<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
JOHN H. WEITNAUER JR.
Chairman of the Board
March 13, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 annual meeting of shareholders of
John H. Harland Company to be held at the Conant Performing Arts Center at
Oglethorpe University, 4484 Peachtree Road, NE, Atlanta, Georgia on Friday,
April 24, 1998 at 10:00 a.m.
Harland is celebrating its 75th Anniversary this year, and we hope you will be
able to join us at the meeting to commemorate this milestone. We look forward to
greeting shareholders at 9:30.
At the meeting we will vote on the election of six directors and the appointment
of auditors. In addition, we will review the Company's results during the past
year and discuss our plans for 1998.
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,
/s/ JOHN H. WEITNAUER JR.
John H. Weitnauer Jr.
Box 105250 Atlanta, Georgia 30348 Phone (770) 981-9460
<PAGE> 3
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1998
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of John H.
Harland Company will be held at the Conant Performing Arts Center at Oglethorpe
University, 4484 Peachtree Road, NE, Atlanta, Georgia on Friday, April 24, 1998
at 10:00 a.m. for the following purposes:
(1) To elect six Directors;
(2) To ratify the appointment of Deloitte & Touche LLP as the Company's
independent certified public accountants for the year ending December 31, 1998;
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 2, 1998 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 13, 1998
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 H. HARLAND COMPANY
BOX 105250
ATLANTA, GA 30348
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1998
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 24,
1998 and any adjournment thereof. When such proxy is duly 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 ratification of auditors. Any shareholder giving a proxy may
revoke it at any time before it is voted, effective upon receipt by the
Secretary of the Company of either notice of revocation 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 2, 1998
are entitled to vote at the meeting. As of that date, the Company had
outstanding 31,057,973 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 13,
1998.
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 three Directors expire at the 1998 Annual Meeting. Each of these
Directors would have been ineligible for re-election under the Company's prior
retirement policy. However, in view of the resignation of Robert J. Amman as
Chairman, President and Chief Executive Officer on January 13, 1998, the Board
has amended the Bylaws to permit these Directors to serve for a one year period,
in order to facilitate the transition to a new Chief Executive Officer.
Accordingly, they are being nominated for re-election to the Board to serve a
one year term expiring in 1999. In addition, in order to properly balance the
three classes of Directors, the three directors whose terms currently expire in
1999 are being nominated for re-election to serve a three year term expiring in
2001. The three remaining Directors will continue to serve until their
respective terms expire in 2000.
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 six directors.
<PAGE> 5
NOMINEES FOR ELECTION FOR A ONE-YEAR TERM
<TABLE>
<CAPTION>
CURRENT DIRECTOR OF
NAME AGE PRINCIPAL OCCUPATION TERM EXPIRES HARLAND SINCE
---- --- -------------------- ------------ -------------
<S> <C> <C> <C> <C>
H. G. PATTILLO 71 Chairman of the Board, Pattillo 1998 1980
Construction Company, Inc.
(industrial development)
JOHN H. WEITNAUER JR. 71 Chairman and Interim President and 1998 1973
Chief Executive Officer of the
Company
ROBERT R. WOODSON 65 Retired Chairman of the Company 1998 1971
Director, Allied Holdings, Inc. and
Haverty Furniture Companies, Inc.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM
JUANITA P. BARANCO 48 Executive Vice President, Baranco 1999 1993
Automotive Group (automobile
dealership) Director, Federal
Reserve Bank of Atlanta and Georgia
Power Company
JOHN J. MCMAHON JR. 55 Chairman of the Board, McWane, Inc. 1999 1988
(pipe and valve manufacturing)
Director, Alabama National
Bancorporation and Protective Life
Corporation
LARRY L. PRINCE 59 Chairman and Chief Executive 1999 1990
Officer, Genuine Parts Company
(distributor of automobile
replacement parts) Director,
Crawford & Company, Equifax Inc.,
Southern Mills, SunTrust Bank Inc.
and UAP Inc. (Canada)
</TABLE>
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING
<TABLE>
<CAPTION>
CURRENT DIRECTOR OF
NAME AGE PRINCIPAL OCCUPATION TERM EXPIRES HARLAND SINCE
---- --- -------------------- ------------ -------------
<S> <C> <C> <C> <C>
EDWARD J. HAWIE 60 Partner, King & Spalding 2000 1991
(legal counsel to the Company)
G. HAROLD NORTHROP 62 Vice Chairman of the Board and Chairman 2000 1984
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 59 Chairman and Chief Executive Officer, 2000 1994
National Data Corporation (information
systems and services for the healthcare
and payment systems industry) Director,
Protective Life Corporation
</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. Weitnauer, who
assumed his present positions with the Company in
2
<PAGE> 6
January 1998. Mr. Weitnauer previously served as Chairman and Chief Executive
Officer of Richway Stores, a division of Federated Department Stores, Inc., an
operator of discount department stores, for seven years until his retirement in
1987.
COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee is composed of Mrs. Baranco (Chair), Mr. Hawie and Mr.
Woodson. Its principal functions are to recommend the independent auditors to
the Board; to review with such auditors the scope of their engagement, their
audit report 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. Northrop
(Chair), McMahon and Prince. Its principal functions are to determine 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 and Nominating Committee is composed of Messrs. Yellowlees
(Chair), McMahon and Prince. Its principal functions are to nominate qualified
persons as directors and executive officers and to act between meetings of the
Board. The Committee is authorized to consider director nominees recommended by
shareholders, who may do so by writing to the Secretary of the Company, giving
the candidate's name, biographical data and qualifications.
The Board met eight times during 1997. The Audit Committee held three
meetings, the Compensation and Stock Option Committee held one meeting, the
Executive Committee held six meetings and the Nominating Committee (prior to
being combined with the Executive Committee) held one meeting. All of the
directors attended at least 75% of the aggregate number of meetings of the Board
and all committees on which they served during the year.
3
<PAGE> 7
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of the Company's
Common Stock by each director, each named executive officer and all directors
and executive officers as a group, all as of February 28, 1998, and by 5%
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>
Juanita P. Baranco.......................................... 1,861(2) *
FMR Corp.................................................... 3,597,725(3) 11.6
Edward J. Hawie............................................. 3,160(4) *
John J. McMahon Jr.......................................... 10,487(5) *
G. Harold Northrop.......................................... 3,883(6) *
Joseph M. O'Connell......................................... 46,735(7) *
S. David Passman III........................................ 26,042(7) *
H. G. Pattillo.............................................. 42,077(8) *
Mark C. Perlberg............................................ 40,932(7) *
Pioneering Management Corporation........................... 2,221,000(9) 7.2
Larry L. Prince............................................. 3,185(10) *
Earl W. Rogers Jr........................................... 60,815(7) *
Tweedy, Browne Company LLC, TBK Partners, L.P. and
Vanderbilt Partners, L.P. ................................ 1,769,750(11) 5.7
John C. Walters............................................. 36,732(7) *
John H. Weitnauer Jr........................................ 12,222(12) *
Robert R. Woodson........................................... 498,808(13) 1.6
Robert A. Yellowlees........................................ 3,122(14) *
All executive officers and directors as a group (14
persons).................................................. 790,061 2.5
</TABLE>
- ---------------
* Represents less than 1%
(1) As defined in Rule 13d-3 under the Securities Exchange Act of 1934
("Exchange Act").
(2) Includes 1,006 share equivalents credited to Mrs. Baranco's deferred
compensation account under the Compensation Plan for Non-Employee Directors
(the "Directors' Plan").
(3) According to a Schedule 13G dated February 14, 1998 filed with the
Securities and Exchange Commission ("SEC"), FMR Corp. ("FMR"), 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.
Except as set forth below, the interest of any such person does not exceed
5% of the outstanding Common Stock. FMR and Edward C. Johnson 3d, Chairman
of FMR, each has sole power to vote 219,025 shares and sole dispositive
power covering the entire 3,597,725 shares. Fidelity Management & Research
Company (a wholly owned subsidiary of FMR) is the beneficial owner of
3,378,700 shares as a result of acting as investment advisor to various
investment funds ("Funds"). The ownership of one investment company,
Fidelity Value Fund, amounted to 2,199,700 shares, or 7.1% of the
outstanding Common Stock. Mr. Johnson, FMR and the Funds each has sole
power to dispose of the shares owned by the Funds. The remaining 219,025
shares are owned beneficially by Fidelity Management Trust Company (a
wholly owned subsidiary of FMR) as a result of its serving as investment
manager of the Funds.
(4) Includes 110 shares held by Mr. Hawie's wife, in which he disclaims any
beneficial interest. Also includes 200 share equivalents credited under the
Directors' Plan.
(5) Includes 5,195 shares held by Mr. McMahon's wife, in which he disclaims any
beneficial interest. Also includes 1,812 share equivalents credited under
the Directors' Plan.
(6) Includes 1,683 share equivalents credited under the Directors' Plan.
(7) Includes 45,000, 25,000, 40,000, 56,000 and 35,000 shares which may be
acquired on or before April 30, 1998 upon the exercise of stock options by
Messrs. O'Connell, Passman, Perlberg, Rogers and Walters, respectively.
4
<PAGE> 8
(8) Includes 30,000 shares held by Mr. Pattillo's wife, in which he disclaims
any beneficial interest.
(9) According to a Schedule 13G dated January 21, 1998 filed with the SEC,
Pioneering Management Corporation, 60 State Street, Boston, Massachusetts
02109, has sole voting and dispositive power covering such shares, all of
which are beneficially owned by such firm.
(10) Includes 1,985 share equivalents credited under the Directors' Plan.
(11) According to a Schedule 13D dated January 28, 1998 filed with the SEC by
Tweedy, Browne Company LLC ("TBC"), TBK Partners, L.P. ("TBK") and
Vanderbilt Partners, L.P. ("Vanderbilt"), 52 Vanderbilt Avenue, New York,
New York 10017, TBC has sole voting power with respect to 1,504,745 shares
held in certain customer accounts and has shared dispositive power with
respect to 1,694,350 shares held in such accounts. TBK and Vanderbilt have
sole voting and sole dispositive power with respect to 50,000 shares and
25,400 shares, respectively. Each of said persons may be deemed to be the
beneficial owner of the shares with respect to which they have voting and
dispositive power as described above.
(12) Includes 1,995 share equivalents credited 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 44,000 shares
which may be acquired upon the exercise of stock options on or before April
30, 1998.
(14) Includes 1,920 share equivalents credited under the Directors' Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 written representations of such persons, the
Company believes that all applicable filing requirements were met during 1997.
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 each of the named executive officers during
1997, 1996 and 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
------------------------------ UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OTHER OPTIONS(#)(2) ($)(3)
- --------------------------- ---- --------- -------- ------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Amman (1).............. 1997 500,000 -- 23,845 -- 19,940
President and 1996 500,000 -- -- -- 7,498
Chief Executive Officer 1995 83,333 -- -- 1,000,000 --
Joseph M. O'Connell.............. 1997 258,077 27,500 100,000(4) -- 7,815
Senior Vice President and 1996 195,833 -- 189,385 125,000 5,014
Chief Information Officer 1995 -- -- -- -- --
S. David Passman III............. 1997 300,000 50,000 -- -- 3,802
Senior Vice President and 1996 36,154 110,000 -- 125,000 --
Chief Financial Officer 1995 -- -- -- -- --
Mark C. Perlberg................. 1997 256,923 27,500 8,546 35,000 7,660
Senior Vice President and 1996 215,912 -- 168,875 90,000 1,276
President -- Financial Markets 1995 -- -- -- -- --
Division
Earl W. Rogers Jr................ 1997 238,846 27,500 1,400 -- 7,244
Senior Vice President and 1996 225,000 -- 2,187 115,000 4,950
President -- Printed Products 1995 190,920 12,123 18,204 5,000 281
Division
John C. Walters.................. 1997 248,846 17,500 1,300 -- 11,510
Senior Vice President and 1996 215,417 -- -- 100,000 7,575
General Counsel 1995 -- -- -- -- --
</TABLE>
- ---------------
(1) Resigned in January 1998.
(2) The Company has not granted any Stock Appreciation Rights ("SARs").
(3) Included in this category for 1997 are amounts for the six named executive
officers for the following compensation plans: (a) life and medical
insurance premiums, $15,140, $3,015, $3,802, $2,860, $3,357 and $6,710,
respectively; and (b) matching contributions to the Company's 401(k) Plan,
$4,800, $4,800, $0, $4,800, $3,887 and $4,800, respectively.
(4) Includes relocation expenses of $92,481.
6
<PAGE> 10
OPTION GRANTS
The following table provides details regarding stock options granted (no
SARs were granted) to the named executive officers during 1997:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ---------- ------------ -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Mark C. Perlberg............... 35,000 33.3 29.375 1/24/07 646,582 1,638,566
</TABLE>
- ---------------
(1) 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.
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. 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 three months after termination of
employment (12 months in the case of options held by Mr. Amman).
OPTION EXERCISES
The following table sets forth information with respect to options
exercised by the named executive officers during 1997 and unexercised options as
of December 31, 1997. The table also illustrates the value 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, 1997.
OPTION EXERCISES IN 1997 AND 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 ($)
SHARES --------------- -------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ --------------- -------------
<S> <C> <C> <C> <C>
Robert J. Amman........................... 10,000 85,000 390,000/600,000 0/0
Joseph M. O'Connell....................... -- -- 25,000/100,000 0/0
S. David Passman III...................... -- -- 25,000/100,000 0/0
Mark C. Perlberg.......................... -- -- 18,000/107,000 0/0
Earl W. Rogers Jr......................... -- -- 36,000/92,000 8,125/0
John C. Walters........................... -- -- 20,000/80,000 0/0
</TABLE>
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. Mr. Rogers is entitled
to receive an annual benefit of $12,000 upon retirement at age 65. In addition,
if his employment is terminated after a change in control of the Company, or if
he resigns within 180 days thereafter, he may elect to receive a lump sum
distribution of benefits. None of the other executive officers participates in
such program.
7
<PAGE> 11
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 COMPENSATION
In 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,
in such amount as fixed by the Board from time to time. The current annual
retainer is 800 shares. Payment of the annual retainer in Common Stock serves to
more closely align the interests of the directors with shareholders.
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, seven
directors have elected to defer retainer or meeting fees as stock equivalents.
During 1997, each non-employee director received 800 shares of Common
Stock. In addition, such directors received $750 per Board and committee meeting
attended with the exception of the committee chairs 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 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
8
<PAGE> 12
- encourage Common Stock ownership to closely align executive and
shareholder interests.
The components of the Company's executive compensation program for 1997
were (i) cash compensation, consisting of base salary and annual incentive bonus
based on the achievement of Company performance goals, and (ii) long-term stock
incentives. 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 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 annually the base salary of each
executive officer, including the Chief Executive Officer. The Committee believes
that the base salaries paid to the executive officers are reasonable and
competitive and enhance the Company's ability to attract and retain talented
executives. Salary adjustments in 1997 were based on changes in the executives'
responsibilities, changes in the competitive market for salaries and changes to
account for inflation.
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. In 1996 the Company adopted a Senior Management
Annual Incentive Plan. Under the Incentive Plan, target bonuses were based
solely upon achievement of the Company's earnings per share goal. A threshold
was established which could result in a bonus equal to 50% of the target bonus.
Performance between threshold and target would result in a prorated bonus with
100% being earned if the target were met. Performance above the target could
result in a maximum bonus equal to 150% of the target bonus. In 1997 the
potential cash bonus at target was up to 50% of base salary with a maximum bonus
of 75% for performance in excess of target. Although executive officers (other
than the Chief Executive Officer) received a discretionary cash bonus for 1997
based on individual performance, they received no bonus under the Incentive Plan
since the earnings per share goal was not achieved.
LONG-TERM INCENTIVES
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
1995 and 1996, but made no grants in 1997 to the named executive officers other
than Mr. Perlberg, who assumed additional responsibilities in 1997. 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 1997. 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.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Amman was recruited to become President and Chief Executive Officer in
October 1995. The Committee considered the compensation history of Mr. Amman,
the competitive market for base salaries and the recommendations of an
independent compensation consulting firm retained as part of the executive
search process in determining his compensation package. The Committee approved
an annual base salary of $500,000, which continued through 1996 and 1997. Under
the Incentive Plan, Mr. Amman would have been eligible for a potential cash
bonus at target of up to 60% of his base salary with a maximum bonus of 120% for
performance in excess of target. No bonus was paid for 1996 or 1997.
In 1995, Mr. Amman was granted options covering 1,000,000 shares vesting
over five years. Two-thirds of the options were priced at significant premiums
above market, with the intent of aligning Mr. Amman's compensation to the
creation of shareholder value. No additional options were granted in 1996 or
1997.
9
<PAGE> 13
Mr. Amman resigned as Chairman, President and Chief Executive Officer on
January 13, 1998. A Search Committee of the Board of Directors consisting of
Messrs. Hawie, as Chair, Prince and Yellowlees has been formed to coordinate the
recruitment and hiring of a new Chief Executive Officer.
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
G. Harold Northrop, Chair
John J. McMahon Jr.
Larry L. Prince
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, 1992 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.
PRELIMINARY
<TABLE>
<CAPTION>
DOW JONES IND. &
COMM SERVICES -
MEASUREMENT PERIOD HARLAND (JOHN H.) GENERAL SERVICES
(FISCAL YEAR COVERED) CO. S&P 500 INDEX
<S> <C> <C> <C>
DEC-92 100 100 100
DEC-93 86 110 104
DEC-94 83 112 101
DEC-95 91 153 129
DEC-96 150 189 141
DEC-97 97 252 168
</TABLE>
10
<PAGE> 14
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 1998. 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, 1997 accompanies this
Proxy Statement.
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 1999
annual meeting of shareholders must be received no later than November 13, 1998
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 13, 1998
11
<PAGE> 15
(HARLAND LOGO)
(RECYCLED LOGO)
<PAGE> 16
APPENDIX
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
JOHN H. HARLAND COMPANY
APRIL 24, 1998
The undersigned hereby appoints JOHN H. WEITNAUER JR. and VICTORIA P.
WEYAND and each of them, proxies, with full power of substitution and
resubstitution, for and in the name of the undersigned, to vote all 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 Shareholders to be held
on Friday, April 24, 1998 at 10:00 a.m., at the Conant Performing Arts Center
at Oglethorpe University, 4484 Peachtree Road, 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]
<PAGE> 17
<TABLE>
<S> <C>
/X/ PLEASE MARK YOUR
VOTES AS THIS
EXAMPLE
WITHHOLD
FOR FOR ALL FOR AGAINST ABSTAIN
1. To elect six / / / / 2. To ratify the appointment / / / / / /
(6) directors: of Deloitte & Touche LLP as
the Company's independent
certified public accountants
for the year ending
December 31, 1998.
Nominees--H.G. Pattillo, John H. Weitnauer Jr., Robert R. Woodson,
Juanita P. Baranco, John J. McMahon Jr., Larry L. Prince
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH NOMINEE'S NAME LISTED ABOVE.)
SIGNATURES(S)
----------------------------------------------
</TABLE>
