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 (AMENDMENT NO. )
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[ ] 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 Rule 14a-11(c) or Rule 14a-12
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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(SCHWEITZER-MAUDUIT LOGO)
March 14, 2002
Wayne H. Deitrich
Chairman of the Board and
Chief Executive Officer
TO OUR STOCKHOLDERS:
On behalf of the Board of Directors and management of Schweitzer-Mauduit
International, Inc., I cordially invite you to the Annual Meeting of
Stockholders to be held on Thursday, April 25, 2002 at 11:00 a.m. at the
Corporation's corporate headquarters located at 100 North Point Center East,
Suite 600, Alpharetta, Georgia.
At the Annual Meeting, stockholders will be asked to elect three directors
for a three-year term. The Corporation's Board of Directors recommends
unanimously that you vote in favor of this proposal, which is more fully
described in the accompanying Notice of Annual Meeting and Proxy Statement.
It is important that your stock be represented at the meeting regardless of
the number of shares you hold. You are encouraged to specify your voting
preferences by so marking and dating the enclosed proxy card. But, if you wish
to vote in accordance with the directors' recommendation, all you need do is
sign and date the card.
Please complete and return the proxy card in the enclosed envelope whether
or not you plan to attend the meeting. If you do attend and wish to vote in
person, you may revoke your proxy at that time.
If you plan to attend the meeting, please check the card in the space
provided. This will assist us with meeting preparations, and will enable us to
expedite your admittance. If your shares are not registered in your own name and
you would like to attend the meeting, please ask the broker, trust, bank or
other nominee which holds the shares to provide you with evidence of your share
ownership, which will enable you to gain admission to the meeting.
Sincerely,
/s/ WAYNE H.DEITRICH
WAYNE H. DEITRICH
PRINTED IN THE UNITED STATES
ON SCHWEITZER-MAUDUIT INTERNATIONAL, INC. PAPER
MANUFACTURED IN LEE, MASSACHUSETTS
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
100 NORTH POINT CENTER EAST, SUITE 600
ALPHARETTA, GEORGIA 30022-8246
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2002
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The Annual Meeting of Stockholders of Schweitzer-Mauduit International,
Inc. will be held at the Corporation's corporate headquarters located at 100
North Point Center East, Suite 600, Alpharetta, Georgia, on Thursday, April 25,
2002 at 11:00 a.m. for the following purposes:
1. To elect three directors for a three-year term to expire at the
2005 Annual Meeting of Stockholders; and
2. To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
Stockholders of record at the close of business on February 28, 2002 are
entitled to notice of and to vote at the meeting and any adjournment thereof. It
is important that your shares be represented at the meeting. I urge you to sign,
date and promptly return the enclosed proxy card in the enclosed business reply
envelope. No postage is required if mailed in the United States.
/s/ JOHN W. RUMELY, JR.
JOHN W. RUMELY, Jr.
Secretary and General Counsel
March 14, 2002
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
100 NORTH POINT CENTER EAST, SUITE 600
ALPHARETTA, GEORGIA 30022-8246
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PROXY STATEMENT
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INTRODUCTION
This Proxy Statement and the accompanying proxy card are furnished to the
stockholders of Schweitzer-Mauduit International, Inc., a Delaware corporation
(the "Corporation"), in connection with the solicitation of proxies by the Board
of Directors of the Corporation for use at the Annual Meeting of Stockholders to
be held on April 25, 2002 ("Annual Meeting") and at any adjournment thereof.
Proxies in the accompanying form, properly signed and received in time for the
meeting, will be voted as instructed. If no instructions are given, proxies will
be voted for the election of the three directors nominated for election. Any
proxy may be revoked by the stockholder granting it at any time before it is
voted by delivering to the Secretary of the Corporation another signed proxy
card, or a signed document revoking the earlier proxy or by attending the
meeting and voting in person. The Corporation intends to mail this Proxy
Statement and proxy card, together with the 2001 Annual Report to Stockholders,
on or about March 14, 2002.
Each stockholder of record at the close of business on February 28, 2002
will be entitled to one vote for each share registered in such stockholder's
name. As of that date, there were outstanding 14,851,935 shares of the
Corporation's common stock, par value $0.10 per share (the "Common Stock").
The entire cost of the proxy solicitation will be borne by the Corporation.
The Corporation has retained American Stock Transfer & Trust Company to aid in
the solicitation of proxies. Solicitation services on routine proxy matters are
included in the fees paid to American Stock Transfer & Trust Company to act as
the Corporation's stock transfer agent and registrar and such service is not
separately compensated beyond reimbursement of reasonable out-of-pocket
expenses. The Corporation does not otherwise expect to pay any compensation for
the solicitation of proxies, but will reimburse brokers, fiduciaries and other
nominees for their reasonable expenses in forwarding proxy materials to
beneficial owners. In addition to solicitation by mail, directors, officers and
employees of the Corporation may solicit proxies in person, by telephone or by
other means of communication.
If a stockholder is a participant in the Schweitzer-Mauduit International,
Inc. Retirement Savings Plan, the proxy card represents the number of full
shares of Common Stock held for the benefit of the participant in the plan as
well as any shares of Common Stock registered in the participant's name. Thus, a
proxy card for such a participant grants a proxy for shares registered in the
participant's name and serves as a voting instruction for the trustee of the
plan for the account in the participant's name. Information as to the voting
instructions given by individuals who are participants in the plan will not be
disclosed to the Corporation.
Under Section 216 of the Delaware General Corporation Law and the
Corporation's By-Laws, a majority of the issued and outstanding shares of the
Corporation's Common Stock, present in person or represented by proxy, shall
constitute a quorum for purposes of the Annual Meeting. Directors shall be
elected by a plurality of the votes present in person or represented by proxy at
the Annual Meeting and entitled to vote on the election of directors. Votes may
be cast in favor of or withheld from each nominee; votes that are withheld will
be excluded entirely from the vote and will have no effect. Under applicable
Delaware law, a broker non-vote will have no effect on the outcome of the
election of directors. In all matters other than the election of directors, the
affirmative vote of a majority of shares present in person or represented by
proxy at the Annual Meeting and entitled to vote on the subject matter shall be
the act of the stockholders.
PROPOSAL ONE: ELECTION OF DIRECTORS
The Certificate of Incorporation of the Corporation provides that the
number of directors constituting the entire Board of Directors shall be as
authorized from time to time exclusively by the affirmative vote of a majority
of the entire Board of Directors. The By-Laws of the Corporation provide that
the number of directors of the Corporation shall not be less than six nor more
than nine and further provide that the Board shall be divided into three classes
of directors, who are elected for staggered terms. Directors of one class are
elected each year for a term of three years. As of the date of this Proxy
Statement, the Board of Directors consists of nine members, three of whom have
terms which expire at the 2002 Annual Meeting (Class I Directors), three of whom
have terms which expire at the 2003 Annual Meeting (Class II Directors), and
three of whom have terms which expire at the 2004 Annual Meeting (Class III
Directors). Eight of the current directors have served on the Corporation's
Board of Directors since November 30, 1995. Alan R. Batkin, a Class I Director,
has served on the Corporation's Board of Directors since May 1, 1999.
The current Class I Directors, Ms. Claire L. Arnold, Mr. Laurent G. Chambaz
and Mr. Alan R. Batkin, are nominated for re-election at the 2002 Annual Meeting
to serve for a term to expire at the 2005 Annual Meeting of Stockholders, and
until their successors are elected and have qualified. Should any nominee become
unable to serve, proxies may be voted for another person designated by
management. The nominees have advised the Corporation that they will serve if
elected. The remaining six directors will continue to serve as directors for the
terms set forth on the following pages.
CERTAIN INFORMATION REGARDING DIRECTORS AND NOMINEES
The names of the directors continuing in office and nominees, their ages as
of the date of the Annual Meeting, their principal occupations during at least
the past five years, other directorships held by each as of the date hereof and
certain other biographical information are as set forth on the following pages
by class, in the order of the next class to stand for election.
2
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
CLASS I DIRECTORS
FOR A THREE-YEAR TERM EXPIRING AT THE 2005 ANNUAL MEETING OF STOCKHOLDERS
YEAR FIRST
ELECTED A PRINCIPAL OCCUPATION AND BUSINESSES DURING LAST
NAME AGE DIRECTOR FIVE YEARS AND CURRENT DIRECTORSHIPS
---- --- ---------- -----------------------------------------------
Claire L. Arnold................... 55 1995 - Chief Executive Officer of Leapfrog Services,
Inc., a computer support company and network
integrator, presently and since 1998
- Private investor in 1997
- Director - Ruby Tuesday, Inc.
- Director - International Multifoods, Inc.
- Chairman of the Board of Trustees of Mary
Baldwin College
Alan R. Batkin..................... 57 1999 - Vice-Chairman of Kissinger Associates, Inc.,
a geopolitical consulting firm, presently and
since May 1990
- Director - Hasbro, Inc.
- Director - Overseas Shipholding Group, Inc.
- Director - Diamond Offshore Drilling, Inc.
Laurent G. Chambaz................. 54 1995 - Partner in the law firm of UGGC & Associes,
presently and since January 1, 2001
- Partner in the law firm of Chambaz in
association with UGGC & Associes from October
1999 to December 2000
- Partner in the law firm of Lafarge Flecheux
Chambaz from January 1999 to September 1999
- Partner in the law firm of Chambaz &
Suermondt from 1971 to 1998
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE
THREE NOMINEES AS CLASS I DIRECTORS.
3
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
CLASS II DIRECTORS
TERM EXPIRING AT THE 2003 ANNUAL MEETING OF STOCKHOLDERS
YEAR FIRST
ELECTED A PRINCIPAL OCCUPATION AND BUSINESSES DURING LAST
NAME AGE DIRECTOR FIVE YEARS AND CURRENT DIRECTORSHIPS
---- --- ---------- -----------------------------------------------
K.C. Caldabaugh.................... 55 1995 - Managing Principal, Southbank Consulting
Group, a provider of operational and
financial restructuring services, presently
and since January 2002
- Principal, Heritage Capital Group, an
investment banking firm, presently and since
July 2001
- Chairman and Chief Executive Officer of
Spinnaker Coating, Inc., a manufacturer of
adhesive coated papers, from 1994 to March
2001. Spinnaker Coating, Inc. filed for
Chapter 11 bankruptcy protection on November
13, 2001
- Member of the Board of Trustees of West
Virginia Wesleyan College
Jean-Pierre Le Hetet............... 58 1995 - Chief Operating Officer of the Corporation,
presently and since April 1998
- President - French Operations of the
Corporation, presently and since August 1995
Richard D. Jackson................. 65 1995 - Private investor, presently and since August,
1995
- Chairman of the Board of ebank.com, Inc.
4
CLASS III DIRECTORS
TERM EXPIRING AT THE 2004 ANNUAL MEETING OF STOCKHOLDERS
YEAR FIRST
ELECTED A PRINCIPAL OCCUPATION AND BUSINESSES DURING LAST
NAME AGE DIRECTOR FIVE YEARS AND CURRENT DIRECTORSHIPS
---- --- ---------- -----------------------------------------------
Wayne H. Deitrich.................. 58 1995 - Chief Executive Officer of the Corporation,
presently and since August 1995
- Chairman of the Board of the Corporation,
presently and since November 1995
Leonard J. Kujawa.................. 69 1995 - Independent international consultant,
presently and since 1995
- Director - American Electric Power Company
Larry B. Stillman.................. 60 1995 - Vice President, Northwest Group, xpedx,
(formerly Dixon Paper), a distributor of
printing paper, packaging supplies and
equipment, presently and since 1988
- Managing General Partner for HEXAD Investment
Company, an investment group focusing on
equities and real estate, presently and since
1983
- Director - Ryall Electric Supply Company
- Director - Advisory Board of the Utah Jazz
5
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of December 31, 2001 and for
the succeeding sixty (60) calendar days regarding the number of shares of the
Corporation's Common Stock beneficially owned by all directors and nominees, the
Corporation's Chief Executive Officer and each of the Corporation's next four
highest paid executive officers (collectively, the Chief Executive Officer and
the next four highest paid executive officers are called the "Named Executive
Officers" herein), and by all directors and executive officers as a group.
Unless otherwise indicated in a footnote, each person listed below possesses
sole voting and investment power with respect to the shares indicated as
beneficially owned by that person.
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF
IDENTITY OF GROUP TITLE OF CLASS BENEFICIAL OWNERSHIP PERCENT OF CLASS(1)
--------------------- -------------- ----------------------- -------------------
Claire L. Arnold.......................... Common Stock 4,210(2) *
Alan R. Batkin............................ Common Stock 1,956(2) *
K.C. Caldabaugh........................... Common Stock 4,210(2) *
Laurent G. Chambaz........................ Common Stock 5,570(3) *
Wayne H. Deitrich......................... Common Stock 443,163(4) 3%
Richard D. Jackson........................ Common Stock 8,170(3)(5) *
Leonard J. Kujawa......................... Common Stock 4,010(2) *
Jean-Pierre Le Hetet...................... Common Stock 173,185(6) 1%
Paul C. Roberts........................... Common Stock 121,774(7) *
John W. Rumely, Jr........................ Common Stock 30,211(8) *
Larry B. Stillman......................... Common Stock 7,622(3) *
Peter J. Thompson......................... Common Stock 65,381(9) *
All Directors, Named Executive Officers
and executive officers as a group (14
Persons)................................ Common Stock 925,099(10) 6%
---------------
(1) Percent of Class is calculated as a percentage of the shares of Common
Stock outstanding as of March 1, 2002, plus unexercised options vested as
of March 1, 2002, for a total of 15,622,980 shares deemed outstanding.
Individuals with an asterisk own less than 1 percent of the shares
outstanding.
(2) As of March 15, 2000, each of these directors elected to defer 100% of
their quarterly retainer pursuant to the Deferred Compensation Plan for
Outside Directors. In addition to the stock they beneficially own, their
individual deferred compensation plan accounts have been credited with the
equivalent of 2,365 stock units which are convertible into the
Corporation's Common Stock at its fair market value or cash upon the
director's retirement or earlier death or disability.
(3) Includes 217 shares of stock received by the director pursuant to the
Outside Directors Stock Plan on January 2, 2002.
(4) Includes: 100 shares held by a Charitable Remainder Unitrust, of which Mr.
Deitrich is the Trustee, 306,380 shares which Mr. Deitrich has the right to
acquire upon the exercise of vested stock options as of December 31, 2001;
options to purchase 82,885 shares vesting in January 2002; and 15,000
shares of restricted stock granted on January 1, 2000 that include the
power to vote such shares.
(5) Includes 1,600 shares held by Mr. Jackson's wife, Elaine M. Jackson.
(6) Includes 127,680 shares which Mr. Le Hetet has the right to acquire upon
the exercise of vested stock options as of December 31, 2001 and options to
purchase 41,055 shares vesting in January 2002.
(7) Includes: 68,980 shares which Mr. Roberts has the right to acquire upon the
exercise of vested stock options as of December 31, 2001; options to
purchase 24,260 shares vesting in January 2002; restricted stock grants
consisting of 7,500 shares granted on January 1, 2000, 5,000 shares granted
on January 1, 2001 and 2,500 shares granted on January 1, 2002 that include
the power to vote the restricted shares; 200 shares held by a custodial
account with Mr. Roberts's wife, Jane H. Roberts, as trustee; 200 shares
held by Jane H. Roberts individually; and 4,332 shares in which Mr. Roberts
has shared voting and investment power with his wife.
(8) Includes: 1,000 shares which Mr. Rumely acquired on February 15, 2002
pursuant to the partial exercise of vested options granted in 1999 and
2000; 9,500 shares which Mr. Rumely has the right to acquire upon the
exercise of vested stock options as of December 31, 2001; options to
purchase 11,130 shares vesting in January 2002; restricted stock grants
consisting of 5,000 shares granted on January 1, 2001 and 2,500 shares
granted on January 1, 2002 that include the power to vote the restricted
shares.
(9) Includes: 25,440 shares which Mr. Thompson has the right to acquire upon
the exercise of vested stock options as of December 31, 2001; options to
purchase 22,765 shares vesting in January 2002; restricted stock grants
consisting of 7,500 shares granted on January 1, 2000, 5,000 shares granted
on January 1, 2001 and 2,500 shares on January 1, 2002 that include the
power to vote the restricted shares.
(10) Includes as to executive officers other than the Named Executive Officers
40,160 shares which may be acquired upon the exercise of vested stock
options as of December 31, 2001 and options to purchase 10,810 shares
vesting in January 2002.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
The following table sets forth certain information as of December 31, 2001
regarding the number of shares of Common Stock of the Corporation beneficially
owned by each person who is known to the Corporation to own, directly or
indirectly, more than 5 percent of the outstanding shares of the Corporation's
Common Stock, and reflects the information presented in each such person's
Schedule 13G (and amendments, if any, thereto) as filed with the Securities and
Exchange Commission ("SEC") and provided to the Corporation. Unless otherwise
indicated in a footnote, each person listed below possesses sole voting and
investment power with respect to the shares indicated as beneficially owned by
that person.
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS(1)
------------------- -------------------- -------------------
Wellington Management Company, LLP(2)....................... 1,524,100 10.27%
75 State Street
Boston, Massachusetts 02109
Gardner Russo & Gardner and Thomas A. Russo(3).............. 1,232,225 8.31%
223 East Chestnut Street
Lancaster, Pennsylvania 17602-2783
AXA Financial, Inc. (4)..................................... 1,173,730 7.91%
1290 Avenue of the Americas
New York, New York 10104
Dimensional Fund Advisors, Inc. (5)......................... 1,070,995 7.22%
1299 Ocean Avenue
11th Floor
Santa Monica, California 90401-1005
Barclays Global Fund Advisors (6)........................... 818,252 5.52%
45 Fremont Street
San Francisco, California 94105
---------------
(1) Percent of Class is calculated as a percentage of the shares of Common Stock
outstanding as of December 31, 2001. As of December 31, 2001 14,835,984
shares were deemed outstanding.
(2) Based on a Schedule 13G filed on February 12, 2002, Wellington Management
Company ("WMC") reported that, in its capacity as investment advisor, it may
be deemed to beneficially own shares of Common Stock which are held of
record by clients of WMC. Of those shares, WMC has shared power to vote or
to direct the vote of 1,051,400 shares and has shared power to dispose or to
direct the disposition of 1,524,100 shares.
(3) Based on a combined Schedule 13G-A, Amendment No. 4, filed on February 6,
2002, Gardner Russo & Gardner reported that it beneficially owns an
aggregate of 1,232,225 shares with shared power to vote or to direct the
vote and with shared power to dispose or to direct the disposition of all
such shares. Thomas Russo, a principal in Gardner Russo & Gardner and using
the same reporting address, reported that of the 1,186,325 shares he
beneficially owns, he holds sole power to vote or to direct the vote and
sole power to dispose or to direct the disposition of 300,000 shares and
shared power to vote or to direct the vote and shared power to dispose or to
direct the disposition of 886,325 shares. Collectively, Thomas Russo and
Gardner Russo & Gardner beneficially own 1,232,225 shares.
(4) Information is based on a Schedule 13G dated February 14, 2002 filed jointly
on behalf of: AXA Financial, Inc.; four French mutual insurance companies,
AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, AXA Conseil
Vie Assurance Mututelle and AXA Courtage Assurance Mutuelle (collectively,
the "Mutuelles AXA"), as a group; AXA; and their respective subsidiaries. Of
the aggregate 1,173,730 shares of Common Stock beneficially owned, the power
to vote or to direct the vote of shares is held by unaffiliated third-party
client accounts managed by one or more clients of Alliance Capital
Management L.P., a majority-owned subsidiary of AXA Financial, Inc. AXA
Rosenberg Investment Management LLC, a subsidiary of AXA, has the sole power
to direct the vote of 49,300 shares and the shared power to dispose or to
direct the disposition of 50,500 shares. Alliance Capital Management L.P.,
has the sole power to vote or to direct the vote of 991,875 shares, the
shared power to vote or to direct the vote of 11,660 shares and the sole
power to dispose or to direct the disposition of 1,123,230 shares.
(5) Based on a Schedule 13G filed on February 12, 2002 Dimensional Fund Advisors
Inc. ("Dimensional") reported that as "an investment advisor registered
under Section 203 of the Investment Advisors Act of 1940, it furnishes
investment advice to four investment companies registered under the
Investment Company Act of 1940, and serves as investment manager to certain
other commingled group trusts and separate accounts. These investment
companies, trusts and accounts are the "Funds." In its role as investment
advisor or investment manager, Dimensional possess voting and/or investment
power over the securities of the Issuer described in the Schedule 13G that
are owned by the Funds. All securities reported in the Schedule 13G are
owned by the Funds. Dimensional disclaims beneficial ownership of such
securities."
(6) Based on a Schedule 13G filed on February 14, 2002 Barclays Global Fund
Advisors reported that it has beneficial ownership of 818,252 shares. Of
those 818,252 shares, Barclays Global Investors N.A., a wholly owned
subsidiary of Barclays Global Fund Advisors, has the sole power to vote or
to direct the vote of 692,702 shares and the sole power to dispose or to
direct the disposition of 692,702 shares. Barclays Global Fund Advisors has
the sole power to vote or to direct the vote of 125,550 shares and the sole
power to dispose or to direct the disposition of 125,550 shares.
7
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
In 2001, the Corporation and certain of its subsidiaries retained the legal
services of Laurent G. Chambaz, a director of the Corporation. The cost of such
services during 2001 was $62,100.
In 2001, the Corporation acquired various materials and manufacturing
supplies used at its Lee Mills from xpedx totaling $74,378. Larry B. Stillman, a
director of the Corporation, has been the Vice President, Northwest Group, xpedx
since 1988.
Management believes that the cost of services rendered by Mr. Chambaz and
the materials and supplies acquired from xpedx during 2001 were reasonable
compared with the cost of obtaining similar services, materials and supplies
from unaffiliated third parties.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors currently consists of nine members, eight of whom
have served on the Board of Directors since November 30, 1995, with the ninth
director commencing his service on the Board of Directors on May 1, 1999. From
January 1, 2001 through December 31, 2001, the Board of Directors met on five
occasions.
The standing committees of the Board of Directors include the Audit
Committee, the Compensation Committee and the Nominating Committee.
The Audit Committee, currently composed of Leonard J. Kujawa, Chairman,
Claire L. Arnold, Alan R. Batkin and K.C. Caldabaugh, met on three occasions in
2001. The Audit Committee recommends to the Board of Directors appointment of
the outside auditors to audit the books, records and accounts of the
Corporation, reviews the scope of such audits, provides oversight in connection
with internal control programs of the Corporation and performs such other duties
as the Board of Directors may from time to time prescribe. The nature and scope
of the Audit Committee's responsibilities are set forth in the "Audit Committee
Charter," a copy of which is on file with the SEC, and its duties are described
more fully herein under the caption "Audit Committee Report."
The Compensation Committee, currently composed of Richard D. Jackson,
Chairman, Claire L. Arnold and Larry B. Stillman, met on one occasion and acted
by unanimous written consent on one occasion in 2001. The Compensation Committee
is composed of non-employee directors and is responsible for the evaluation,
review and approval of officer compensation and acts as the administrating
authority under a number of the Corporation's executive compensation plans. The
Compensation Committee also reviews the Corporation's salaried employee
compensation plan. The nature and scope of the Committee's responsibilities are
set forth herein in further detail under the caption "Compensation Committee
Report."
The Nominating Committee, currently composed of Larry B. Stillman,
Chairman, K.C. Caldabaugh and Laurent G. Chambaz, acted by unanimous written
consent on one occasion in 2001. The Nominating Committee proposes and considers
suggestions for candidates for membership on the Board of Directors and
recommends candidates to fill vacancies on the Board of Directors. The
Nominating Committee will consider nominees recommended by stockholders as
candidates for election to the Board of Directors at the Annual Meeting of
Stockholders. A stockholder wishing to nominate a candidate for election to the
Board of Directors at the Annual Meeting of Stockholders is required to follow
the procedures set forth in the Corporation's By-Laws, which procedures are
hereinafter discussed under the caption "Other Matters - Stockholder Proposals."
8
DIRECTOR ATTENDANCE AT MEETINGS
During the year ended December 31, 2001, each director attended 100 percent
of the Board of Directors meetings.
COMPENSATION OF DIRECTORS
Each director who is not an officer or employee of the Corporation or any
of its subsidiaries or affiliates (a "non-employee director") receives an annual
retainer fee of $20,000, payable pro rata quarterly in advance, which retainer
fee is payable in Common Stock of the Corporation pursuant to the Outside
Directors' Stock Plan (the "Directors' Plan"). In 2001, each non-employee
director received 974 shares of Common Stock under the Directors' Plan or the
same amount in stock unit equivalents pursuant to the Schweitzer-Mauduit
International, Inc. Deferred Compensation Plan for Non-Employee Directors for
those directors who elected to participate in that plan. Each non-employee
director also receives a meeting fee of $3,000 for each Board of Directors
meeting attended and a committee fee of $1,000 for each committee meeting
attended. Each chairperson of a committee receives an additional $500 for each
committee meeting attended. In addition, the Corporation reimburses the
non-employee directors for expenses incurred as a result of attending such
meetings. A director who is an officer or an employee of the Corporation or any
of its subsidiaries or affiliates does not receive any fees for services as a
member of the Board of Directors or any committee thereof, but is reimbursed for
expenses incurred as a result of such service.
Directors who so elect annually, can defer all or part of their
compensation received from the Corporation pursuant to the Corporation's
Non-Employee Directors Deferred Compensation Plan. Participation in this plan
allows a director to defer receipt of compensation and to thereby also defer
certain state and federal income taxes until the deferred compensation is paid
upon the director's retirement from the Board of Directors or earlier death or
disability.
9
EXECUTIVE COMPENSATION
For the 1999, 2000 and 2001 fiscal years, compensation paid to, earned by
or awarded to the Named Executive Officers for services rendered to the
Corporation and its subsidiaries is set forth below, in accordance with the
rules and regulations of the SEC.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------------------ ------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING
OTHER ANNUAL AWARDS OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) ($) (#)(1) COMPENSATION($)
--------------------------- ---- --------- -------- --------------- ---------- ---------- ---------------
Wayne H. Deitrich............ 2001 $490,000 $470,915(2) $ 5,100(3) $ 0 66,550 $74,465(4)
Chairman of the Board and... 2000 480,846(5) 0 5,100(3) 201,563(14) 0 59,202(15)
Chief Executive Officer..... 1999 450,200 279,602 4,800(3) 0 157,300 0
Jean-Pierre Le Hetet......... 2001 $447,571(5)(6) $157,584(2) $92,835(7)(8) $ 0 28,450 $84,280(4)
Chief Operating Officer
and....................... 2000 291,258(5) 18,732 12,502(7) 0 4,000 11,385(15)
President -- French
Operations................ 1999 320,680(5) 127,911 12,985(7) 0 78,300 0
Paul C. Roberts.............. 2001 $264,808(5) $172,750(2) $ 5,486(3)(9) $ 95,750(10) 20,800 $29,080(4)(11)
Chief Financial Officer
and....................... 2000 246,923(5) 41,760 5,597(3)(9) 100,781(14) 3,000 26,445(15)(16)
Treasurer................... 1999 238,846(5) 104,420 5,501(3)(9) 0 42,800 0
John W. Rumely, Jr. (12)..... 2001 $205,000 $98,683(2) $ 5,586(3)(9) $ 95,750(10) 12,100 $35,900(4)(13)
Secretary and General
Counsel................... 2000 185,000 22,339 5,532(3)(9) 0 5,000 0
Peter J. Thompson............ 2001 $225,000 $108,326(2) $ 5,224(3)(9) $ 95,750(10) 18,350 $13,975(4)(11)
President -- U.S.
Operations................ 2000 215,000 20,640 5,262(3)(9) 100,781(14) 3,000 16,250(15)(16)
1999 193,750 65,120 4,858(3)(9) 0 40,900 0
---------------
(1) Awarded January 4, 1999, January 3, 2000, and January 8, 2001,
respectively.
(2) Includes amounts earned in the first year of the 2001-2003 performance
cycle under the Corporation's Long-Term Incentive Plan, payment of which is
subject only to continued employment, in the following amounts: for Mr.
Deitrich $219,398; for Mr. Le Hetet $88,976; for Mr. Roberts $68,506; for
Mr. Rumely $39,776; and for Mr. Thompson $60,446.
(3) Includes contributions by the Corporation of $5,100 for 2001, $5,100 for
2000 and $4,800 for 1999 to the Schweitzer-Mauduit International, Inc.
Retirement Savings Plan.
(4) Includes value received for surrendering outstanding options granted in
1998. Individuals received 50 percent of the present value of the options
as of February 21, 2001 calculated using the Black-Scholes option valuation
method that resulted in the following payments: for Mr. Deitrich in the
amount of $74,465; for Mr. Le Hetet in the amount of $84,280; for Mr.
Roberts in the amount of $19,080; for Mr. Rumely in the amount of $28,400;
and for Mr. Thompson in the amount of $3,975.
(5) Includes unused regular vacation earned by Messrs. Deitrich, in the amount
of $10,846 for 2000; Le Hetet in the amount of $31,691 for 2001, $3,070 for
2000 and $25,103 for 1999; and Roberts, in the amount of $9,808 for 2001,
$6,923 for 2000 and $8,846 for 1999.
(6) Includes $132,081 that Mr. Le Hetet elected to take in the form of a cash
distribution from his Compte Epargne Temps ("CET") in 2001. Under French
law, salaried employees accumulate supplemental hours of paid leave that
can be credited to an account, the CET, in accordance with specific
regulations. This account grows over their career and the hours accumulated
may be withdrawn upon retirement or under other special circumstances. The
funds removed from the CET by Mr. Le Hetet reflected a redemption of hours
at his 2001 rate of pay that had been accumulating since 1988 under these
legally mandated programs.
10
(7) Includes the contribution on Mr. Le Hetet's behalf to the Profit Sharing
Plan ("Participation") by LTR Industries, S.A., the Corporation's 72
percent-owned subsidiary, in the amount of $11,969 for 2001, $12,502 for
2000 and $12,985 for 1999.
(8) Includes $80,866 representing 74 days of paid leave accumulated under
various French laws for Mr. Le Hetet.
(9) Includes imputed income for group life insurance coverage in excess of
$50,000 for: Messrs. Roberts, in the amount of $386 for 2001, $497 for 2000
and $701 for 1999; Rumely in the amount of $486 for 2001 and $432 for 2000
and Thompson in the amount of $124 for 2001, $162 for 2000 and $58 for
1999.
(10) The closing price of the Common Stock was $19.15 per share on December 29,
2000 and was used to determine the dollar value of the restricted stock
grants awarded under the Corporation's Restricted Stock Plan ("Restricted
Stock") on January 1, 2001 in the amount of 5,000 shares each for Messrs.
Roberts, Rumely and Thompson. Dividends are payable to the holders of the
Restricted Stock.
(11) Includes a contribution by the Corporation of $10,000 made on January 1,
2001 pursuant to the Corporation's Deferred Compensation Plan. The
contribution vests on January 1, 2004.
(12) Mr. Rumely was elected Secretary and General Counsel effective January 1,
2000.
(13) Includes a contribution by the Corporation of $7,500 made on January 1,
2001 pursuant to the Corporation's Deferred Compensation Plan. The
contribution vests on January 1, 2005.
(14) The closing price of the Common Stock was $13.4375 per share on December
31, 1999 and was used to determine the dollar value of the Restricted Stock
grants awarded on January 1, 2000 in the amount of 15,000 shares for Mr.
Deitrich, 7,500 shares for Mr. Roberts and 7,500 shares for Mr. Thompson.
Dividends are payable to the holders of Restricted Stock.
(15) Includes value received for surrendering outstanding options granted in
1997. Individuals received 50 percent of the present value of the options
as of September 30, 1999 calculated using the Black-Scholes option
valuation method that resulted in the following payments: for Mr. Deitrich
in the amount of $59,202; for Mr. Le Hetet in the amount of $11,385; for
Mr. Roberts in the amount of $16,445; and for Mr. Thompson in the amount of
$6,250.
(16) Includes a contribution by the Corporation of $10,000 made on January 1,
2000 pursuant to the Corporation's Deferred Compensation Plan. The
contribution vests on January 1, 2004.
11
The following table sets forth information concerning stock options granted
during 2001 to the Named Executive Officers of the Corporation.
2001 OPTION GRANTS
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME GRANTED(1) FISCAL YEAR(2) ($/SHARE)(3) DATE(4) ($)(5)
---- ---------- -------------- ------------ --------------- -------------
Wayne H. Deitrich.............. 66,550 34% $19.35 January 7, 2011 $399,966
Jean-Pierre Le Hetet........... 28,450 15% $19.35 January 7, 2011 $170,985
Paul C. Roberts................ 20,800 11% $19.35 January 7, 2011 $125,008
John W. Rumely, Jr............. 12,100 6% $19.35 January 7, 2011 $ 72,721
Peter J. Thompson.............. 18,350 9% $19.35 January 7, 2011 $110,284
---------------
(1) Represents shares of Common Stock underlying options granted on January 8,
2001 pursuant to the Corporation's Equity Participation Plan.
(2) The Corporation granted options during fiscal 2001 to employees to purchase
an aggregate of 195,900 shares of Common Stock.
(3) The exercise price of the options granted in 2001 was based upon the mean of
the high and low sales prices of the Corporation's Common Stock on January
8, 2001, the date the options were granted.
(4) The options granted in January 2001 are exercisable in increments of 30
percent, 30 percent and 40 percent on or after January 8, 2002, January 8,
2003 and January 8, 2004, respectively.
(5) Calculation is based on the Black-Scholes option-pricing model adapted for
use in valuing stock options. The following assumptions were used for the
2001 grants: market value of the stock equal to the exercise price; ten-year
option term; estimated volatility of 32.6 percent; risk-free rate of return
of 5.15 percent based on the interest rate on 10-year government securities;
and a yield of 3.55 percent.
The following table sets forth information concerning the pre-tax value of
unexercised options held by the Corporation's Named Executive Officers as of
December 31, 2001. Except as noted in the following table, no options were
exercised by the Named Executive Officers in 2001.
2001 YEAR END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT DECEMBER 31, 2001 (#)(1) DECEMBER 31, 2001 ($)(2)
------------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------------- ----------- -------------
Wayne H. Deitrich(3)................... 306,380 129,470 $1,330,689 $461,918
Jean-Pierre Le Hetet(3)................ 127,680 62,570 $ 605,333 $407,798
Paul C. Roberts(3)..................... 68,980 40,020 $ 330,670 $252,125
John W. Rumely, Jr.(3)................. 10,500 21,600 $ 88,688 $139,240
Peter J. Thompson(3)................... 25,440 36,810 $ 207,529 $235,218
---------------
(1) All options granted in 1995 have vested, 60 percent of the options granted
in 1999 have vested and 30 percent of the options granted in 2000 have
vested.
(2) The fair market value of the Corporation's Common Stock was $23.75 per share
on December 31, 2001.
(3) These individuals surrendered on July 10, 2001 vested options granted in
1998. The decrease in vested options was as follows: for Mr. Deitrich
28,100, for Mr. Le Hetet 30,200, for Mr. Roberts 7,200, for Mr. Rumely
10,000 and for Mr. Thompson 1,500.
12
The following table provides information respecting the award opportunity
provided to the Corporation's Named Executive Officers for the Performance Cycle
commencing January 1, 2001 and ending December 31, 2003 ("2003 Performance
Cycle") pursuant to the Corporation's Long-Term Incentive Plan ("LTIP"). LTIP
awards for the 2003 Performance Cycle are contingent on achieving predetermined
financial performance objectives for the Corporation established by the
Compensation Committee for such period and are based on a range of percentages
of the Participant's 2001 base salary for achieving the Threshold, Target,
Maximum and Outstanding Performance Objectives, respectively. Performance at
less than Threshold results in no award. Additional information about the
purpose of and method for determining LTIP awards is set forth herein on pages
18-19 under the caption "Compensation Committee Report" on Executive
Compensation.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK PRICE
LONG TERM INCENTIVE PLAN AWARDS IN 2001 BASED PLANS (1)
--------------------------------------- -----------------------------------------------
PERFORMANCE
OR OTHER
PERIODS UNTIL
NUMBER OF SHARES, UNITS MATURATION THRESHOLD TARGET OUTSTANDING MAXIMUM
NAME OR OTHER RIGHTS (%)(2) OR PAYOUT ($) ($) ($) ($)
---- ----------------------- ------------- --------- -------- ----------- ----------
Wayne H. Deitrich...... Threshold...... 56.25% 2004 $229,688 $918,750 $1,378,125 $1,837,500
Target......... 225.00%
Outstanding.... 337.50%
Maximum........ 450.00%
Jean-Pierre Le
Hetet(3)............. Threshold...... 39.38% 2004 $ 93,149 $372,597 $ 558,895 $ 745,194
Target......... 157.50%
Outstanding.... 236.25%
Maximum........ 315.00%
Paul C. Roberts........ Threshold...... 33.75% 2004 $ 71,719 $286,875 $ 430,313 $ 573,750
Target......... 135.00%
Outstanding.... 202.50%
Maximum........ 270.00%
John W. Rumely, Jr..... Threshold...... 24.38% 2004 $ 41,641 $166,563 $ 249,845 $ 333,126
Target......... 97.50%
Outstanding.... 146.25%
Maximum........ 195.00%
Peter J. Thompson...... Threshold...... 33.75% 2004 $ 63,282 $253,125 $ 379,688 $ 506,250
Target......... 135.00%
Outstanding.... 202.50%
Maximum........ 270.00%
---------------
(1) The "Estimated Future Payouts" reflect potential amounts that may be earned
in years 2002 and 2003 of the 2003 Performance Cycle. The award amounts can
be increased by up to an additional 15% based on increases in the
Corporation's operating profit year over year.
(2) The percentage stated for each Named Executive Officer is the potential
opportunity as a percent of the Participant's 2001 base salary to be earned
over the entire three-year 2003 Performance Cycle. The dollar amount of the
award actually earned in 2001 under the LTIP is included as 2001 Annual
Bonus in the Summary Compensation Table found on page 10 herein for each of
the Named Executive Officers. The 2001 award was earned, but is not payable
until 2004 and is subject to forfeiture if the individual is not employed by
the Corporation as of the date of payment.
(3) Mr. Le Hetet's awards will be paid in Euros. The rate used to convert the
Euro to US$ was the December 31, 2001 closing rate of 0.8904.
13
DEFINED BENEFIT RETIREMENT PLAN
The Corporation provides certain benefits to its U.S. employees through the
Schweitzer-Mauduit International, Inc. Retirement Plan (the "Retirement Plan"),
a U.S. pension plan covering hourly and salaried employees. In July 2000, the
Retirement Plan was amended to add a cash balance formula benefit ("CBB") that
would apply to newly hired employees, certain employees previously covered under
the final average pay formula benefit ("FAPB") and employees who had the right
to elect coverage under either the new CBB or the FAPB. The FAPB and the CBB
provisions of the Retirement Plan are discussed separately below.
Final Average Pay Formula Benefit
The FAPB entitles each vested salaried U.S. employee participating in that
benefit formula to an annual pension benefit at normal retirement equal to 1.50
percent of final average earnings times the employee's years of service, subject
to a deduction for social security benefits or, if greater, 1.125 percent of
final average earnings times years of service plus a specific amount for certain
employees. Final average earnings is defined as the highest average of any five
years of Earnings (as defined in the Retirement Plan) out of the last 15
calendar years of employment, or over the last 60 months of credited service, if
greater. The minimum monthly benefit payable in a single-life annuity to
salaried employees is the lesser of $125 or $25 times years of service.
Retirement benefits for salaried participants who have at least five years
of vesting service may begin on a reduced basis at age 55, or on an unreduced
basis at normal retirement age. Unreduced benefits also are available for
salaried participants with ten years of vesting service at age 62 or as early as
age 60 with 30 years of vesting service. The normal form of benefit for
unmarried salaried participants is a single-life annuity payable monthly.
Benefits will be actuarially adjusted if the employee receives one of the
available forms of joint and survivor or other optional forms of benefit.
Table A illustrates the estimated annual benefits payable upon retirement
at age 65 without regard to IRS limitations under the Retirement Plan for
specified highest five-year average remuneration and years-of-service
classifications for U.S. salaried employees, computed on a single-life annuity
basis, without deduction for Social Security or other offset amounts. Benefits
will be adjusted if the employee receives one of the optional forms of benefit.
Benefits under the Retirement Plan will be limited to the extent required by
U.S. tax provisions. Any excess over such limitation for certain salaried
employees will be paid pursuant to supplemental arrangements.
TABLE A
FINAL AVERAGE PAY FORMULA BENEFIT
YEARS OF BENEFIT SERVICE
AVERAGE -------------------------------------------------------------------
ANNUAL 15 20 25 30, 35 40 45
EARNINGS YEARS YEARS YEARS YEARS YEARS YEARS YEARS
---------- ------- ------- ------- ------- ------- ------- -------
$ 100,000 $22,500 $30,000 $37,500 $45,000 $52,500 $60,000 $67,500
200,000 45,000 60,000 75,000 90,000 105,000 120,000 135,000
300,000 67,500 90,000 112,500 135,000 157,500 180,000 202,500
400,000 90,000 120,000 150,000 180,000 210,000 240,000 270,000
500,000 112,500 150,000 187,500 225,000 262,500 300,000 337,500
600,000 135,000 180,000 225,000 270,000 315,000 360,000 405,000
700,000 157,500 210,000 262,500 315,000 367,500 420,000 472,500
800,000 180,000 240,000 300,000 360,000 420,000 480,000 540,000
900,000 202,500 270,000 337,500 405,000 472,500 540,000 607,500
1,000,000 225,000 300,000 375,000 450,000 525,000 600,000 675,000
14
The estimated years of benefit service, which includes years of benefit
service while at Kimberly-Clark Corporation (from which the Corporation was
spun-off in November, 1995) as of normal retirement at age 65, for Messrs.
Deitrich and Roberts, are 38.5 and 36.6, respectively. Messrs. Rumely and
Thompson have their retirement benefits determined under the CBB.
Mr. Le Hetet's retirement benefits are provided under a foreign
subsidiary's pension plan that bases benefits on years of service and
compensation. His projected annual benefit at normal retirement at age 65 is
298,341Euros or $265,643 with 29 years of credited service.
Cash Balance Benefit Formula
The CBB covers all salaried employees hired on or after July 1, 2000 and
salaried employees as of July 1, 2000 who are not "grandfathered" under the
terms of the Retirement Plan, or are grandfathered employees who chose the CBB.
Salaried employees who, as of July 1, 2000, had either attained the sum of their
age plus years of vesting service equal to 65 or more, or attained the sum of
their age plus years of vesting service equal to 60 or more and had at least 15
years of vesting service were grandfathered under the FAPB. The grandfathered
employees had until October 1, 2000 to elect to remain under the FAPB or to take
the CBB.
For salaried employees who as of July 1, 2000 were not grandfathered or who
were grandfathered, but elected the CBB, an initial account balance was
established based on the employee's accrued benefit payable at normal retirement
age under the FAPB converted to a lump sum based on a mortality table and an
interest rate that was consistent with industry norms.
A "Retirement Contribution Credit" is added to the participant's account
balance each year in which the participant accrues a year of vesting service.
The Retirement Contribution Credit is determined in accordance with the schedule
noted in Table B. The account balance is also credited with an interest credit
based on the average yield for 30-year Treasury securities for the November
immediately preceding the current Retirement Plan year
TABLE B
RETIREMENT CONTRIBUTION CREDIT
PLUS ADDITIONAL
PERCENTAGE OF
EARNINGS OVER
PARTICIPANT'S ATTAINED AGE PLUS PERCENTAGE OF ALL SOCIAL SECURITY
YEARS OF VESTING SERVICE EARNINGS WAGE BASE
------------------------------- ----------------- ---------------
35 or less.................................................. 2.4% 2.4%
36 to 44.................................................... 3.2% 3.2%
45 to 54.................................................... 4.0% 4.0%
55 to 64.................................................... 4.8% 4.8%
65 and over................................................. 6.4% 5.7%
Participants have the option to receive their vested account balance as
either a lump-sum payment or an immediate single life annuity or a 50 percent
joint and survivor annuity if married when they terminate employment with the
Corporation or become disabled.
Messrs. Rumely and Thompson are the only Named Executive Officers who
participate in the CBB. Messrs. Deitrich and Roberts are grandfathered employees
who elected to remain covered by the FAPB.
Table C shows the estimated annual retirement benefit payable under the CBB
for the participating Named Executive Officers computed as a single life annuity
based on 2000 earnings, without regard to Code limitations. These estimates
assume an average annual interest credit of 5.78% percent, 2001 earnings the
15
same as 2000 earnings and earnings increases of 4 percent per year thereafter.
The Social Security wage base was also assumed to increase 4 percent per year.
TABLE C
CASH BALANCE BENEFIT FORMULA
AMOUNT OF LEVEL
NAMED EXECUTIVE OFFICER YEAR REACHING AGE 65 ANNUITY ($)
----------------------- -------------------- ---------------
John W. Rumely, Jr.......................................... 2018 $ 75,944
Peter J. Thompson........................................... 2027 $215,388
Supplemental Retirement Plan
The Corporation's supplemental retirement plan provides a benefit equal to
the difference between (i) the benefit payable to a participant under the
Retirement Plan and (ii) the benefit that would be payable to such participant
under such plan, calculated without regard to the compensation limit under Code
Section 401(a)(17) and the limitations on benefits under Code Section 415. The
Supplemental Plan is unfunded and participation is limited to salaried employees
with earnings in excess of Code Section 401(a)(17) limits and who are members of
a select group of management or highly-compensated employees.
EXECUTIVE SEVERANCE PLAN
The Corporation's Executive Severance Plan (the "Severance Plan") provides
that in the event of termination of a participant's employment with the
Corporation or one of its French affiliates for any reason other than Death,
Disability or Retirement (as defined in the Severance Plan) within two years
after a change of control of the Corporation, as defined in the Severance Plan,
a participant employed in the United States will be entitled to: (i) receive a
cash payment in an amount equal to three times the highest annual compensation
(base salary and any incentive awards) paid or payable within the three-year
period ending on the date of termination; (ii) receive health, dental and life
insurance benefits from the Corporation for a period of three years; and (iii)
receive a cash payment in an amount equal to the actuarial equivalent of the
accrued benefits the participant would have earned under the Retirement Plan and
the Supplemental Plan if the participant had continued participation in those
plans for three years following termination. A participant employed by one of
the Corporation's French affiliates is entitled to essentially the same payments
and benefits as a United States participant, subject to certain adjustments
which take into account the differences between the respective compensation,
benefit and pension plans and programs in the United States and France.
Severance payments under the Severance Plan for participants subject to United
States Federal Income Tax will be limited to the extent necessary to avoid an
excise tax on the participant under Code Section 4999 if the "parachute
payments" under Code Section 280G with respect to such participant are less than
3.5 times the "base amount" for purposes of Code Section 280G. If such parachute
payments equal or exceed 3.5 times such base amount with respect to a
participant, the Corporation shall pay the participant an additional gross-up
payment to compensate such participant for the excise tax liability under Code
Section 4999. The Compensation Committee of the Board of Directors of the
Corporation has established the eligibility criteria for participation and, from
time to time, designates key employees as participants in the Severance Plan.
Subject to certain conditions, the Severance Plan may be amended or terminated
by resolution of the Board of Directors, but no such amendment or termination
shall be effective during the two-year period following a change of control of
the Corporation without the consent of all of the participants. The Corporation
has agreements under the Severance Plan with the Named Executive Officers and
certain other key employees. The maximum amount payable upon termination (with
respect to base salary and annual
16
incentive compensation) pursuant to the agreements under the Severance Plan with
the Named Executive Officers, assuming that a change of control of the
Corporation and the termination of their employment had occurred on December 31,
2001, would have been as follows: Mr. Deitrich, $2,224,551, Mr. Le Hetet,
$1,270,464, Mr. Roberts, $1,077,732, Mr. Rumely, $791,721 and Mr. Thompson
$818,640.
If a participant's employment is otherwise terminated for any reason other
than Death, Retirement, Voluntary Resignation or Cause (as defined in the
Severance Plan), the participant will receive a cash payment in an amount of up
to 24 months base salary.
COMPENSATION COMMITTEE REPORT
The following report summarizes the Compensation Committee's actions during
2001. This report shall not be deemed to be incorporated by reference by any
general statement incorporating this Proxy Statement by reference into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that the Corporation specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
acts.
The Compensation Committee was established by the Board of Directors on
December 1, 1995, and is composed entirely of directors who are not, and have
never been, officers or employees of the Corporation. The Board of Directors
designates the members and the chairperson of such committee. The Compensation
Committee's duties include establishing and administering the Corporation's
compensation and benefit policies and practices for executive officers and key
managerial employees. The Compensation Committee also administers the Annual
Incentive Plan ("AIP"), the Equity Participation Plan ("EPP"), pursuant to which
stock options are granted, the Restricted Stock Plan ("RSP") and the LTIP (see
"Long-Term Incentive Compensation"), as well as approving any contributions by
the Corporation to the account of any participant in the Deferred Compensation
Plan ("DCP").
The executive compensation information reported in the Summary Compensation
Table of this Proxy Statement is for services rendered to the Corporation and
its subsidiaries commencing on January 1, 1999 and ending on December 31, 2001,
the last day of the Corporation's 2001 fiscal year.
Executive Compensation Policies
The Corporation's executive compensation policies are designed to attract
and retain qualified executives, to appropriately reward individual achievement,
and to enhance the financial performance of the Corporation, and thus
stockholder value, by significantly aligning the financial interests of the
Corporation's executives with those of its stockholders. To accomplish these
objectives, the executive compensation program as administered by the
Compensation Committee consists primarily of (i) annual cash compensation, the
components of which are base salary and an annual variable cash incentive
payable pursuant to the Corporation's AIP and (ii) long-term incentive
compensation, consisting of stock options and restricted stock awards pursuant
to the Corporation's EPP and RSP, respectively, and a long-term incentive
opportunity payable in cash pursuant to the Corporation's LTIP. Base salary and
annual bonuses are designed to recognize individual performance and achievement
of business objectives each year. The value of long-term incentives is directly
linked to the financial performance of the Corporation including, in the case of
stock options and restricted stock, the performance of the Corporation's Common
Stock, and, therefore, total stockholder return. Executive officers also
participate in other benefit plans available to employees generally, including
the Corporation's Retirement Savings Plan and a medical plan.
In developing the Corporation's executive compensation programs and to
assist in determining appropriate compensation levels for executives, the
Compensation Committee retained a national compensation
17
consulting firm to provide information and advice regarding plan design and
industry pay practices for executives holding specified positions. Comparative
compensation information was drawn from a broader range of companies than those
included in the industry index used in the performance graph on page 23 of this
Proxy Statement, and not all of the companies included in the performance graph
were included in the surveys utilized. The Compensation Committee's objective is
to provide opportunities to an executive officer for compensation, both on an
overall basis and on the basis of each respective component, which is targeted
in each case at the 50th percentile of the market groups studied within the
country of their employment.
Annual Salary and Incentive Bonuses
In determining the base salaries of executive officers effective as of
January 1, 2001, the Compensation Committee reviewed salaries paid to similarly
situated executives in the companies reflected in the above-described
compensation study. In establishing base salary levels, the Compensation
Committee considers such factors as job complexity, level of responsibility, the
relationship of the position to the Corporation's long-term strategic goals, and
the particular individual's skills, experience and background. While no
pre-established weightings are given to these factors, particular emphasis is
placed on attracting and retaining quality individuals in order to develop and
retain an effective executive team for the Corporation.
The purpose of the Corporation's AIP is to further unite the interests of
the stockholders of the Corporation and its key employees through (i) the annual
establishment of Corporate objectives and (ii) the annual payment of cash
incentive awards to key employees based on individual performance and the
attainment of the Corporation's objectives. Target incentive cash opportunities
under the AIP for executive officers including the Chief Executive Officer can
range from 25 to 60 percent of a participant's base salary with a maximum payout
of up to 195 percent of the participant's target incentive award percentage.
Actual annual cash bonuses are determined by measuring performance against
specific goals established at the beginning of each year. The goals take into
account, depending on the responsibility of the individual, two or more of the
following: the individual's performance; the performance of the functional group
or unit with which the individual is associated (primarily based upon the
operating profit of such unit); and the overall performance of the Corporation
(primarily based upon diluted earnings per share). Such goals may or may not be
equally weighted and may vary from one executive officer to another.
Long-Term Incentive Compensation
The Corporation's long-term incentive compensation for its key executives
consists of: (i) grants of stock options pursuant to the Corporation's EPP; (ii)
grants of restricted stock pursuant to the RSP; and (iii) a cash opportunity
payable based on achievement of objectives over a three-year performance period
pursuant to the Corporation's LTIP.
The EPP is intended to provide a means of encouraging an ownership interest
in the Corporation by those employees who have contributed or are determined to
be in a position to contribute materially to the success of the Corporation,
thereby increasing their motivation for and interest in the achievement of the
Corporation's long-term success. Because the value of a stock option bears a
direct relationship to the price of shares of the Corporation's Common Stock,
stock options are viewed as a means of encouraging executives and other key
management employees to increase long-term stockholder value. In determining
awards of stock options under the EPP, the Compensation Committee makes grants
based on such factors as the competitive target long-term incentive opportunity
for executives with comparable responsibilities in similarly sized corporations,
individual contributions to corporate performance and management
recommendations.
The RSP is intended to promote the long-term financial success of the
Corporation by attracting to and retaining for the Corporation and its
Affiliates outstanding executive personnel and to motivate such personnel
18
by means of restricted stock grants to contribute to the Corporation's success.
The Compensation Committee selects participants and establishes the terms on
which grants of restricted stock are made. Awards of restricted stock will be
made from the Corporation's treasury stock and constitute an immediate transfer
of ownership to the participant of shares of the Corporation's Common Stock,
including the right to vote the shares and to receive dividends thereon, at a
share price established by the Compensation Committee in its discretion. The
Participant's continued ownership of and right to freely transfer the restricted
stock is subject to such conditions on transferability and to such risks of
forfeiture as are established by the Compensation Committee at the time of the
grant, which may include continued employment with the Corporation for a defined
period, achievement of specified management performance objectives or other
conditions established by the Compensation Committee. As with stock options, a
portion of the value of restricted stock bears a direct relationship to the
value of the Corporation's Common Stock and, therefore, total stockholder
return.
The LTIP is designed to enable the Corporation to attract and retain key
executives by providing a competitive and diversified total compensation package
and to help focus executives' attention on the long-term performance of the
Corporation. The Compensation Committee selects participants and determines
awards under the LTIP on the basis of a three-year performance period and is
otherwise responsible for administration of the LTIP. Performance is measured on
a cumulative basis and awards are earned annually. However, a part of the award
opportunity may be earned in each year of the performance period if the
cumulative performance objectives are not met, but pre-established stand-alone
annual objectives are met. Payment of any earned awards is made at the end of
the performance period and is subject to the participant's continued employment
as defined by the LTIP. New award opportunities are not established until the
current performance period is concluded thereby maintaining a clearer focus on
the long-term performance objectives established by the Compensation Committee.
The LTIP award opportunities are based on a competitive market analysis of
long-term incentive opportunities for executive management positions in
comparable companies. Under the LTIP, a target cash award is established for
each participant, which, taken together with a participant's stock option
grants, is structured to provide the participant with a total long-term
incentive award commensurate with the participant's responsibilities. The award
opportunity is allocated 50 percent in cash and 50 percent in stock options. A
participant in the LTIP can earn awards that range from 25 percent up to 230
percent of the performance award opportunity allocated by the Compensation
Committee. The Compensation Committee may, in its discretion, adjust the award
opportunity ranges up or down through the use of special conditions established
when the performance objectives are determined for a performance period under
the LTIP. An award opportunity was established by the Compensation Committee and
approved by the Board of Directors for the 2001 to 2003 performance period.
The Board of Directors approved the repurchase in July 2000 of certain
vested options granted in 1997 and 1998 that had strike prices of $28.00 per
share or higher. The targeted strike prices were substantially above the then
prevailing market price for the Common Stock. These options were granted prior
to the time that the long-term impact on sales volumes of cigarettes in the
United States resulting from the multi-state settlement by the major cigarette
manufacturers was known. This and related market events, which occurred
subsequent to the grant dates of the options being repurchased, fundamentally
changed the business environment in which the U.S. operations are conducted and
were due to factors that were outside of management's control. The Board of
Directors therefore determined it was in the best interest of the Corporation to
offer to repurchase selected options for 50 percent of their present value
determined using the Black-Scholes option valuation model. On July 10, 2001, the
second and final phase of the previously authorized option repurchase program
was concluded with the repurchase of 107,500 options at a total cost of
$292,401.
19
Deferred Compensation
As an adjunct to the annual salary and to the annual bonus and long-term
incentive bonus that may be earned under the AIP and LTIP, respectively, by the
Named Executive Officers and other key employees, the Corporation adopted the
DCP. The DCP permits eligible employees who elect to participate to defer
receipt and taxation of a portion of their annual salary and incentive bonuses.
The amount of annual salary and incentive bonus awards that may be deferred is
limited to 25 percent and 50 percent, respectively. Eligibility to participate
in the DCP is limited to "management" and "highly compensated employees" as
defined in the Employee Retirement Income Security Act of 1974, as amended. The
Corporation may, with Compensation Committee approval, make cash contributions
to a participant's account in the DCP.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Compensation Committee used the same compensation policy described
above for all executive officers to determine the compensation for Wayne H.
Deitrich, the Chief Executive Officer of the Corporation. Mr. Deitrich is a
participant in or is entitled to participate in each of the executive
compensation plans described above on the same terms as the other executive
officers. In setting both the cash-based and equity-based elements of Mr.
Deitrich's compensation, the Committee attempted to target the 50th percentile
of such compensation as paid to chief executive officers of the companies
analyzed in the outside consultant's study.
CORPORATE TAX DEDUCTION FOR EXECUTIVE COMPENSATION
Pursuant to the Omnibus Budget Reconciliation Act of 1993 ("OBRA"), annual
compensation payable to the chief executive officer and each of the four highest
paid executive officers of a public corporation will not be deductible by the
corporation for Federal Income Tax purposes to the extent any such officer's
overall compensation exceeds $1,000,000. Certain types of compensation, however,
including qualifying performance-based incentive compensation, are both
deductible and excluded for purposes of calculating the $1,000,000 base under
Code Section 162(m). OBRA recognizes stock option plans as performance-based if
such plans meet certain requirements. The Compensation Committee will take
advantage of qualifying compensation paid to the Named Executive Officers under
OBRA to maintain the Corporation's deduction for such expenses where it deems
appropriate and advisable. However, all executive compensation plans and
compensation paid to the Named Executive Officers may not be so qualified.
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
Richard D. Jackson (Chairman)
Claire L. Arnold
Larry B. Stillman
20
AUDIT COMMITTEE REPORT
The following report summarizes the Audit Committee's actions during 2001.
This report shall not be deemed to be incorporated by reference by any general
statement incorporating this Proxy Statement by reference into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that the Corporation specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such acts.
In accordance with its written charter, the Audit Committee of the Board of
Directors ("Audit Committee") assists the Board in fulfilling its responsibility
for oversight of the quality and integrity of the accounting, internal control
and financial reporting practices of the Corporation. The members of the Audit
Committee meet the applicable independence and experience requirements of the
New York Stock Exchange. During 2001, the Audit Committee met three times, and
the Audit Committee chairman, as representative of the Audit Committee,
discussed the interim financial information contained in each quarterly earnings
announcement with the Chief Financial Officer, Controller and outside auditor
prior to public release.
The following table discloses the aggregate audit and non-audit fees
relating to amounts paid by the Corporation to its outside auditor, Deloitte &
Touche LLP, the member firms of Deloitte Touche Tohmatsu and their respective
affiliates, (collectively, "Deloitte") for the fiscal year ended December 31,
2001:
Audit Fees.................................................. $357,400
Financial Information Systems Design and Implementation
Fees...................................................... $ 0
All Other Fees.............................................. $ 90,291
"All Other Fees" paid by the Corporation to Deloitte for the fiscal year ended
December 31, 2001 can be categorized as follows:
Tax Services Fees -- The aggregate fees for tax planning and compliance
were $54,037.
Attestation and Other Fees -- The aggregate fees for attestation
services for matters such as audits of employee benefit plans, comfort
letters and consents related to SEC and other registration statements
and fees for consultation on regulatory matters, accounting standards,
procedures or transactions were $36,254.
It is the Corporation's policy to restrict it's outside auditor to the
non-audit work detailed under "All Other Fees" and not to utilize it's outside
auditor for "Financial Information Systems Design and Implementation," merger
and acquisition due diligence, internal audit services, record keeping or
strategic consulting. The Corporation may depart from this policy if the related
fees are immaterial or if there is an exceptional business consideration, the
work and associated fees are not deemed to present a conflict of interest with
the independent audit function and the Audit Committee approves such exception.
In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the outside auditor a formal written statement
describing all relationships between the outside auditor and the Corporation
that might bear on the outside auditor's independence consistent with
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees," discussed with the outside auditor any relationships that may
impact their objectivity and independence, including the services and amounts
reflected in the above table, and satisfied itself as to the outside auditor's
independence.
The Committee reviewed with the outside auditor their audit plans, audit
scope and identification of audit risks. The Audit Committee also discussed with
management and the outside auditor the quality and adequacy of the Corporation's
internal controls.
21
The Audit Committee discussed and reviewed with the outside auditor all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the outside auditor's examination of the
financial statements.
The Audit Committee reviewed and discussed the audited financial statements
of the Corporation as of and for the fiscal year ended December 31, 2001, with
management and the outside auditor. Management has the responsibility for the
preparation of the Corporation's financial statements and the outside auditor
has the responsibility for the examination of those statements.
Based on the above-mentioned review and discussions with management and the
outside auditor, the Committee recommended to the Board of Directors that the
Corporation's audited financial statements be included in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2001, for filing with the SEC.
The Audit Committee also recommended the reappointment of the outside auditor
and the Board of Directors concurred in such recommendation.
AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
Leonard J. Kujawa (Chairman)
Claire L. Arnold
Alan R. Batkin
K. C. Caldabaugh
22
PERFORMANCE GRAPH
The following graph compares the total cumulative stockholder return on the
Corporation's Common Stock during the period from December 31, 1996 through
December 31, 2001, with the comparable cumulative total returns of the Wilshire
500 Index and a self-constructed peer group that reflects, but is not exactly
comparable to the Dow Jones Paper Products Index ("Peer Group"). The graph
assumes that the value of the investment in the Common Stock and each index was
$100 on December 31, 1996 and that all dividends were reinvested. The Peer Group
is comprised of the following companies: Boise Cascade Corporation, Bowater
Incorporated, Champion International Corporation, P. H. Glatfelter Company, Mead
Corporation and MeadWestvaco Corporation.
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
(PERFORMANCE GRAPH)
-------------------------------------------------------------------------------------------------
BASE YEARS ENDING
PERIOD ---------------------------------------------------------
31-DEC-96 31-DEC-97 31-DEC-98 31-DEC-99 31-DEC-00 31-DEC-01
-------------------------------------------------------------------------------------------------
Schweitzer-Mauduit
International Inc. $100.00 $119.77 $ 50.80 $ 46.24 $ 68.64 $ 87.50
Wilshire 5000 Index $100.00 $131.29 $162.05 $200.23 $178.43 $158.85
Peer Group $100.00 $107.34 $107.15 $144.42 $114.45 $115.04
OTHER MATTERS
The management of the Corporation knows of no other matters to be presented
at the 2002 Annual Meeting of Stockholders. Should any other matter requiring a
vote of the stockholders arise at the meeting, the persons named in the proxy
will vote the proxies in accordance with their best judgment.
OUTSIDE AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Corporation has selected Deloitte & Touche LLP as the principal outside
auditors for the Corporation for the current year. Deloitte & Touche LLP has
been the outside auditor for the Corporation since its incorporation.
Representa-
23
tives of Deloitte & Touche LLP are expected to be present at the Annual Meeting
with the opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
To be considered for inclusion in the Corporation's proxy statement and
form of proxy for the 2003 Annual Meeting of Stockholders, stockholder proposals
must be received by the Secretary of the Corporation at the Corporation's
principal executive offices no later than November 14, 2002. The Corporation
reserves the right to decline to include in the Corporation's proxy statement
any stockholder's proposal which does not comply with the rules of the SEC for
inclusion therein.
The By-Laws of the Corporation include requirements applicable to
stockholder proposals other than those included in the proxy materials pursuant
to the regulations of the SEC. Pursuant to the By-Laws, a stockholder proposing
to nominate persons for election to the Board of Directors or to introduce other
business at the Annual Meeting of Stockholders must give timely written notice
to the Corporation's Secretary. To be timely, a stockholder's notice must be
delivered and received at the Corporation's principal executive offices not less
than 50 days nor more than 75 days prior to the Annual Meeting of Stockholders;
provided that if less than 60 days notice or prior public disclosure of the date
of the Annual Meeting of Stockholders is given or made to stockholders, notice
by the stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the Annual
Meeting of Stockholders date was mailed or such public disclosure of the date
was made, whichever first occurs.
The Corporation's By-Laws further provide that a stockholder's notice
proposing to nominate persons for election to the Board of Directors must
contain certain information about both the nominee and the stockholder making
the nomination. A stockholder's notice proposing to bring other business before
the Annual Meeting of Stockholders must contain: (1) a brief description of the
business desired to be brought before the Annual Meeting of Stockholders and the
reasons for conducting such business at the Annual Meeting of Stockholders; (2)
the stockholder's name and address; (3) the class and number of shares of the
Corporation's capital stock beneficially owned by the stockholder; (4) any
material interest of the stockholder in such business; and (5) a representation
that such stockholder intends to appear in person or by proxy at the annual
meeting to bring such business before the Annual Meeting of Stockholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers and persons who own more than 10
percent of a registered class of the Corporation's equity securities to file
reports with the SEC regarding beneficial ownership of Common Stock and other
equity securities of the Corporation. Officers, directors and greater than 10
percent stockholders are required by SEC regulations to furnish the Corporation
with copies of all forms they file pursuant to Section 16(a).
To the Corporation's knowledge, based solely on a review of copies of such
reports furnished to the Corporation and written representations that no other
reports were required, during the fiscal year ended December 31, 2001, all
officers, directors and greater than 10 percent beneficial owners complied with
the Section 16(a) filing requirements of the Act.
FORM 10-K
The Corporation's Annual Report to the SEC on Form 10-K for the fiscal year
ended December 31, 2001 (including the consolidated financial statements and
schedules thereto, but excluding exhibits) has been
24
included with the mailing of this Proxy Statement to stockholders of record and
beneficial holders as of February 28, 2002. Additional copies of the
Corporation's Annual Report to the SEC on Form 10-K for the fiscal year ended
December 31, 2001 (excluding exhibits) will be provided without charge to each
stockholder so requesting in writing. Each request must set forth a good faith
representation that, as of February 28, 2002, the record date for the Annual
Meeting, the person making the request beneficially owned shares of the
Corporation's Common Stock. The written request should be directed to: Paul C.
Roberts, Chief Financial Officer and Treasurer.
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by marking the
appropriate boxes on the enclosed proxy card.
25
(SCHWEITZER-MAUDUIT LOGO)
INVITATION TO STOCKHOLDERS
NOTICE OF 2002 ANNUAL MEETING
PROXY STATEMENT
PROXY
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
100 NORTH POINT CENTER EAST
SUITE 600
ALPHARETTA, GEORGIA 30022-8246
COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, APRIL 25, 2002
The undersigned hereby appoints JOHN W. RUMELY, JR., PAUL C. ROBERTS
and WAYNE L. GRUNEWALD, and each of them, proxies with full power of
substitution, to represent and to vote as set forth herein all the shares of
Common Stock of Schweitzer-Mauduit International, Inc. (the "Corporation") held
of record by the undersigned on February 28, 2002, at the Annual Meeting of
Stockholders of the Corporation, to be held at the Corporation's headquarters,
100 North Point Center East, Alpharetta, GA 30022 at 11:00 a.m. local time, on
Thursday, April 25, 2002, and any adjournment thereof.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
APRIL 25, 2002
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
PLEASE MARK YOUR
A [X] VOTES AS IN THIS
EXAMPLE.
MANAGEMENT RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
WITHHELD
FOR ALL FROM ALL
NOMINEES NOMINEES
1. Election of 2. In their discretion, the proxies are authorized to vote as
Class I [ ] [ ] NOMINEES: described in the Proxy Statement and upon such other
Directors (01) Claire L. Arnold business as may properly come before the meeting.
(02) Alan R. Batkin
[ ] (03) Laurent G. Chambaz THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
-------------------------------------- DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
FOR THE NOMINEES EXCEPT AS NOTED ABOVE MADE, THIS PROXY WILL BE VOTED "FOR" ITEM 1.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
Signature: Date: Signature: Date:
--------------------------------- --------------- --------------------------------- ---------------
NOTE: Please sign exactly as name appears on Stock Certificate. If stock is held in the name of two or more persons, all must sign.
When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name
by authorized person.
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