<PAGE>
<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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
[X] Definitive Proxy Statement Commission only
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11c or Rule 14a-12
MATTHEWS INTERNATIONAL 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)(4) 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:
----------------------------------
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:
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<PAGE>
<PAGE> 2
MATTHEWS INTERNATIONAL CORPORATION
2000
NOTICE
OF
ANNUAL
MEETING
AND
PROXY
STATEMENT
<PAGE>
<PAGE> 3
Matthews International Corporation
Corporate Office
Two NorthShore Center
Pittsburgh, Pennsylvania 15212-5851
412.442.8200 Fax 412.442.8290
Notice of
ANNUAL MEETING OF SHAREHOLDERS
To be held February 19, 2000
To Our Shareholders:
The Annual Meeting of the Shareholders of Matthews International Corporation
will be held at 10:30 AM on Saturday, February 19, 2000 at the Health and
Science Theater, Carnegie Science Center, Pittsburgh, Pennsylvania, for the
purpose of considering and acting upon the following:
1. To elect two Directors of the Company for a term of three years.
2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
certified public accountants to audit the records of the Company for the
fiscal year ending September 30, 2000.
3. To transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on December 31, 1999 will be
entitled to vote at the Annual Meeting or any adjournments thereof.
Please indicate on the enclosed proxy card whether you will or will not be able
to attend this meeting. Return the card in the enclosed envelope as soon as
possible. If you receive more than one proxy (for example, because you own
Class A and Class B Common Stock, or you own common stock in more than one
account), please be sure to complete and return all of them.
We hope you can be with us for this important occasion.
Sincerely,
Edward J. Boyle
Edward J. Boyle
Corporate Secretary
January 19, 2000
<PAGE>
<PAGE> 4
Matthews International Corporation
Two NorthShore Center
Pittsburgh, PA 15212 - 5851
412 / 442-8200
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of the Company
whose principal executive offices are located at Two NorthShore Center,
Pittsburgh, Pennsylvania 15212. This Proxy Statement and the accompanying proxy
were first released to shareholders on January 19, 2000.
Execution of the proxy will not affect a shareholder's right to attend the
meeting and vote in person. Any shareholder giving a proxy has the right to
revoke it at any time before it is voted by giving notice to the Corporate
Secretary or by attending the meeting and voting in person.
Matters to be considered at the Annual Meeting are those set forth in the
accompanying notice. Shares represented by proxy will be voted in accordance
with instructions. In the absence of instructions to the contrary, the proxy
solicited will be voted for the proposals set forth.
Management does not intend to bring before the meeting any business other than
that set forth in the Notice of Annual Meeting of Shareholders. If any other
business should properly come before the meeting, it is the intention of
Management that the persons named in the proxy will vote in accordance with
their best judgment.
OUTSTANDING STOCK AND VOTING RIGHTS
The Company has two classes of stock outstanding: Class A Common Stock, par
value $1.00 per share, and Class B Common Stock, par value $1.00 per share.
Together, these two classes are referred to as the "Common Stock."
Each outstanding share of Class A Common Stock of the Company entitles the
holder to one vote, and each outstanding share of Class B Common Stock entitles
the holder to ten votes, upon any business properly presented at the
shareholders' meeting. Cumulative voting is not applicable to the election
of directors.
The Board of Directors of the Company has established December 31, 1999 as the
record date for shareholders entitled to vote at the Annual Meeting. The
transfer books of the Company will not be closed. A total of 13,237,688 shares
of Class A Common Stock, and 2,351,722 shares of Class B Common Stock are
outstanding and entitled to vote at the meeting.
Abstentions and broker non-votes have no effect on any proposal to be voted
upon. Broker non-votes as to any matter are shares held by brokers and other
nominees which are voted at the meeting on matters as to which the nominee has
discretionary authority, but which are not voted on the matter in question
because the nominee does not have discretionary voting authority as to
such matter.
<PAGE>
<PAGE> 5
GENERAL INFORMATION REGARDING CORPORATE GOVERNANCE
Board of Directors
The Board of Directors is the ultimate governing body of the Company. As such,
it functions within a framework of duties and requirements established by
statute, government regulations and court decisions. In carrying out their
responsibilities, directors are expected to perform their duties in good faith
and with the diligence, care and skill which ordinarily prudent people would
exercise under similar circumstances.
Generally, the Board of Directors reviews and confirms the basic objectives and
broad policies of the Company, approves various important transactions,
appoints the officers of the Company and monitors Company performance in key
results areas. Management is accountable to the Board of Directors for the
satisfactory conduct of the day-to-day business of the Company.
Management is responsible for providing the Board of Directors with adequate
support, services and resources, together with thorough information, reports
and analyses concerning the Company's principal activities and plans. In
addition, the Board of Directors has the power, in its discretion, to employ
the services of outside consultants and is free to have discussions and
interviews with personnel of the Company and others as it deems appropriate and
helpful to its work.
Board Composition
The Restated Articles of Incorporation of the Company provide that the Board
of Directors has the power to set the number of Directors constituting the full
Board, provided that such number shall not be less than five nor more than 15.
Until further action, the Board of Directors has fixed the number of directors
constituting the full Board at seven, divided into three classes. The terms
of office of the three classes of Directors end in successive years.
During fiscal year 1999, there were four regularly scheduled and three
additional meetings of the Board of Directors.
Board Committees
There are three standing committees appointed by the Board of Directors -- the
Executive, Audit and Compensation Committees.
Management has the same responsibility to each committee as it does to the
Board of Directors with respect to providing adequate staff services and
information. Furthermore, each committee has the same power as the Board of
Directors to employ the services of outside consultants and to have discussions
and interviews with personnel of the Company and others.
The principal functions of the three standing committees are summarized as
follows:
<PAGE>
<PAGE> 6
Executive Committee
The Executive Committee is appointed by the Board of Directors to have and
exercise during periods between Board meetings all of the powers of the Board
of Directors, except that the Executive Committee may not elect directors,
change the membership of or fill vacancies in the Executive Committee, change
the By-laws of the Company or exercise any authority specifically reserved by
the Board of Directors. Among the functions customarily performed by the
Executive Committee during periods between Board meetings are the approval,
within limitations previously established by the Board of Directors, of the
principal terms involved in sales of securities of the Company, and such
reviews as may be necessary of significant developments in major events and
litigation involving the Company. In addition, the Executive Committee is
called upon periodically to provide advice and counsel in the formulation of
corporate policy changes and, where it deems advisable, make recommendations
to the Board of Directors.
The Executive Committee holds meetings at such times as are required. During
fiscal year 1999, the Executive Committee met a total of four times. The
Chairman of the Executive Committee is David M. Kelly. The membership of the
Executive Committee from October 1, 1998 until June 4, 1999 consisted of
Messrs. Kelly, David J. DeCarlo and Geoffrey D. Barefoot. The membership of
the Committee since June 4, 1999 consisted of Messrs. Kelly and DeCarlo.
Audit Committee
The principal function of the Audit Committee is to endeavor to assure the
integrity and adequacy of financial statements issued by the Company. It is
intended that the Audit Committee will review internal auditing systems and
procedures as well as the activities of the public accounting firm performing
the external audit. During fiscal year 1999, the Audit Committee adopted a
formal charter governing its responsibilities and activities.
The Committee members are John P. O'Leary, Jr. (Chairman), William J. Stallkamp
and Robert J. Kavanaugh. During fiscal year 1999, the Audit Committee
met twice.
Compensation Committee
The principal function of the Compensation Committee, the members of which are
Messrs. Stallkamp (Chairman), Kavanaugh and Thomas N. Kennedy, is to review
periodically the suitability of the remuneration arrangements (including
benefits), other than stock remuneration, for the principal officers of the
Company. A subcommittee of the Compensation Committee, the Stock Compensation
Committee, the members of which are Messrs. Stallkamp (Chairman) and Kavanaugh,
consider and grant stock remuneration and administer the Company's 1992 Stock
Incentive Plan. The Compensation Committee met three times during fiscal
year 1999.
Meeting Attendance
Under the applicable rules of the Securities and Exchange Commission, the
Company's Proxy Statement is required to name those directors who during the
preceding year attended fewer than 75% of the total number of meetings held by
the Board and by the Committees of which they are members. During fiscal year
1999, all directors attended more than 75% of such meetings for which they
were eligible.
<PAGE> 7
Compensation of Directors
Pursuant to the Director Fee Plan, directors who are not also officers of the
Company each receive as an annual retainer fee shares of the Company's Class A
Common Stock equivalent to approximately $16,000. In addition, each such
director is paid $1,000 for every meeting of the Board of Directors attended
and (other than a Chairman) $500 for every committee meeting attended. The
Chairman of a committee of the Board of Directors is paid $700 for every
committee meeting attended. Directors may also elect to receive the common
stock equivalent of meeting fees. Each director may elect to be paid these
shares on a current basis or have such shares credited to a deferred stock
account as phantom stock, with such shares to be paid to the director
subsequent to leaving the Board. No other remuneration is otherwise paid by
the Company to any director for services as a director.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominations for election to the Board of Directors may be made by the Board of
Directors or by the shareholders. Messrs. Thomas N. Kennedy and William J.
Stallkamp, whose terms of office are expiring, have been nominated by the Board
to serve for three-year terms that will end in 2003. Nominations made by the
shareholders shall be made in writing in accordance with Section 6.1 of the
Restated Articles of Incorporation. No such nominations have been received.
The Board of Directors has no reason to believe that any of the nominees will
become unavailable for election. If a nominee should become unavailable prior
to the meeting, the accompanying proxy will be voted for the election in his
place of such other person as the Board of Directors may recommend.
The Board of Directors recommends that you vote FOR the election of Directors.
The following information is furnished with respect to the two persons
nominated by the Board of Directors for election as a director and with respect
to the continuing directors.
The Nominees
Thomas N. Kennedy, age 64, has been a Director of the Company since 1987. He
was Senior Vice President, Chief Financial Officer and Treasurer of the Company
until his retirement from Matthews effective December 1, 1995. Mr. Kennedy had
been employed by the Company since 1972. He was elected Treasurer in 1974 and
Vice President - Treasurer in 1986. Mr. Kennedy received a Bachelor of
Business Administration from the University of Pittsburgh in 1958.
<PAGE>
<PAGE> 8
William J. Stallkamp, age 60, has been a Director of the Company since 1981.
Mr. Stallkamp was a Vice Chairman of Mellon Bank Corporation in Pittsburgh, PA
and Chairman of Mellon PSFS in Philadelphia, PA until his retirement on
January 1, 2000. He received a Bachelor of Science Degree in Business
Administration from Miami University of Oxford, Ohio. He serves as a Director
of Yoder Brothers, Inc., Highmark Blue Cross/Blue Shield, Greater Philadelphia
Chamber of Commerce and Greater Philadelphia First. He also serves on the
Board of Directors for YMCA of Philadelphia and Vicinity, the Southeastern
Pennsylvania Chapter of the American Red Cross, the Pennsylvania Academy of
Fine Arts and the Franklin Institute.
Continuing Directors
David M. Kelly, age 57, was elected Chairman of the Board on March 15, 1996.
He joined Matthews on April 3, 1995 as President and Chief Operating Officer
and was appointed Chief Executive Officer on October 1, 1995. Prior to his
employment with Matthews, Mr. Kelly was employed by Carrier Corporation for
22 years. During that time, his positions included Marketing Vice President
for Asia Pacific; President of Japanese Operations; Vice President,
Manufacturing; President of North American Operations; and Senior Vice
President for Carrier's residential and light commercial businesses. Mr. Kelly
received a Bachelor of Science in Physics from Boston College in 1964, a Master
of Science degree in Molecular Biophysics from Yale University in 1966, and a
Master of Business Administration from Harvard Business School in 1968. He is
Chairman of the Executive Committee and the Jas. H. Matthews & Co. Educational
and Charitable Trust, a member of the Pension Board, and serves on the boards
of various subsidiaries of Matthews International Corporation. Mr. Kelly is
a member of the Board of Directors of Mestek, Inc., Elliott Company, the United
Way of Allegheny County, and the Pittsburgh Symphony Orchestra.
David J. DeCarlo, age 54, is President, Bronze Division and has been a Director
of the Company since 1987. He was elected President, Bronze Division in
November 1993. Mr. DeCarlo received a Bachelor of Science Degree in Industrial
Management from West Virginia University in 1967, a Master of Arts Degree in
Economics and Statistics from the University of Pennsylvania in 1970, and an
M.B.A. in Finance from the University of Pennsylvania Wharton School of Finance
in 1971 where he also completed all the required courses for a Ph.D. in Applied
Economics and Finance. Prior to joining Matthews, Mr. DeCarlo held various
management positions with Reynolds Aluminum Company, Westinghouse Electric
Corporation, and Joy Manufacturing Company where his last position was Vice
President of Field Operations.
Robert J. Kavanaugh, age 62, has been a Director of the Company since 1998.
Mr. Kavanaugh is a retired partner of the Pittsburgh office of Arthur Andersen
LLP, an accounting firm. Mr. Kavanaugh has more than 38 years of experience
assisting clients in numerous industries and has extensive experience in public
reporting, SEC related matters, and mergers and acquisitions. Mr. Kavanaugh
served as the advisory partner to a number of major clients, both public
and private. Mr. Kavanaugh is on the Board of Directors of the Pittsburgh
Symphony Society. He is on the Board of Trustees of Carlow College and is
Chairman of the Finance Committee. He is also on the Board of Directors of the
Pittsburgh Regional Alliance and the Board of Trustees of Shady Side Academy.
Mr. Kavanaugh retired from Arthur Andersen LLP in August 1996.
<PAGE>
<PAGE> 9
John P. O'Leary, Jr., age 53, has been a Director of the Company since 1992.
Mr. O'Leary is President and Chief Executive Officer of Tuscarora Incorporated,
the nation's largest producer of custom-molded foam plastic products. He also
serves as a member of Tuscarora's Board of Directors. Immediately prior to
taking over as President and Chief Executive Officer, Mr. O'Leary served as
President of Western Division operations and was responsible for overseeing the
operation of 12 profit centers located throughout the Midwest and South.
Mr. O'Leary holds a Masters in Business Administration from the University of
Pennsylvania Wharton School of Business and received a Bachelor's Degree in
Economics from Gettysburg College. He currently serves on the Board of
Directors of the Beaver County Corporation of Economic Development, Beaver
County Educational Trust, and Gateway Rehabilitation Center. Mr. O'Leary is
a Trustee of Gettysburg College.
John D. Turner, age 53, was elected to the Board of Directors of the Company
in April 1999 to replace retiring Director, James L. Parker. In accordance
with the By-laws of the Company, Mr. Turner will fill the remaining term of
Mr. Parker. Mr. Turner has been Executive Vice President of The LTV
Corporation and President of LTV Copperweld, a manufacturer of tubular and
bimetallic wire products, since November 1999. Mr. Turner was formerly
President and Chief Executive Officer of Copperweld Corporation. He joined
Copperweld in 1984 as Group Vice President - Marketing & Sales and later held
the positions of Group Vice President - Specialty Bar & Tubing and Executive
Vice President. Mr. Turner received a Bachelor's Degree in Biology from
Colgate University. He currently serves on the Board of Directors of Shenango,
Inc., The Joseph M. Katz School of Business, Coalition of Christian Outreach,
and Greater Pittsburgh Council, Boy Scouts of America. Mr. Turner is also a
member of the Carnegie Mellon Board of Trustees and the Advisory Board of the
Fellowship of Christian Athletes.
The term for each nominee and each Director is listed below:
Term to expire at Annual
Nominees Meeting of Shareholders in:
Thomas N. Kennedy 2003
William J. Stallkamp 2003
Continuing Directors
David J. DeCarlo 2001
Robert J. Kavanaugh 2001
John P. O'Leary, Jr. 2001
David M. Kelly 2002
John D. Turner 2002
<PAGE>
<PAGE> 10
PROPOSAL 2
SELECTION OF AUDITORS
The Board of Directors of the Company, upon recommendation of the Audit
Committee, has appointed PricewaterhouseCoopers LLP as independent certified
public accountants to audit the records of the Company for the year ending
September 30, 2000.
The Board of Directors has determined that it would be desirable to request an
expression of opinion from the shareholders on the appointment. Ratification
of the appointment of PricewaterhouseCoopers LLP requires the affirmative vote
of a majority of all the votes cast by shareholders of Common Stock entitled
to vote at the meeting. If the shareholders do not ratify the selection of
PricewaterhouseCoopers LLP, the selection of alternative independent certified
public accountants will be considered by the Board of Directors.
It is not expected that any representative of PricewaterhouseCoopers LLP will
be present at the Annual Meeting of Shareholders.
The Board of Directors recommends that you vote FOR Proposal 2.
OTHER INFORMATION
Certain Reportable Transactions
The Securities and Exchange Commission requires disclosure of certain business
transactions or relationships between the Company, or its subsidiaries, and
other organizations with which any of the Company's directors are affiliated
as an owner, partner, director, officer or employee. Briefly, disclosure is
required where such a business transaction or relationship meets the standards
of significance established by the Securities and Exchange Commission with
respect to the types and amounts of business transacted. The Company is aware
of no transaction requiring disclosure pursuant to this item during the past
fiscal year.
Stock Ownership
The Company's Articles of Incorporation divide its voting stock into three
classes: Preferred Stock and Class A and Class B Common Stock. At the present
time, none of the Preferred Stock is issued or outstanding. The following
information is furnished with respect to persons who the Company believes,
based on its records, beneficially own more than five percent of the
outstanding shares of Class A and Class B Common Stock of the Company, and with
respect to the Company's officers and nominees for election to and current
members of the Board of Directors. Those individuals with more than five
percent of such shares could be deemed to be "control persons" of the Company.
<PAGE>
<PAGE> 11
This information is as of November 30, 1999.
Number of Number of
Class A Shares Class B Shares
Name of Beneficially Percent Beneficially Percent
Beneficial Owner (1) Owned (2) of Class Owned (2) of Class
- ---------------- -------------- -------- -------------- --------
Directors and Officers:
- ----------------------
D.M. Kelly 302,333 (3) 2.2% 56,000 2.3%
E.J. Boyle 31,417 (3) 0.2 18,750 0.8
D.J. DeCarlo 209,333 (3) 1.6 289,990 12.2
R.J. Kavanaugh 1,000 * None -
T.N. Kennedy 55,000 0.4 None -
J.P. O'Leary, Jr. 13,450 0.1 None -
R.J. Schwartz 21,352 (3) 0.2 None -
W.J. Stallkamp 6,200 * None -
J.D. Turner None - None -
All directors and
executive officers as
a group (10 persons) 671,528 (3) 4.9 381,940 16.0
Others:
- ------
D. Majestic None - 302,000 12.7
T. Rowe Price
Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202 1,321,400 10.0 None -
Lord, Abbett & Co.
767 Fifth Avenue
New York, NY 10153 1,196,925 9.0 None -
Neuberger Berman, LLC
605 Third Avenue
New York, NY 10158 712,165 5.4 None -
* Less than 0.1%
(1) Unless otherwise noted, the mailing address of each beneficial owner is
the same as that of the Registrant.
(2) The nature of the beneficial ownership for all shares is sole voting and
investment power, except as follows:
Mr. Stallkamp has sole voting power except for 200 Class A shares held
by Mr. Stallkamp as custodian under UTMA for son.
Shares held by T. Rowe Price Associates, Inc. ("Price Associates") are
owned by various individual and institutional investors, including
T. Rowe Price Small-Cap Stock Fund, Inc. which owns 803,000 shares,
which Price Associates serves as investment advisor with power to
direct investments and/or sole power to vote the shares. For
purposes of the reporting requirements of the Securities Exchange
Act of 1934, Price Associates is deemed to be a beneficial owner of
such shares; however, Price Associates expressly disclaims that it
is, in fact, the beneficial owner of such shares. Price Associates
has sole dispositive power for 1,321,400 shares and sole voting
power for 404,200 shares.
Lord, Abbett & Co. is an investment advisor for various accounts and,
as such, disclaims beneficial ownership of shares.
<PAGE>
<PAGE> 12
Neuberger Berman, LLC ("Neuberger"), as a registered investment
advisor, may have discretionary authority to dispose of or vote
shares that are under its management. As a result, Neuberger may be
deemed to have beneficial ownership of such shares. Neuberger does
not, however, have any economic interest in the shares. Its clients
are the actual owners of the shares and have the sole right to
receive and the power to direct the receipt of dividends from or
proceeds from the sale of such shares. Of the shares set forth in
the table, Neuberger had shared dispositive power with respect to
712,165 shares, sole voting power with respect to 362,365 shares and
shared voting power on 349,800 shares. With regard to the shared
voting power, Neuberger Berman Management, Inc. and Neuberger Berman
Funds are deemed to be beneficial owners for purpose of Rule 13(d)
since they have shared power to make decisions whether to retain or
dispose of the shares. Neuberger is the sub-advisor to the above
referenced Funds.
(3) Includes options exercisable within 60 days of November 30, 1999 as
follows: Mr. Kelly, 268,333 shares; Mr. Boyle, 13,667 shares;
Mr. DeCarlo, 209,333 shares; Mr. Schwartz, 10,000 shares; and all
directors and officers as a group, 524,333 shares.
Changes in Control
The Company knows of no arrangement which may, at a subsequent date, result in
a change in control of the Company.
Executive Officers
The Executive Officers of the Company as of December 31, 1999 are the
following:
Year First
Elected as
Name Age an Officer Positions with Registrant
- ---- --- ---------- -------------------------
David M. Kelly 57 1995 President and Chief Executive
Officer
Edward J. Boyle 53 1991 Vice President, Accounting &
Finance, Treasurer and Secretary
David J. DeCarlo 54 1986 President, Bronze Division
Steven F. Nicola 39 1995 Controller
Robert J. Schwartz 52 1998 President, Marking Products
Division
During the past five years, the business experience of each executive officer
named has been as reflected above or in a management capacity with the Company,
except for the following: Mr. Kelly was a Senior Vice President for Carrier
Corporation prior to April 1995. Mr. Schwartz joined the Company in January
1997 as Director of Sales and Marketing for the Marking Products Division.
Prior thereto, he was Vice President - Sales for Northeast Distributors, Inc.,
a distributor of air conditioning products.
<PAGE>
<PAGE> 13
Compensation of Executive Officers and Retirement Benefits
The following table sets forth the individual compensation information for the
fiscal years ended September 30, 1999, 1998 and 1997 for the Company's Chief
Executive Officer and the four most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
----------------- -----------------------
Awards Payouts
------ ------- All
Securities Other
Name of Individual Underlying LTIP Compen-
and Principal Position Year Salary Bonus Options Payouts sation
- ---------------------- ---- ------- ------- ---------- --------- -------
(1) (Shares) (2) (3)
<S> <C> <C> <C> <C> <C> <C>
David M. Kelly 1999 $329,618 $339,298 275,000 $734,737 None
Chairman of the Board and 1998 312,409 324,082 40,000 239,850 None
Chief Executive Officer 1997 290,174 290,687 190,000 None None
David J. DeCarlo 1999 217,411 171,334 149,000 711,607 $ 1,419
Director and President, 1998 207,921 169,552 None 269,660 2,520
Bronze Division 1997 199,473 174,477 250,000 None 3,046
Edward J. Boyle 1999 143,041 89,962 78,000 187,183 3,294
Vice President, 1998 129,689 87,394 36,000 60,211 4,250
Accounting & Finance 1997 113,379 75,043 41,000 None 3,804
Robert J. Schwartz 1999 126,577 80,952 10,000 55,464 747
President, Marking 1998 118,323 75,177 32,000 None 1,038
Products Division
Robert B. Heffernan 1999 183,626 None 20,000 None 85,069
President, Graphics 1998 64,308 18,653 20,000 None 120
Imaging Group
<FN>
(1) Includes the current portion of management incentive plan and supplemental management
incentive payments and for Mr. Kelly, an amount equal to his life insurance premium
cost. At his request, the Company did not provide life insurance for Mr. Kelly, but
in lieu thereof paid to him annually the amount which the Company would have paid in
premiums to provide coverage, considering his position and age. Such amounts are not
included in calculating other Company benefits for Mr. Kelly. The amount paid to
Mr. Kelly in lieu of life insurance for 1999, 1998 and 1997 was $4,100 each year.
The Company has adopted a management incentive plan for officers and key management
personnel. Participants in such plan are not eligible for the Company's profit
distribution plan. The incentive plan is based on improvement in divisional and
Company economic value added and the attainment of established personal goals. A
portion of amounts earned are deferred by the Company and are payable with interest
at a market rate over a two-year period contingent upon economic value added
performance and continued employment during such period. See Long-Term Incentive
Plans - Awards in Last Fiscal Year table. In addition, payments include a
supplement in amounts which are sufficient to pay annual interest expense on the
outstanding notes of management under the Company's Designated Employee Stock Purchase
Plan and to pay medical costs which are not otherwise covered by a Company plan.
<PAGE>
<PAGE> 14
(2) Represents payments of deferred amounts under the management incentive plan.
(3) Includes premiums for term life insurance and educational assistance for dependent
children. Each officer of the Company is provided term life insurance coverage in
an amount approximately equivalent to three times his respective salary. Educational
assistance for dependent children is provided to any officer or employee of the Company
whose child meets the scholastic eligibility criteria and is attending an eligible
college or university. Amounts reported in this column include life insurance benefit
costs except for Mr. Boyle and Mr. Heffernan. Educational assistance amounts for
Mr. Boyle in fiscal 1999, 1998 and 1997, respectively, were $2,400, $2,200 and $2,000.
The amount reported in this column in 1999 for Mr. Heffernan represents severance
benefits only. See also note (1).
</TABLE>
The Summary Compensation Table does not include expenses to the Company of
incidental benefits of a limited nature to executive officers including use of
Company vehicles, club memberships, dues, or tax planning services. The Company
believes such incidental benefits are in the conduct of the Company's business,
but, to the extent such benefits and use would be considered personal benefits,
the value thereof is not reasonably ascertainable and does not exceed, with
respect to any individual named in the compensation table, the lesser of $50,000
or 10% of the annual compensation reported in such table.
Long-Term Incentive Plans - Awards in Last Fiscal Year
<TABLE>
<CAPTION>
Performance Estimated Future
or Other Payouts Under
Number Period Non-Stock Price-
of Shares Until Based Plans
or Other Maturation ----------------
Name Rights or Payout Target
- ------------- ---------- ----------- ----------------
<S> <C> <C> <C>
D.M. Kelly - 2 Years $ 429,438
D.J. DeCarlo - 2 Years 585,654
E.J. Boyle - 2 Years 112,322
R.J. Schwartz - 2 Years 125,718
R.B. Heffernan - 2 Years None
<FN>
The Company has a management incentive plan based on improvement in divisional and Company
economic value added and the attainment of established personal goals. A portion of amounts
earned are deferred by the Company and are payable with interest at a market rate over a
two-year period contingent upon economic value added performance and continued employment
during such period.
</TABLE>
<PAGE>
<PAGE> 15
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realized
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants (1) Option Term
- ----------------------------------------------------------------- ----------------------
Percent
of Total
Number of Options
Securities Granted to Exercise
Underlying Employees or Base
Options in Fiscal Price Expiration
Name Granted Year per Share Date 5% 10%
- -------------- ---------- ---------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
D.M. Kelly 250,000 35.7% $27.969 03/16/09 $4,397,349 $11,143,746
25,000 3.6 27.688 11/16/08 435,313 1,103,169
D.J. DeCarlo 126,000 18.0 27.969 03/16/09 2,216,264 5,616,448
23,000 3.3 27.688 11/16/08 400,488 1,014,915
E.J. Boyle 63,000 9.0 27.969 03/16/09 1,108,132 2,808,224
15,000 2.1 27.688 11/16/08 261,188 661,901
R.J. Schwartz 10,000 1.4 27.688 11/16/08 174,125 441,267
R.B. Heffernan 20,000 2.9 27.688 11/16/08 348,250 882,535
<FN>
(1) All options were granted at market value as of the date of grant. Options are
exercisable in various share amounts based on the attainment of certain market value
levels of Class A Common Stock, but, in the absence of such events, are exercisable in
full for a one-week period beginning five years from the date of grant. In addition,
options vest in one-third increments after three, four and five years, respectively,
from the grant date (but, in any event, not until the attainment of the certain market
value levels described above). The options are not exercisable within six months from
the date of grant and expire on the earlier of ten years from the date of grant, upon
employment termination, or within specified time limits following voluntary employment
termination (with consent of the Company), retirement or death.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Value of Unexercised
Shares Securities Underlying In-the-Money Options
Acquired Unexercised Options at Fiscal Year End
On Value -------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------- ---------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
D.M. Kelly 50,000 $1,115,625 205,000 505,000 $3,891,353 $3,338,063
D.J. DeCarlo None None 126,000 399,000 2,497,688 3,819,887
E.J. Boyle 63,000 1,279,250 None 155,000 None 941,482
R.J. Schwartz None None None 80,000 None 620,373
R.B. Heffernan None None None None None None
</TABLE>
<PAGE>
<PAGE> 16
Report of the Compensation Committee
The Company's officer compensation policies are administered by the
Compensation Committee of the Board of Directors. The Committee consists of
three independent, non-employee directors: Messrs. Stallkamp (Chairman),
Kavanaugh and Kennedy (a former officer of the Company). Executive
compensation for the Company's chief executive officer and the four other most
highly compensated executive officers is presented in the Summary
Compensation Table.
Objectives and Policies
The Compensation Committee seeks to:
. Ensure that there is a strong linkage between officer compensation and the
creation of shareowner value;
. Align the interests of the Company's officers with those of its stockholders
through potential stock ownership;
. Ensure that compensation and incentives are at levels which enable the
Company to attract and retain high-quality officers.
Components of Compensation
The Company's officer compensation program presently is comprised of three
elements: base salary, annual incentives (bonuses) and stock options. An
executive compensation consulting firm is periodically engaged to provide
comparative market compensation data. The Company endeavors to determine that
officers' base salary levels and opportunities for incentive compensation are
competitive in the marketplace.
Base Salary
The objective of the base salary policy is to provide income at a median level
in comparison to a peer group and to reflect individual performance. An
outside consulting firm specializing in such services is retained periodically
to compare officers' responsibilities with a peer group of other corporations
whose annual revenues range between $100 million and $250 million.
Accordingly, base salaries of executive officers for calendar 1999 were
increased over calendar 1998 to reflect competitive market pay practices.
Annual Incentive Compensation (Bonuses)
Annual incentive payments paid to officers in 1999 were based upon the
improvement in economic value added over the prior two years' base. Economic
value added is defined for this purpose as operating profit less associated
capital costs of operating assets. The incentive pools are determined based
upon a percentage of absolute economic value added plus a percentage of the
incremental economic value added over a two-year base. The incentive pools are
distributed to individuals based upon each participant's target incentive and
performance relative to achievement of personal goals. Earned incentive awards
that exceed target levels are deferred and paid in the subsequent two fiscal
years. In 1999, certain executive officers received a payout of fifty percent
of incentive award amounts earned and deferred from fiscal years 1998 and 1997.
The remaining fifty percent earned in fiscal 1998 is payable in 2000 contingent
upon economic value added performance and continued employment during
fiscal 2000.
<PAGE>
<PAGE> 17
In fiscal 1999, certain executive officers earned incentive awards in excess
of target levels. Amounts in excess of target have been deferred and are
payable contingent upon economic value added performance and continued
employment during fiscal years 2000 and 2001.
Stock Options
Stock options, which are an integral part of incentive compensation for the
officers of the Company, serve to encourage share ownership by Company
executives and thus align the interests of officers and shareholders. The
Stock Compensation Committee (Messrs. Stallkamp and Kavanaugh) makes periodic
grants of stock options to executive officers and other key employees of the
Company to foster a commitment to increasing long-term shareholder value.
During fiscal 1999, certain officers and other management personnel were
granted nonstatutory stock options to purchase a combined total of 699,800
shares of the Company's stock at fair market value at the time of the grants.
Report on 1999 CEO Compensation
The chief executive officer's compensation is established based on the
philosophy and policies enunciated above for all executive officers. This
includes cash compensation (base salary and annual cash incentive payouts) and
long-term incentives (stock option awards). In calendar 1999, Mr. Kelly's base
salary was increased 6.3 percent. Mr. Kelly's annual incentive paid in 1999
was based upon the annual incentive plan described above. In fiscal 1999,
Mr. Kelly was granted 275,000 non-statutory stock options under the 1992 Stock
Incentive Plan to further align his long-term interests with those of the
Company's shareowners.
Tax Policy
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
disallows federal income tax deductions for compensation paid to the Chief
Executive Officer and any of the other four highest compensated executive
officers in excess of $1 million in any taxable year, subject to certain
exceptions. One exception involves compensation paid pursuant to
shareholder-approved compensation plans that are performance-based. Certain
of the provisions in the Company's 1992 Stock Incentive Plan, as amended, are
intended to cause grants of stock options under such plan to be eligible for
this performance-based exception (so that compensation upon exercise of such
options should be deductible under the Code). Payments of cash compensation
to executives (and certain other benefits which could be awarded under the
plan, such as restricted stock) are not at present eligible for this
performance-based exception. The Committee has taken and intends to continue
to take whatever actions are necessary to minimize, if not eliminate, the
Company's non-deductible compensation expense, while maintaining, to the extent
possible, the flexibility which the Committee believes to be an important
element of the Company's executive compensation program.
Compensation Committee:
W.J. Stallkamp, Chairman
R.J. Kavanaugh
T.N. Kennedy
December 17, 1999
<PAGE>
<PAGE> 18
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN *
AMONG MATTHEWS INTERNATIONAL CORPORATION,
S&P 500 INDEX AND S&P MANUFACTURING INDEX **
S&P
S&P 500 Manufacturing
Year Matthews Index Index
- ---- -------- ------- -------------
1994 $100 $100 $100
1995 135 129 134
1996 191 155 174
1997 271 217 241
1998 343 237 218
1999 416 303 341
* Total return assumes dividend reinvestment
** Fiscal year ended September 30
Note:
Performance graph assumes $100 invested on October 1, 1994 in Matthews
International Corporation common stock, Standard & Poor's (S&P) 500 Index and
S&P Manufacturing (Diversified) Index. The results are not necessarily
indicative of future performance.
Compensation Committee Interlocks and Insider Participation
Thomas N. Kennedy, a former officer of the Company, is a member of the
Company's Compensation Committee.
<PAGE>
<PAGE> 19
Retirement Plans
The Company's domestic retirement plan is noncontributory and provides benefits
based upon length of service and final average earnings. Generally, employees
age 21 with one year of continuous service are eligible to participate in the
retirement plan. The benefit formula is 3/4 of 1% of the first $550 of final
average monthly earnings plus 1-1/4% of the excess times years of credited
service (maximum 35). The plan is an insured, defined benefit plan and covered
compensation is limited generally to base salary or wages. Benefits are not
subject to any deduction or offset for Social Security.
In addition to benefits provided by the Company's retirement plan, the Company
has a Supplemental Retirement Plan, which provides for supplemental pension
benefits to executive officers of the Company designated by the Board of
Directors, including those named in the Summary Compensation Table. Upon normal
retirement under this plan, such individuals who meet stipulated age and
service requirements are entitled to receive monthly supplemental retirement
payments which, when added to their pension under the Company's retirement plan
and their maximum anticipated Social Security primary insurance amount, equal,
in total, 1.85% of final average monthly earnings (including incentive
compensation) times the individual's years of continuous service (subject to
a maximum of 35 years). Upon early retirement under this plan, reduced
benefits will be provided, depending upon age and years of service. Benefits
under this plan do not vest until age 55 and the attainment of 15 years of
continuous service. However, in order to recruit Mr. Kelly, the Company waived
such minimum service requirement with respect to Mr. Kelly. No benefits will
be payable under such supplemental plan following the voluntary employment
termination or death of any such individual. The Supplemental Retirement Plan
is unfunded; however, a provision has been made on the Company's books for the
actuarially computed obligation.
The following table shows the total estimated annual retirement benefits
payable at normal retirement under the above plans for the individuals named
in the Summary Compensation Table at the specified executive remuneration and
years of continuous service:
Years of Continuous Service
Covered ----------------------------------------------------
Remuneration 15 20 25 30 35
- ------------------ -------- -------- -------- -------- --------
$125,000 $ 34,688 $ 46,250 $ 57,813 $ 69,375 $ 80,938
150,000 41,625 55,500 69,375 83,250 97,125
175,000 48,563 64,750 80,938 97,125 113,313
200,000 55,500 74,000 92,500 111,000 129,500
250,000 69,375 92,500 115,625 138,750 161,875
300,000 83,250 111,000 138,750 166,500 194,250
400,000 111,000 148,000 185,000 222,000 259,000
500,000 138,750 185,000 231,250 277,500 323,750
600,000 166,500 222,000 277,500 333,000 388,500
700,000 194,250 259,000 323,750 388,500 453,250
800,000 222,000 296,000 370,000 444,000 518,000
<PAGE>
<PAGE> 20
The table shows benefits at the normal retirement age of 65, before applicable
reductions for social security benefits. The Employee Retirement Income
Security Act of 1974 places limitations, which may vary from time to time, on
pensions which may be paid under federal income tax qualified plans, and some
of the amounts shown on the foregoing table may exceed the applicable
limitation. Such limitations are not currently applicable to the Company's
Supplemental Retirement Plan.
Estimated years of continuous service for each of the individuals named in the
Summary Compensation Table, as of October 1, 1999 and rounded to the next
higher year, are: Mr. Kelly, 5 years; Mr. DeCarlo, 15 years; Mr. Boyle, 13
years; and Mr. Schwartz, 3 years.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Shareholders may make proposals for inclusion in the proxy statement and proxy
form for the 2001 Annual Meeting of Shareholders. To be considered for
inclusion, any such proposal should be written and mailed to the Secretary of
the Company at the corporate office for receipt by September 21, 2000.
Section 2.09 of the By-laws of the Company requires that any shareholder
intending to present a proposal for action at an Annual Meeting must give
written notice of the proposal, containing the information specified in such
Section 2.09, so that it is received by the Company not later than the notice
deadline determined under such Section 2.09. This notice deadline will
generally be 75 days prior to the anniversary of the Company's Annual Meeting
for the previous year, or December 6, 2000 for the Company's Annual Meeting
in 2001. Any shareholder proposal received by the Secretary of the Company
after December 6, 2000 will be considered untimely under Rule 14a-4(c)(1)
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
OTHER MATTERS
The cost of soliciting proxies in the accompanying form will be paid by
the Company. Shareholder votes at the Annual Meeting will be tabulated by
the Company's transfer agent, First Chicago Trust Company, a Division of
EquiServe LLP.
A copy of the Company's Annual Report for 1999 has previously been mailed to
each shareholder of record, or will be mailed with this Proxy Statement.
By Order of The Board of Directors
Edward J. Boyle
Edward J. Boyle
Corporate Secretary
<PAGE>
<PAGE> 21
APPENDIX
PROXY
MATTHEWS INTERNATIONAL CORPORATION
I hereby appoint David M. Kelly and Edward J. Boyle and each of them, with full
power of substitution and revocation, proxies to vote all shares of Common
Stock of Matthews International Corporation which I am entitled to vote at the
Annual Meeting of Shareholders or any adjournment thereof, with the authority
to vote as designated on the reverse side.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED PREPAID ENVELOPE
- -----------------------------------------------------------------------------
NOTICE
Please note the location and time of the Shareholders' Meeting.
Date: Saturday, February 19, 2000
Time: 10:30 AM
Location: Carnegie Science Center, Pittsburgh, PA
(near Three Rivers Stadium)
PARKING ARRANGEMENTS
There is a parking lot directly in front of the Carnegie Science Center.
Please advise the parking lot attendant upon entry that you are attending the
Matthews Shareholders' Meeting and there will be no charge for parking.
<PAGE>
<PAGE> 22
[ X ] Please mark your votes as in this example.
- -----------------------------------------------------------------------------
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE LISTED PROPOSALS.
- -----------------------------------------------------------------------------
FOR WITHHELD NOMINEES:
1. Election of Thomas N. Kennedy
Directors [ ] [ ] William J. Stallkamp
For, except vote withheld from the following nominee:
- -------------------------------------------------------
FOR AGAINST ABSTAIN
2. To ratify the appointment of
PricewaterhouseCoopers LLP as independent
certified public accountants to audit
the records of the Company for the fiscal
year ending September 30, 2000. [ ] [ ] [ ]
3. To transact such other business as may
properly come before the meeting.
I plan to attend
the meeting. [ ]
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
----------------------------------------------------
----------------------------------------------------
SIGNATURE(S) DATE
- -------------------------------------------------------------------------------
MATTHEWS INTERNATIONAL CORPORATION
Notice of
ANNUAL MEETING OF SHAREHOLDERS
To be held February 19, 2000
To Our Shareholders:
The Annual Meeting of the Shareholders of Matthews International Corporation
will be held at 10:30 AM, Saturday, February 19, 2000 at Carnegie Science
Center, Pittsburgh, Pennsylvania, for the purpose of considering and acting
upon the proposals set forth above.
Shareholders of record at the close of business on December 31, 1999 will be
entitled to vote at the Annual Meeting or any adjournments thereof.