<PAGE> 1
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. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
John H. Harland Company
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(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):
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
(5) Total fee paid:
N/A
[ ] Fee paid previously with preliminary materials:
N/A
[ ] 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:
N/A
(2) Form, Schedule or Registration Statement No.:
N/A
(3) Filing Party:
N/A
(4) Date Filed:
N/A
<PAGE> 2
HARLAND LOGO
John H. Harland Company
ROBERT R. WOODSON
Chairman of the Board
March 24, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 annual meeting of shareholders
of John H. Harland Company to be held at the High Museum of Art, 1280 Peachtree
Street, NE, Atlanta, Georgia on Friday, April 25, 1997 at 10:00 a.m.
The items of business are listed in the Notice of Annual Meeting and are
more fully addressed in the Proxy Statement which follows. In addition, we will
review the Company's results during the past year and discuss our key business
initiatives and future plans.
Your vote is important regardless of the number of shares you hold. Please
date, sign and return the proxy in the enclosed envelope to ensure that your
shares are represented at the meeting.
On behalf of your Board of Directors, thank you for your continued support
and interest in Harland.
Sincerely,
Robert R. Woodson
PO Box 105250 Atlanta, Georgia 30348 Phone (770) 981-9460
<PAGE> 3
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1997
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of John H.
Harland Company will be held at the High Museum of Art, 1280 Peachtree Street,
NE, Atlanta, Georgia on Friday, April 25, 1997 at 10:00 a.m. for the following
purposes:
(1) To elect three Directors;
(2) To ratify the appointment of Deloitte & Touche LLP as the Company's
independent certified public accountants for the year ending December 31, 1997;
and
(3) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on March 3, 1997 as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the meeting and any adjournment thereof.
Your attention is directed to the Proxy Statement submitted with this
Notice.
VICTORIA P. WEYAND
Vice President and Secretary
Atlanta, Georgia
March 20, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE VOTE, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE, WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 4
[JOHN HARLAND LOGO]
BOX 105250
ATLANTA, GA 30348
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1997
The enclosed form of proxy is solicited by the Board of Directors of John
H. Harland Company (the "Company") for use at the annual meeting on April 25,
1997 and any adjournment thereof. When such proxy is properly executed and
returned, the shares it represents will be voted as directed, or, if no
direction is indicated, they will be voted for the election of the nominees as
directors and in favor of the appointment of auditors. Any shareholder giving a
proxy has the power to revoke it at any time before it is voted, effective upon
receipt by the Secretary of the Company of either an instrument revoking it or a
duly executed proxy bearing a later date. Furthermore, if a shareholder
attending the meeting elects to vote in person, any previously executed proxy is
thereby revoked.
Only shareholders of record as of the close of business on March 3, 1997
are entitled to vote at the meeting. As of that date, the Company had
outstanding 30,944,066 shares of Common Stock. Each share is entitled to one
vote. No cumulative voting rights are authorized. This Proxy Statement and the
accompanying proxy will be first mailed to shareholders on or about March 20,
1997.
Votes cast by proxy or in person at the meeting will be tabulated by the
election inspectors appointed for the meeting, who also will determine whether a
quorum is present. The inspectors will treat abstentions as shares that are
present and entitled to vote for purposes of determining a quorum but as unvoted
for purposes of approving any matter submitted to the shareholders. If a broker
indicates on a proxy that it does not have discretionary authority as to certain
shares to vote on a particular matter, those shares will not be considered as
present.
Pursuant to the Company's Bylaws and applicable state law, a quorum is
present if a majority of the votes entitled to be cast are represented in person
or by proxy at the meeting. The affirmative vote of a plurality of votes cast is
required to elect directors.
ELECTION OF DIRECTORS
Under the Bylaws, directors are divided into three classes with each class
serving a three-year term and one class elected at each annual meeting. The
terms of four directors expire at the 1997 annual meeting. Three directors are
being nominated for reelection to the Board to serve three-year terms expiring
in 2000. Lawrence L. Gellerstedt, Jr. is not eligible for reelection under the
Company's retirement policy, and will retire at the annual meeting after ten
years of dedicated service to the Board and the Company. The remaining directors
will continue to serve until their respective terms expire as indicated.
The Board has no reason to believe that any of the nominees will be
unavailable to serve as a director. However, if at the time of the meeting any
nominee should be unable or decline to serve, the persons named in the proxy
will vote for a substitute nominee, vote to allow the vacancy created thereby to
remain open until filled by the Board, or vote to reduce the number of directors
for the ensuing year, as the Board recommends. In no event, however, can the
proxy be voted to elect more than three directors.
<PAGE> 5
The following list sets forth information regarding the nominees for
election. Such information has been furnished by the respective individuals.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM
<TABLE>
<CAPTION>
CURRENT DIRECTOR OF
NAME AGE PRINCIPAL OCCUPATION TERM EXPIRES HARLAND SINCE
---- --- -------------------- ------------ -------------
<S> <C> <C> <C> <C>
EDWARD J. HAWIE 59 Partner, King & Spalding (legal 1997 1991
counsel to the Company)
G. HAROLD NORTHROP 61 Vice Chairman of the Board and 1997 1984
Chairman of the Executive Committee,
Callaway Gardens (horticultural,
environmental and recreational
facility) Director, American Business
Products, Inc. and SunTrust Bank,
West Georgia NA
ROBERT A. YELLOWLEES 58 Chairman and Chief Executive Officer, 1997 1994
National Data Corporation
(information systems and services for
the healthcare and payment systems
industry) Director, Protective Life
Corporation
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING
ROBERT J. AMMAN 58 President and Chief Executive Officer 1999 1995
of the Company
JUANITA POWELL BARANCO 47 Executive Vice President, Baranco 1999 1993
Automotive Group (automobile
dealership) Director, Federal Reserve
Bank of Atlanta
JOHN J. MCMAHON JR. 54 Chairman of the Board, McWane, Inc. 1999 1988
(pipe and valve manufacturing)
Director, National Bank of Commerce
and Protective Life Corporation
H. G. PATTILLO 70 Chairman of the Board, Pattillo 1998 1980
Construction Company, Inc.
(industrial development) Director,
Protective Life Corporation, SunTrust
Bank, Atlanta and SunTrust Banks of
Georgia, Inc.
LARRY L. PRINCE 58 Chairman and Chief Executive Officer, 1999 1990
Genuine Parts Company (distributor of
automobile replacement parts)
Director, Crawford & Company, Equifax
Inc., Southern Mills, SunTrust Banks
of Georgia, Inc. and UAP Inc.
(Canada)
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
CURRENT DIRECTOR OF
NAME AGE PRINCIPAL OCCUPATION TERM EXPIRES HARLAND SINCE
---- --- -------------------- ------------ -------------
<S> <C> <C> <C> <C>
JOHN H. WEITNAUER JR. 70 Retired Chairman and Chief Executive 1998 1973
Officer, Richway Stores, a division
of Federated Department Stores, Inc.
(operator of discount department
stores) Director, Payless Cashways,
Inc.
ROBERT R. WOODSON 64 Chairman of the Board of the Company 1998 1971
Director, Allied Holdings, Inc. and
Haverty Furniture Companies, Inc.
</TABLE>
Each of the directors and nominees has been principally employed in his or
her present capacity for at least five years, except for Mr. Amman, who joined
the Company in October 1995. Previously, Mr. Amman served as Vice Chairman of
First Financial Management Corporation, a diversified information and financial
services company, from November 1994 through October 1995. Prior to such time he
served as President and Chief Executive Officer of New Valley Corporation, a
financial services company, and its Western Union Financial Services subsidiary,
since 1988. A petition under Chapter 11 of the Federal Bankruptcy Code was
entered against New Valley Corporation in March 1993, and it emerged from
bankruptcy in January 1995.
BENEFICIAL OWNERSHIP
The following table sets forth (in alphabetical order) the beneficial
ownership of the Company's Common Stock by (i) the Company's directors and
nominees, (ii) the Chief Executive Officer and the four most highly compensated
executive officers of the Company, (iii) all directors and executive officers as
a group, all as of February 28, 1997, and (iv) five percent shareholders of the
Company as of the dates indicated in the footnotes.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
-------------------------------
NAME NUMBER PERCENT OF CLASS
- - ---- --------- ----------------
<S> <C> <C>
Robert J. Amman............................................. 220,848(2) .7
Juanita Powell Baranco...................................... 1,055(3) *
FMR Corp.................................................... 4,013,804(4) 13.0
Lawrence L. Gellerstedt Jr.................................. 5,600(5) *
Edward J. Hawie............................................. 2,360(6) *
John J. McMahon Jr.......................................... 9,124(7) *
G. Harold Northrop.......................................... 2,649(8) *
Joseph M. O'Connell......................................... 20,756(2) *
H. G. Pattillo.............................................. 41,132(9) *
Larry L. Prince............................................. 1,649(10) *
Earl W. Rogers Jr........................................... 40,510(2) *
Soros Fund Management LLC................................... 2,042,200(11) 6.6
John C. Walters............................................. 15,752(2) *
John H. Weitnauer Jr........................................ 10,663(12) *
Robert R. Woodson........................................... 532,769(13) 1.7
Robert A. Yellowlees........................................ 1,625(14) *
All executive officers and directors as a group (16
persons).................................................. 921,492 3.0
</TABLE>
3
<PAGE> 7
- - ---------------
* Represents less than .2%
(1) As defined in Rule 13d-3 under the Securities Exchange Act of 1934
("Exchange Act").
(2) Includes shares which may be acquired on or before April 30, 1997 upon the
exercise of stock options as follows: 190,000 shares by Mr. Amman, 20,000
shares by Mr. O'Connell, 36,000 shares by Mr. Rogers and 15,000 shares by
Mr. Walters.
(3) Such shares are held jointly by Mrs. Baranco with her husband. Includes 200
share equivalents credited to her deferred compensation account under the
Compensation Plan for Non-Employee Directors (the "Directors' Plan").
(4) According to a Schedule 13G dated February 14, 1997 filed with the
Securities and Exchange Commission ("SEC"), FMR Corp., 82 Devonshire
Street, Boston, Massachusetts 02109, holds the shares on behalf of other
persons who have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, such shares. The interest
of any such person does not exceed 5% of the outstanding Common Stock. FMR
Corp. and Edward C. Johnson 3d, Chairman of FMR Corp., each has sole power
to vote 18,176 shares and sole dispositive power covering the entire
4,013,804 shares. Fidelity Management & Research Company (a wholly owned
subsidiary of FMR Corp.) is the beneficial owner of 3,784,328 shares as a
result of acting as investment advisor to various Fidelity investment funds
("Funds"). Mr. Johnson, FMR and the Funds each has sole power to dispose of
the 3,784,328 shares owned by the Funds. The remaining 229,476 shares are
owned beneficially by Fidelity Management Trust Company (a wholly owned
subsidiary of FMR Corp.) as a result of acting as investment manager of the
Funds.
(5) Includes 1,000 shares held by Mr. Gellerstedt's wife, in which he disclaims
any beneficial interest.
(6) Includes 110 shares held by Mr. Hawie's wife, in which he disclaims any
beneficial interest.
(7) Includes 5,195 shares held by Mr. McMahon's wife, in which he disclaims any
beneficial interest. Also includes 449 share equivalents credited to his
deferred compensation account under the Directors' Plan.
(8) Includes 449 share equivalents credited to Mr. Northrop's deferred
compensation account under the Directors' Plan.
(9) Includes 30,000 shares held by Mr. Pattillo's wife, in which he disclaims
any beneficial interest.
(10) Includes 449 share equivalents credited to Mr. Prince's deferred
compensation account under the Directors' Plan.
(11) According to a Schedule 13D dated January 1, 1997 filed with the SEC, Soros
Fund Management LLC ("SFM LLC"), 888 Seventh Avenue, New York, New York
10106, has sole voting and dispositive power covering 1,809,900 shares, and
George Soros, the sole proprietor of Soros Fund Management ("SFM"), has
shared voting and dispositive power with respect to such shares. Each of
SFM LLC and Mr. Soros may be deemed the beneficial owner of 1,856,600
shares, which consists of 1,809,900 shares held for the account of Quantum
Partners, LDC and 46,700 shares held for the account of Quota Fund N.V.,
clients of SFM. The remaining 185,600 shares are held for the accounts of
certain clients of Duquesne Capital Management, L.L.C. ("Duquesne LLC"),
2579 Washington Road, Pittsburgh, Pennsylvania 15241. Stanley F.
Druckenmiller, sole managing member of Duquesne LLC, is a member of the
management committee of SFM LLC. Mr. Druckenmiller has sole voting and
dispositive power covering 185,600 shares and shared voting and dispositive
power with respect to 1,809,900 shares, and may be deemed the beneficial
owner of the entire 2,042,200 shares. Duquesne LLC may be deemed the
beneficial owner of 185,600 shares. SFM LLC and Mr. Soros disclaim
beneficial ownership of any shares not held directly for the accounts of
clients of SFM LLC, and Duquesne LLC disclaims beneficial ownership of any
shares not held directly for the accounts of its clients.
4
<PAGE> 8
(12) Includes 515 share equivalents credited to Mr. Weitnauer's deferred
compensation account under the Directors' Plan.
(13) Includes 28,800 shares owned by Mr. Woodson's wife, in which he disclaims
any beneficial interest. Also includes 250,000 shares held in trust with
respect to which Mr. Woodson may be deemed to have investment power but in
which he disclaims any beneficial interest. Also includes 78,286 shares
which may be acquired upon the exercise of stock options on or before April
30, 1997.
(14) Includes 425 share equivalents credited to Mr. Yellowlees' deferred
compensation account under the Directors' Plan.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers,
directors and 10% shareholders to file certain reports with respect to
beneficial ownership of the Company's equity securities. Based solely upon a
review of such reports, and certain representations of such persons, the Company
believes that all applicable filing requirements were met during 1996.
COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee is composed of Mr. Weitnauer (Chairman), Mrs. Baranco
and Mr. McMahon. Its principal functions are to recommend the independent
auditors to the Board; to review with such auditors the scope of their
engagement, their report of audit and the accompanying management letter, if
any; and to consult with the auditors and management with regard to the
Company's accounting methods and the adequacy of its internal system of
accounting control.
The Compensation and Stock Option Committee is composed of Messrs.
Gellerstedt (Chairman), Northrop and Prince. Its principal functions are to fix
the compensation of the Chief Executive Officer and to review and approve his
recommendations regarding the compensation of other officers of the Company; to
approve stock options for officers and certain key employees; and to make
recommendations to the Board relating to other aspects of employee compensation.
The Executive Committee is composed of Messrs. Woodson (Chairman), Amman,
Gellerstedt, Hawie, Pattillo and Weitnauer. Its principal function is to act
between meetings of the Board.
The Long Range Planning Committee is composed of Messrs. McMahon
(Chairman), Northrop, Pattillo and Yellowlees. Its principal function is to
review and make recommendations to the Company on its long-term goals and
objectives.
The Board met five times during 1996. In 1996 the Audit Committee held five
meetings, the Compensation and Stock Option Committee held four meetings, the
Executive Committee held seven meetings and the Long Range Planning Committee
held one meeting. All of the directors attended 75% or more of the aggregate
number of meetings of the Board and all committees on which they served during
the year, other than Mr. Gellerstedt, who attended 69% of such meetings. The
Company does not have a nominating committee.
5
<PAGE> 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table presents summary information with respect to
compensation paid by the Company to the Chief Executive Officer and each of the
four most highly compensated executive officers of the Company during 1996, 1995
and 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
-------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(2) ($)(3)
--------------------------- ---- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Robert R. Woodson (1)........................ 1996 404,920 -- -- 74,978
Chairman of the Board 1995 404,920 -- 20,000 79,015
1994 382,000 143,250 20,000 82,341
Robert J. Amman.............................. 1996 500,000 -- -- 7,498
President and Chief Executive Officer 1995 83,333 -- 1,000,000 --
1994 -- -- -- --
Joseph M. O'Connell.......................... 1996 195,833 -- 125,000 194,399
Senior Vice President 1995 -- -- -- --
1994 -- -- -- --
Earl W. Rogers Jr............................ 1996 225,000 -- 115,000 7,137
Senior Vice President 1995 190,920 12,123 5,000 --
1994 181,810 63,179 8,000 --
John C. Walters.............................. 1996 215,417 -- 100,000 7,575
Senior Vice President and General Counsel 1995 -- -- -- --
1994 -- -- -- --
</TABLE>
- - ---------------
(1) Mr. Woodson also served as President and Chief Executive Officer until Mr.
Amman's election in October 1995. Mr. Woodson will resign as Chairman of
the Board effective with the annual meeting on April 25, 1997 and retire as
an employee as of such date in accordance with the Company's retirement
policy.
(2) The Company has not granted any Stock Appreciation Rights ("SARs").
(3) Includes $65,645 and $2,187 accrued pursuant to deferred compensation
arrangements in 1996 for Messrs. Woodson and Rogers, respectively. Includes
life, medical and split dollar insurance premiums paid on behalf of the
above persons in 1996 as follows: Mr. Woodson -- $4,833; Mr.
Amman -- $2,998; Mr. O'Connell -- $514; Mr. Rogers -- $450; and Mr.
Walters -- $3,075. Includes a one-time hiring incentive, relocation and
commuting expenses for Mr. O'Connell aggregating $189,385. Also includes
$4,500 contributed to the Company's 401(k) Plan in 1996 for each named
person.
6
<PAGE> 10
OPTION GRANTS
The following table provides details regarding stock options granted (no
SARs were granted) to the named executive officers during 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- ------------ -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Joseph M. O'Connell.......... 100,000 9.2 23.625 3/26/06 1,485,764 3,765,217
25,000 2.3 31.875 10/15/06 501,150 1,270,014
Earl W. Rogers Jr............ 100,000 9.2 23.625 3/26/06 1,485,764 3,765,217
15,000 1.4 31.875 10/15/06 300,690 762,008
John C. Walters.............. 75,000 6.9 23.625 3/26/06 1,114,323 2,823,912
25,000 2.3 31.875 10/15/06 501,150 1,270,014
</TABLE>
- - ---------------
(1) Upon exercise of an option, the exercise price may be paid in cash, Common
Stock or a combination of cash and Common Stock. Options granted prior to
October 1995 are fully exercisable one year from the date of grant and
expire on the earlier of five years from the date of grant or three months
after termination of employment (other than Mr. Woodson, whose options will
continue to be exercisable after his normal retirement from the Company
through their expiration dates). Options granted since October 1995 are
exercisable at the rate of 20% per year beginning one year from the date of
grant and expire on the earlier of 10 years from date of grant (or, in the
case of options held by Mr. Amman, seven years) or three months after
termination of employment.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock and overall market conditions. The amounts
reflected in this table may not necessarily be achieved.
OPTION EXERCISES
None of the named executive officers exercised any options during 1996. The
following table shows the number of shares covered by both exercisable and
unexercisable stock options as of December 31, 1996. The table also illustrates
the values of in-the-money options based on the positive spread between the
exercise price of such options and the closing price of the Company's Common
Stock on December 31, 1996:
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
--------------- -------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- - ---- --------------- -------------------
<S> <C> <C>
Robert R. Woodson........................................ 78,286/0 765,431/0
Robert J. Amman.......................................... 200,000/800,000 1,549,996/6,200,009
Joseph M. O'Connell...................................... 0/125,000 0/965,625
Earl W. Rogers Jr........................................ 16,000/115,000 182,875/954,375
John C. Walters.......................................... 0/100,000 0/731,250
</TABLE>
7
<PAGE> 11
DEFERRED COMPENSATION ARRANGEMENTS
The Company has entered into deferred compensation agreements with certain
of its key employees, providing for monthly payments upon retirement, disability
or other termination of employment. These agreements provide for specified
monthly payments at retirement, subject to reduction in the event of early
retirement, and continue during the life of the employee.
The following table indicates the estimated annual benefit payable upon
retirement at age 65 to the named executive officers under such agreements.
Messrs. Amman, O'Connell and Walters do not participate in this program.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL
NAME RETIREMENT BENEFIT
- - ---- ------------------
<S> <C>
Robert R. Woodson........................................... $100,000(1)
Earl W. Rogers Jr........................................... 12,000(2)
</TABLE>
- - ---------------
(1) This amount represents actual annual retirement benefit. Mr. Woodson will
resign as Chairman of the Board effective April 25, 1997 and retire as an
employee as of such date, in accordance with the Company's retirement
policy. Mr. Woodson will continue to serve as a director of the Company
through his current term which expires at the annual meeting in 1998. In
addition to the amounts to be received pursuant to his deferred
compensation agreement, the Company will continue to pay Mr. Woodson's base
salary through his term as director. During such period, Mr. Woodson will
make himself available to consult with management on business matters
relating to the Company and its subsidiaries at such times as are mutually
agreeable.
(2) The amount shown is based upon continued employment with the Company until
retirement, and is conditioned upon Mr. Rogers not competing with the
Company following termination of employment. However, if his employment is
terminated after a change in control of the Company (as defined in such
agreement), or if he resigns within 180 days following any such occurrence,
the agreement not to compete shall not apply, and he may elect to receive a
lump sum distribution of benefits.
NONCOMPETE AND TERMINATION AGREEMENTS
The Company has entered into noncompete and termination agreements with
certain officers, including each of the named executive officers (other than Mr.
Amman), under which each officer has agreed that he will not compete with the
Company for a two-year period following voluntary termination of employment.
However, if employment is terminated (other than for cause) at any time after a
change in control of the Company, or if the officer resigns within one year
thereafter, then the agreement not to compete will not apply and the officer
will receive a lump sum payment equal to the lesser of three times such
officer's average annual compensation for the five calendar year period
preceding the date of termination or the maximum payment which the Company can
make to such officer under appropriate Federal tax provisions. In the event of
an involuntary termination of employment without cause (in the absence of a
change in control), the officer shall receive a lump sum payment equal to his
base salary for one year.
DIRECTOR FEES
Prior to 1996 the Company paid each non-employee director an annual
retainer of $16,000. In July 1996, the Board of Directors adopted a Compensation
Plan for Non-Employee Directors ("Directors' Plan"), pursuant to which the
annual retainer is paid in Common Stock of the Company, issuable on a quarterly
basis,
8
<PAGE> 12
in such amount as approved by the Board and fixed from time to time. The annual
retainer has been initially fixed at 800 shares. Payment of the annual retainer
in Common Stock serves to more closely align the interests of the directors with
shareholder interests.
Directors may elect to defer receipt of all or any portion of the annual
retainer, as well as meeting and committee fees payable by the Company. Fees so
deferred are credited to the Director's deferred compensation account, in cash
or stock equivalents, or a combination thereof. Directors may credit deferred
meeting fees in stock equivalents which will be based on the fair market value
of the Common Stock on the date fees are otherwise payable. The cash portion
earns interest at the Prime Rate in effect from time to time as published in The
Wall Street Journal. The stock equivalent portion is credited with dividends in
the form of additional stock equivalents. Deferred fees will be distributed in
Common Stock or cash at such future dates as specified by the directors in
accordance with the Directors' Plan, unless distribution is accelerated in
certain events, including a change in control of the Company. Currently, six
directors have elected to defer retainer or meeting fees as stock equivalents.
During 1996 each non-employee director received a cash retainer of $5,333
(prior to the adoption of the Directors' Plan) and 600 shares of Common Stock.
In addition, such directors received $750 per Board and committee meeting
attended with the exception of the committee chairmen who received $1,000.
Employee directors receive no compensation for Board services.
The report of the Compensation and Stock Option Committee and the stock
performance graph that follow shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that the Company specifically incorporates the information
by reference, and shall not otherwise be deemed filed under such Acts.
COMPENSATION AND STOCK OPTION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committee (the "Committee") is
responsible for overseeing the Company's executive compensation program. The
Committee, which consists of outside, non-employee directors, has adopted a
compensation program designed to:
- attract and retain highly qualified key executives;
- provide competitive base salaries;
- reward performance that supports achievement of business plan goals;
- motivate executives to achieve strategic operating objectives; and
- encourage Common Stock ownership to closely align executive and
shareholder interests.
The components of the Company's executive compensation program for 1996
were (i) cash compensation, consisting of base salary and annual incentive bonus
based on the achievement of Company performance goals, and (ii) long-term
incentives, including stock options. In 1996 the Company terminated its Profit
Sharing Plan and merged it with the Company's 401(k) Plan, which was enhanced by
adding a Company matching feature. The Committee's policy with respect to
executive compensation is to implement such policy taking into account any
potential limitation on the deductibility of compensation in excess of
$1,000,000 per
9
<PAGE> 13
year imposed by Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), but does not require that all compensation qualify for exemption
from such limitation.
CASH COMPENSATION
Base Salary. The Committee reviews each executive officer's base salary,
including the Chief Executive Officer, on an annual basis. The Committee
believes that the base salaries paid to the Company's executive officers are
reasonable and competitive and enhance the Company's ability to attract and
retain talented executives.
As a result of changes in responsibilities, the Committee did not increase
the base salary of Mr. Woodson in 1996. In determining Mr. Rogers' 18% increase,
the Committee considered recommendations of the Chief Executive Officer, the
termination of the Company's Profit Sharing Plan, the competitive market for
base salaries, internal equity with newly hired executives, the executive's past
and potential contributions to the success of the Company, and the Company's
overall performance in 1995. These factors were considered subjectively by the
Committee in the aggregate, and none of the factors was accorded any specific
weight. Messrs. O'Connell and Walters joined the Company in 1996. Their initial
salaries were established based on the competitive market as well as their
anticipated contributions to the success of the Company. There was no change in
their base salaries during 1996.
Annual Incentive Bonus. Under the supervision of the Committee, the
Company maintains a bonus plan pursuant to which annual cash bonuses are payable
to certain key officers and employees. These key executives are responsible for
establishing strategic direction or are responsible for major functional or
operating units, and have a significant impact on bottom-line results. For the
past several years the Company has tied a significant portion of executive
compensation to the achievement of Company goals, putting a substantial portion
of total compensation at risk. Additionally, bonus plans prior to 1996 included
a component of the bonus based on individual performance. In 1996 the Company
adopted a Senior Management Annual Incentive Plan. Under the Incentive Plan,
target bonuses were established based solely upon achievement of the Company's
earnings per share goal. A threshold was established which if met would result
in payment of a bonus equal to 50% of the target bonus. Performance between
threshold and target would result in a prorated bonus with 100% of the bonus
being earned if the target were met. Performance above the target could result
in a maximum bonus equal to 150% of the target bonus. The potential cash bonus
was up to 45% of base salary with a maximum bonus of 67.5% of base salary. No
bonuses were earned or paid for 1996 since the earnings per share goal was not
achieved.
LONG-TERM INCENTIVES
Stock Options. Under the Company's 1981 Incentive Stock Option Plan, the
Committee may grant stock options to key employees. Based on a prior consulting
survey and recommendation, the Committee increased the size of the option grants
during the past three years. The Committee considered recommendations of the
Chief Executive Officer, responsibility levels, compensation and the market
price of the Company's Common Stock in determining the size of option grants in
1996. The stock option awards made to executive officers in 1996 (excluding Mr.
Amman) were significantly higher than in prior periods. The Committee determined
that such higher grants were necessary to attract and retain senior officers to
the Company (four of the five Senior Vice Presidents of the Company were hired
since January 1996). The Committee also believes that increased stock ownership
among executive officers will serve to provide additional motivation on their
part to contribute to the success of the Company.
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<PAGE> 14
Profit Sharing Plan. The Company maintained a profit sharing plan for the
benefit of its executive officers and certain other employees of the Company
through 1995. The annual profit sharing contribution was determined by the
Committee based on the profitability of the Company. This plan was terminated in
1996 and merged with the Company's 401(k) plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Amman was recruited to become President and Chief Executive Officer in
October 1995. The Committee considered both the compensation history of Mr.
Amman and the recommendations of an independent compensation consulting firm
retained as part of the executive search process in determining the compensation
package required to recruit Mr. Amman to the Company. Based on the competitive
market for base salaries and Mr. Amman's anticipated contributions to the
success of the Company, the Committee approved an annual base salary of
$500,000, which continued through 1996. Under the Incentive Plan, upon meeting
the Company performance target, Mr. Amman would be eligible for a potential cash
bonus of up to 60% of his base salary and a maximum bonus of 120% of base
salary. No bonus was paid for 1996.
Effective October 31, 1995, Mr. Amman was granted options covering
1,000,000 shares vesting over five years. At the time of the grant the Committee
priced two-thirds of the options at significant premiums above market, closely
aligning Mr. Amman's compensation to the creation of shareholder value. No
additional options were granted in 1996.
The Committee believes these executive compensation policies and programs
effectively serve the interests of shareholders and the Company and are
appropriately balanced to provide increased motivation for executives to
contribute to the Company's overall future success. As described above, a
significant portion of the executive officers' compensation is at risk and tied
to attaining corporate earnings targets and improving shareholder value.
COMPENSATION AND STOCK OPTION COMMITTEE
Lawrence L. Gellerstedt Jr., Chairman
G. Harold Northrop
Larry L. Prince
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<PAGE> 15
FIVE YEAR STOCK PERFORMANCE GRAPH
The line graph below reflects the cumulative, five-year shareholder return
on the investment of $100 (assuming the reinvestment of dividends) on December
31, 1991 in the Company's Common Stock compared to such return of the S&P 500
Index and the Dow Jones Industrial and Commercial Services -- General Services
Index.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD JOHN H. S&P 500 DOW JONES
(FISCAL YEAR COVERED) HARLAND IND. &
COMPANY COMM.
SERVICES
<S> <C> <C> <C>
DEC-91 100 100 100
DEC-92 113 108 114
DEC-93 98 118 119
DEC-94 94 120 115
DEC-95 103 165 147
DEC-96 170 203 161
</TABLE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP, subject to
ratification by the shareholders at the annual meeting, as auditors of the
Company for fiscal 1997. Deloitte & Touche LLP, or its predecessors, has audited
the Company's financial statements since 1947. Should this firm be unable to
perform the requested services for any reason or not be ratified by the
shareholders, the Directors will appoint other independent auditors to serve for
the remainder of the year. Representatives of Deloitte & Touche LLP will be
present at the meeting, will have the opportunity to make a statement if they so
desire, and will be available to respond to appropriate questions.
ANNUAL REPORT TO SHAREHOLDERS
The annual report for the year ended December 31, 1996 accompanies this
Proxy Statement.
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<PAGE> 16
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge, at the written request of any
shareholder, a copy of the Company's Annual Report on Form 10-K including the
financial statements and financial statement schedules, as filed with the
Securities and Exchange Commission, except exhibits thereto. The Company will
provide copies of the exhibits, if requested by shareholders, and may impose a
reasonable fee for providing such exhibits. Requests should be mailed to:
JOHN H. HARLAND COMPANY
Box 105250
Atlanta, Georgia 30348
Attention: Victoria P. Weyand
Vice President and Secretary
(770) 593-5127
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the Company's 1998
annual meeting of shareholders must be received no later than November 20, 1997
in order to be considered for inclusion in the proxy statement to be distributed
in connection with such meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
meeting. However, if any other matters should come before the meeting, the
persons named in the proxy will vote such proxy in accordance with their
judgment.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company. In an
effort to have as large a representation at the meeting as possible, special
solicitation of proxies may be made personally or by telephone, facsimile or
mail by employees of the Company. The Company also may reimburse brokers, banks,
nominees and other fiduciaries for their expenses of forwarding the proxy
material to beneficial owners. In addition, the Company has retained Georgeson &
Co., Inc. to assist in the solicitation of proxies, which may be made through
the mail, by facsimile or by telephone, at a fee of $5,500.
Victoria P. Weyand
Vice President and Secretary
March 20, 1997
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<PAGE> 17
[JOHN HARLAND LOGO]
(RECYCLE LOGO)
<PAGE> 18
APPENDIX
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF
SHAREHOLDERS
P JOHN H. HARLAND COMPANY
APRIL 25, 1997
R
The undersigned hereby appoints ROBERT J. AMMAN and VICTORIA P.
O WEYAND and each of them, proxies, with full power of substitution and
resubstitution, for and in the name of the undersigned, to vote all
X shares of Common Stock of John H. Harland Company, which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Y Shareholders to be held on Friday, April 25, 1997 at 10:00 a.m., at the
High Museum of Art, 1280 Peachtree Street, NE, Atlanta, Georgia, and at
any adjournment thereof, upon the matters described in the accompanying
Notice of Annual Meeting of Shareholders and Proxy Statement, receipt of
which is hereby acknowledged, and upon any other business that may
properly come before the meeting or any adjournment thereof. Said
proxies are directed to vote on the matters described in the Notice of
Annual Meeting and Proxy Statement as follows, and otherwise in their
discretion upon such other business as may properly come before the
meeting and any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED
THE PROXY WILL BE VOTED "FOR" THE STATED PROPOSALS.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON OTHER SIDE.) [SEE REVERSE
SIDE]
[X] PLEASE MARK YOUR
VOTES AS THIS
EXAMPLE
<TABLE>
<S> <C>
WITHHOLD
FOR FOR ALL FOR AGAINST ABSTAIN
1. To elect three [ ] [ ] 2. To ratify the appointment of Deloitte [ ] [ ] [ ]
(3) directors: & Touche LLP as the Company's
independent certified public
Nominees -- Edward J. Hawie, G. Harold Northrop, Robert A. accountants for the year ending
Yellowlees December 31, 1997.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH NOMINEE'S NAME LISTED ABOVE.)
SIGNATURE(S)
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</TABLE>
