<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 CO.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
AND PROXY STATEMENT
(HARLAND LOGO)
John H. Harland Company
JOHN H. WEITNAUER JR.
Chairman of the Board
March 17, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 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 28, 2000 at 10:00 a.m. A 9:30 reception will precede
the meeting.
We will elect three Directors at the meeting and seek ratification
of the appointment of auditors. In addition, we will review the
Company's 1999 results and discuss our plans for 2000.
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 28, 2000
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 28, 2000 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 2000; 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 7, 2000 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.
JOHN C. WALTERS
Vice President and Secretary
Atlanta, Georgia
March 17, 2000
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
J O H N H. H A R L A N D C O M P A N Y
BOX 105250
ATLANTA, GEORGIA 30348
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 2000
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 28,
2000 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 by delivering to the Secretary of the
Company a 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 will be revoked.
Only shareholders of record as of the close of business on March 7, 2000
are entitled to vote at the meeting. As of that date, the Company had issued and
outstanding 28,271,357 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 17,
2000.
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 Georgia 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 2000 Annual Meeting. Mr. Weitnauer is
retiring after 27 years of service to the Board and to the Company. In addition,
Mr. Hawie, who has recently retired as a partner of King & Spalding, has chosen
to retire as a Director, and due to time demands Mr. Yellowlees also will not be
standing for re-election. We thank all three of these individuals for their
dedicated efforts on behalf of the Company. Ms. Rudden and Messrs. Antle and
Johns, each of whom was elected to the Board subsequent to the 1999 annual
meeting, and whose terms also expire at the 2000 annual meeting, are being
nominated for re-election for a three-year term expiring in 2003. The remaining
Directors will continue to serve until their respective terms expire as
indicated.
<PAGE> 5
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.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM
<TABLE>
<CAPTION>
CURRENT DIRECTOR OF
AGE PRINCIPAL OCCUPATION TERM EXPIRES HARLAND SINCE
NAME --- -------------------- ------------ --------------
<S> <C> <C> <C> <C>
WILLIAM S. ANTLE III 55 Chairman, President and Chief 2000 January 2000
Executive Officer of Oak
Industries Inc. (engineered
components for telecommunications
industry)
Director, Nvest, L.P.,
Genrad, Inc. and Esco Electronics
Corporation
JOHN D. JOHNS 48 President and Chief Operating 2000 January 2000
Officer of Protective Life
Corporation (insurance and
investment products)
Director, Alabama National
Bancorporation,
National Bank of Commerce,
Protective Life Corporation,
Protective Life Insurance Company
and Protective Life and Annuity
Insurance Company
EILEEN M. RUDDEN 49 Senior Vice President of Lotus 2000 September 1999
Development Corporation (software
development), a subsidiary of IBM
Corporation
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING
JUANITA P. BARANCO 50 Executive Vice President, Baranco 2001 1993
Automotive Group (automobile
Dealership)
Director, Federal Reserve Bank of
Atlanta and Georgia Power Company
RICHARD K. LOCHRIDGE 56 President, Lochridge & Company, 2002 1999
Inc. (management consulting)
Director, Dover Corporation,
Hannaford Bros. Co., Lowe's
Companies, Inc. and PETsMART,
Inc.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
CURRENT DIRECTOR OF
AGE PRINCIPAL OCCUPATION TERM EXPIRES HARLAND SINCE
NAME --- -------------------- ------------ --------------
<S> <C> <C> <C> <C>
JOHN J. MCMAHON JR. 57 Chairman of the Executive 2001 1988
Committee, McWane, Inc. (pipe and
valve manufacturing) and
Chairman, Ligon Industries, LLC
(leveraged buyouts)
Director, Alabama National
Bancorporation and Protective
Life Corporation
G. HAROLD NORTHROP 64 Chairman of the Board, American 2002 1984
Business Products, Inc.
(specialty packaging and printed
office products)
Director, SunTrust Bank, West
Georgia NA
LARRY L. PRINCE 61 Chairman and Chief Executive 2001 1990
Officer, Genuine Parts Company
(distributor of automobile
replacement parts)
Director, Crawford & Company,
Equifax, Inc., Southern Mills and
SunTrust Banks, Inc.
TIMOTHY C. TUFF 52 President and Chief Executive 2002 1998
Officer of the Company
Director, Printpack, Inc.
</TABLE>
Each of these Directors and nominees has been principally employed in his
or her present capacity for at least five years, except Messrs. Northrop and
Tuff. Mr. Northrop has served with American Business Products, Inc. since 1999,
prior to which he had been employed by Callaway Gardens, a horticultural,
environmental and recreational facility, for 27 years, last serving as Vice
Chairman of the Board and retired President and Chief Executive Officer. Mr.
Tuff was elected to his present positions with the Company in October 1998. For
the prior five years he served as President and Chief Executive Officer of Boral
Industries, Inc., managing the North American and European operations of
Australian-based Boral, Ltd., a world leader in building and construction
materials. In addition, Mr. McMahon, who has been employed by McWane, Inc. for
more than the past five years, assumed his position with Ligon Industries in
1999.
COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee is composed of Mrs. Baranco (Chair), Mr. Johns and Ms.
Rudden. Its principal functions are to recommend the independent auditors to the
Board; review with such auditors the scope of their engagement, their audit
report and management letter; review and discuss the audited financial
statements with management and the independent auditors; and consult with the
auditors and management regarding the Company's accounting methods, the adequacy
of its internal controls and the objectivity of its financial reporting.
3
<PAGE> 7
The Executive Committee is composed of Messrs. Prince (Chair), McMahon and
Tuff. Its principal function is to act between meetings of the Board.
The Governance Committee is composed of Messrs. Northrop (Chair), Antle and
Lochridge. Its principal functions are to review qualifications for Board
membership and make recommendations for the election of Directors and
appointment of executive officers of the Company; make recommendations to the
Board as to matters of corporate governance; administer management incentive
compensation and stock option plans; establish the compensation of the Chief
Executive Officer and other officers of the Company; and review the compensation
of Directors. 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 biographical data and qualifications.
The Board met six times during 1999. The Audit Committee held four
meetings, the Executive Committee held four meetings and the Governance
Committee held ten meetings. 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.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN OTHER PERSONS
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 15, 2000, and by 5%
shareholders 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>
William S. Antle III........................................ 10,000 *
Juanita P. Baranco.......................................... 5,732(2) *
Richard C. Blum & Associates, L.P........................... 4,052,750(3) 14.3
FMR Corp.................................................... 2,494,700(4) 8.8
Edward J. Hawie............................................. 5,999(5) *
John D. Johns............................................... 0
Richard K. Lochridge........................................ 9,011(6) *
John J. McMahon Jr.......................................... 15,230(7) *
G. Harold Northrop.......................................... 10,164(8) *
S. David Passman III........................................ 109,144(9) *
Mark C. Perlberg............................................ 107,857(9) *
Pioneering Investment Management, Inc....................... 1,865,500(10) 6.6
Larry L. Prince............................................. 8,311(11) *
Earl W. Rogers Jr........................................... 124,532(9) *
Eileen Rudden............................................... 1,276(12) *
Timothy C. Tuff............................................. 193,001(9) *
John C. Walters............................................. 96,847(9) *
John H. Weitnauer Jr........................................ 26,875 *
Robert A. Yellowlees........................................ 7,957(13) *
All executive officers and Directors as a group (17
persons).................................................. 732,473(9) 2.6
</TABLE>
4
<PAGE> 8
- ---------------
* Represents less than 1%
(1) As defined in Rule 13d-3 under the Securities Exchange Act of 1934
("Exchange Act").
(2) Includes 3,877 share equivalents credited to Mrs. Baranco's deferred
compensation account under the Compensation Plan for Non-Employee Directors
(the "Deferral Plan").
(3) According to a Schedule 13D dated April 23, 1999 filed with the Securities
and Exchange Commission ("SEC") by Richard C. Blum & Associates, L.P.
("RCBA L.P."), Richard C. Blum & Associates, Inc. ("RCBA Inc."), RCBA
Strategic Partners, L.P. ("Strategic"), RCBA GP, L.L.C. ("RCBA GP") and
Richard C. Blum (the Chairman and a substantial shareholder of RCBA Inc.
and a managing member of RCBA GP), 909 Montgomery Street, San Francisco,
California 94133, (i) RCBA L.P. and RCBA Inc. hold 1,959,250 shares on
behalf of limited partnerships (for which RCBA L.P. serves as the general
partner) and certain investment advisory clients, (ii) Strategic holds
1,818,800 shares, and (iii) RCBA L.P. has voting and investment power with
respect to 274,700 shares that are owned by an unaffiliated third party
investment manager. Voting and investment power concerning such shares are
held solely by RCBA L.P. and RCBA GP, and each of the reporting persons has
shared voting and shared dispositive power with respect to such shares. Mr.
Blum disclaims beneficial ownership of such shares except to the extent of
any pecuniary interest therein.
(4) According to a Schedule 13G dated February 1, 1999 filed with the 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 195,000 shares
and sole dispositive power covering the entire shares. Fidelity Management
& Research Company is the beneficial owner of 2,299,700 shares as a result
of acting as investment advisor to various investment funds ("Funds"), one
of which, Fidelity Value Fund, holds 2,199,700 shares. Mr. Johnson, FMR and
the Funds each has sole power to dispose of the shares owned by the Funds.
The remaining 195,000 shares are owned beneficially by Fidelity Management
Trust Company as a result of its serving as investment manager of the
Funds.
(5) Includes 110 shares held by Mr. Hawie's wife, in which he disclaims any
beneficial interest, and 3,039 share equivalents under the Deferral Plan.
(6) Includes 2,011 share equivalents under the Deferral Plan.
(7) Includes 5,195 shares held by Mr. McMahon's wife, in which he disclaims any
beneficial interest, and 6,555 share equivalents under the Deferral Plan.
(8) Includes 7,964 share equivalents under the Deferral Plan.
(9) Includes 105,000, 105,000, 118,200, 140,000 and 93,000 shares which may be
acquired on or before April 15, 2000 upon the exercise of stock options by
Messrs. Passman, Perlberg, Rogers, Tuff and Walters, respectively, and
561,200 shares by all executive officers as a group. Mr. Perlberg resigned
from the Company in February 2000.
(10) According to a Schedule 13G dated January 4, 2000 filed with the SEC,
Pioneering Investment Management, Inc., 60 State Street, Boston,
Massachusetts 02109, has sole voting and dispositive power covering such
shares, all of which are beneficially owned by such firm.
(11) Includes 7,111 share equivalents under the Deferral Plan.
(12) Represents share equivalents under the Deferral Plan.
(13) Includes 6,757 share equivalents under the Deferral Plan.
5
<PAGE> 9
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers, Directors and 10% shareholders to file reports covering their
beneficial ownership of the Company's equity securities. Based solely upon a
review of such reports, and written representations of such persons, the Company
believes that all applicable filing requirements were met during 1999, with one
exception. Ms. Baranco purchased 1,000 shares of Common Stock in March 1999 and
reported such transaction on the Form 4 Statement on April 27, 1999.
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
1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------
ANNUAL COMPENSATION($) RESTRICTED SECURITIES ALL OTHER
--------------------------- STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER AWARDS($) OPTIONS(#)(1) ($)(2)
- --------------------------- ---- ------- ------- ------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Timothy C. Tuff......... 1999 545,192 472,500 120,763(3) 149,558(4) 350,000 16,896
President and Chief 1998 70,673 150,000 407,650 504,849 350,000 --
Executive Officer 1997 -- -- -- -- -- --
S. David Passman III.... 1999 313,077 225,000 -- -- -- 8,093
Vice President and 1998 260,000 272,500 -- -- 125,000 8,092
General Manager 1997 260,000 90,000 -- -- -- 3,802
Mark C. Perlberg........ 1999 290,769 197,400 -- -- -- 7,719
Vice President and 1998 260,000 195,000 -- -- 125,000 7,623
General Manager 1997 256,923 27,500 -- -- 35,000 7,660
Earl W. Rogers Jr....... 1999 253,846 174,600 -- -- -- 4,879
Vice President -- 1998 241,775 180,000 -- -- 123,000 3,370
Manufacturing 1997 238,846 27,500 -- -- -- 7,244
Services &
Technology
John C. Walters......... 1999 259,615 187,500 -- -- -- 11,121
Vice President, 1998 250,000 187,500 -- -- 70,000 11,218
Secretary and 1997 248,846 17,500 -- -- -- 11,510
General Counsel
</TABLE>
- ---------------
(1) The Company has not granted any Stock Appreciation Rights ("SARs").
(2) Included in this category for 1999 are amounts for Messrs. Tuff, Passman,
Perlberg, Rogers and Walters covering (a) life and medical insurance
premiums -- $12,096, $3,293, $2,919, $3,633 and $6,321, respectively; and
(b) matching contributions of $4,800 to the Company's 401(k) Plan (other
than Mr. Rogers -- $1,246).
(3) Represents reimbursement of taxes incurred in connection with the issuance
of restricted stock.
(4) At December 31, 1999 Mr. Tuff held 50,000 shares of restricted stock valued
at $915,625.
6
<PAGE> 10
OPTION GRANTS
The following table provides details regarding stock options granted during
1999. No other executive officer received stock options during such year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTIONS TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------------
GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
----------- ------------ -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Timothy C. Tuff............... 100,000 9.6 20.00 1/4/09 1,257,789 3,187,485
Timothy C. Tuff............... 250,000 24.1 25.00 1/4/09 3,930,591 9,960,890
</TABLE>
- ---------------
(1) These amounts represent assumed rates of appreciation. Actual gains, if any,
on stock option exercises are dependent on the future performance of the
Common Stock and overall market conditions, and the amounts reflected in
this table may not necessarily be achieved.
Options are exercisable at the rate of 20% per year beginning one year from
date of grant and normally expire on the earlier of 10 years from date of grant
or three months after termination of employment. The 1999 Stock Option Plan, as
amended, also provides for the grant of restricted stock. No such grants were
made during 1999.
OPTION EXERCISES
None of the named executive officers exercised any options during 1999. The
following table sets forth information with respect to unexercised options as of
December 31, 1999 and the value of in-the-money options based on the positive
spread between the exercise price and the closing price of the Company's Common
Stock on such date.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FY-END(#) FY-END($)
--------------------------- ---------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Timothy C. Tuff.................................. 140,000 560,000 778,750 333,750
S. David Passman III............................. 100,000 150,000 105,312 421,250
Mark C. Perlberg................................. 93,000 157,000 105,312 421,250
Earl W. Rogers Jr................................ 98,600 144,400 103,887 415,550
John C. Walters.................................. 74,000 96,000 58,000 232,000
</TABLE>
DEFERRED COMPENSATION ARRANGEMENTS
The Company has entered into a Supplemental Retirement Agreement with Mr.
Tuff pursuant to which he is entitled to receive an annual benefit of $186,000
upon retirement at age 65. In addition, if he remains employed by the Company
for a minimum of five years, he will be entitled to a reduced normal retirement
7
<PAGE> 11
benefit ($36,000 after five years, increasing annually), which vests in the
event of long term disability, and may elect to receive a reduced early
retirement benefit after age 62 in the annual amount of $92,000. All such
benefits are payable for a period of 10 years. The Company has also provided
life insurance coverage for Mr. Tuff in the amount of $750,000.
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 which 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.
NONCOMPETE AND TERMINATION AGREEMENTS
The Company has entered into noncompete and termination agreements with
certain officers, including each of the named executive officers, 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 his average annual compensation for
the five calendar year period preceding the date of termination (or the highest
compensation in any single year, in the case of Mr. Tuff) or the maximum payment
which the Company can make to such officer without triggering Federal excise tax
liability. In the event of an involuntary termination of employment without
cause (in the absence of a change in control), the officer (other than Mr. Tuff)
shall receive a lump sum payment equal to his annual base salary at that time.
The agreement with Mr. Tuff provides that in the event of such involuntary
termination, he will receive salary continuation for a period of 36 months if
such termination occurs less than two years after his date of employment, 24
months if such termination occurs between two and three years thereafter and 12
months if such termination occurs more than three years thereafter. Each
agreement is for an initial term of five years, renewable for successive
one-year terms until terminated by either party.
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 retainer is
2,000 shares. Payment of the retainer in Common Stock serves to more closely
align the interests of the Directors with shareholders. In addition, the Board
has adopted a Director share ownership program pursuant to which non-employee
Directors are expected to acquire ownership of Common Stock equal to five times
the annual retainer over a period of five years.
Directors may elect to defer receipt of all or any portion of the annual
retainer as well as meeting and committee fees. Deferred fees are credited to
the Director's deferred compensation account, in cash or stock equivalents.
Directors may credit deferred meeting fees in stock equivalents based on the
average market price of the Common Stock during the five trading dates prior to
the meeting date. 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'
8
<PAGE> 12
Plan, unless distribution is accelerated in certain events, including a change
in control of the Company. Currently, ten Directors defer the retainer or
meeting fees as stock equivalents.
During 1999, each non-employee Director received 2,000 shares of Common
Stock (or a pro rata portion for partial service during such year) as well as
$1,000 per Board and committee meeting attended, with committee chairs receiving
$1,500. Employee Directors receive no compensation for Board services.
The following report of the Governance Committee and the stock performance
graph 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.
GOVERNANCE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Governance Committee (the "Committee"), comprised solely of outside
directors, is responsible for overseeing the Company's executive compensation
program and the use of stock for compensation purposes as approved by
shareholders under the Company's 1999 Stock Option Plan. This report summarizes
the Committee's compensation philosophy, strategy and actions for the Chief
Executive Officer and all other executive officers.
COMPENSATION PHILOSOPHY AND STRATEGY
The Committee's compensation philosophy is to implement compensation
programs that are 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.
Such compensation programs are designed to balance short and long-term
financial objectives, build shareholder value and provide rewards for
individual, team and corporate performance. The Company believes that it is
important to encourage the ownership of the Company's Common Stock throughout
the Company, with an overall intent to encourage each employee to be, and to
behave like, an owner of the business. To that end, the Company has expanded the
group of key employees receiving stock option grants, and also maintains an
employee stock purchase plan which enables employees to purchase Company stock
at a discount through payroll deductions.
The components of the Company's executive compensation program are (i) cash
compensation, consisting of base salary and annual incentive bonus based on the
achievement of Company, business unit and personal performance goals, and (ii)
long-term stock incentives. In determining base salaries the Committee considers
each individual's roles, responsibilities and performance, taking into account
market-competitive pay levels. For both annual incentives and long-term stock
incentives, the Committee intends to provide competitive compensation for
expected levels of performance; more than competitive compensation for
performance above expectations; and less than competitive compensation in the
event the Company or an individual does not meet the Committee's performance
expectations.
9
<PAGE> 13
During 1999, the Committee undertook a thorough review of its executive
compensation program, and reaffirmed its intention to provide competitive
compensation opportunities consistent with market median pay levels. With the
assistance of an outside consultant, the Committee assessed the competitiveness
of the base salaries, annual incentive opportunities and stock incentive grants
with respect to a peer group of comparably sized firms with whom the Company
competes for customers and for executive talent, as well as comparably sized
firms across a wide range of industries from whom the Company may hire or lose
executives. Because the Committee wants to tailor its competitive perspective to
companies it believes are most relevant, the companies employed for these
external competitive analyses overlap with, but are not identical to, the
companies represented in the indices employed in the Five Year Stock Performance
Graph.
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 annually reviews 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. Changes in base salary for executive officers reflect the
Committee's assessment of competitive norms, changes in roles and
responsibilities, and the performance of each individual.
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 executive officers and employees. These key executives are
responsible for establishing strategic direction or are responsible for major
functional or operating units, and have an impact on bottom-line results. For
the past several years, the Company has tied executive compensation to the
achievement of Company goals, putting a substantial portion of total
compensation at risk. Under the Company's Senior Management Incentive Plan,
bonuses for 1999 were based on the achievement of the Company's earnings per
share goal, personal stretch objectives (reflecting expectations above and
beyond the scope of normal performance goals), and specific financial objectives
for business unit participants. With respect to each element of the plan,
performance expectations based on the Company's annual plan are communicated to
each participant at the beginning of the year. Achievement of these levels of
performance is designed to yield the payment of a target incentive award that is
consistent with median competitive levels of incentive compensation. For
performance above or below expectations, incentive awards can range from 0% to
150% of each individual's target award. The Committee believes this close link
between individual incentive opportunity and the Company and its business unit
performance appropriately motivates and rewards participants for their
contributions to the Company's success.
LONG-TERM INCENTIVES
The Committee may grant stock incentives to key employees under the
Company's stock option plan. As part of the Committee's review of the
compensation program, it assessed the competitiveness of the Company's option
grant practices, and determined that it is appropriate to implement a more
regular review and allocation of options to executives and other key employees,
consistent with their performance and competitive guidelines. The Committee
considers recommendations of the Chief Executive Officer, responsibility levels,
compensation and the market price of the Company's Common Stock in determining
the size of
10
<PAGE> 14
such option grants. The Committee 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. Tuff was recruited to become President and Chief Executive Officer in
October 1998. In determining Mr. Tuff's compensation package, the Board
considered the competitive market for salaries as well as the recommendations of
the executive compensation search firm retained by the Company. For 1999, Mr.
Tuff's incentive award was based on the Company's and his individual
performance, consistent with the terms and conditions of the Senior Management
Incentive Plan as outlined above. His base salary remained unchanged during
1999. The stock options and restricted stock grant received by Mr. Tuff in
January 1999 were included in his initial 1998 compensation package.
The Committee believes that its 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.
GOVERNANCE COMMITTEE
G. Harold Northrop, Chair
William S. Antle III
Richard K. Lochridge
11
<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, 1994 in the Company's Common Stock compared to the S&P 500 Index and the S&P
Specialty Printing Index.
<TABLE>
<CAPTION>
JOHN H. HARLAND COMPANY S&P 500 S&P SPEC. PRINT
----------------------- ------- ---------------
<S> <C> <C> <C>
1994 $100.00 $100.00 $100.00
1995 $109.47 $137.12 $127.39
1996 $178.41 $168.22 $123.52
1997 $115.16 $223.90 $136.81
1998 $ 88.36 $287.35 $156.08
1999 $104.00 $347.36 $102.12
</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 2000. 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.
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<PAGE> 16
ANNUAL REPORT TO SHAREHOLDERS
The annual report for the year ended December 31, 1999 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 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, Communications
(770) 593-5127
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the Company's 2001
annual meeting of shareholders must be received no later than November 17, 2000
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.
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 by employees of the Company personally or by
telephone, facsimile or mail. 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.
John C. Walters
Vice President and Secretary
March 17, 2000
13
<PAGE> 17
(HARLAND LOGO)
(RECYCLED PAPER LOGO)
<PAGE> 18
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
JOHN H. HARLAND COMPANY
APRIL 28, 2000
The undersigned hereby appoints TIMOTHY C. TUFF and JOHN C. WALTERS, 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 28, 2000 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
- --------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
<PAGE> 19
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
1. To elect FOR WITHHELD William S. Antle III 2. To ratify the appointment of FOR AGAINST ABSTAIN
three directors: [ ] [ ] John D. Johns Deloitte & Touche LLP as the [ ] [ ] [ ]
Eileen M. Rudden Company's independent certified
public accountants for the year
For, except vote withheld from the following nominee(s): ending December 31, 2000.
- ----------------------------------------------------
Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title
as such.
-----------------------------------------------------------
-----------------------------------------------------------
SIGNATURE(S) DATE
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-- FOLD AND DETACH HERE --
</TABLE>
