<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
/ / 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 240.14a-11(c) or 240.14a-12
Hunt Corporation
- -----------------------------------------------------------------------------
(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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / 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:
___________________________________________________________________________
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[GRAPHIC OMITTED]
HUNT CORPORATION
---------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held on April 19, 2000
---------------------------
To Our Shareholders:
The Annual Meeting of Shareholders of Hunt Corporation will be held at
10:00 o'clock a.m. on April 19, 2000, on the 50th Floor, Furness Forum, Bell
Atlantic Tower, 1717 Arch Street, Philadelphia, Pennsylvania, for the following
purposes:
1. To elect four directors to serve for a three-year term;
2. To vote on a proposal to ratify the appointment of independent
accountants; and
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on February 18,
2000, as the record date for the determination of shareholders entitled to
notice of, and to vote at, the meeting and any adjournments thereof.
All shareholders are cordially invited to attend the meeting in person.
However, whether or not you plan to attend, please promptly sign, date and mail
the enclosed proxy card in the enclosed return envelope which requires no
postage if mailed in the United States. Returning your proxy card does not
deprive you of your right to attend the meeting and vote your shares in person.
By order of the Board of Directors,
WILLIAM E. CHANDLER, Secretary
March 1, 2000
<PAGE>
HUNT CORPORATION
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
---------------------------
PROXY STATEMENT
---------------------------
This proxy statement, which is being sent to shareholders on or about
March 8, 2000, is furnished in connection with the solicitation of proxies by
the Board of Directors of Hunt Corporation (the "Company") for use at the
forthcoming Annual Meeting of Shareholders (the "Meeting") to be held on April
19, 2000, and at any adjournments thereof.
At the close of business on February 18, 2000, the record date for
determination of shareholders entitled to notice of, and to vote at, the
meeting, there were outstanding an aggregate of 9,992,239 of the Company's
Common Shares. Pursuant to the Company's 1990 shareholders' Rights Agreement,
rights to purchase securities of the Company under certain circumstances are
deemed to be attached to outstanding Common Shares.
Voting and Revocability of Proxies
Each Common Share outstanding on the record date is entitled to one vote
on all matters to come before the Meeting, except that shareholders have the
right to cumulate their votes in the election of directors. This means that
shareholders may multiply the number of votes to which they are entitled by the
number of directors to be elected, and the whole number of such votes may be
cast for one nominee or distributed among any two or more nominees. If you wish
to cumulate your votes in this manner, you must clearly indicate on your proxy
card your desire to cumulate and how many votes you wish to cast for each
nominee.
A majority of the Common Shares entitled to vote at the Meeting,
represented in person or by proxy, constitutes a quorum. In the election of
directors, assuming a quorum is present, the four nominees receiving the
highest number of votes cast at the Meeting will be elected. The affirmative
vote of a majority of the votes cast at the meeting is required for approval of
Proposal 2, assuming a quorum is present. Abstentions, the withholding of a
vote, or the specific direction not to cast any vote on a specific matter, such
as broker non-votes, will not constitute the casting of a vote on such matter.
Your proxy may be revoked at any time prior to its exercise by giving
written notice to the Secretary of the Company, by presenting a duly executed
proxy bearing a later date or by voting in person at the Meeting, but your mere
attendance at the Meeting will not revoke your proxy. Your proxy, when properly
executed, will be voted in accordance with the specific instructions indicated
on your proxy card. Unless contrary instructions are given, your proxy will be
voted FOR the election of the four nominees for director, as provided under
"Election of Directors" below (in equal amounts or cumulatively, as the persons
voting the proxies may determine); FOR
1
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ratification of the appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for the 2000 fiscal year; and, to the extent permitted
by the rules of the Securities and Exchange Commission (the "SEC"), in
accordance with the judgment of the persons voting the proxies upon such other
matters as may come before the Meeting and any adjournments. In the latter
regard, the Company intends to avail itself, until further notice, of the
provisions of Rule 14a-4(c)(i) which grants the persons voting the proxies
discretionary authority to vote on any shareholder proposals presented at an
Annual Meeting of which the Company has not received notice at least 45 days
before the anniversary of the date (March 8, 1999) on which the Company first
mailed its proxy materials for the previous year's Annual Meeting.
1. ELECTION OF DIRECTORS
The Restated Articles of Incorporation and By-laws of the Company
presently provide that the number of directors shall be eleven, to be divided
into three classes as nearly equal in number as possible. The Board of
Directors has nominated, and recommends the election of, the following four
persons to serve as directors of the Company until the 2003 Annual Meeting or
until their successors are elected and have qualified:
Ursula M. Burns Jack Farber
Gordon A. MacInnes Donald L. Thompson
All the nominees are presently serving as directors of the Company, having
previously been elected by the shareholders of the Company, except for Ursula
M. Burns, who was elected a director by the Board in April 1999. Although the
Board of Directors has no reason to believe any of the nominees will be unable
to serve, if such should occur, your proxy will be voted (unless marked to the
contrary) for such person or persons, if any, as shall be recommended by the
Board of Directors. However, your proxy will not be voted for the election of
more than four directors.
The following table sets forth, as of February 1, 2000, certain
information with respect to each nominee for election as a director and each
director whose term of office will continue after the Meeting:
<TABLE>
<CAPTION>
Present
Name, Age and Director Term
Occupation(1) Since Expires
------------- -------- -------
<S> <C> <C>
1997 2002
Donald D. Belcher, 61
Chairman, President and Chief Executive Officer of
Banta Corporation, a printing and digital imaging company.
Ursula M. Burns, 41 1999 2000
Senior Vice President, Worldwide Manufacturing and Supply
Chain, Corporate Strategic Services (since 1999) of Xerox
Corporation, a document company. Previously, Vice President
and General Manager, Departmental Business Unit (1997 -
1999) and Vice President and General Manager, Workgroup
Copier Business Unit (1995 - 1997) of Xerox Corporation.
Director of Lincoln Electric Company.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Present
Name, Age and Director Term
Occupation(1) Since Expires
------------- -------- -------
<S> <C> <C>
Jack Farber, 66 1970 2000
Chairman of the Board (and President until June 1999) of
CSS Industries, Inc., a consumer products company.
William F. Hamilton, Ph.D., 60 1986 2001
Landau Professor of Management and Technology, The
Wharton School of the University of Pennsylvania. Director
of Neose Technologies, Inc., Marlton Technologies, Inc. and
Digital Lightwave, Inc.
Mary R. (Nina) Henderson, 49 1991 2001
Corporate Vice President, Global Core Business
Development, of Bestfoods, an international food company.
Director of AXA Financial Inc. (formerly The Equitable
Companies), The Equitable Life Assurance Society of the
United States, Pactiv Corporation (formerly Tenneco
Packaging, Inc.)
Gordon A. MacInnes, 58(2) 1970 2000
President, New Jersey Institute for School Innovation (since
January 1999); Author and former New Jersey State Senator
(1994-1998). Chairman of the Board of the Company
(1995-1996).
Robert H. Rock, D.B.A., 49 1989 2002
President of MLR Holdings, L.L.C., a publishing company
which produces business publications, executive conferences
and community newspapers. Director of Alberto-Culver
Company and Quaker Chemical Co.
Roderic H. Ross, 69 1978 2001
Vice Chairman of the Board and Chief Executive Officer of
Keystone State Life Insurance Company. Director of PNC
Bank Corp. and PMA Capital Corp.
Donald L. Thompson, 58 1996 2000
Chairman, President and Chief Executive Officer of the
Company (since 1996). Previously, Group Vice President of
the Office Products Business (1993-96) of Avery Dennison
Corporation, an office products company.
Malcolm J. Thompson, Ph.D., 54 1998 2002
President and Chief Executive Officer of Novalux, Inc., a
fiber optics communications systems company. Previously
President and Chief Executive Officer, dpiX Inc., a Xerox
New Enterprise Company, a digital imaging company
(1996-99) and Chief Technologist of Xerox PARC (1981-1996).
Director of Photon Dynamics Inc.
Victoria B. Vallely, 49(2) 1976 2002
Manager, Bartol Family Partnership, an investment
partnership.
</TABLE>
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(1) Except as otherwise noted, the named individuals have had the occupations
indicated (other than directorships) for at least five years.
(2) Mr. MacInnes is married to Ms. Vallely's sister. Both Mrs. MacInnes and Ms.
Vallely are daughters of the late George E. Bartol III, a former Chairman
of the Board, Chief Executive Officer and principal shareholder of the
Company.
3
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Information Concerning Meetings and Certain Committees
The Board of Directors held five formal meetings during fiscal 1999. The
Company has standing Audit, Compensation, and Nominating Committees of its
Board of Directors. The Audit Committee members currently are Messrs. Farber,
Hamilton and MacInnes. This Committee makes recommendations to the Board of
Directors concerning the engagement, retention and discharge of independent
accountants, reviews with members of the Company's management and internal
auditors and with the Company's independent accountants the plans and results
of the auditing engagement, the Company's financial statements and the adequacy
of the Company's system of internal accounting controls, and directs any
investigations into matters within the scope of the foregoing duties. During
fiscal 1999, the Audit Committee held two formal meetings. The Compensation
Committee currently is composed of Messrs. Rock and Ross and Ms. Henderson.
This Committee establishes the salaries of executive officers and makes
recommendations to the Board of Directors regarding the adoption, extension,
amendment and termination of compensation plans in which officers or directors
may participate. It also exercises administrative powers pursuant to certain of
those plans. The Compensation Committee held three formal meetings during
fiscal 1999. The members of the Nominating Committee currently are Messrs.
Belcher, MacInnes and Rock and Ms. Vallely. The primary purpose of this
Committee, which held one meeting during fiscal 1999, is to identify and
recommend to the Board qualified individuals to serve as directors of the
Company. The Nominating Committee has not determined whether it will consider
nominees recommended by shareholders.
The Board of Directors also has an Executive Committee whose current
members are Messrs. MacInnes, Farber, Rock and Mr. Donald L. Thompson. The
Executive Committee generally is empowered, subject to certain limitations, to
exercise the authority of the Board between Board meetings. The Board also,
from time to time, appoints special committees for specific purposes.
During fiscal 1999, all directors attended in person or by conference
telephone at least 75% of the aggregate of the total number of meetings of the
Board of Directors and committees of the Board on which they served.
Compensation of Directors
The ten current non-employee directors of the Company participate in the
Company's 1997 Non-Employee Director Compensation Plan. Pursuant to this plan,
the Company pays annual directors' fees of $5,000 in cash and $12,000 in grants
of Common Shares, plus cash of $1,000 for each Board meeting and $1,000 ($1,250
for Committee Chairpersons) for each committee meeting attended, to each of its
non-employee directors. In addition, the plan provides for annual grants to
each non-employee director of non-qualified stock options to purchase up to
2,000 Common Shares at the fair market value of such shares on the date of
grant, such options to vest after two years (subject to possible acceleration)
and to extend for 10 years (subject to possible earlier termination). During
fiscal 1999, options to purchase 2,000 Common Shares were granted to each of
the non-employee directors at an exercise price of $9.16 per share. The
exercise prices of options outstanding under this plan
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<PAGE>
range from $23.22 to $9.16. As of February 1, 2000, no such options had been
exercised. In addition, the Company reimburses directors for certain expenses
incurred in attending Board and committee meetings. From time to time, the
Company also compensates non-officer directors for special services but did not
do so in fiscal 1999.
The non-officer directors also participate in the 1994 Non-Employee
Directors' Stock Option Plan which provides for one-time automatic grants of
non-qualified options to purchase 5,000 Common Shares (at a per share price
equal to the fair market value of a Common Share on the grant date of the
option) on January 26, 1994 to each of the non-employee directors in office at
that time, and to subsequent non-employee directors at the time of their
election to the Board. Ms. Burns received such an option grant under this plan
in fiscal 1999 with an exercise price of $10.5625 per share. Options granted
under this plan extend for a term of ten years from the grant date (subject to
earlier termination in certain circumstances) and become exercisable at the
rate of 20% per year over five years from the grant date (subject to
acceleration in certain circumstances). The options outstanding under this plan
have exercise prices ranging from $18.6875 per share to $10.5625 per share. As
of February 1, 2000, an aggregate of 3,000 options had been exercised under
this plan.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP served as the Company's independent
accountants for fiscal 1999 and has been selected by the Board of Directors to
serve in the same capacity for fiscal 2000. The shareholders will be asked to
ratify this appointment at the Meeting.
A representative of PricewaterhouseCoopers LLP is expected to be present
at the Meeting and will be available to respond to appropriate questions. The
representative will also have the opportunity to make a statement if he or she
desires to do so.
3. OTHER MATTERS
The Board of Directors knows of no matters to be presented for action at
the Annual Meeting, other than those set forth in the attached Notice and
customary procedural matters. However, if any other matters should properly
come before the Meeting or any adjournments thereof, the proxies solicited
hereby will be voted on such matters, to the extent permitted by the rules of
the Securities and Exchange Commission, in accordance with the judgment of the
persons voting such proxies.
ADDITIONAL INFORMATION
Common Share Ownership by Certain Beneficial Owners and Management
The following table sets forth, as of February 1, 2000, certain
information concerning the beneficial ownership of Common Shares by: (i) each
person who is known by the Company to be the beneficial owner of more than 5%
of such shares, (ii) each director and nominee for director of the Company,
(iii) each of the executive officers of the Company named in the Summary
Compensation Table appearing later in this proxy statement, and (iv) all
directors and executive officers of the Company as a group. Such information is
based upon information provided to the Company by such persons.
5
<PAGE>
<TABLE>
<CAPTION>
Common Shares Percent
Name of Beneficial Owner Beneficially Owned(1) of Class(1)
------------------------ --------------------- -----------
<S> <C> <C>
Richard J. Bove Esq. ....................................... 2,069,766(2) 20.7
Bove & Associates
2000 Market Street, 6th Floor
Philadelphia, PA 19103
Ariel Capital Management, Inc. ............................. 1,614,180(3) 16.2
307 North Michigan Avenue
Chicago, IL 60601
Reed Conner & Birdwell, Inc. ............................... 774,394(4) 7.7
11111 Santa Monica Blvd., Ste. 1700
Los Angeles, CA 90025
Dimensional Fund Advisors Inc. ............................. 568,800(4) 5.7
1299 Ocean Ave., 11th Floor
Santa Monica, CA 09401
Donald D. Belcher, director ................................ 7,085(5) *
Ursula M. Burns, director .................................. 1,301 *
Jack Farber, director ...................................... 22,245(5) *
William F. Hamilton, director .............................. 11,785(5)(6) *
Mary R. (Nina) Henderson, director ......................... 8,685(5) *
Gordon A. MacInnes, director ............................... 620,844(5)(7) 6.2
Robert H. Rock, director ................................... 8,585(5) *
Roderic H. Ross, director .................................. 16,760(5) *
Donald L. Thompson, director and executive officer ......... 244,500(8) 2.4
Malcolm J. Thompson, director .............................. 2,722(5) *
Victoria B. Vallely, director .............................. 107,018(5)(9) 1.1
John W. Carney, executive officer .......................... 80,674(10) *
William E. Chandler, executive officer ..................... 137,029(11) 1.4
W. Ernest Precious, executive officer ...................... 103,257(12) 1.0
Eugene A. Stiefel, executive officer ....................... 54,341(13) *
Spencer W. O'Meara, former executive officer ............... 138,885(14) 1.4
All current directors and executive officers as a group
(16 persons) .............................................. 1,426,831(15) 13.5
</TABLE>
- ---------------
*Less than 1%
(1) Except as otherwise indicated, the beneficial ownership of Common Shares
reflected in this proxy statement is based upon sole voting and
dispositive power with respect to such shares. Further, for the purposes
of computing beneficial ownership and the percent of class of an
individual, Common Shares which the individual has the right, upon
exercise of options and in certain other circumstances, to acquire within
60 days, are deemed to be outstanding and beneficially owned by the
individual.
(2) Represents shares held by Mr. Bove as successor and sole trustee under four
separate irrevocable trusts established by the late George E. Bartol III
(a former Chairman of the Board, Chief Executive Officer and principal
shareholder of the Company) for the benefit of Mr. Bartol's four adult
daughters.
6
<PAGE>
(3) According to information supplied by Ariel, Ariel is a registered
investment adviser, and all shares held by it are owned by its investment
advisory clients, none of whom, to the knowledge of Ariel, owns more than
5% of the Company's Common Shares.
(4) According to information set forth in its Schedule 13G filed with the SEC,
this entity is a registered investment adviser.
(5) Includes for the following named individuals, the following number of
shares which he or she has the right to acquire by exercise of stock
options under the non-employee director stock option and compensation
plans: Messrs. Farber, Hamilton, MacInnes, Rock and Ross, and Ms. Henderson
and Mrs. Vallely -- 6,000 shares; Mr. Belcher -- 3,000 shares; and Dr. M.
L. Thompson -- 1,000 shares.
(6) Includes 3,500 shares held jointly with his wife.
(7) Includes 532,293 shares as to which Mr. MacInnes has shared voting and
dispositive power as co-trustee (with Katherine B. Stenson-Lunt) of an
irrevocable trust established by the late George E. Bartol III for the
benefit of his grandchildren, and 74,529 shares held by Mr. MacInnes as
custodian for his children. Does not include 159,840 shares beneficially
owned by Mr. MacInnes' wife, the beneficial ownership of which shares is
disclaimed by Mr. MacInnes. Mrs. Stenson-Lunt and Mrs. MacInnes are
daughters of the late George E. Bartol III.
(8) Includes 237,500 shares which Mr. Thompson has the right to acquire by
exercise of stock options.
(9) Includes 19,224 shares held jointly with her husband. Does not include an
aggregate of 44,057 shares held by her husband as trustee or custodian for
their children, the beneficial ownership of which shares is disclaimed by
Ms. Vallely.
(10) Includes 72,260 shares which Mr. Carney has the right to acquire by
exercise of stock options. Does not include 9,000 shares held for his
account in the Supplemental Executive Retirement Plan.
(11) Includes 83,545 shares which Mr. Chandler has the right to acquire by
exercise of stock options. Does not include 12,000 shares held for his
account in the Supplemental Executive Retirement Plan.
(12) Includes 97,917 shares which Mr. Precious has the right to acquire by
exercise of stock options. Does not include 12,000 shares held for his
account in the Supplemental Executive Retirement Plan.
(13) Includes 51,180 shares which Mr. Stiefel has the right to acquire by
exercise of stock options.
(14) Includes 104,829 shares which Mr. O'Meara has the right to acquire by
exercise of stock options. Does not include 12,000 shares held for his
account in the Supplemental Executive Retirement Plan.
(15) Includes an aggregate of 588,402 shares which certain directors and
current executive officers have the right to acquire by exercise of stock
options. Does not include shares which are excluded in the notes above.
-------------------------
7
<PAGE>
Executive Compensation
Compensation Committee Report on Executive Compensation
The Company's Compensation Committee (the "Committee") is composed of
three outside directors, none of whom has ever been an employee of the Company
or any of its subsidiaries. The Committee makes recommendations to the full
Board of Directors regarding the adoption, extension, amendment, and
termination of the Company's compensation plans and also administers certain of
these plans. The Committee also reviews in conjunction with the Company's
Chairman, President and Chief Executive Officer (the "CEO") the performance of
other executive officers and establishes the salaries of the CEO and other
executive officers (subject to the terms of any employment agreements). The
Committee has provided the following report on executive compensation:
The Committee has been guided by the following executive compensation
philosophy of the Company:
1. Align the interests of shareholders and management through a
compensation program that provides a substantial proportion of executive
officers' total compensation in the form of Company shares and options.
2. Make a significant portion of total compensation for executive
officers contingent upon the attainment of demanding performance goals
that support growth in the Company's share value over time.
3. Balance the objectives of short-term earnings increases and
investment in the long-term financial health of the Company with an
incentive compensation program that rewards improved profit performance
with annual cash bonuses and stimulates a long-term perspective through
the granting of options to purchase Common Shares of the Company.
4. Enable the Company to attract and retain superior management by
providing a very competitive total compensation package.
Executive compensation consists primarily of three components: base
salary, incentive compensation, and stock options/stock grants.
Base Salary
The Company's policy generally has been to set base salaries for each
executive officer position at a level up to the fiftieth percentile when
compared to compensation survey data available for equivalent positions with
other industrial, bonus-paying employers. If performance objectives for annual
incentive and long-term goals are met, total direct compensation may reach the
seventy-fifth percentile of compensation for equivalent positions with other
industrial employers of comparable size. The Company uses compensation studies,
surveys and outside consultants to monitor the Company's competitive executive
compensation position and to recommend salary ranges and compensation changes
to the Committee. These studies may include but are not limited to the peer
group of companies used for the Shareholder Return Performance Graph herein.
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The performance reviews of the executive officers other than the CEO are
conducted by the CEO, and the results of such reviews are reported to the
Committee by the CEO. The performance of the CEO is reviewed by the
Compensation Committee and the Board of Directors. The Committee adjusts
executive officers' salaries with input from the CEO based on the quality of
their individual performance and the relationship of their salary to their
established salary range. Merit increases in the form of a one-time payment (as
distinct from the annual bonuses) are granted under certain circumstances;
however no such merit increases were granted during fiscal 1999.
The base salary of the CEO presently is set at $450,000 per year, subject
to adjustment, by his employment agreement. Adjustments to the base salary of
the CEO are governed by the same factors as other executive officers but also
specifically take into account the Company's current financial performance (as
measured by earnings, balance sheet strength, and overall financial soundness)
and the extent to which the CEO is successful in establishing a vision and
strategic plan for the Company and implementing that plan over time. The
Committee also considers the CEO's leadership in setting high standards for
financial performance, motivating management colleagues, and representing the
Company and its values to internal and external constituencies. These factors
are largely subjective in nature and are not specifically weighted.
Incentive Compensation
The Company's incentive compensation program as in effect during fiscal
1999 had only an annual component. Under the annual program, bonuses were based
on achievement of a specific corporate earnings per share threshold which was
established by the Committee with reference to the Company's prior year's
results and management's budget for the 1999 fiscal year, achievement of
specific business unit revenue and operating margin, and achievement of certain
objectives for each individual executive. The maximum potential annual bonus
award for executive officers, including the CEO, for fiscal 1999 was up to 70%
of base salary. No annual bonus was earned by the executive officers for fiscal
1999. However, the Board of Directors authorized a discretionary special cash
award in fiscal 1999, payable to the employees and executive officers of the
Company other than the CEO, Mr. Thompson. This special cash award was approved
in recognition of the progress of the Company's business in fiscal 1999.
Stock Options/Stock Grants
The Company's 1993 Stock Option and Stock Grant Plan provides for grants
by the Compensation Committee of incentive and/or non-qualified stock options,
as well as grants of stock, to executive officers and others, thus tying a
portion of executive compensation directly to the performance of the Company
stock. The exercise price of the stock options under the Plan (and predecessor
option plans) may not be less than 100% of the fair market value of the
Company's stock on the date of grant. Stock options become exercisable at least
one year (usual practice has been two years) from
9
<PAGE>
the date of grant, subject to possible acceleration in certain circumstances,
and usually expire ten years following the date of grant. Executive officers
typically have been granted stock options each year for a number of shares, the
market value of which shares on the date of grant has been in a range of 75% to
125% of the executive officer's base salary. However, in fiscal 1997, the
Committee granted three years' worth of options to executive officers, other
than the CEO, (which were intended to be largely in lieu of grants to them
during the next three fiscal years), in order to compensate the executive
officers for their efforts related to the Company's restructuring and as part
of the Committee's intention to have a greater portion of executive officers'
total compensation be based on stock options. The CEO received options in
fiscal 1998 and 1997 pursuant to his employment agreement.
The Compensation Committee is mindful of the potential impact upon the
Company of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), which prohibits public companies from deducting certain executive
remuneration in excess of $1,000,000. While reserving the right of the Company
to offer such compensation arrangements as may be from time-to-time necessary
to attract and retain top-quality management, the Compensation Committee
intends generally to structure such arrangements, where feasible, so as to
minimize or eliminate the impact of the limitations of Section 162(m) of the
Code.
February 9, 2000 Compensation Committee:
Robert H. Rock, Chairman
Mary R. (Nina) Henderson
Roderic H. Ross
10
<PAGE>
Summary Compensation Table
The following table sets forth certain information concerning the annual
and long-term compensation paid or accrued to or for: (i) the Company's Chief
Executive Officer and (ii) the Company's four most highly compensated other
current executive officers and one former executive officer whose total annual
salary and bonus exceeded $100,000 (collectively, the "Named Officers") for
services rendered to the Company and its subsidiaries during fiscal years 1999,
1998 and 1997:
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
---------------------------------------------------- -------------
Other Securities All Other
Annual Underlying Compen-
Name and Bonus Compen- Options/ sation
Principal Position Year Salary (1) sation SARs (2) (3)
- ------------------------------------------------ ------ --------- ---------------- --------------- ------------- ----------
($) ($) ($) (#) ($)
--------- ---------------- --------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Thompson 1999 450,000 -- -- -- 7,637
Chairman of the Board, 1998 453,462 -- -- 45,283 10,478
President and Chief Executive Officer 1997 450,000 225,000(4) -- 62,500 11,250
William E. Chandler 1999 225,216 25,000 -- -- 4,014
Senior Vice President, 1998 218,537 -- -- -- 5,641
Finance; Chief Financial Officer and Secretary 1997 213,200 105,001 -- 124,000 4,236
W. Ernest Precious 1999 215,359 21,967 -- -- 3,882
Executive Vice President, 1998 217,016 -- -- -- 5,532
Corporate Development 1997 215,816 98,139 44,908(5) 124,000 3,108
John W. Carney 1999 190,000 19,000 -- -- 2,978
Vice President, General Manager, 1998 174,636 -- -- -- 3,500
Hunt Graphics 1997 164,565 63,423 -- 89,000 3,096
Eugene A. Stiefel 1999 163,075 20,874 -- -- 2,487
Vice President, 1998 147,273 -- -- -- 2,833
Information Services 1997 125,225 38,475 -- 89,000 2,516
Spencer W. O'Meara(6) 1999 290,000 30,000 -- -- 285,298
Former Executive Vice President 1998 263,251 -- -- -- 7,119
1997 245,595 118,665 -- 124,000 4,901
</TABLE>
- ---------------
(1) Represents annual bonuses awarded under the Company's Incentive
Compensation Program for the respective fiscal years, unless otherwise
indicated. No bonus was earned under that program in either fiscal 1998 or
1999. However, the Board authorized a discretionary special cash award for
fiscal 1999 payable to employees and executive officers, other than Mr.
Thompson, in recognition of the substantial progress of the Company's
business in fiscal 1999.
(2) Represents shares underlying stock options unless otherwise indicated.
(3) Includes contributions made by the Company under its 401(k) Savings Plan,
its Supplemental Executive Benefits Plan (see "Pension Plans" below) and
premiums paid by the Company for group term life insurance coverage,
unless otherwise indicated. Does not include contributions made by the
Company with respect to the Pension Plan.
(4) The bonus of $225,000 paid to Mr. Thompson for fiscal 1997 represented the
minimum annual incentive pay for that fiscal year under the terms of his
employment agreement.
(5) Includes reimbursement of $17,144 of relocation expenses, $13,652 of
related taxes and $14,112 of compensation for relocation.
11
<PAGE>
(6) Mr. O'Meara resigned as an executive officer, effective September 30, 1999
but continued to receive his salary during fiscal 1999. The amount
reflected for him under "All Other Compensation" includes $280,000 accrued
in connection with his separation arrangements. (See "Employment and
Severance Agreements and Arrangements" below.)
Stock Option/SAR Grants, Exercises and Holdings
The following table sets forth certain information concerning stock
options and SARs exercised by the Named Officers during fiscal 1999 and
unexercised stock options held by them at the end of fiscal 1999. No stock
options or SARs were granted to the Named Officers during fiscal 1999.
Aggregate Option/SAR Exercises in Fiscal 1999
and Fiscal Year-End Option/SAR Values(1)
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Shares Options/SARs at FY-End at FY-End(2)
Acquired on Value --------------------------------- -----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
(#) ($) (#) (#) ($) ($)
------------- ---------- ---------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Thompson ...... -- (3) 131,250(3) 43,750(3) -- --
Donald L. Thompson ...... -- -- 237,500 45,283 -- --
William E. Chandler ..... -- -- 83,545 124,000 -- --
W. Ernest Precious ...... -- -- 97,917 124,000 -- --
John W. Carney .......... -- -- 72,260 89,000 -- --
Eugene A. Stiefel ....... -- -- 51,180 89,000 -- --
Spencer W. O'Meara ...... -- -- 104,829 124,000 -- --
</TABLE>
- ---------------
(1) The information presented in this table is with respect to options, unless
otherwise noted. All options reflected in this table were granted at fair
market value under the Company's 1983 or 1993 Stock Option Plans.
(2) The value in the case of options is calculated by subtracting the exercise
price from the fair market value of the securities underlying the options
at November 28, 1999. There is no exercise price for Mr. Thompson's
phantom stock/SARs. (See footnote (4) below.)
(3) Relates to the 175,000 shares of phantom stock/SARs granted to Mr. Thompson
on June 1, 1996 pursuant to the terms of his employment agreement. (See
"Employment and Severance Agreements and Arrangements" below.) These
phantom shares/SARs vest at the rate of 25% per year commencing December
1, 1996. The fair market value of the 43,750 shares of phantom stock/SARs
that vested on December 1, 1998 (which was during fiscal 1999) was
$601,563 on that date. Upon his separation from the Company, Mr. Thompson
will be entitled to receive, in monthly installments with interest, an
aggregate amount equal to the number of such phantom shares/SARs as shall
have vested, multiplied by the per share price of the Company's Common
Shares as of the end of the month prior to his separation from the
Company, plus an amount equal to the dividends which would have accrued on
an equivalent number of Common Shares prior to his separation, minus any
such dividend equivalent amounts as may previously have been distributed
to him.
12
<PAGE>
Pension Plans
The following table sets forth the estimated annual retirement benefits
payable under the Company's Pension Plan and the retirement benefits portion of
the Supplemental Executive Benefits Plan (the "Supplemental Plan") to
participants in both Plans, assuming they retired at age 65 in fiscal 2000 with
the indicated levels of compensation and years of benefit service:
<TABLE>
<CAPTION>
Years of Service
-----------------------------------------------------------------------------------------
Remun-
eration 10 15 20 25 30 35 40 or More
- ----------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 55,000 $ 60,000 $ 60,000
150,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 82,500 $ 90,000 $ 90,000
200,000 $ 40,000 $ 60,000 $ 80,000 $100,000 $110,000 $120,000 $120,000
250,000 $ 50,000 $ 75,000 $100,000 $125,000 $137,500 $150,000 $150,000
300,000 $ 60,000 $ 90,000 $120,000 $150,000 $165,000 $180,000 $180,000
350,000 $ 70,000 $105,000 $140,000 $175,000 $192,500 $210,000 $210,000
400,000 $ 80,000 $120,000 $160,000 $200,000 $220,000 $240,000 $240,000
450,000 $ 90,000 $135,000 $180,000 $225,000 $247,500 $270,000 $270,000
500,000 $100,000 $150,000 $200,000 $250,000 $275,000 $300,000 $300,000
550,000 $110,000 $165,000 $220,000 $275,000 $302,500 $330,000 $330,000
600,000 $120,000 $180,000 $240,000 $300,000 $330,000 $360,000 $360,000
650,000 $130,000 $195,000 $260,000 $325,000 $357,500 $390,000 $390,000
700,000 $140,000 $210,000 $280,000 $350,000 $385,000 $420,000 $420,000
750,000 $150,000 $225,000 $300,000 $375,000 $412,500 $450,000 $450,000
800,000 $160,000 $240,000 $320,000 $400,000 $440,000 $480,000 $480,000
</TABLE>
- ---------------
(1) Benefits shall be paid under the Supplemental Plan to the extent not
payable under the Pension Plan.
As used in the above table, the term, "Remuneration" means covered
compensation (as defined below) averaged over a participant's highest five
consecutive calendar years out of the last ten calendar years of employment, or
if the participant has been employed fewer than 5 years, the average over the
total months of employment. Covered compensation essentially means wages or
salary, bonus, salary reductions elected under the Company's Savings Plan, and
any cash awards under the Company's 1988 Long-Term Incentive Compensation Plan
(which terminated in 1996), except that, for the purposes of determining
Remuneration under the Pension Plan, but not the Supplemental Plan, only
covered compensation not in excess of limitations imposed by the Internal
Revenue Code ($160,000 for the Plan year which began October 1, 1999) may be
taken into account. The covered compensation of the Named Officers for fiscal
1999 was as follows: Mr. Thompson -- $454,737; Mr. Chandler -- $253,698; Mr.
Precious -- $240,655; Mr. Carney -- $211,933; Mr. Stiefel -- $186,435; and Mr.
O'Meara -- $324,436.
13
<PAGE>
The approximate present years of benefit service for the Named Officers
are as follows: Mr. Thompson -- 4 years; Mr. Chandler -- 7 years; Mr. Precious
- -- 22 years; Mr. Carney -- 15 years; Mr. Stiefel -- 15 years; and Mr. O'Meara
- -- 20 years. For purposes of calculating benefits, a participant may not be
credited with more than 40 years of service under the Pension Plan or 35 years
of service under the retirement benefits portion of the Supplemental Plan.
Retirement benefits shown in the above table have been computed on a
single-life annuity basis and are not subject to any deduction for Social
Security or other offset amount.
The Pension Plan generally covers employees (including executive officers
but excluding certain non-resident aliens) who are not covered by a collective
bargaining agreement. The Supplemental Plan provides supplemental benefits only
to executive officers and other officers. The Supplemental Plan has an elective
salary deferral feature with a Company matching contribution of 25% of an
officer's elective deferral but such contribution not to exceed 1.5% of the
officer's compensation. The Company made matching contributions to this portion
of the Supplemental Plan for the Named Officers of $20,755 in fiscal 1999. In
addition, the Company makes basic contributions equal to the amount that would
have been contributed under the Hunt Corporation Savings Plan but for the
$160,000 limit previously discussed. In fiscal 1999, this amount totaled $4,893
for all the Named Officers.
Employment and Severance Agreements and Arrangements
In connection with his hiring as Chairman, President and Chief Executive
Officer by the Company in 1996, Donald L. Thompson and the Company entered into
an employment agreement for an initial term ending May 31, 1998 and continuing
thereafter from year to year until Mr. Thompson reaches the age of 65 or until
earlier terminated by either party. The agreement provides for an initial
annual base salary of $450,000 (subject to periodic review and possible
increase by the Compensation Committee), plus an annual incentive bonus under
the Company's incentive compensation program of up to a maximum of 70% of base
salary. Pursuant to the agreement, Mr. Thompson was granted at the time his
employment commenced: (i) stock options under the Company's 1993 Stock Option
and Stock Grant Plan for 175,000 Common Shares, and (ii) 175,000 shares of
phantom stock/SARs. He also is entitled to receive additional annual option
grants of a value of up to 2 1/2% of his base salary under some circumstances.
The agreement further provided for reimbursement of Mr. Thompson, on an after
tax basis, for various moving and relocation expenses in connection with his
move from California to Pennsylvania and entitles him to participate in most of
the Company's benefit plans and programs for executives. (See the Summary
Compensation and Option/SAR Exercises in Fiscal 1999 Tables above for further
information concerning Mr. Thompson's compensation and benefits.)
In the event of termination of his employment with the Company, Mr.
Thompson's entitlement to severance compensation and benefits varies depending
upon the circumstances and timing of such termination. If his employment were
terminated by reason of his death or disability, by the Company without cause,
or by him because of
14
<PAGE>
a material reduction in his authority or duties, he would be entitled under the
agreement to continuation of his base salary, bonus and benefits for periods of
from six months to two years following termination of employment, and there
would be acceleration of the vesting of certain of his benefits, including his
phantom stock. Should there be a change in control of the Company (as defined
in the agreement) and a termination of his employment within two years
thereafter, his entitlement to severance compensation and benefits under the
agreement would be essentially as provided in the change in control agreements
with other executive officers discussed in the following paragraph, except
that: (i) his severance allowance generally would be equal to 2.99 times his
recent annual cash compensation; and (ii) his life and health insurance plans
and certain other benefits would continue for up to three years.
Since 1990 the Company has had change in control agreements with executive
officers, as well as with other officers and certain key employees. These
agreements were amended in fiscal 1999 to extend for an additional five years
through December 31, 2004. Under the agreements with executive officers, in the
event of a change in control (as defined in the agreements) of the Company, the
agreements would become effective and would provide for the executive officers'
continued employment by the Company, generally for a period of two years
following the change in control and generally at not less than their recent
compensation and benefit levels. If within such two-year period an executive
officer's employment is terminated by the Company without cause or if such
executive officer resigns in certain specified circumstances, then the
executive officer generally is entitled to the payment of a severance allowance
equal to approximately twice his or her recent annual cash compensation level
(including cash amounts earned under incentive compensation plans) and to the
continuation of life and health insurance plans and certain other benefits for
up to two years following such termination of employment. Mr. Thompson does not
have a separate change in control agreement, but his employment agreement
contains similar provisions, as described in the preceding paragraph.
The Company also currently has a severance policy covering executive
officers and certain other officers. Under this plan, executive officers who
are not covered by employment agreements may, subject to certain conditions,
continue to receive their base salaries, plus medical, life insurance and
certain other benefits, for varying periods up to 24 months following
termination of their employment with the Company other than by reason of
voluntary resignation, retirement, death, disability or cause. However, to the
extent termination benefits under the change in control agreements described
above are payable to an executive officer, such benefits reduce any salary
continuation benefits under this severance plan.
Spencer W. O'Meara resigned as an executive officer of the Company,
effective September 30, 1999. In connection with his resignation and in
recognition of his contributions to the Company, the Company expects that it
will enter into an agreement with Mr. O'Meara which may provide him with
compensation and benefits somewhat greater than those provided for in the
Company's standard severance policy. The terms of such agreement are still
under discussion with Mr. O'Meara.
15
<PAGE>
Shareholder Return Performance Graph
The following graph and chart provide an indicator of five-year cumulative
total shareholder returns for the Company as compared with the Russell 2000
Index ("the Russell 2000") and a Peer Group Index(1).
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Cumulative Total Return
-------------------------------------------------------------------------------
11/25/94 12/1/95 11/29/96 11/28/97 11/27/98 11/28/99
<S> <C> <C> <C> <C> <C> <C>
HUNT CORPORATION $ 100.00 $ 107.21 $ 130.06 $ 161.82 $ 98.84 $ 69.09
PEER GROUP $ 100.00 $ 122.48 $ 122.58 $ 135.07 $ 133.61 $ 99.15
RUSSELL 2000 $ 100.00 $ 127.00 $ 153.92 $ 202.55 $ 189.95 $ 187.24
</TABLE>
The above graph and chart assume that the value of the investment in Hunt
Corporation, the Russell 2000 Index companies and the Peer Group Index
companies was $100 on November 25, 1994, and that all dividends were
reinvested. The performance as reported above provides no assurances that this
performance will continue in the future.
- ---------------
(1) The Peer Group is comprised of American Business Products, Inc.; A. T.
Cross Company; Dixon Ticonderoga Company; Paris Corporation; Fibermark,
Inc.; General Binding Corporation; Nashua Corporation; Pentech
International, Inc.; and Workflow Management, Inc. Although none of the
companies in the Peer Group is directly comparable with the Company in
terms of all businesses engaged in, there are similarities in respect to
certain products offered, specific lines of business and/or channels of
distribution. For purposes of the Peer Group Index, companies have been
weighted based upon their relative market capitalizations as of the
beginning of each period for which a return is indicated.
16
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, as well as persons beneficially
owning more than 10% of the Company's Common Shares and certain other holders
of such shares (collectively, "Covered Persons"), to file with the SEC and the
New York Stock Exchange, within specified time periods, initial reports of
ownership, and subsequent reports of changes in ownership, of Common Shares and
other equity securities of the Company.
Based solely upon the Company's review of copies of such reports furnished
to it and upon representations of Covered Persons that no other reports were
required, to the Company's knowledge all of the Section 16(a) filing
requirements applicable to Covered Persons were complied with on a timely basis
in fiscal 1999.
Solicitation of Proxies
The cost of soliciting the proxies will be paid by the Company. Directors,
officers and employees of the Company may solicit proxies in person, or by
mail, telephone or telegraph, but no such person will be specially compensated
for such services. The Company will request banks, brokers and other nominees
to forward proxy materials to beneficial owners of stock held of record by them
and will reimburse them for their reasonable out-of-pocket expenses in so
doing.
Shareholder Proposals
In order to be eligible for inclusion in the Company's proxy materials for
the 2001 Annual Meeting, shareholders' proposals to take action at such meeting
must comply with applicable Securities and Exchange Commission rules and
regulations, must be directed to the Secretary of the Company at its offices
set forth on page 1 of this proxy statement, and must be received by the
Company not later than November 15, 2000.
Miscellaneous
A copy of the Company's fiscal 1999 Annual Report to Shareholders is also
enclosed but is not to be regarded as proxy solicitation material.
The Company, upon request, will furnish to record and beneficial holders
of its Common Shares, free of charge, a copy of its Annual Report on Form 10-K
(including financial statements and schedules but without exhibits) for fiscal
1999. Copies of exhibits to the Form 10-K also will be furnished upon request
and the payment of a reasonable fee. All requests should be directed to the
Secretary of the Company at the offices of the Company set forth on page 1 of
this proxy statement.
By order of the Board of Directors,
WILLIAM E. CHANDLER, Secretary
March 1, 2000
17
<PAGE>
HUNT CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 19, 2000
- --------------------------------------------------------------------------------
The undersigned hereby appoint(s) Donald L. Thompson and William E.
Chandler, or any of them, with full power of substitution, proxies to vote, as
designated on the reverse side of this proxy card, all the Common Shares of Hunt
Corporation held of record by the undersigned on February 18, 2000, at the
Annual Meeting of Shareholders to be held on April 19, 2000, and at any
adjournments thereof.
(Continued, and to be dated and signed, on other side)
<PAGE>
Please sign, date and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
HUNT CORPORATION
April 19, 2000
| Please Detach and Mail in the Enclosed Envelope |
<TABLE>
<CAPTION>
<S> <C> <C>
Please mark your
A /X/ votes as in this
example
AUTHORITY GRANTED
to vote for all nominees
(except as marked to the AUTHORITY
contrary below) WITHHELD FOR AGAINST ABSTAIN
(1) ELECTION / / / / Nominees: (2) Ratification of the appointment / / / / / /
OF Ursula M. Burns of PricewaterhouseCoopers LLP
DIRECTORS Jack Farber as the independent accountants
Gordon A. Macinnes of the Company for fiscal 2000.
If you wish to withhold authority to vote for Donald L. Thompson
one or more but less than all of the nominees (3) and, to the extent permitted by the Rules of the
named at right, or to cumulate your votes for Securities and Exchange Commission, upon such other
any such nominee(s), so indicate on the line matters as may properly come before the meeting and
provided below. any adjournment thereof.
This proxy when properly executed will be voted in the
- --------------------------------------------- manner directed herein by the undersigned. If no contrary
direction is made, this proxy will be voted FOR the
nominees listed in Item 1 at left (in equal amounts or
cumulatively, as the proxies may determine) or, if any
such nominee(s) should be unable to serve, for such other
person(s) as may be recommended by the Board of
Directors: FOR the proposal set forth in Item 2 and in
accordance with the proxies' best judgment upon other
matters properly coming before the meeting and any
adjournments thereof.
SIGNATURE ____________________________ DATED ____________, 2000 SIGNATURE _____________________________ DATED ____________, 2000
(Signature if held jointly)
NOTE: Please date and sign exactly as your name appears herein. In case of joint holders, each should sign. If the signor is a
corporation or partnership, sign in full the corporate or partnership name by an authorized officer or partner. When signing
as attorney, executor, trainee, officer, partner, etc. give full title.
</TABLE>
