SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<Table>
[ ] 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-11c or Section 240.14a-12
</Table>
ANTHONY & SYLVAN POOLS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
PROXY STATEMENT
MARCH 29, 2002
GENERAL INFORMATION
This proxy statement is furnished to shareholders of Anthony & Sylvan Pools
Corporation (the "Company") on its behalf, by its Board of Directors, in
connection with its Annual Meeting of Shareholders (the "Annual Meeting") to be
held on Wednesday, May 1, 2002 at the Company's corporate offices at 6690 Beta
Drive, Suite 300, Mayfield Village, Ohio, at 10:00 a.m. EDT, or any adjournments
thereof, to elect four directors. This proxy statement was first mailed on March
29, 2002 to shareholders of record on March 20, 2002.
On March 20, 2002, there were 4,746,211 common shares outstanding. Each
shareholder of record as of that date is entitled to notice of the meeting and
to cast one vote per share held on all matters to come before the Annual
Meeting. The holders of a majority of the votes entitled to be cast present in
person or by proxy shall constitute a quorum for the purposes of the Annual
Meeting.
A form of proxy accompanies this statement which shareholders are urged to fill
in and return. The persons appointed by validly executed proxies will vote the
shares covered thereby according to the instructions endorsed thereon. Shares
covered by signed proxies otherwise unmarked or on which contradictory or
unclear instructions are given will be voted in accordance with the best
judgment of the persons appointed thereon.
The appointment of a proxy may be revoked at any time by providing notice to the
Company prior to the Annual Meeting or by appearing at the Annual Meeting to
vote in person.
NOMINATION AND ELECTION OF DIRECTORS
The number of directors of the Company is currently set at four. All directors
are to be elected at the Annual Meeting with their terms expiring with the
Company's annual meeting of shareholders to be held in 2003.
The Board of Directors has nominated Stuart D. Neidus, Mary Ann Jorgenson,
Thomas B. Waldin and Roger D. Blackwell to succeed themselves as incumbents.
They have all agreed to serve if elected.
The Regulations of the Company provide for the nomination of directors by
shareholders pursuant to a notice satisfying specified requirements, timely
given to the Secretary of the Company. No such notice has been received as of
the date hereof. The Company's Executive Committee will also consider
recommendations by shareholders for nomination as directors. Directors are
elected by a plurality of the votes represented at the meeting, either in person
or by proxy, and entitled to vote.
A brief biography of each of the nominees including their principal occupations,
ages at the date of this statement, a brief account of their business
experience, and the identity of certain companies of which they are or were
directors or with which they are or were associated appear in the following
section. Their beneficial ownership of common shares of the Company is contained
in the section headed "Beneficial Ownership of Shares."
NOMINEES AND DIRECTORS
STUART D. NEIDUS
AGE 51
Mr. Neidus has served as Chairperson of the Board of Directors and Chief
Executive Officer of the Company since September 1998. He is also a director of
PVF Capital Corp., a Federally insured savings bank. Mr. Neidus served as Chief
Financial Officer of the Company from September 1998 through April 1999. He also
served as Executive Vice President and Chief Financial Officer of Essef
Corporation (the former indirect parent of the Company) from September 1996 to
August 1999. Prior to that, from 1992 to 1996, Mr. Neidus served with Premier
Farnell plc, successor to Premier Industrial Corporation, most recently as
Executive Vice President. Prior to joining Premier Farnell plc, Mr. Neidus spent
19 years as an independent public accountant with KPMG LLP, including eight
years as a partner.
Mr. Neidus has served as a director since May 1997 and is a member of the
Executive Committee.
MARY ANN JORGENSON
AGE 61
Ms. Jorgenson is a partner and a member of the Management Committee in the law
firm of Squire, Sanders & Dempsey L.L.P. and has been associated with that firm
since 1975. She is a director of the general partner of Cedar Fair, L.P., the
owner of five regional amusement parks. She is also a director of Women's Golf
Unlimited, Inc., a manufacturer and distributor of golf clubs and bags, and a
director of Continental Business Enterprises, Inc., an Ohio-based metal stamping
company.
Ms. Jorgenson served as Secretary of the Company from May of 1997 to September
of 1999 and has been a director since September 1998. She is Chairperson of the
Compensation Committee and a member of the Audit and Executive Committees.
THOMAS B. WALDIN
AGE 59
Mr. Waldin was the President and Chief Executive Officer of Essef Corporation
from 1990 to August 1999. Since 1977 he has been active as an investor in and a
director of a number of small businesses. He retired in 1987 as Chief Operating
Officer of USG Interiors, Inc. and Chief Executive Officer of Donn, Inc. The
former is a unit of
2
USG Corporation, a worldwide manufacturer and distributor of building products,
created in connection with the acquisition of Donn, Inc. in 1986.
Mr. Waldin has served as a director since May 1997 and was Chairperson of the
Board of Directors from May 1997 until September 1998. He is Chairperson of the
Executive Committee and the Audit Committee and a member of the Compensation
Committee.
ROGER D. BLACKWELL
AGE 61
Mr. Blackwell is Professor of Marketing at The Ohio State University Fisher
College of Business and is also President and Chief Executive Officer of Roger
D. Blackwell Associates, Inc., a marketing consulting firm in Columbus, Ohio.
Mr. Blackwell is a director of Airnet Systems, Inc., Applied Industrial
Technologies, Inc., Bank Stock Group, The Flex-Funds, Max & Erma's Restaurants,
Inc., Intimate Brands, Inc. and Frontstep, Inc.
Mr. Blackwell has served as director since November 1999 and is a member of both
the Audit Committee and Compensation Committee.
DIRECTORS' COMMITTEES, MEETINGS AND FEES
At its meeting following the Annual Meeting of Shareholders, the Board of
Directors will appoint from among its membership an Audit Committee, a
Compensation Committee and an Executive Committee, which will serve until the
next annual meeting.
THE AUDIT COMMITTEE consists of three directors, none of whom is an officer or
employee of the Company or its subsidiaries. The committee consists of Mr.
Waldin, Chairperson, Mr. Blackwell and Ms. Jorgenson. The Audit Committee
receives the report of the Company's independent auditors, oversees the
preparation of the Company's financial statements and assesses the adequacy of
the Company's system of internal accounting controls, establishing policies and
guidelines in respect thereto. The Audit Committee met four times in 2001.
THE COMPENSATION COMMITTEE consists of three directors, none of whom is an
officer or employee of the Company or its subsidiaries. The committee consists
of Ms. Jorgenson, Chairperson, Mr. Blackwell and Mr. Waldin. The Compensation
Committee has authority to recommend, approve and, relating to specific mandate
from the Board of Directors, implement its recommendations on all matters
relating to direct and indirect compensation of officers and employees of the
Company and its subsidiaries. The Compensation Committee met twice in 2001.
THE EXECUTIVE COMMITTEE consists of three directors, one of whom, Mr. Neidus, is
an officer of the Company. The committee consists of Mr. Waldin, Chairperson,
Mr. Neidus and Ms. Jorgenson. The Executive Committee is empowered to exercise
all authority of the Board of Directors between meetings of that body, subject
to report, with the exception of the declaration of dividends, appointment or
election of officers and determination of their compensation, and the filling of
vacancies on the Board or any Committee. The Executive Committee did not meet in
2001.
THE BOARD OF DIRECTORS of the Company and its three committees held a total of
twelve meetings during 2001 of which six were meetings of the Board of
Directors. All of the directors attended five of the meetings of the Board of
Directors and all of the committees of which they were members.
Employee directors receive no compensation for their services as directors.
Non-employee directors each receive: (i) 2,000 nonqualified options to purchase
Company shares on the date the person first becomes a director; (ii) 1,000
nonqualified options to purchase Company shares at each annual meeting of
shareholders; and (iii) $25,000 per year in Company shares, credited at the end
of each month, in the form of deferred compensation.
3
EXECUTIVE COMPENSATION
The following table sets forth information relating to the annual and long-term
compensation for the fiscal years ended December 31, 2001, 2000 and 1999,
respectively, for the named executive officers of the Company.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------- ----------------------
OTHER
SALARY BONUS COMPENSATION(2)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) OPTIONS
- --------------------------- ---- ------- ------- --------------- ----------------------
Stuart D. Neidus, 2001 245,000 -- 22,518 --
Chairman & Chief 2000 229,000 201,990 22,023 --
Executive Officer 1999(1) 176,792 32,503 12,408 149,495
Howard P. Wertman, 2001 182,000 -- 13,389 --
President 2000 175,000 128,632 11,466 --
1999 175,000 -- 8,940 74,253
William J. Evanson, 2001 155,300 -- 18,542 --
Executive Vice President 2000 115,385 92,736 9,530 62,553
& Chief Financial Officer
Richard M. Kelso, 2001 142,500 -- 13,318 --
Executive Vice President 2000 137,500 100,701 8,894 --
& Chief Operating Officer 1999 137,500 -- 6,372 60,277
Martin J. Degnan, 2001 140,400 -- 9,104 --
Vice President, Secretary 2000 135,000 99,231 8,179 --
& General Counsel 1999 20,769 -- 1,275 34,696
</Table>
- ---------------
(1) Includes an allocation of 60% of the amount earned by Mr. Neidus in his
capacity as an officer of Essef Corporation prior to the split-off from the
Company's former parent on August 10, 1999 and the full amount earned in his
capacity as Chairman and Chief Executive Officer of the Company since that
date.
(2) Includes for each named executive officer, a motor vehicle allowance, life
insurance premiums and matching contributions to either the Essef or Anthony
& Sylvan 401(k) retirement plan.
4
OPTION GRANTS
No stock options were granted to the Company's named executive officers during
the fiscal year ended December 31, 2001.
The following table shows information relating to aggregate stock option
exercises during 2001 and year-end stock option values for each of the named
executive officers:
<Table>
<Caption>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT OPTIONS AT
SHARES ACQUIRED VALUE DECEMBER 31, 2001 DECEMBER 31, 2001 ($)
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- --------------- -------- ------------------------- -------------------------
Stuart D. Neidus, -- -- 165,120 / 106,169 795,549 / 64,295
Chairman & Chief
Executive Officer
Howard P. Wertman, -- -- 23,112 / 51,141 62,402 / 49,135
President
William J. Evanson, -- -- 19,530 / 43,023 28,026 / 42,042
Executive Vice President
& Chief Financial Officer
Richard M. Kelso, -- -- 18,620 / 41,657 25,569 / 38,354
Executive Vice President
& Chief Operating Officer
Martin J. Degnan, -- -- 9,486 / 25,210 5,848 / 8,770
Vice President, Secretary
& General Counsel
</Table>
EMPLOYMENT AGREEMENTS
The Company currently has employment agreements with four of its named executive
officers: Messrs. Neidus, Wertman, Evanson and Kelso.
The term of each Agreement extends through December 31, 2002, and may be further
extended or terminated according to its terms. As compensation for his service
as Chief Executive Officer of the Company, Mr. Neidus will receive an annual
base salary of at least $229,000 and performance-based bonuses targeted at at
least 60% of his annual salary. In addition, at the time of the split-off from
Essef Corporation, Mr. Neidus received options to purchase common shares which,
when adjusted for stock dividends, equal 109,807, at an exercise price equal to
$10.93 per share exercisable 25% per year following the second anniversary of
the split-off from Essef Corporation. As compensation for his service as
President, Mr. Wertman will receive an annual base salary of at least $175,000
and performance-based bonuses targeted at at least 50% of his annual salary. In
addition, at the time of the split-off from Essef Corporation, Mr. Wertman
received options to purchase common shares which, when adjusted for stock
dividends, equal 43,923, at an exercise price equal to $10.93 per share
exercisable 25% per year following the second anniversary of the split-off.
As compensation for his services as Executive Vice President, Mr. Evanson will
receive an annual base salary of at least $150,000 and performance-based bonuses
targeted at at least 50% of his annual salary. In addition, at the commencement
of his employment, Mr. Evanson received options to purchase common shares which,
when adjusted for stock dividends, equal 36,602 at an exercise price equal to
$10.93 per share exercisable 25% per year following the second anniversary of
the split-off from Essef Corporation. As compensation for his services as
Executive Vice President, Mr. Kelso will receive an annual base salary of at
least $137,500 and performance-based bonuses targeted at at least 50% of his
annual salary. In addition, at the time of the split-off from Essef Corporation,
Mr. Kelso received options to purchase common shares which, when adjusted for
stock dividends, equal 36,602 at an exercise price equal to $10.93 per share
exercisable 25% per year following the second anniversary of the split-off.
5
If any of Messrs. Neidus, Wertman, Evanson or Kelso is terminated by the Company
without cause, he will be entitled to receive salary for a period of one year,
along with the pro rata portion of any bonus payable for such fiscal year.
Messrs. Wertman, Evanson and Kelso also would receive the right to exercise, for
three months, any options to acquire Company shares granted to them that are
exercisable. Mr. Neidus will be entitled to exercise, for one year, any options
to acquire Company shares granted to him whether or not otherwise exercisable.
Mr. Neidus will be deemed to have been terminated without cause if, among other
things, the Company at any time materially changes his duties and
responsibilities without his consent.
Upon a change in control of the Company, Mr. Neidus shall have the right to
terminate his employment with the Company and receive the same rights and
benefits to which he would be entitled upon his termination without cause.
6
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee establishes compensation for the executive officers
of the Company and its subsidiaries. In discharging its function, the Committee
seeks to harmonize three objectives. First, compensation levels are designed to
be sufficiently competitive to attract and retain highly qualified management
personnel. Second, recognition is given to the achievement of annual financial,
operational and strategic objectives. Finally, it is the Company's objective to
continue to align pay and performance for the Company's executives with the
longer-term goal of enhancing shareholder value. To implement these objectives,
the compensation program for executive officers consists of base salary, annual
cash incentives, and the long-term compensation plan.
Base salaries are determined in the first instance by the evaluation of the
executive officer's responsibility and by comparison to similarly situated
executives at other comparable firms to ensure that the Company's salaries are
competitive.
Annual cash incentives are used to recognize the achievement of annual
objectives in line with the Company's long-term goals. The annual objectives are
based on specific and quantifiable financial and operational performance
criteria, which are set at the beginning of each fiscal year by the Committee.
Bonuses of executive officers are primarily based on earnings per share of the
Company.
The Company's current long-term compensation plan is made up of the Executive
and Director Leveraged Stock Purchase Plan and the 2001 Long-Term Incentive
Plan. Under the Stock Purchase Plan, eligible executives purchased shares of
Company common stock for up to two times their base compensation while
non-employee Directors purchased shares for up to four times their annual
retainer. The participants' shares were then purchased at fair market value on
the Acceptance Date. At the option of each participant these purchases were
financed through external borrowings guaranteed by the Company and secured by
the stock. For every share of common stock purchased under the Plan,
participants received .40 of a stock option grant issued at the fair market
value of the common stock at the Acceptance Date that vests over periods ranging
from two to five years. All of the eligible participants purchased shares in the
program. At December 31, 2001 the Company has guaranteed total borrowings of
$3,127,000 under the Plan.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
For 2001, Mr. Neidus's compensation package was based on a review of his
compensation package in connection with his employment agreement. The Committee
determined then that his total cash compensation should be at the 75th
percentile for compensation received by chief executive officers of similarly
situated companies.
Mr. Neidus's total cash compensation for 2001 consisted of annual base salary of
$245,000. No bonus was paid for the year.
THE COMPENSATION COMMITTEE
Mary Ann Jorgenson, Chairperson
Roger D. Blackwell
Thomas B. Waldin
7
REPORT OF THE AUDIT COMMITTEE
The Audit Committee, on behalf of the Board of Directors, has oversight
responsibility with respect to the Company's financial audit and reporting
process and its system of internal controls. Management has the primary
responsibility for the financial statements and the reporting process, including
the systems of internal controls. In fulfilling its oversight responsibilities,
the Committee reviewed the audited financial statements in the Annual Report
with management, including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant
judgments, and the clarity of disclosures in financial statements.
The Committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles, their judgment of the quality,
not just the acceptability, of the Company's accounting principles and such
other matters as are required to be discussed with the Committee under generally
accepted auditing standards. In addition the Committee has discussed with the
independent auditors the auditors' independence from management and the Company,
including the matters in the written disclosure required by the Independence
Standards Board, and considered the compatibility of non-audit services with the
auditors' independence.
The Committee discussed with the Company's independent auditors the overall
scope and plans for their audits. The Committee meets with the independent
auditors, with and without management present, to discuss the results of their
examinations, their evaluation of the Company's internal controls and the
overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Committee has
made a recommendation to the Board of Directors, which the Board has approved,
that the audited financial statements be included in the Annual Report on the
Form 10-K for the year ended December 31, 2001 for filing with the Securities
and Exchange Commission.
The Committee and the Board have approved the selection of KPMG LLP as the
Company's independent auditors for 2002. The Committee has approved and
recommended to the Board, and the Board has adopted, an Audit Committee Charter.
THE AUDIT COMMITTEE
Thomas B. Waldin, Chairperson
Roger D. Blackwell
Mary Ann Jorgenson
8
PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in cumulative
shareholder return with the cumulative total return of the Standard & Poors
Smallcap 600 and the NASDAQ Stock Market (U.S. Companies) Composite Index since
August 11, 1999, the first date on which the Company's shares were publicly
traded:
COMPARISON OF CUMULATIVE TOTAL RETURN*
[GRAPH]
LEGEND
<Table>
<Caption>
INDEX DESCRIPTION 8/11/99 12/31/99 12/31/00 12/31/01
----------------- ------- -------- -------- --------
Anthony & Sylvan Pools Corporation 100.0 115.6 168.9 179.4
S&P SmallCap 600 100.0 111.9 125.2 133.3
CRSP Index for NASDAQ Stock Market
(U.S. Companies) 100.0 144.1 86.7 68.5
</Table>
Notes:
A. Data complete through last fiscal year.
B. Graph with peer group uses peer group only performance (excludes the
Company).
C. Peer group indices use beginning of period market capitalization weighting.
9
BENEFICIAL OWNERSHIP OF SHARES
The following tables display, as of March 20, 2002, the name and address of each
person who is known to the Company to own beneficially more than 5% of the
Company's common shares as well as the number of Common Shares beneficially
owned by each director and named executive officer, and the directors and named
executive officers of the Company as a group.
FIVE PERCENT BENEFICIAL OWNERSHIP
<Table>
<Caption>
COMMON SHARES
BENEFICIALLY OWNED
-------------------
NAME NUMBER PERCENT
- ---- -------- --------
Thomas B. Waldin(1) 456,016 9.8
6690 Beta Drive, Suite 300
Mayfield Village, Ohio 44143
Stuart D. Neidus(2) 436,900 8.9
6690 Beta Drive, Suite 300
Mayfield Village, Ohio 44143
Ralph T. King(3) 337,169 7.1
30050 Chagrin Boulevard, Suite 150
Pepper Pike, Ohio 44124
Steven T. Newby(4) 259,842 5.5
555 Quince Orchard Road, Suite 606
Gaithersburg, Maryland 20878
</Table>
BENEFICIAL OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
<Table>
<Caption>
COMMON SHARES
BENEFICIALLY OWNED
-------------------
NAME NUMBER PERCENT
- ---- --------- -------
Thomas B. Waldin(1) 456,016 9.8
Mary Ann Jorgenson(5) 42,410 0.9
Roger D. Blackwell(6) 41,744 0.9
Stuart D. Neidus(2) 436,900 8.9
Howard P. Wertman(7) 102,000 2.1
William J. Evanson(8) 89,761 1.9
Richard M. Kelso(9) 73,784 1.6
Martin J. Degnan(10) 21,533 0.5
All directors and officers as a group (15 persons)(11) 1,651,535 33.1
</Table>
- ---------------
(1) Thomas B. Waldin is a beneficial owner of: (a) 456,016 shares owned
directly by him (10,853 shares consist of options to purchase which are
exercisable within 60 days of December 31, 2001) and (b) 957,074 shares
held in a Deferred Compensation Plan Trust over which he has no voting or
dispositive power. If the trust shares were added to the calculation, he
would have beneficial ownership of 30% of the Company's shares.
(2) Stuart D. Neidus is the beneficial owner of 436,900 shares owned directly
by him (137,669 shares consist of options to purchase which are exercisable
within 60 days of December 31, 2001).
(3) Includes 326,277 shares in the Ralph T. King Revocable Trust, over which
Mr. King has voting and dispositive power; and 10,892 shares, held by a
foundation of which he is a trustee with shared voting and dispositive
power.
(4) Based on Schedule 13-G filed with the Securities and Exchange Commission as
of December 31, 2001.
10
(5) Mary Ann Jorgenson is the beneficial owner of: (a) 52,604 shares owned
directly by her (6,140 shares consist of options to purchase which are
exercisable within 60 days of December 31, 2001) and (b) 10,194 shares held
in a Deferred Compensation Plan Trust over which she has no voting or
dispositive power.
(6) Roger D. Blackwell is the beneficial owner of: (a) 41,744 shares owned
directly by him (6,140 shares consist of options to purchase which are
exercisable within 60 days of December 31, 2001) and (b) 8,957 shares held
in a Deferred Compensation Plan Trust over which he has no voting or
dispositive power.
(7) Howard P. Wertman is the beneficial owner of 102,000 shares owned directly
by him (12,132 shares consist of options to purchase which are exercisable
within 60 days of December 31, 2001).
(8) William J. Evanson is the beneficial owner of 89,761 shares owned directly
by him (10,380 shares consist of options to purchase which are exercisable
within 60 days of December 31, 2001).
(9) Richard M. Kelso is the beneficial owner of 73,784 shares owned directly by
him (9,470 shares consist of options to purchase which are exercisable
within 60 days of December 31, 2001).
(10) Martin J. Degnan is the beneficial owner of 21,533 shares owned directly by
him (2,166 shares consist of options to purchase which are exercisable
within 60 days of December 31, 2001).
(11) Includes 238,210 options to purchase, which are exercisable by directors
and officers within 60 days of December 31, 2001. In addition, Messrs.
Blackwell and Waldin and Ms. Jorgenson are the beneficial owners of 976,225
shares held by a Deferred Compensation Plan Trust over which they have no
voting or dispositive power.
CERTAIN TRANSACTIONS
Ms. Mary Ann Jorgenson, a current Director and nominee for Director for an
additional term, is a member of the law firm of Squire, Sanders & Dempsey,
L.L.P. The Company retained the services of this firm during the past fiscal
year, and proposes retaining its services during the current fiscal year.
A subcontracting firm owned by Mr. Howard P Wertman, III, son of the Company's
President, was retained in 2001 and was paid $168,516 for services it provided
during that year. Mr. Ernest Girod, the brother-in-law of the Company's
President, was employed as a commissioned salesperson in 2001 and received
$60,720 for his services during that year. The Company believes that these
transactions were conducted on terms no less favorable to the Company than could
have been obtained from unaffiliated third parties.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP acted as independent auditors of the Company for the fiscal year ended
December 31, 2001 and for the second, third and fourth quarters thereof. Their
representatives will be present at the meeting and will be given an opportunity
to make a statement, if they so desire, as well as to respond to appropriate
questions. Deloitte & Touche LLP acted as independent auditors of the Company
for the first quarter of the fiscal year ended December 31, 2001.
Effective June 4, 2001, Deloitte & Touche LLP was dismissed as the Company's
independent auditors and KPMG LLP was retained. The Board of Directors and Audit
Committee participated in and approved this decision. The reports of Deloitte &
Touche LLP on the Company's financial statements for the fiscal years ending
December 31, 2000 and December 31, 1999 contained neither an adverse opinion nor
a disclaimer of opinion. Likewise, the opinions were neither qualified nor
modified as to uncertainty, audit scope or accounting principles.
There were no disagreements with Deloitte & Touche LLP regarding the two fiscal
years ending December 31, 2000 and December 31, 1999, except for a disagreement
in March 2001 related to accounting for the Company's Executive and Director
Leveraged Stock Purchase Plan (the "Plan"). The Plan was adopted in the fall of
1999, at which time it was believed that the Plan's design did not require
variable accounting treatment. The Board of Directors and Audit Committee
discussed the subject matter of the disagreement with Deloitte & Touche. The
Company restated its previously issued results for 2000 to address the matter
and reflect variable accounting for the Plan. As a result, Deloitte & Touche LLP
indicated that this disagreement was satisfactorily resolved.
11
The Company did not consult KPMG LLP regarding the matters described in Item
304(a)(2)(i) or (ii) of Securities and Exchange Commission Regulation S-K during
the fiscal years ending December 31, 1999 and December 31, 2000 or during the
interim period prior to engaging KPMG LLP.
AUDIT FEES
The aggregate fees billed by the firm of KPMG LLP for audit of the Company's
annual financial statements, and for the review of the financial statements
included in the Company's Second and Third Quarterly Reports on Form 10-Q, for
the fiscal year ended December 31, 2001 were $81,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
KPMG LLP did not bill for or provide any financial information systems design
and implementation services.
ALL OTHER FEES
The aggregate fees billed by KPMG LLP for services rendered to the Company,
other than described above under "Audit Fees", for the fiscal year ended
December 31, 2001 were $170,150. The services provided were related to tax
compliance and planning. The Audit Committee considered whether provision of
these services was compatible with maintaining KPMG LLP's independence.
SHAREHOLDER PROPOSALS
Proposals of shareholders for the fiscal 2002 Annual Meeting of Shareholders to
be held in May, 2003 must be received by the Secretary of the Company no later
than November 29, 2002 to be included in the proxy statement and form of proxy
for that meeting.
SOLICITATION EXPENSES
The Company will bear the costs of proxy solicitation including the preparation
and mailing of this statement and accompanying material. Proxies will be
solicited principally by mail, by employees and agents of the Company and its
subsidiaries. No employee of the Company who assists in the solicitation will be
paid for doing so beyond his regular compensation.
The Company will request brokers, banks and other custodians or fiduciaries
holding shares in their names or in the names of nominees to forward copies of
proxy solicitation materials to the beneficial owners of the shares held by them
and, upon request, will reimburse them for the reasonable expenses incurred in
forwarding the material to their principals and processing responses.
VOTE TABULATION POLICIES AND PROCEDURES
Shares voted by proxy on the form provided by management with this statement
will be tabulated according to the tenor thereof. Shares voted by omnibus proxy
or other proxy forms by brokers, nominees or agents will be tabulated according
to instructions and limitations accompanying the form of proxy. All shares for
which valid proxies are returned will be counted as present at the meeting for
determination of a quorum (a majority of shares entitled to vote at the Annual
Meeting), but the votes of shares represented by omnibus or similar proxy will
be tabulated only to the extent the vote is specifically instructed.
By Order of the Board of Directors
Martin J. Degnan, Secretary
March 29, 2002
12
DETACH HERE
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ANTHONY & SYLVAN POOLS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Anthony & Sylvan Pools Corporation hereby
appoints William Evanson and Richard Mills, the Proxies of the undersigned, to
vote the shares of the undersigned at the 2002 Annual Meeting of Shareholders of
the Company and any adjournment thereof upon the following:
The Board of Directors recommends votes be cast FOR proposal 1.
(1) ELECTION OF DIRECTORS: Roger D. Blackwell, Mary Ann Jorgenson, Stuart D.
Neidus and Thomas B. Waldin for terms expiring in 2003.
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees
(INSTRUCTION: IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST ABOVE.)
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
(Continued, and to be signed on other side)
DETACH HERE
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PROXY NO. (Continued from other side) SHARES
IF THIS CARD IS RETURNED SIGNED, BUT WITH NO INSTRUCTIONS, AUTHORITY IS
GRANTED TO CAST THE VOTE OF THE UNDERSIGNED FOR THE ELECTION OF THE NOMINEES FOR
DIRECTOR.
Dated , 2002
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Signature
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Signature if held jointly
NOTICE: When signing as
attorney, executor,
administrator, trustee or
guardian, please give your
full title as such. A proxy
given by a corporation should
be signed in the corporate
name by the chairman of its
board of directors, its
president, vice president,
secretary, or treasurer.
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY IN
THE ENCLOSED ENVELOPE CARE OF:
NATIONAL CITY BANK CORPORATE
TRUST OPERATIONS, LOCATOR 5352,
P.O. BOX 92301, CLEVELAND, OH
44193-0900.