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PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT
OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filing by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED
[X] Definitive Proxy Statement BY RULE 14C-5(D)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CALGON CARBON CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--Enter Company Name Here--
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Notes:
[LOGO OF CALGON CARBON CORPORATION]
CALGON CARBON CORPORATION P.O. BOX 717 PITTSBURGH, PA 15230-0717
(412) 787-6700 TELEX 671 1837 CCC PGH
PANAFAX: 412-787-6713
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of Calgon
Carbon Corporation at 1:00 p.m., Eastern Daylight Saving Time, on Tuesday,
April 23, 1996 at the principal executive office of the Company, 400 Calgon
Carbon Drive, Pittsburgh, Pennsylvania.
Information about the business of the meeting and the nominees for election as
directors is set forth in the notice of the meeting and the Proxy Statement,
which are attached. This year you are asked to elect four directors and to elect
independent auditors for 1996.
It is important that your shares be represented at the meeting. Even if you plan
to attend the meeting in person, we hope that you will send a proxy voting on
the matters to be considered. Please sign, date and return your proxy in the
enclosed envelope as promptly as possible.
Very truly yours,
/s/ Colin Bailey
Colin Bailey
President
March 22, 1996
CALGON CARBON CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Calgon Carbon Corporation will be held at
the principal executive office of the Company, 400 Calgon Carbon Drive,
Pittsburgh, Pennsylvania, on Tuesday, April 23, 1996 at 1:00 p.m., Eastern
Daylight Saving Time, for the following purposes:
(1) To elect four directors;
(2) To elect independent auditors to examine the consolidated financial
statements of the Company for 1996; and
(3) To transact such other business as may properly come before the
meeting.
Please refer to the accompanying Proxy Statement for a description of the
matters to be considered at the meeting.
Holders of record of the Company's Common Stock as of the close of business on
March 12, 1996 are entitled to notice of and to vote at the meeting.
Please sign, date and return the enclosed proxy promptly in the envelope
provided, which requires no United States postage.
Joseph A. Fischette
Secretary
March 22, 1996
CALGON CARBON CORPORATION
PROXY STATEMENT
TABLE OF CONTENTS
PAGE
Voting Securities and Record Date............................................................................ 1
Security Ownership of Certain Beneficial Owners and Management............................................... 1
Board of Directors and Committees of the Board............................................................... 2
Election of Directors........................................................................................ 4
Executive Compensation....................................................................................... 5
Election of Independent Auditors............................................................................. 12
Vote Required................................................................................................ 12
Other Business............................................................................................... 13
Stockholder Proposals........................................................................................ 13
CALGON CARBON CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1996
The enclosed proxy is solicited on behalf of the Board of Directors of Calgon
Carbon Corporation (the "Company") for use at the Annual Meeting of
Stockholders to be held at 1:00 p.m., Eastern Daylight Saving Time, on Tuesday,
April 23, 1996 at the principal executive office of the Company, 400 Calgon
Carbon Drive, Pittsburgh Pennsylvania. The accompanying Notice of Annual
Meeting of Stockholders sets forth the purposes of the meeting.
The enclosed proxy may be revoked at any time before its exercise by giving
written notice of revocation to the Secretary of the Company. The shares
represented by proxies in the form solicited by the Board of Directors will be
voted at the meeting. If a choice is specified on the proxy with respect to a
matter to be voted upon, the shares represented by the proxy will be voted in
accordance with that specification. If no choice is specified, the shares will
be voted as stated below in this Proxy Statement.
It is expected that this Proxy Statement and the accompanying form of proxy will
first be mailed to stockholders on or about March 22, 1996. The Company's Annual
Report to Stockholders for 1995 is enclosed with this Proxy Statement but does
not form a part of the proxy soliciting material. The cost of soliciting proxies
will be borne by the Company. Following the original mailing of the proxy
soliciting material, regular employees of the Company may solicit proxies by
mail, telephone, telecopy, telegraph and personal interview. The Company may
also request brokerage houses and other nominees or fiduciaries to forward
copies of the proxy soliciting material and 1995 Annual Report to beneficial
owners of the stock held in their names, and the Company will reimburse them for
reasonable out-of-pocket expenses incurred in doing so.
VOTING SECURITIES AND RECORD DATE
Holders of the Company's Common Stock of record as of the close of business on
March 12, 1996 are entitled to receive notice of and to vote at the meeting. At
the record date, the Company had outstanding 40,418,860 shares of Common Stock,
the holders of which are entitled to one vote per share. The Company does not
have cumulative voting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the number of shares of Common Stock beneficially
owned by each director of the Company, by Joseph A. Fischette, John M. MacCrum
and Robert V. Carrubba, executive officers of the Company, by Clayton P.
Shannon, who has retired as an executive officer of the Company but who is named
in the summary compensation table, and by all directors and executive officers
of the Company as a group, as of the record date. Unless otherwise indicated in
the footnotes to the table, each person named and all directors and executive
officers as a group have sole voting power and sole investment power with
respect to the shares. Management of the Company does not know of any other
person who beneficially owned as of the record date more than five percent of
the Company's Common Stock. As used herein, "beneficial ownership" means the
sole or shared power to vote, or to direct the voting of, a security, or the
sole or shared investment power with respect to a security (i.e., the power to
dispose of, or to direct the disposition of, the security). A person is deemed
to have "beneficial ownership" of any security that the person has the right to
acquire within 60 days after the record date.
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NAME OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES OF CLASS
---------------- --------- --------
Colin Bailey 1,880,424 4.7%
Robert W. Cruickshank(2) 7,500 *
Arthur L. Goeschel(2) 2,000 *
Thomas A. McConomy(2) 4,850,980 12.0
Nick H. Prater(2) 2,000 *
Seth E. Schofield 2,000 *
Ronald R. Tisch 1,570,000 3.9
Harry H. Weil(1)(2) 5,100 *
Robert L. Yohe 1,000 *
Roger H. Zanitsch(2) 1,776,034 4.4
Clayton P. Shannon 200,676 *
Joseph A. Fischette(2)(3) 125,708 *
John M. MacCrum(1)(2)(3) 103,166 *
Robert V. Carrubba(2)(3) 36,273 *
All directors and executive officers
as a group (14 persons)(1)(2)(3) 10,362,185 25.6
- ---------
*Less than 1%.
(1) Includes 200 shares held by Mr. Weil's wife and 400 shares held by Mr.
MacCrum's wife, as to which beneficial ownership is disclaimed by Mr. Weil
and Mr. MacCrum.
(2) Includes (i) 1,500 shares in the case of each of Messrs. Cruickshank,
Goeschel and Weil, 1,000 shares in the case of Mr. Prater and 500 shares in
the case of each of Messrs. McConomy and Zanitsch, granted under the
Company's 1993 Non-Employee Directors' Stock Option Plan, (ii) 10,000
shares in the case of each of Messrs. Fischette, MacCrum and Carrubba,
granted under the Company's Stock Option Plan and (iii) 36,500 shares in
the case of all directors and executive officers as a group, in each case
covered by presently exercisable options granted under the aforementioned
plans. The "percent of class" set forth above for any individual and the
group (but not for the other individuals listed above) is computed as
though such shares optioned to such individual or the group, as the case
may be, were outstanding.
(3) Includes 9,708, 7,366, 7,794 and 24,868 shares in the case of Messrs.
Fischette, MacCrum and Carrubba, and all directors and executive officers
as a group, respectively, held under the Company's Employees Growth
Participation Plan and allocated to the accounts of such executive
officers. That plan was terminated in 1990.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The business of the Company is under general supervision of a Board of Directors
as provided by the laws of Delaware, the Company's state of incorporation. The
Board of Directors has established committees to assist it, consisting of the
Executive Committee, the Compensation Committee, the Audit Committee, the
Nominating Committee and the Pension Committee.
Executive Committee. The Executive Committee consists of Messrs. McConomy
(Chairman), Bailey, Goeschel, Prater and Weil. The Executive Committee, during
the intervals between meetings of the Board, may exercise all
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the powers and authority of the Board of Directors in the management of the
business and affairs of the Company.
Compensation Committee. The Compensation Committee consists of Messrs.
Cruickshank (Chairman), Goeschel and Prater. The Compensation Committee
determines the salaries payable to all executive officers. The Committee also
determines bonuses, if any, to be paid each year to officers and key employees.
The Committee also administers the Company's stock option plan and has the
authority to grant options thereunder.
Audit Committee. The Audit Committee consists of Messrs. Weil (Chairman) and
Cruickshank. The responsibilities of the Audit Committee are to (i) provide
assistance to the Board of Directors in fulfilling its statutory and fiduciary
responsibilities for examinations of the Company and in monitoring its
accounting and financial reporting practices; (ii) determine that the Company
has adequate administrative, operational and internal accounting controls and
that the Company is operating in accordance with its prescribed procedures and
codes of conduct; (iii) serve as an independent and objective party in the
review of the financial information presented by management for distribution to
stockholders and the general public; and (iv) provide direction and supervision
over the internal audit function and the independent accountants. One of the
functions of the Audit Committee is to recommend to the Board of Directors the
selection of independent accountants for the coming year.
Nominating Committee. The Nominating Committee consists of Messrs. Bailey
(Chairman), McConomy, Tisch and Zanitsch. The Nominating Committee reviews the
size and composition of the Board of Directors and makes recommendations with
respect to nominations for election or appointment of directors. The Nominating
Committee will consider nominees recommended by stockholders provided that
stockholders submit the names of nominees in writing to the Secretary of the
Company together with a statement of the nominees' qualifications. Such
information should be received no later than January 31, 1997 with respect to
nominations for election at the 1997 Annual Meeting of Stockholders.
Pension Committee. The Pension Committee consists of Messrs. Cruickshank and
Prater (Co-Chairmen), Tisch and Zanitsch. The Pension Committee reviews and
approves the investments of the Company's defined benefit pension plans and
interacts with the investment manager for such plans.
During 1995, the Executive Committee held one meeting, the Compensation
Committee held six meetings, the Audit Committee held three meetings, the
Nominating Committee held three meetings and the Pension Committee held one
meeting. The Board of Directors held nine meetings during 1995.
COMPENSATION OF DIRECTORS
Board and Committee Fees. Directors who are full-time employees of the Company
or a subsidiary receive no additional compensation for services as a member of
the Board or any committee of the Board. Directors (other than the Chairman) who
are not employees of the Company receive an annual retainer of $15,000 (prior to
October 17, 1995), and thereafter $18,000, and the Chairman receives an annual
retainer of $100,000 (prior to October 17, 1995) and thereafter $40,000, for
Board service. Non-employee Directors also receive a fee of $900 (prior to
October 17, 1995), and thereafter $1,500, for each Board and committee meeting
attended, and the Chairmen of each committee receive an additional $3,000 for
each committee meeting attended. No committee meeting fees are paid for
committee meetings held by telephone or on the same day as a Board meeting.
1993 Non-employee Directors' Stock Option Plan. The 1993 Non-employee Directors'
Stock Option Plan provides for an annual grant of non-statutory stock options to
each non-employee Director in an amount equal to the sum of 500 plus 100 times
the number of calendar years during which, as of April 1 of such year, such
person was a non-employee Director of the Company. The option price for each
stock option is $15.50, the fair market value of the Common Stock on April 21,
1993, the date of the first grant. In general, stock options will vest if the
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"income from operations" of the Company for the fiscal year in which such
options were granted is greater than that of the prior fiscal year; otherwise
such stock options will be forfeited.
ELECTION OF DIRECTORS
The Board of Directors, acting pursuant to the bylaws of the Company, has
determined that the number of directors constituting the full Board of Directors
shall be ten at the present time. The Board is divided into three classes of
nearly equal size. One such class is elected every year at the Annual Meeting
for a term of three years.
The Board of Directors has, upon recommendation of the Nominating Committee,
nominated Nick H. Prater, Seth E. Schofield, Harry H. Weil and Robert L. Yohe
for reelection as directors, and each of them has agreed to serve if elected.
Each director elected at the 1996 Annual Meeting of Stockholders will hold
office until the 1999 Annual Meeting of Stockholders or until the director's
prior death, disability, resignation or removal. Proxies are solicited in favor
of those nominees and will be voted for them unless otherwise specified. Mr.
Weil has served as a director since the formation of the Company in 1985, Mr.
Prater has served as a director since August 1990, and Messrs. Schofield and
Yohe were elected to serve as directors in December, 1995. If any nominee
becomes unable or unwilling to serve as a director, it is intended that the
proxies will be voted for the election of such other person, if any, as shall be
designated by the Board of Directors.
Information concerning those nominees for director and the other directors who
will continue in office after the meeting is set forth below, together with
information concerning the Company's executive officers who are not directors.
NAME AGE POSITION WITH THE COMPANY
Class of 1999
Nick H. Prater 67 Director
Seth E. Schofield 56 Director
Harry H. Weil 62 Director
Robert L. Yohe 59 Director
Class of 1997
Colin Bailey 49 President, Director
Ronald R. Tisch 54 Executive Vice President, Director
Roger H. Zanitsch 52 Director
Class of 1998
Robert W. Cruickshank 50 Director
Arthur L. Goeschel 74 Director
Thomas A. McConomy 62 Director
Executive Officers
R. Scott Keefer 48 Senior Vice President--Finance
Joseph A. Fischette 49 Senior Vice President, General
Counsel and Secretary
John M. MacCrum 48 Senior Vice President
Robert V. Carrubba 59 Vice President
Messrs. Bailey and Tisch have been directors and executive officers of the
Company since its formation in 1985. Effective October 1, 1995 Clayton P.
Shannon retired as Senior Vice President--Finance of the Company. R. Scott
Keefer was hired in that position on August 15, 1995. Prior thereto Mr. Keefer
was Vice President, Finance and Chief Financial Officer of Quaker State
Corporation. Mr. Fischette has been an executive officer of
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the Company, and Dr. Carrubba and Mr. MacCrum have been key employees or
executive officers of the Company, since 1985.
Mr. McConomy has been a director of the Company since its formation in 1985. He
retired as President effective July 1, 1994 but remains Chairman of the Board.
Mr. McConomy is also a director of PNC Bank, N.A. and Equitable Resources, Inc.
Mr. Cruickshank has been a director of the Company since November 1985. In 1994
Mr. Cruickshank became President of R.W. Cruickshank & Co. Prior thereto he was
Chairman of the Board of Wiltek, Inc. and a private investor for more than the
past five years. He is also a director of New Canaan Bank & Trust Company,
Friedmans, Inc. and Data Documents, Inc.
Mr. Goeschel has been a director of the Company since its formation in 1985. In
1992, Mr. Goeschel, previously retired, became Chairman of the Board of Rexene
Corporation, a manufacturer of polypropylene and other thermoplastic and
petrochemical products. He also was Chairman of the Board of Tetra Technologies,
Inc., which manufactures water treatment equipment, from 1992 until October
1993. Mr. Goeschel is also a director of the Dreyfus-Laurel Mutual Funds and
National Picture Frame.
Mr. Prater has been a director of the Company since August 1990. Until June
1990, when he retired, Mr. Prater was President and Chief Executive Officer of
Mobay Corporation (now called Bayer Corporation), a chemical producer. He is
also a director of Harsco, Inc.
Mr. Schofield was elected to serve as a director of the Company in December
1995. From June 1992 until January 1996, when he retired, Mr. Schofield was
Chairman and Chief Executive Officer of USAir Group, a major air carrier. From
June 1991 until May 1992 he was President and Chief Executive Officer of USAir
Group. Prior thereto he was President and Chief Operating Officer of USAir
Group. Mr. Schofield is also a director of PNC Bank, N.A., USX Corporation and
Erie Indemnity Company.
Mr. Weil has been a director of the Company since its formation in 1985. Mr.
Weil is a partner in the law firm of Reed Smith Shaw & McClay, which provides
legal services to the Company. Mr. Weil is also a director of Erie Indemnity
Company.
Mr. Yohe was elected to serve as a director of the Company in December 1995.
Until March 1994, when he retired, Mr. Yohe was Vice Chairman of Olin
Corporation, a producer of chemicals, microelectronic materials, metals,
sporting ammunition and defense and aerospace products. Prior thereto he was
Executive Vice President of Olin Corporation. Mr. Yohe is also a director of
Airgas, Inc. and Betz Laboratories, Inc.
Mr. Zanitsch has been a director of the Company since its formation in 1985. He
retired as Senior Vice President on December 31, 1994. On November 9, 1994, Mr.
Zanitsch and Company entered into a consulting agreement providing that Mr.
Zanitsch would act as a consultant to the Company for a minimum of one year,
beginning January 1, 1995, for a fee of $60,000 per year. The consulting
agreement with Mr. Zanitsch will terminate on March 31, 1996.
EXECUTIVE COMPENSATION
In 1985 the Board of Directors created a Compensation Committee, consisting of
at least three directors who are not employees of the Company. One of the
functions of the Compensation Committee is to review at least annually, and more
often if circumstances make an interim review appropriate, the compensation of
the Company's executive officers and the plans or formulas from which such
compensation is derived. The Compensation Committee then makes recommendations
to the full Board of Directors as to such matters (except for the grant of
options under the Company's Stock Option Plan, which is done by the Committee
alone so that the grants will satisfy Rule 16b-3 under Securities Exchange Act
of 1934).
5
Set forth below is the report of the members of the Compensation Committee,
Messrs. Cruickshank (Chairman), Goeschel and Prater, as to the Committee's
recommendations for the compensation of the Company's executive officers
applicable to 1995.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General policies with respect to executive compensation
and the relationship between compensation and performance
---------------------------------------------------------
The Compensation Committee's policies with respect to executive compensation are
intended to achieve three principal goals. First, they are intended to create
base compensation levels sufficient to attract and retain talented and dedicated
executive officers. To accomplish this, the Committee compares the Company's
base salary levels with those currently being paid for similar positions by
other companies. The Committee also reviews the total compensation package
available to executive officers, to make sure it remains competitive.
Second, the compensation policies are intended to provide a direct link between
performance during the year (both the performance of the Company as a whole and
the performance of the individual officer) and a significant part of the
officer's compensation. This is done through cash bonuses available to executive
officers based on the Company's performance as a whole and the officer's
performance as an individual. These bonuses have ranged from a high of 100% of
salary to a low of zero.
Third, the compensation policies are intended to provide executive officers with
the opportunity to acquire a significant equity stake in the Company, through
granting them stock options at full market prices and with delayed vesting
provisions. These options will become and remain important assets if, and only
if, the market price of the Common Stock increases over the period of the
options. Short-term price fluctuations up and down will not be as important to
optionees as long-term growth. In this respect, therefore, the interests of the
executive officers will be aligned directly with the interests of the
stockholders in increasing stockholder value.
Compensation policies applied to executive officers in 1995
-----------------------------------------------------------
The Company's executive officers are Messrs. Bailey, Tisch, Keefer, Fischette,
MacCrum and Carrubba. Mr. Shannon retired as Senior Vice President of Finance on
October 1, 1995. Mr. Keefer was hired to fill that position on August 15, 1995.
The compensation of the Company's executive officers has three main components:
base salary, bonus, and stock options.
Salary. Base salaries for the executive officers are designed to be at levels at
or slightly lower than those of executive officers of comparable companies under
the so-called "Hay point" system. This system was designed some years ago by The
Hay Group, Inc., an independent salary consulting firm, and it has been adopted
in various forms by many companies. The Hay Group provides a comparison to the
Company's compensation with all companies participating in the Hay system, and
with those companies in the Company's same industry sector. Under this system, a
certain number of "Hay points" is assigned to each executive position, depending
on factors such as the relative importance of the executive's functions to the
overall results of the Company, the number of employees reporting to the
executive, the levels of supervision, if any, over the executive and similar
factors. Once established, the number of Hay points applicable to a particular
position is unlikely to change unless there is a significant change in the
duties and responsibilities associated with that position.
In associating particular levels of salary with particular numbers of Hay
points, the Compensation Committee is guided primarily by information from The
Hay Group, Inc. and other sources as to competitive salaries. The other
companies compared with the Company for this purpose are selected by The Hay
Group, Inc., not by the Company, and are not necessarily the same as those used
for the Performance Graph in the Proxy Statement. The Committee also considers
the present and projected cash position of the Company, and the availability to
the
6
executive officers of additional forms of compensation described below. This
consideration is done at the Committee's discretion and not on any formula or
objective basis. The Committee's general philosophy is that salary levels for
the Company's executive officers should be somewhat less than the median
salaries paid by other companies for comparable positions, so that the overall
compensation of an executive officer in a particular year will be more heavily
weighted toward incentive compensation, such as bonus and stock options, than
toward a fixed salary. In this way, the executive officer's compensation will
vary from year to year and will be strongly influenced by the results achieved
by the Company.
Bonus. The Officers Incentive Plan provides a bonus pool from which cash bonuses
may be granted to executive officers. The total amount of bonuses that may be
awarded under the plan (the "bonus pool") cannot exceed 100% of the annualized
salaries of all the participants, measured at year-end, and the maximum bonus
for any individual officer is 100% of the officer's salary. The 100% level for
the bonus pool is available if the Company meets certain performance targets, as
described below, and if the Committee chooses not to apply a discount factor,
which can be as much as 15%. The failure to meet performance targets reduces the
available bonus pool. Although the Committee has traditionally recommended
bonuses equal to the amounts calculated on an objective basis under the plan, it
retains the discretion under the plan to reduce or to eliminate bonuses.
The plan provides for three factors in determining the officers' bonus payments.
First, there is a "return on assets" performance target, which is the average of
the actual return on assets for the five years prior to the award year; second,
there is an "earnings per share" performance target, set by the Board of
Directors at the beginning of the year; and third, the individual officer's
performance for the plan year is assessed by the Committee. The performance
factors of return on assets and earnings per share are weighted 40% each, and
the individual officer's performance is weighted 20%. The Company surpassed its
target for earnings per share and achieved 74% of its target for return on
assets; this, coupled with the individual performance factors of the officers
taken collectively, resulted in an award pool of 58% of the maximum available
award pool. Each officer's bonus was then calculated based upon his individual
performance rating.
Stock options. Under the terms of the Company's Stock Option Plan adopted in
1985, the Compensation Committee alone determines that identity of the
optionees, the number of shares to be covered by each option, the years in which
the options will become vested, and other terms and conditions of the options.
In determining whether to grant any options, the Committee takes into account
the number of options already outstanding, the market price of the Company's
Common Stock, the results achieved by the Company in the past year or more (such
as earnings, cash flow, return on equity and other measures), and its prospects
during the next several years. Potential dilution resulting from the exercise of
options in the future is considered, as is the desirability of more closely
linking the rewards of the optionees to increases in the market price of the
stock. These matters are at the discretion of the Committee, and are not
determined by any formula or weighting of particular factors. The Committee
believes that such a link provides an additional incentive to achieve results
which are valued by the market, and which thus may benefit stockholders through
an increased market price.
In determining whether to grant options to a particular individual, the
Committee considers, again in its discretion, the level of responsibility of the
individual within the Company, the effect which successful efforts by the
individual may have on the overall results of the Company, the need to provide
incentive compensation comparable to that available from other companies which
may compete for the individual's services, and the number of unexercised options
and shares of the Company's Common Stock already held by the individual. In view
of the fact that many of the executive officers have substantial holdings of
Common Stock, the Committee in general has granted less stock options to its
executive officers than those in its comparative group.
At its meeting in early 1995, the Committee granted stock options for 50,000
shares to each of R.V. Carrubba, J.A. Fischette, J.M. MacCrum and C.P. Shannon.
7
The Committee may consider a number of factors in determining whether to grant
stock options relating to past, present or future events. Notwithstanding this
flexibility, in the case of the grant of the 1995 options, the Committee
intended solely to link the options to the occurrence of future events, and not
to reward any past performance of any individual officers or the officers as a
whole. The Committee reasoned that the Company's past performance did not
necessarily merit the option awards, but that the options would provide a strong
incentive toward improving future performance. This is evidenced by the fact
that the options which were granted were at the then market price and are
exercisable in 20% increments over a five-year period commencing February 16,
1996. The options will terminate on December 31, 2003.
Mr. Keefer was granted stock options to purchase 60,000 shares under the
Company's Stock Option Plan pursuant to his employment with the Company. The
options were granted under the same theory as those of the other officers in
1995, evidenced by the fact the options were at the then market price and are
exercisable over a three-year period commencing on August 15, 1996. Due to his
already large stock holdings, Mr. Tisch was not granted stock options.
The Stock Option Plan makes stock appreciation rights, payable in cash,
available for grant, but the Compensation Committee has not granted any.
Compensation of the Chief Executive Officer in 1995
---------------------------------------------------
The methods used by the Compensation Committee in fixing Mr. Bailey's
compensation for 1995 were the same as those described above for other executive
officers. As the chief executive officer of the Company, all other officers of
the Company report to him, and he is responsible, directly or indirectly, for
all of the operations and business of the Company. Consequently, Mr. Bailey has
a substantially larger number of "Hay points" assigned to him than any other
officer, and in his case the Committee is typically guided primarily by the
overall results of the Company, and less by efforts expended or achievements at
particular tasks or in particular areas.
Mr. Bailey's salary was not changed in 1995. As is the case for all executive
officers of the Company, Mr. Bailey's base salary is at a level with or slightly
lower than that of executive officers of comparable companies.
Mr. Bailey qualified for a bonus under the Officers Incentive Plan upon the same
factors as are discussed above in connection with such plan.
In view of Mr. Bailey's substantial holdings of Company Common Stock and his
position with the Company, the Committee did not grant him any stock options
under the Stock Option Plan in 1995.
ROBERT W. CRUICKSHANK
ARTHUR L. GOESCHEL
NICK H. PRATER
8
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1)
- --------------------------- ---- ---------- --------- -------------------
Colin Bailey 1995 324,996 176,776 504
Director, President 1994 278,898 0 0
and Chief Executive Officer 1993 232,800 0 0
Ronald R. Tisch 1995 194,400 105,769 823
Director and Executive 1994 176,700 26,432 497
Vice President 1993 166,320 0 201
John M. MacCrum 1995 144,252 80,141 65
Senior Vice President 1994 131,372 21,235 0
1993 111,996 0 0
Joseph A. Fischette 1995 140,880 78,227 59
Senior Vice President, 1994 132,180 20,730 0
General Counsel and Secretary 1993 120,792 0 0
Robert V. Carrubba 1995 120,559 64,252 714
Vice President 1994 112,320 13,966 658
1993 106,320 0 600
C. P. Shannon(2) 1995 134,128 66,477 72
1994 162,960 22,156 2,927
1993 150,900 0 553
- ---------
(1) Consists only of premiums paid by the Company on term life insurance
policies on the lives of the named individuals.
(2) Mr. Shannon retired from the Company effective October 1, 1995.
9
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATE OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION --------------------
NAME GRANTED (POUND) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---- --------------- ------------ ----------- ---------- ------ -------
Colin Bailey 0 0% $0 0 $0 $0
Ronald R. Tisch 0 0 0 0 0 0
Joseph A. Fischette 50,000 7.1 10.50 12/31/03 284,454 698,432
John M. MacCrum 50,000 7.1 10.50 12/31/03 284,454 698,432
Robert V. Carrubba 50,000 7.1 10.50 12/31/03 284,454 698,432
Clayton P. Shannon(1) 50,000 7.1 10.50 12/31/03 284,454 698,432
(1) Mr. Shannon's options expired unexercised upon his retirement on October 1,
1995.
EMPLOYMENT AGREEMENTS
All the executive officers of the Company have entered into employment
agreements with the Company. The agreements generally provide, subject to
certain termination provisions, for continued employment of the officers through
December 31, 1996, with automatic one year renewals, unless six months' prior
notice is provided. The agreements provide for a base salary and bonus
compensation as determined by the Company. The agreements contain change in
control provisions pursuant to which, if a change in control (as defined in the
agreements) occurs, (i) the term of the employment agreement is extended to the
last day of the second full calendar year after the change in control, (ii) the
employee may only be discharged for cause, and not based solely on the
performance of such employee, and (iii) the employee is permitted to terminate
employment on a date which is within the period beginning on the first
anniversary of such change in control and ending on the second anniversary. If
the employment of an employee is terminated by the Company for cause or based on
performance, or the agreement expires by its terms, no severance is payable to
an employee. However, if an employee is otherwise terminated or an employee
terminates his or her employment as provided in (iii) above, the Company is
required to pay severance compensation to the employee for 36 months (or, if
earlier, until the employee is employed by another employer for compensation at
least equal to 90% of his prior compensation) equal to his or her monthly
compensation (including salary but not bonuses) for the calendar year
immediately prior to termination. In addition, for such period the employee will
receive equivalent benefits as were provided at the time of termination. The
agreements also contain confidentiality and non-compete provisions.
10
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG CALGON CARBON'S COMMON STOCK, S&P 500 COMPOSITE INDEX
AND S&P CHEMICALS-SPECIALTY COMPOSITE INDEX
Measurement period CALGON CARBON S&P 500 S&P CHEMICAL
(Fiscal year Covered) CORPORATION Index Index
- --------------------- ------------- ------- ------------
Measurement PT -
12/31/90 $100 $100 $100
FYE 12/31/91 $99.54 $130.47 $141.17
FYE 12/31/92 $82.81 $140.41 $149.56
FYE 12/31/93 $61.83 $154.56 $170.53
FYE 12/31/94 $48.21 $156.60 $148.87
FYE 12/31/95 $62.19 $215.45 $195.67
*Assumes that the value of the investment in Calgon Carbon Common Stock
and each index was $100 on December 31, 1990 and that all
dividends were reinvested.
PENSION BENEFITS
The Company's Retirement Plan for Salaried Employees is a non-contributory
defined benefit pension plan. In addition, the Company has a Supplemental
Retirement Plan, which is applicable to certain employees selected by the Board
of Directors, designed to supplement retirement benefits under the Retirement
Plan for Salaried Employees which have been limited by various Internal Revenue
Code provisions. At present no executive officers participate in such
Supplemental Retirement Plan. The following table shows the estimated annual
pension benefits which would be payable under the above-stated plans in the form
of a single life annuity, for various levels of average annual compensation and
years of service, based upon retirement at age 65 in the calendar year 1995,
before any reduction to take account of benefits payable by the Company's former
owner, Merck & Co., Inc. (by agreement with Merck, benefits payable under
Company plans are reduced by the benefit amounts payable to the individual by
Merck, which are computed utilizing a 2.5% compensation increase assumption).
11
AVERAGE ANNUAL
COMPENSATION FOR HIGHEST
FIVE CONSECUTIVE YEARS ANNUAL BENEFITS FOR YEARS OF SERVICE (1)
IN 10-YEAR PERIOD --------------------------------------------------------
PRECEDING RETIREMENT 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ----------------------- -------- -------- -------- -------- --------
$150,000 $ 32,925 $ 43,900 $ 54,875 $ 65,850 $ 76,825
200,000 44,550 59,400 74,250 89,100 103,950
250,000 56,175 74,900 93,625 112,350 131,075
300,000 67,800 90,400 113,000 135,600 158,200
350,000 79,425 105,900 132,375 158,850 185,325
400,000 91,050 121,400 151,750 182,100 212,450
450,000 102,675 136,900 171,125 205,350 239,575
500,000 114,300 152,400 190,500 228,600 266,700
(1) Under Section 415 of the Internal Revenue Code of 1986, the amount of
annual benefits which may be paid under the Retirement Plan for Salaried
Employees to any employee may not exceed $120,000 during 1995 and 1996 and
under Section 401(a)(17) of the Code the amount of annual compensation of
each employee taken into account under such plan for any year may not
exceed $150,000 during 1995 and 1996. These limitations have not been
reflected in the table.
Other than the reduction with respect to Merck benefits discussed above, the
benefits payable under the plans are not subject to any deduction for Social
Security or other offset amounts. Covered compensation for purposes of the chart
above includes salary and incentive awards which are reported in the "bonus"
column of the summary compensation table. As of December 31, 1995, Messrs.
Bailey, Fischette, Shannon, Tisch, MacCrum and Carrubba had 8, 16, 10, 17, 26
and 16 years of service, respectively, under the plans. Mr. Bailey is also
covered by a pension plan applicable to certain of the Company's foreign
employees with respect to his years of service in the Company's Belgian and
other European operations. Pursuant to the formula used to calculate the
benefits payable to Mr. Bailey for such service he is entitled to an annual
amount upon retirement equal to the greater of (a) .5% of his average
compensation up to the parallel average Belgian state pension ceiling, plus 1.5%
of such compensation in excess of this ceiling, for the period he was covered by
the plan, and (b) two times Mr. Bailey's own contributions to the plan plus
interest at 4% per year. In Mr. Bailey's case the latter calculation would
apply. Upon Mr. Bailey's retirement at age 65 he would be entitled to payment of
an estimated annual pension benefit of approximately $10,000 (based upon
conversion of Belgian francs to U.S. dollars at the exchange rates in effect at
the end of 1994) under such plan.
ELECTION OF INDEPENDENT AUDITORS
The Board of Directors, following recommendation of the Audit Committee, has
nominated the independent public accounting firm of Price Waterhouse LLP as the
independent auditors to examine the consolidated financial statements of the
Company for 1996. The proxies solicited on behalf of the Board of Directors will
be voted for that firm unless otherwise specified.
Price Waterhouse LLP has served as the independent auditors for the Company
since its formation in 1985. Representatives of Price Waterhouse LLP are
expected to be present at the Annual Meeting. They will have the opportunity to
make statements if they desire to do so and will be available to respond to
appropriate questions.
VOTE REQUIRED
The four nominees for election as directors at the Annual Meeting who receive
the greatest number of votes cast for the election of directors at that meeting
by the holders of the Company's Common Stock, present in person or represented
by proxy at the meeting and entitled to vote at that meeting, a quorum being
present, shall become
12
directors at the conclusion of the tabulation of votes. The affirmative vote of
the holders of a majority of the votes cast of the Company's Common Stock,
present in person or represented by proxy at the meeting and entitled to vote at
that meeting, a quorum being present, is necessary to approve the actions
proposed in item 2 of the accompanying Notice of 1996 Annual Meeting of
Stockholders. Under Delaware law and the Company's Restated Certificate of
Incorporation and By-laws, the total number of votes cast "for" or "against"
will be counted for purposes of determining the minimum number of affirmative
votes required for approval of item 2 and the total number of votes cast "for"
any of these matters will be counted for purposes of determining whether
sufficient affirmative votes have been cast. An abstention from voting on a
matter by a shareholder present in person or represented by proxy at the meeting
or any broker non-vote shall not be counted in such voting.
OTHER BUSINESS
The Board of Directors does not know of any other business to be presented to
the Annual Meeting of Stockholders. If any other matters properly come before
the meeting, however, the persons named in the enclosed form of proxy will vote
the proxy in accordance with their best judgment.
STOCKHOLDER PROPOSALS
If any stockholder wishes to present a proposal to be acted upon at the 1997
Annual Meeting of Stockholders, the proposal must be received by the Secretary
of the Company by November 22, 1996 to be considered for inclusion in the
Company's Proxy Statement and form of proxy relating to the 1997 Annual Meeting.
The 1997 Annual Meeting is tentatively scheduled for April 22, 1997.
Joseph A. Fischette
Secretary
March 22, 1996
13
CALGON CARBON CORPORATION
Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting of the Stockholders April 23, 1996
Colin Bailey and Joseph A. Fischette, or either of them, are hereby
appointed proxies for the undersigned, with full power of substitution,
P to vote all the shares of Common Stock of Calgon Carbon Corporation
R (the "Company") which the undersigned may be entitled to vote, at the
O Annual Meeting of Stockholders of the Company scheduled for April 23,
X 1996, and at any adjournment thereof, as directed on the reverse side of
Y this proxy card and, in their discretion, on any other matters which may
properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS and will be
voted as specified on the reverse side hereof. If not specified, the
shares represented by this proxy will be voted FOR proposals 1 and 2.
Please mark, sign and date this proxy card on the reverse side hereof
and return it in the enclosed envelope.
[SEE REVERSE]
[ SIDE ]
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
ANNUAL MEETING OF STOCKHOLDERS
OF
CALGON CARBON CORPORATION
APRIL 23, 1996
1:00 P.M.
COMPANY'S OFFICE
400 CALGON CARBON DRIVE
PITTSBURGH, PENNSYLVANIA
PLEASE MARK YOUR
[X] VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF
DIRECTORS AND FOR PROPOSAL 2.
______________________________________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
______________________________________________________________________________
FOR WITHHELD
1. Election of [ ] [ ] Nominees: Nick H. Prater
Directors Seth E. Schofield
Harry H. Weil
Robert L. Yohe
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Election of Price Waterhouse LLP [ ] [ ] [ ]
as auditors for 1996.
YES NO
3. I plan to attend the annual [ ] [ ]
meeting.
SIGNATURE(S) DATE
---------------------------------- ------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
CALGON CARBON CORPORATION
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE.