior to the annual meeting
and not revoked will be voted in accordance with the instructions marked
thereon. Unless contrary instructions are marked, proxies will be voted "FOR"
each of AMCOL's nominees for director. The Board of Directors knows of no other
business which will be presented for consideration at the annual meeting. If any
other matter is properly presented, it is the intention of the persons named in
the enclosed proxy to vote in accordance with their best judgment. Any
shareholder may revoke his or her proxy at any time prior to the exercise
thereof by doing any of the following:
. giving written notice to the Secretary of AMCOL at One North Arlington,
1500 West Shure Drive, Suite 500, Arlington Heights, Illinois,
60004-7803;
. submitting a duly executed proxy bearing a later date;
. voting by telephone on a later date; or
. attending the annual meeting and voting in person.
Attendance at the annual meeting will not, in itself, constitute revocation
of a proxy.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of AMCOL's common stock is necessary to constitute a quorum
at the annual meeting. In deciding all questions, a holder of AMCOL's common
stock is entitled to one vote, in person or by proxy, for each share held in
such holder's name on the record date. Abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business but are not counted for purposes of determining whether
a proposal has been approved. Thus, abstentions and broker non-votes will have
the same effect as a vote against AMCOL's nominees for directors.
Proxy Solicitation and Expenses
The accompanying proxy is being solicited on behalf of the Board of
Directors of AMCOL. All expenses of this solicitation, including the cost of
preparing and mailing this proxy statement, will be paid by AMCOL. Solicitation
of holders of AMCOL's common stock by mail, telephone, facsimile or by personal
solicitation may be done by directors, officers and regular employees of AMCOL,
for which they will receive no additional compensation. Brokerage houses and
other nominees, fiduciaries and custodians nominally holding shares of AMCOL's
common stock as of the record date will be requested to forward proxy soliciting
material to the beneficial owners of such shares, and will be reimbursed by
AMCOL for their reasonable out-of-pocket expenses.
-3-
ELECTION OF DIRECTORS
AMCOL's Board of Directors consists of 10 directors. AMCOL's Certificate of
Incorporation divides the Board of Directors into three classes, with the
members of one class to be elected each year for a three-year term. The terms of
the Class I directors will expire at the Annual Meeting. The following tables
set forth certain information regarding the director nominees and the continuing
members of the Board:
Information Concerning Nominees
CLASS I
(Term expiring in 2005)
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Name Age Director Since Principal Occupation for Last Five Years
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John Hughes 59 1984 Chairman of the Board. Chief Executive Officer of AMCOL from 1985
until May 2000.
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Clarence O. Redman 59 1989 Secretary of AMCOL. Also, of counsel to Lord, Bissell & Brook since
October 1997, the law firm that serves as Corporate Counsel to
AMCOL; prior thereto, he was the sole shareholder and President of
Clarence Owen Redman, Ltd., a corporate partner of the law firm of
Keck, Mahin & Cate. Mr. Redman and his professional corporation
also served as Chief Executive Officer of Keck, Mahin & Cate. In
December 1997, Keck, Mahin & Cate filed a voluntary petition in
bankruptcy under Chapter 11 of the United States Bankruptcy Code.
- ----------------------------------------------------------------------------------------------------------------------------------
Lawrence E. Washow 48 1998 President and Chief Executive Officer of AMCOL since May 2000,
Chief Operating Officer of AMCOL since August 1997; prior thereto,
Senior Vice President of AMCOL and President of Chemdal
International Corporation (unit sold to BASF AG in June 2000).
- ----------------------------------------------------------------------------------------------------------------------------------
Audrey L. Weaver* 47 1997 Private investor.
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* Paul C. Weaver and Audrey L. Weaver are first cousins.
Each nominee must receive the favorable vote of the holders of a majority
of the shares of common stock represented at the annual meeting in person or by
proxy, assuming a quorum is present.
The Board of Directors recommends that AMCOL's shareholders vote "FOR" each
of the nominees named above.
-4-
Information Concerning Continuing Members of the Board
CLASS II
(Term expiring in 2003)
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Name Age Director Since Principal Occupation for Last Five Years
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Robert E. Driscoll, III 63 1985 Retired Dean and Professor of Law, University of South Dakota.
- -----------------------------------------------------------------------------------------------------------------------------------
C. Eugene Ray 69 1981 Retired Executive Vice President - Finance of Signode Industries,
Inc., a manufacturer of industrial strapping products.
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Dale E. Stahl 54 1995 President and Chief Executive Officer of Inland Paperboard and
Packaging, Inc., a manufacturer of containerboard and corrugated
boxes since June 2000; prior thereto President and Chief Operating
Officer of Gaylord Container Corporation, a manufacturer and
distributor of brown paper and packaging products.
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CLASS III
(Term expiring in 2004)
- -----------------------------------------------------------------------------------------------------------------------------------
Name Age Director Since Principal Occupation for Last Five Years
- -----------------------------------------------------------------------------------------------------------------------------------
Arthur Brown 61 1990 Chairman, President and Chief Executive Officer of Hecla
Mining Company.
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Jay D. Proops 60 1995 Private investor since 1995; prior thereto, Vice Chairman and
co-founder of The Vigoro Corporation. Also a Director of Great Lakes
Chemical Corporation.
- -----------------------------------------------------------------------------------------------------------------------------------
Paul C. Weaver* 39 1995 Managing partner of Consumer Aptitudes, Inc. since July 1997, a
marketing research firm; prior thereto, various sales and account
management positions for AC Nielsen Company, a provider of marketing
information services.
- -----------------------------------------------------------------------------------------------------------------------------------
* Paul C. Weaver and Audrey L. Weaver are first cousins.
-5-
SECURITY OWNERSHIP
Security Ownership of Five Percent Beneficial Owners
The following table sets forth all persons known to be the beneficial
owner of more than 5 percent of AMCOL's common stock as of February 28, 2002.
--------------------------------------------------------------------------------------------------------------------
Number of Shares and Percent
Name and Address of Beneficial Owner Nature of Beneficial of Class
Ownership (1)
--------------------------------------------------------------------------------------------------------------------
Advisory Research, Inc. (2) 1,567,100 5.48%
180 North Stetson St., Suite 5780
Chicago, Illinois 60601
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Bankmont Financial Corp. 3,094,451 10.82%
Paul Bechtner Trust (3)
111 West Monroe Street
Chicago, Illinois 60690
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Cannell Capital, LLC (4) 1,527,900 5.34%
J. Carlo Cannell
The Anegada Fund Limited
The Cuttyhunk Fund Limited
Tonga Partners, L.P.
GS Cannell, LLC
Pleiades Investment Partners, LP
George S. Sarlo 1995 Charitable Remainder Trust
150 California Street, 5/th/ Floor
San Francisco, California 94111
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Everett P. Weaver 3,119,451 10.91%
c/o AMCOL International Corporation (5)(6)
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
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William D. Weaver 3,863,952 13.51%
c/o AMCOL International Corporation (5)(7)
1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
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(1) Nature of beneficial ownership is direct unless otherwise indicated by
footnote. Beneficial ownership as shown in the table arises from sole
voting and investment power unless otherwise indicated by footnote.
(2) Based solely on a Schedule 13G filed with the SEC on February 12, 2002.
According to the Schedule 13G, Advisory Research, Inc. is an investment
advisor.
(3) Voting and investment power are shared by the trustees of this trust. See
note (5) below.
(4) Based solely on a Schedule 13G filed with the SEC on February 14, 2002.
According to the Schedule 13G, Cannell Capital, LLC is a registered
investment adviser ("Cannell Capital"). J. Carlo Cannell ("Managing
Member") controls Cannell Capital by virtue of his position as Managing
Member and majority owner of Cannell Capital. Cannell Capital's beneficial
ownership of the reported AMCOL common stock is direct as a result of its
discretionary authority to buy, sell and vote these shares for its
investment advisory clients. Managing Member's beneficial ownership of the
reported AMCOL common stock is indirect as a result of his ownership and
management of Cannell Capital.
(5) Includes 3,094,451 shares held in the Paul Bechtner Trust as to which
Messrs. Everett P. Weaver, William D. Weaver and Bankmont Financial Corp.
are co-trustees and share voting and investment power.
(6) Includes 15,000 shares in a trust as to which voting and investment power
are shared with Mr. Weaver's wife.
(7) Includes 344,501 shares held in a living trust and 200,000 shares in a
family charitable trust, also includes 225,000 shares held in Mr. Weaver's
wife's living trust, as to which Mr. Weaver may be deemed to have voting
and investment power.
-6-
Security Ownership of Directors and Executive Officers
The following table sets forth, as of February 28, 2002, shares
beneficially owned by: (i) each director and nominee; (ii) the Chief Executive
Officer; (iii) the named officers set forth on page 9; and (iv) as a group, such
persons and other executive officers.
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Number of Shares and Percent of
Beneficial Owner Nature of Beneficial Class
Ownership (1)
--------------------------------------------------------------------------------------------------------------------
Arthur Brown 70,728 *
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Robert E. Driscoll, III 418,793 1.36%
--------------------------------------------------------------------------------------------------------------------
John Hughes 1,500,442 4.95%
--------------------------------------------------------------------------------------------------------------------
Jay D. Proops 112,629 *
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C. Eugene Ray 148,728 *
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Clarence O. Redman 283,086 *
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Dale E. Stahl 98,129 *
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Lawrence E. Washow 965,648 3.15%
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Audrey L. Weaver 766,133 2.50%
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Paul C. Weaver 415,931 1.36%
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Gary L. Castagna 219,873 *
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Ryan McKendrick 127,259 *
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Gary Morrison 211,688 *
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Frank B. Wright, Jr. 109,185 *
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All of the above and other executive officers as a group
(17 persons) 5,448,252 16.98%
--------------------------------------------------------------------------------------------------------------------
* Percentage represents less than 1% of the total shares of common stock
outstanding as of February 28, 2002.
(1) Nature of beneficial ownership is set forth on Page 8.
-7-
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Nature of Beneficial Ownership (Shares Held) as of February 28, 2002
- --------------------------------------------------------------------------------------------------------------------------------
As Trustee
Directly or In the In As As By of the Subject to
Beneficial Owner as Joint Company's Limited Trustee or Custodian Family Company's Options
Tenants (1) Savings Partnership Co-Trustee Members Pension Exercisable
Plan (2) (3) Plan (4) in 60 Days
- --------------------------------------------------------------------------------------------------------------------------------
Arthur Brown 23,400 -- -- -- -- -- -- 47,328
- --------------------------------------------------------------------------------------------------------------------------------
Robert E. Driscoll, III 9,000 -- 388,895 -- -- -- -- 18,368
- --------------------------------------------------------------------------------------------------------------------------------
John Hughes 106,705 135,711 517,837 -- 55,838 217,500 466,851
- --------------------------------------------------------------------------------------------------------------------------------
Jay D. Proops 24,000 -- 10,000 -- -- -- -- 78,629
- --------------------------------------------------------------------------------------------------------------------------------
C. Eugene Ray 81,150 -- -- -- -- 20,250 -- 47,328
- --------------------------------------------------------------------------------------------------------------------------------
Clarence O. Redman 159,670 55,136 -- 56,800 -- -- -- 11,480
- --------------------------------------------------------------------------------------------------------------------------------
Dale E. Stahl 19,500 -- -- -- -- -- -- 78,629
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Lawrence E. Washow 234,957 16,130 -- -- 14,500 217,500 482,561
- --------------------------------------------------------------------------------------------------------------------------------
Audrey L. Weaver 685,050 -- -- 56,800 -- 24,283 --
- --------------------------------------------------------------------------------------------------------------------------------
Paul C. Weaver 318,876 -- -- 30,638 -- 30,831 -- 35,586
- --------------------------------------------------------------------------------------------------------------------------------
Gary L. Castagna 1,100 1,273 -- -- -- -- 217,500 --
- --------------------------------------------------------------------------------------------------------------------------------
Ryan F. McKendrick 2,298 908 -- -- -- -- -- 124,053
- --------------------------------------------------------------------------------------------------------------------------------
Gary D. Morrison 467 41,180 -- -- -- -- -- 170,041
- --------------------------------------------------------------------------------------------------------------------------------
Frank B. Wright, Jr. 74,432 29,886 -- -- -- -- -- 4,867
- --------------------------------------------------------------------------------------------------------------------------------
All Directors and
Executive Officers 1,633,900 251,218 534,606 662,075 20,170 139,152 217,500 1,720,259
- --------------------------------------------------------------------------------------------------------------------------------
(1) Includes shares held in joint tenancy with spouses for which voting
rights may be shared.
(2) With the exception of Mr. Redman's shares, which are held in the
Clarence O. Redman PC Savings Plan, the shares are held in AMCOL's
Savings Plan.
(3) The named director is a general partner.
(4) Messrs. Castagna, Hughes and Washow share voting rights.
- 8 -
NAMED OFFICERS' COMPENSATION
Summary Compensation Table
The Summary Compensation Table below includes, for each of the fiscal
years ended December 31, 2001, 2000 and 1999, individual compensation for
services to AMCOL and its subsidiaries of those persons who were at December 31,
2001: (i) the Chief Executive Officer; and (ii) the four other most highly
compensated executive officers of AMCOL, or collectively, the named officers.
- -------------------------------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation (1)(2) Compensation Awards
- -------------------------------------------------------------------------------------------------------------------------------
Securities All Other
Underlying Compen-
Salary Bonus Bonus Options sation
Name and Principal Position Year ($) ($)(3) ($)(4) (#)(5) ($)(6)
- -------------------------------------------------------------------------------------------------------------------------------
Lawrence E. Washow 2001 400,000 394,801 -- 31,500 25,585
President and Chief 2000 375,000 -- 700,000 21,500 39,139
Executive Officer since May 2000 1999 350,000 437,500 -- 121,956 31,280
- -------------------------------------------------------------------------------------------------------------------------------
Gary L. Castagna 2001 220,000 115,464 -- 27,000 7,962
Senior Vice President of 2000 91,667 73,333 300,000 -- 20,145
AMCOL and former President 1999 200,000 200,000 -- 64,565 18,571
of Chemdal International
Corporation from August 1997
until May 2000
- ------------------------------------------------------------------------------------------------------------------------------
Ryan F. McKendrick 2001 200,000 195,552 -- 14,000 7,998
Vice President of AMCOL 2000 184,000 119,598 -- 12,000 12,941
and President of CETCO 1999 175,000 56,731 -- 53,948 9,404
- -------------------------------------------------------------------------------------------------------------------------------
Gary Morrison 2001 190,000 76,380 -- 14,000 7,600
Vice President of AMCOL 2000 170,000 136,000 -- 12,000 16,705
and President of American 1999 148,200 111,619 -- 35,009 9,155
Colloid Company
- -------------------------------------------------------------------------------------------------------------------------------
Frank B. Wright, Jr.* 2001 215,000 43,215 -- 12,000 8,600
Vice President of AMCOL 2000 215,000 20,000 -- 12,000 10,708
and President of Volclay 1999 215,000 112,698 -- 64,565 15,840
International Corporation
- ------------------------------------------------------------------------------------------------------------------------------
*Mr. Wright has resigned as an officer of the Company effective as of April 15,
2002.
-9-
Summary Compensation Table (continued)
(1) Includes deferred compensation under AMCOL's Savings Plan and AMCOL's
Deferred Compensation Plan.
(2) The incremental cost of non-cash compensation and other personal
benefits during any year presented did not exceed the lesser of $50,000 or
10 percent of the total of annual salary and bonus reported for any
individual named above.
(3) The figures in this column reflect bonuses from the Executive Incentive
Compensation Plan and the Bonus Plan as described in the Board
Compensation Committee Report on Executive Compensation.
(4) The Compensation Committee granted bonuses to certain executives in
recognition of their contribution to the development and success of the
absorbent polymers business that was sold to BASF AG in June 2000.
(5) The number of options granted in 1999 has been adjusted to reflect the
effect of the partial liquidation on unexercised stock options.
(6) The figures in this column include Company matching contributions under
AMCOL's Savings Plan and the 401(k) restoration plan whereby the matching
contributions for salary deferrals in excess of ERISA limits to AMCOL's
Savings Plan were credited to AMCOL's Deferred Compensation Plan.
-10-
Option Grants in Last Fiscal Year
Shown below is information on grants of incentive stock options during the
fiscal year ended December 31, 2001, to the named officers, which are reflected
in the Summary Compensation Table on Page 9.
- -------------------------------------------------------------------------------------------------------
Grant
Date
Individual Grants in 2001 Value
----------------------------------------------------------------------------
Number of % of Total
Securities Options Grant
Underlying Granted to Date
Options Employees Exercise Expiration Present
Name Granted (1) (2) Price (3) Date Value (4)
- -------------------------------------------------------------------------------------------------------
Lawrence E. Washow 31,500 9.66 $5.00 05/17/11 $44,352
- -------------------------------------------------------------------------------------------------------
Gary L. Castagna 27,000 8.28 $5.00 05/17/11 $64,092
- -------------------------------------------------------------------------------------------------------
Ryan F. McKendrick 14,000 4.29 $5.00 05/17/11 $24,755
- -------------------------------------------------------------------------------------------------------
Gary D. Morrison 14,000 4.29 $5.00 05/17/11 $24,755
- -------------------------------------------------------------------------------------------------------
Frank B. Wright, Jr. 12,000 3.68 $5.00 05/17/11 $24,755
- -------------------------------------------------------------------------------------------------------
(1) These Incentive Stock Options ("ISOs") were issued pursuant to AMCOL's 1998
Long-Term Incentive Plan (the "1998 Plan") and may not be exercised until
they vest. These ISOs vest 40% after two years, 60% after three years, 80%
after four years and 100% after five years, provided that on death or
retirement under specified conditions, these ISOs become fully vested. The
exercise price may not be less than the fair market value of the shares
subject to the option on the date of grant. The exercise price may not be
less than 110% of such fair market value if the purchaser is a holder of
more than 10% of AMCOL's outstanding voting securities.
(2) Based on 326,050 options granted to all employees.
(3) Fair market value on the date of grant.
(4) The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the value
of the options reflected in the above table include the following: an
exercise price on the option of $5.00, equal to the fair market value of
the underlying stock on the date of grant; an option term of 6.3 years; an
interest rate of 5.14% representing the interest rates on U.S. Treasury
securities on the date of grant with maturity dates corresponding to the
vesting of the options; volatility of 52.05%; and dividends at the rate of
$0.06 per share representing the annualized dividends paid with respect to
a share of common stock at the date of grant. There have been no reductions
to reflect the probability of forfeiture due to termination prior to
vesting, or to reflect the probability of a shortened option term due to
termination of employment prior to the option expiration date. The ultimate
values of the options will depend on the future market price of AMCOL's
stock, which cannot be forecast with reasonable accuracy. The actual value,
if any, an optionee will realize upon exercise of an option will depend on
the excess of the market value of AMCOL's common stock over the exercise
price on the date the option is exercised.
-11-
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Shown below is information with respect to (i) options exercised by the
named officers pursuant to AMCOL's option plans during fiscal 2001 and (ii)
unexercised options granted in fiscal 2001 and prior years under AMCOL's option
plans to the named officers and held by them at December 31, 2001.
------------------------------------------------------------------------------------------------------------------
Number of Securities
Shares Underlying Value of Unexercised
Name Acquired Value Unexercised Options In-the-Money
on Realized at 12/31/01 Options at 12/31/01
Exercise Exercisable/ Exercisable/
Unexercisable Unexercisable (1)
------------------------------------------------------------------------------------------------------------------
Lawrence E. Washow 30,000 $ 118,053 461,921 / 183,850 $2,372,236 / $839,549
------------------------------------------------------------------------------------------------------------------
Gary L. Castagna. -- -- -- / 27,000 -- / $ 69,100
------------------------------------------------------------------------------------------------------------------
Ryan F. McKendrick 72,743 $ 297,787 92,172 / 93,233 $ 474,946 / $425,932
------------------------------------------------------------------------------------------------------------------
Gary D. Morrison 7,500 $ 32,508 150,270 / 65,226 $ 816,881 / $280,164
------------------------------------------------------------------------------------------------------------------
Frank B. Wright, Jr. 63,045 $ 265,145 4,867 / 98,395 $ 27,410 / $462,122
------------------------------------------------------------------------------------------------------------------
(1) Based on the closing sale price as quoted on The New York Stock Exchange on
that date.
Pension Plans
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Estimated Annual Retirement Benefits Based on Years of Service
------------------------------------------------------------------------------------------
Remuneration 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
------------------------------------------------------------------------------------------------------------------
$150,000 $ 33,750 $ 45,000 $ 56,250 $ 67,500 $ 78,750 $ 84,375
------------------------------------------------------------------------------------------------------------------
200,000 45,000 60,000 75,000 90,000 105,000 112,500
------------------------------------------------------------------------------------------------------------------
250,000 56,250 75,000 93,750 112,500 131,250 140,625
------------------------------------------------------------------------------------------------------------------
300,000 67,500 90,000 112,500 135,000 157,500 168,750
------------------------------------------------------------------------------------------------------------------
350,000 78,750 105,000 131,250 157,500 183,750 196,875
------------------------------------------------------------------------------------------------------------------
400,000 90,000 120,000 150,000 180,000 210,000 225,000
------------------------------------------------------------------------------------------------------------------
450,000 101,250 135,000 168,750 202,500 236,250 253,125
------------------------------------------------------------------------------------------------------------------
500,000 112,500 150,000 187,500 225,000 262,500 281,250
------------------------------------------------------------------------------------------------------------------
550,000 123,750 165,000 206,250 247,500 288,750 309,375
------------------------------------------------------------------------------------------------------------------
The above table shows the estimated annual retirement benefits payable on a
straight life annuity basis to participating employees, including officers, in
the earnings and years of service classifications indicated under AMCOL's
retirement plans, which cover substantially all of its domestic employees on a
non-contributory basis. The estimated benefits as disclosed on page 12 assume
(i) that the plans will be continued and (ii) that the employee will elect to
receive his pension at normal retirement age. The table above and the estimates
on page 12 do not reflect the reduction in an individual's final monthly
compensation due to social security monthly covered compensation. This reduction
is based upon the retirement year for a particular individual.
-12-
---------------------------------------------------------------------------
Name Years of Average Pension
Service Compensation Benefit
---------------------------------------------------------------------------
Lawrence E. Washow 23 $ 612,094 $ 199,998
---------------------------------------------------------------------------
Gary L. Castagna -- - --
---------------------------------------------------------------------------
Ryan F. McKendrick 18 216,077 53,712
---------------------------------------------------------------------------
Gary D. Morrison 21 226,192 60,577
---------------------------------------------------------------------------
Frank B. Wright, Jr. 6 263,742 23,408
---------------------------------------------------------------------------
The above table indicates the average earnings for the highest five
consecutive calendar years and the number of years of credited service under the
pension plans as of December 31, 2001, for each of the named officers. Covered
compensation includes a participant's base salary, commissions, bonuses and
salary reductions under AMCOL's Savings Plan and Deferred Compensation Plan. Mr.
Castagna has already received his full pension payout in the form of a lump-sum
payment during 2000 in connection with the sale of the absorbent polymers
business, of which he was President.
Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as
amended, limit the annual benefits that may be paid from a tax-qualified
retirement plan. As permitted by the Employee Retirement Income Security Act of
1974, AMCOL has a supplemental plan that authorizes the payment out of general
funds of AMCOL any benefits calculated under provisions of AMCOL's pension plan
that may be above the limits under these sections. The accrued, unfunded
liability of the supplemental plan at September 30, 2001, was $1,741,180.
Employment Agreements
Each of Messrs. Washow, Castagna, McKendrick and Morrison entered into
employment agreements with AMCOL, effective March 15, 2002. The initial
employment term under each agreement is three years, with a rolling six-month
extension (unless either party gives notice of expiration six months prior to
the extension). Each agreement provides a specified annual salary, a specified
target annual bonus, certain payments in the event of termination that is not a
result of a change of control, and a non-competition / non-solicitation covenant
effective during employment and for one year thereafter.
If one of these officers is terminated without cause or for good reason,
which includes termination at the officer's election for a 30 day period
commencing six months after a Change of Control, he is entitled to receive: (1)
his earned but unpaid salary and bonus; (2) a pro-rata annualized bonus; (3) a
lump sum equal to three times (in the case of Washow and Castagna) or two times
(in the case of McKendrick and Morrison) the sum of his base salary and
annualized bonus; (4) continued benefits for three years (in the case of Washow
and Castagna) or two years (in the case of McKendrick and Morrison) or cash in
lieu thereof; and (5) a lump sum of any amount then payable to him pursuant to
the tax gross-up payment. In the event of termination of one of these officers
for death or disability within seven months after a Change of Control, the
officer's beneficiaries are entitled to receive the above compensation and
benefits except that the continued benefits (or cash in lieu thereof) described
in (4) above are limited to welfare benefits.
Each agreement also provides that if a Change of Control occurs, all
outstanding stock options,
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restricted stock and other equity compensation granted to the officer become
fully vested and exercisable.
A Change of Control is defined as any one or more of the following: (1) any
person (other than a Subsidiary, any employee benefit plan (or any related
trust) of the Company or any of its Subsidiaries or any Excluded Person)
acquiring 50.1% or more of the Company's common stock; (2) whenever the
Incumbent Directors cease to constitute at least one-half of the directors of
the Company then serving; (3) immediately prior to the consummation of a merger
or similar transaction for the sale of all, or substantially all of, the assets
of the Company (in the case of McKendrick and Morrison) or a sale of 50.1% of
assets of the Company (in the case of Washow and Castagna); (4) shareholder
approval of a plan of liquidation; and (5) a sale of all of the stock or assets
of a subsidiary where being president of the subsidiary is the officer's primary
responsibility.
Board Committee Membership Roster and Meetings
--------------------------------------------------------------------------------------
Name Audit Compensation Executive Nominating
--------------------------------------------------------------------------------------
Arthur Brown X* X
--------------------------------------------------------------------------------------
Robert E. Driscoll III X X
--------------------------------------------------------------------------------------
John Hughes X X
--------------------------------------------------------------------------------------
Jay D. Proops X* X X
--------------------------------------------------------------------------------------
C. Eugene Ray X X X* X*
--------------------------------------------------------------------------------------
Clarence O. Redman X X
--------------------------------------------------------------------------------------
Dale E. Stahl X X X X
--------------------------------------------------------------------------------------
Lawrence E. Washow X
--------------------------------------------------------------------------------------
Audrey L. Weaver X
--------------------------------------------------------------------------------------
Paul C. Weaver X X
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Number of Meetings in 2001 5 4 4 0
--------------------------------------------------------------------------------------
* Chairperson.
The Board of Directors held four meetings during the 2001 fiscal year.
During the last year, all Directors attended at least 75% of the aggregate of
the total number of meetings of the Board of Directors and the total number of
meetings held by each committee of the Board on which such Directors served. The
mandatory retirement age for directors is 70.
The Audit Committee, comprised of independent, non-employee directors, is
responsible for reviewing the proposed audit program for each fiscal year, the
results of the audits and the adequacy of AMCOL's systems of internal accounting
control with AMCOL's financial management and its independent auditors. The
Committee recommends to the Board of Directors the appointment of the
independent auditors for each fiscal year. The Audit Committee charter is
attached to this Proxy Statement.
The Compensation Committee, comprised of non-employee directors, is
responsible for annually reviewing the salaries and bonuses of all executive
officers, and oversees AMCOL's compensation, incentive and employee benefit
programs. This Committee is also responsible for the selection of those
officers, directors and key employees who are eligible to receive stock options,
determines the number of options to be awarded and the period during which
options may be exercised under AMCOL's various
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option plans. Clarence O. Redman is a member of AMCOL's Compensation Committee
and, as such, participated in discussions where the compensation awarded to each
of the Named Officers was decided. Mr. Redman is of counsel to Lord, Bissell &
Brook, the principal law firm engaged by AMCOL.
The Nominating Committee is responsible for recommending to the Board
of Directors, at the request of the Board of Directors, nominees who are deemed
by the Committee to be qualified for Board of Directors' membership. The
Nominating Committee will not consider nominees recommended by shareholders of
AMCOL.
Director Compensation
-------------------------------------------------------------------------------------------
Type of Compensation Cash Stock Options
-------------------------------------------------------------------------------------------
Annual Retainer $14,700 2,000 shares
-------------------------------------------------------------------------------------------
Board Meeting Attendance Fee $ 1,470
-------------------------------------------------------------------------------------------
Annual Retainer for Committee Chairman $ 1,969
-------------------------------------------------------------------------------------------
Committee Meeting Attendance Fee $ 525
-------------------------------------------------------------------------------------------
Directors who are also full-time employees of AMCOL are not paid for
their services as directors or for attendance at meetings.
Pursuant to the 1998 Long-Term Incentive Plan, each of the non-employee
directors was granted 2,000 options at $5.00 per share in 2001.
-15-
Compensation Committee Report on Executive Compensation
AMCOL's mission is to supply high-quality performance products and
innovative technologies for mineral and environmental markets worldwide. To
accomplish this objective, AMCOL has developed comprehensive compensation
strategies that emphasize maximizing shareholder value and growth in sales and
earnings. The compensation program has been designed to reinforce and support
AMCOL's business goals and to help the organization both attract and retain high
quality executive talent.
The Compensation Committee of the Board of Directors is comprised of
seven non-employee directors whose objectives are to approve the design, assess
the effectiveness of and administer compensation programs in support of the
compensation policies. The Compensation Committee also evaluates executive
performance and reviews and approves all salary arrangements and other
remuneration for the officer group.
Compensation Committee Philosophy
The Compensation Committee is committed to implementing and
administering a compensation program that supports and underscores AMCOL's
mission and values. The policies underlying the Compensation Committee's
compensation decisions are enumerated more fully below:
Compensation opportunities should strengthen AMCOL's ability to
attract, retain, and encourage the growth and development of the
highest caliber executive talent upon whose efforts the success of
AMCOL largely depends.
A substantial portion of pay for senior executives should be comprised
of at-risk, variable compensation whose payout is dependent on the
achievement of specific corporate and individual performance
objectives. In addition, the at-risk components of pay will have a
significant equity-based element to ensure appropriate linkage between
executive behavior and shareholder interests.
The committee considers stock ownership by management to be an
important means of linking management's interests with those of
shareholders. Effective February 1999, AMCOL adopted stock ownership
guidelines for its corporate and subsidiary officers. The amount of
stock required to be owned increases with the level of responsibility
of each executive, with the Chief Executive Officer expected to own
stock with a value at least equal to four times base salary. Shares
that the executives have the right to acquire through the exercise of
stock options are not included in the calculation of stock ownership
for purposes of these guidelines. Executives are expected to reach
their respective stock ownership goals over a three-year period.
Each compensation component targets pay opportunities at the median of
compensation paid to executives included in AMCOL's comparative
compensation peer group. AMCOL's comparative compensation group is not
the same as the companies that make
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up the peer group in the stock price performance graph included in this
proxy statement. In order to provide an appropriate basis for
compensation analysis, a group larger than the stock price graph's peer
group was used; note, however, that a significant number of the peer
group companies are included in the comparative compensation group.
Components of Compensation
AMCOL's total compensation program consists of several components, each
of which plays a role in supporting overall business goals and pay philosophy.
In assessing the competitiveness of AMCOL's senior executive compensation
programs, available salary data consisting of general manufacturing companies is
used for comparison purposes. Pay decisions are based upon pay data for
comparable positions. The total compensation program consists of base salary,
annual incentives and long-term incentives.
Base Pay
Base salary targets are set at median levels (50th percentile) relative
to competitive market levels for comparable positions based upon available
survey data from AMCOL's comparative compensation group. The Compensation
Committee annually reviews each executive's base salary and makes adjustments
based upon levels of responsibility, breadth of knowledge, internal equity
issues, as well as market pay practices. Salary adjustments are based primarily
upon individual performance, which is evaluated based on individual
contributions to AMCOL.
In arriving at Mr. Washow's base salary, the Compensation Committee
considered his individual performance and his long-term contributions to the
financial success of AMCOL. The Committee also compared Mr. Washow's base salary
with the base salaries of chief executive officers from appropriate salary
surveys.
Annual Incentives
The Executive Incentive Compensation Plan, or the incentive plan,
underscores AMCOL's pay-for-performance philosophy by rewarding executives for
meaningful contributions toward predetermined financial performance goals. The
annual incentive opportunity for the Chief Executive Officer and Chief Financial
Officer is based upon performance of AMCOL, as a whole, compared to targets for
return on capital and earnings per share. These executives do not receive
bonuses until AMCOL achieves a return on capital and earnings per share, which
the committee deems appropriate. In the case of the other executives, their
bonuses are determined pursuant to formulas tailored for each business segment
with an emphasis on the return on capital and earnings of the particular
business segment to which the executive devotes the majority of his time. Mr.
Washow, as Chief Executive Officer, was paid a bonus of $394,801 for the 2001
financial performance of AMCOL.
Limitations on Payments
Code Section 162(m) denies a deduction to any publicly held corporation
for compensation paid to certain "covered employees" in a taxable year to the
extent that such compensation exceeds
-17-
$1,000,000. "Covered employees" are a corporation's chief executive officer on
the last day of the taxable year and any other individuals whose compensation is
required to be reported to shareholders under the Securities Exchange Act of
1934 by reason of being among the four most highly compensated officers (other
than the chief executive officer) for the taxable year and who are employed on
the last day of the taxable year. Compensation paid under some qualified
performance-based compensation arrangements, which (among other things) provide
for compensation based on pre-established performance goals established by a
compensation committee that is composed solely of two or more "outside
directors," is not considered in determining whether a "covered employee's"
compensation exceeds $1,000,000. To the extent that any bonus payments cause the
executive's total compensation to exceed $1,000,000 in any given year, the
excess will be deferred until a year when such amount can be deducted by the
Company.
Long-Term Incentives
Long-term incentives are provided annually in the form of incentive
stock options (ISOs). ISOs under AMCOL's 1998 Long-Term Incentive Plan are
granted by the Compensation Committee. ISOs are granted at a price not less than
the fair market value of the common stock on the date of grant. Hence, the
options will only have value when and if the stock price appreciates above the
grant date price. ISOs are the only long-term incentive compensation vehicle
currently used by AMCOL.
The option program serves to focus executives on long-term shareholder
value creation and foster an ownership mentality among the executive management
team. In keeping with AMCOL's commitment to provide a total compensation package
that focuses on at-risk pay components, long-term incentives will continue to
comprise a large portion of the value of an executive's total compensation
package. Currently, approximately 10 to 15 percent of the value of total
compensation is comprised of equity incentives.
When determining award sizes, the Compensation Committee considers the
executive's responsibility level, prior experience, historical award data and
ability to positively impact long-term shareholder value. The Compensation
Committee also strives to deliver market competitive long-term incentive award
opportunities to executives based on the dollar value of the award delivered.
In 2001, the Chief Executive Officer received options to purchase
31,500 shares with an exercise price of $5.00, as provided in the Option Grant
Table on Page 11. The Compensation Committee believes the equity incentive
program provides a strong link between management behavior and shareholder
interests.
Compensation Committee
----------------------
Jay D. Proops, Chairman
Arthur Brown
Robert E. Driscoll, III
C. Eugene Ray
Clarence O. Redman
Dale E. Stahl
Audrey L. Weaver
-18-
Report of the Audit Committee
The Audit Committee of AMCOL consists of four independent (as defined
by the rules of the New York Stock Exchange) directors and operates under a
written charter approved by the Audit Committee and adopted by the Board of
Directors. The members of the committee are Arthur Brown, Chairman, Robert E.
Driscoll, III, C. Eugene Ray and Dale E. Stahl. The Audit Committee recommends
the selection of the Company's independent accountants to the Board of
Directors.
Management is responsible for the Company's financial reporting process
including its system of internal control, and for the preparation of
consolidated financial statements in accordance with generally accepted
accounting principles. The Company's independent auditors are responsible for
auditing those financial statements. Our responsibility is to monitor and review
these processes. It is not our duty or our responsibility to conduct auditing or
accounting reviews or procedures. We are not employees of the Company and we may
not be, and we may not represent ourselves to be or to serve as, accountants or
auditors by profession or experts in the fields of accounting or auditing.
Therefore, we have relied, without independent verification, on management's
representation that the financial statements have been prepared with integrity
and objectivity and in conformity with accounting principles generally accepted
in the United States of America and on the representations of the independent
auditors included in their report on the Company's financial statements. Our
oversight does not provide us with an independent basis to determine that
management has maintained appropriate accounting and financial reporting
principles or policies, or appropriate internal controls and procedures designed
to assure compliance with accounting standards and applicable laws and
regulations. Furthermore, our considerations and discussions with management and
the independent auditors do not assure that the Company's financial statements
are presented in accordance with generally accepted accounting principles, that
the audit of our Company's financial statements has been carried out in
accordance with generally accepted auditing standards or that our Company's
independent accountants are in fact "independent."
Review with Management
The Audit Committee has reviewed and discussed the Company's audited
financial statements for the year ended December 31, 2001 with management.
Review and Discussions with Independent Accountants
The Audit Committee has discussed with KPMG LLP, the Company's
independent accountants, the matters required to be discussed by Statement on
Auditing Standards No. 61, "Communication with Audit Committees," which include,
among other items, matters related to the conduct of the audit of the Company's
financial statements.
-19-
The Audit Committee has also received the written disclosures from KPMG
LLP required by Independence Standards Board Standard No. 1, which relates to
the accountants' independence from the Company and its related entities, and has
discussed with KPMG LLP their independence from the Company.
Conclusion
Based on the review and discussions referred to above, the Audit
Committee recommended to the Company's Board of Directors that the Company's
audited financial statements be included in the Company's Annual Report on Form
10-K for the year ended December 31, 2001 filed with the Securities and Exchange
Commission.
Audit Committee
---------------
Arthur Brown, Chairman
Robert E. Driscoll, III
C. Eugene Ray
Dale E. Stahl
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INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of KPMG LLP served as AMCOL's independent auditors for the
fiscal year ended December 31, 2001. During fiscal year 2001, AMCOL retained
KPMG LLP to audit AMCOL's consolidated financial statements and benefit plans
and to perform certain other auditing and tax services. Fees paid to KPMG LLP
for these services were as follows:
Financial statement audit and quarterly review fees $ 170,443
All other fees $ 356,856(a)
(a) Other fees include amounts related to tax consultation in
connection with various transactions, statutory audits of certain
non-U.S. subsidiaries and audits of the financial statements of
AMCOL's benefit plans.
The Audit Committee has considered whether the provision of these
non-audit services by KPMG LLP is compatible with maintaining auditor
independence.
KPMG LLP did not render professional services relating to financial
information systems design and implementation for the year ended December 31,
2001.
A representative of KPMG LLP will be present at the annual meeting,
will be afforded the opportunity to make a statement, and will be available to
respond to appropriate questions.
-21-
Stock Performance Graph
The following graph sets forth a five-year comparison of cumulative
total returns for: (i) AMCOL (which trades on The New York Stock Exchange); (ii)
S&P SmallCap 600 Index; and (iii) a custom peer group of publicly traded
companies, or the peer group.
Using the assistance of consultants, AMCOL selected the peer group
which consists of companies whose businesses, sales sizes, market capitalization
and stock trading volumes were similar to that of AMCOL.
All returns were calculated assuming dividend reinvestment on a
quarterly basis. The returns of each company in the peer group have been
weighted according to market capitalization.
The peer group consists of the following companies: Calgon Carbon
Corporation, ChemFirst, Inc., Mississippi Chemical Corporation, Oil-Dri
Corporation of America and Zemex Corporation.
Comparison of Five-Year Cumulative Total Return (1)
AMCOL, S&P SmallCap 600 and Self-Determined Peer Group
[GRAPH]
. AMCOL International
[_] S&P SmallCap 600 Index
-- Custom Peer Group *
*The peer group consists of the following companies: Calgon Carbon Corporation,
ChemFirst, Inc., Mississippi Chemical Corporation, Oil-Dri Corporation of
America, and Zemex Corporation. Lilly Industries Inc. and McWhorter Technologies
stock are no longer actively traded and therefore have been excluded.
(1) Assumes $100 invested on December 31, 1996, in AMCOL International
Corporation Common Stock, S&P SmallCap 600 and Self-Determined Peer Group.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Clarence O. Redman is of counsel to Lord, Bissell & Brook, the
principal law firm engaged by AMCOL.
-22-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, AMCOL's directors, its
executive officers and any persons holding more than 10% of AMCOL's common stock
are required to report their initial ownership of AMCOL's common stock and any
subsequent changes in that ownership to the Securities and Exchange Commission.
Specific due dates for these reports have been established and AMCOL is required
to disclose in this proxy statement if a director or executive officer filed a
late report. No late reports were filed. In making these disclosures, AMCOL has
relied solely on written representations of its directors and executive officers
and copies of the reports that they have filed with the Commission.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be included in AMCOL's proxy
statement and form of proxy relating to, and to be presented at, the annual
meeting of shareholders of AMCOL to be held in 2003 must be received by AMCOL on
or before December 11, 2002.
If a shareholder intends to present a proposal at the 2003 annual
meeting of shareholders but does not seek inclusion of that proposal in AMCOL's
proxy statement for that meeting, such shareholder must deliver written notice
of the proposal to AMCOL in accordance with the requirements of AMCOL's By-Laws.
Generally, such proposals must be delivered to AMCOL between February 9, 2003
and March 11, 2003. All proposals or notices should be directed to the Secretary
of AMCOL at One North Arlington, 1500 West Shure Drive, Suite 500, Arlington
Heights, Illinois 60004-7803.
OTHER MATTERS
In addition to the business described above, there will be remarks by
the Chairman and the Chief Executive Officer and a general discussion period
during which shareholders will have an opportunity to ask questions about AMCOL.
As of the date of this proxy statement, AMCOL's management knows of no
matter not specifically referred to above as to which any action is expected to
be taken at the annual meeting. It is intended, however, that the persons named
as proxies will vote the proxies, insofar as they are not otherwise instructed,
regarding such other matters and the transaction of such other business as may
be properly brought before the meeting, as seems to them to be in the best
interest of AMCOL and its shareholders.
By Order of the Board of Directors,
Clarence O. Redman
Secretary
Arlington Heights, Illinois
April 9, 2002
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AMCOL INTERNATIONAL CORPORATION
Annual Meeting of Shareholders to be held on May 16, 2002
As a shareholder of AMCOL International Corporation (the "Company"), I
acknowledge receipt of Notice of Annual Meeting and accompanying Proxy Statement
and appoint John Hughes, Lawrence E. Washow and Paul C. Weaver, or any one of
them, to vote all shares of stock of AMCOL International Corporation that I am
entitled to vote, at the annual meeting of shareholders to be held on Thursday,
May 16, 2002, at 11:00 a.m., Central Daylight Savings Time, and at any
adjournment thereof, at Wyndham Hotel, 400 Park Boulevard, Itasca, Illinois,
60143.
1. The election of John Hughes, Clarence O. Redman, Lawrence E. Washow and
Audrey L. Weaver to three-year terms as Class I directors.
[_] FOR ALL NOMINEES EXCEPT NOMINEES [_] WITHHOLD AUTHORITY TO
NOMINEES WRITTEN BY THE VOTE FOR ALL NOMINEES
UNDERSIGNED BELOW
-------------------------------------------------------------------------
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN, AND IN THE
ABSENCE OF SUCH INSTRUCTIONS, SHALL BE VOTED FOR ALL OF THE NOMINEES FOR
DIRECTOR NAMED IN ITEM 1 AND FOR ITEM 2. IF OTHER BUSINESS IS PRESENTED AT THE
MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE
PROXIES ON THOSE MATTERS.
This Proxy Is Solicited on Behalf of the Board of Directors
You are urged to mark, sign and return your proxy promptly in the enclosed
self-addressed, postage-paid (if mailed in the United States) envelope.
Dated ________________, 2002
____________________________________________
SIGNATURE OF SHAREHOLDER
____________________________________________
SIGNATURE OF SHAREHOLDER
When signing the proxy, please date it and take care
to have the signature agree to the shareholder's name
as it appears on this side of the proxy. If shares
are registered in the names of two or more persons,
each person should sign. Executors, administrators,
trustees and guardians should so indicate when
signing.
VOTE BY TELEPHONE
Call Toll Free On a Touch Tone Telephone
1-800-PROXIES
There is NO CHARGE to you for this call.
The Board of Directors encourages you to use this inexpensive, time saving
method to vote.
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you call. Call Toll Free On a
Touch Tone Telephone. There is NO CHARGE to you for this call.
Option 1: To vote as the Board of Directors recommends on ALL proposals, press
1.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1-THANK YOU FOR
VOTING.
Option 2: If you choose to vote on each proposal separately, press 0. You will
hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; To WITHHOLD FOR ALL
nominees, press 9; and To WITHHOLD FOR AN INDIVIDUAL
nominee, press 0 and listen to the instructions.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1-THANK YOU FOR
VOTING.
If you vote by telephone, DO NOT mail back your proxy.
YOUR CONTROL NUMBER IS