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 Section 240.14a-11(c) or
Section 240-14a-12
THE MONARCH CEMENT COMPANY
(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. (Set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________________________
5) Total fee paid:
______________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
______________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________________________
3) Filing Party:
______________________________________________________________________________
4) Date Filed:
______________________________________________________________________________
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
(April 8, 1998)
The annual meeting of the stockholders of The Monarch Cement Company,
a Kansas corporation will be held Wednesday, April 8, 1998, at 2:00 in the
afternoon of that day, at the Company's corporate offices, Humboldt, Kansas,
to consider and act upon the following:
1. The election of four directors to serve until the
annual meeting of the stockholders of the Company
in 2001;
2. Any other business which may properly come before
the meeting;
3. Adjourning the meeting from time to time.
The Board of Directors has fixed the close of business on February 20,
1998 as the record date for the determination of the stockholders entitled to
notice of and to vote at the meeting. Only stockholders of record at that
time will be entitled to vote at the meeting, or any adjournment thereof.
The Board of Directors of the Company solicits you to sign, date and
return the enclosed proxy. Your proxy may be revoked at any time before it
is exercised.
THE MONARCH CEMENT COMPANY
Lyndell G. Mosley, CPA
Assistant Secretary
Humboldt, Kansas
March 13, 1998
<PAGE>
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Walter H. Wulf, Karl Callaway, Robert M.
Kissick and Byron K. Radcliff as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote all of the
shares of Capital Stock and Class B Capital Stock of The Monarch Cement
Company held of record by the undersigned on February 20, 1998 at the annual
meeting of stockholders to be held on April 8, 1998, or any adjournment or
adjournments thereof, as fully and with the same effect as the undersigned
might or could do if personally present, with respect to the following
business proposed by the Company to be conducted at the meeting:
1. ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY to
below (except as marked vote for all
to the contrary below) [ ] nominees listed below [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST BELOW.)
Jack R. Callahan Ronald E. Callaway Robert M. Kissick Byron K. Radcliff
2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
A majority of said Proxies, or their substitutes, present and acting at
said meeting, or any adjournment thereof (or if only one be present and act,
that one) shall have and may exercise all of the powers of all of said
Proxies. This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ABOVE-NAMED NOMINEES. The undersigned hereby
ratifies and confirms all that said Proxies, or any of them or their
substitutes, may lawfully do or cause to be done by virtue hereof and
acknowledges receipt of the notice of said meeting and the Proxy Statement
accompanying it.
PLEASE SIGN EXACTLY AS NAME APPEARS.
When shares are held by joint
tenants, both should sign. When
signing as attorney, as 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
Dated_________________, 1998. _____________________________
Signature if held jointly
Please mark, sign, date and return this proxy promptly using the enclosed
envelope.
<PAGE>
THE MONARCH CEMENT COMPANY
P.O. Box 1000
Humboldt, Kansas 66748-1000
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
(2:00 p.m., April 8, 1998)
GENERAL INFORMATION
The enclosed proxy is being solicited on behalf of the Board of Directors
of The Monarch Cement Company and all expenses of the solicitation will be
borne by the Company. In addition to solicitation by mail, a number of
regular employees may solicit proxies in person or by telephone. The Company
does not expect to pay any compensation for the solicitation of proxies. The
proxy may be revoked at any time before it is exercised by giving written
notice to the Secretary of the Company. The enclosed proxy and this Proxy
Statement were first sent or given to the holders of Monarch stock on or about
March 13, 1998.
The record date with respect to this solicitation is February 20, 1998
and only holders of Capital Stock and/or Class B Capital Stock of the Company
as of the close of business on that date are entitled to vote, either in
person or by proxy, at the meeting. At the close of business on that date
2,287,611 shares of Capital Stock and 1,918,103 shares of Class B Capital
Stock were issued and outstanding. Holders of Capital Stock are entitled to
one vote per share standing in their names on the record date. Holders of
Class B Capital Stock are entitled to ten votes per share standing in their
names on the record date.
Directors are elected by a plurality (a number greater than those cast
for any other candidates) of the votes cast, in person or by proxy, by the
stockholders entitled to vote at the annual meeting for that purpose. The
affirmative vote of the holders of a majority of the votes of the Company's
stock entitled to vote at the annual meeting is required for the approval of
such other matters as properly may come before the annual meeting or any
adjournment thereof.
A stockholder entitled to vote in the election of directors can withhold
authority to vote for all nominees for director or can withhold authority to
vote for certain nominees for director. Broker non-votes are treated as
shares of the Company's stock as to which voting power has been withheld by
the respective beneficial holders and, therefore, as shares not entitled to
vote on the proposal as to which there is the broker non-vote.
To the knowledge of the Company, there are no special arrangements or
understandings between any of the directors and officers other than each of
them acting solely in their capacity as such.
ELECTION OF DIRECTORS AND RELATED INFORMATION
The Board of Directors is divided into three classes. Class I is
comprised of three directors and Classes II and III are each comprised of four
directors. At each annual meeting of stockholders, one class of directors is
elected for a three-year term.
<PAGE>
The four directors to be elected at the forthcoming annual meeting of
stockholders will serve as directors in Class III of the Board of Directors.
Their term of office will commence upon election and will continue until the
2001 annual meeting of stockholders and until their successors are elected and
qualified.
The Board of Directors has selected the nominees for directors. Shares
represented by a proxy given pursuant to this solicitation will be voted in
favor of the nominees listed below. Each nominee is at present a member of
Class III of the Board of Directors. If any of such nominees should
unexpectedly become unavailable for election, the shares represented by the
proxy will be voted for such substituted nominee or nominees as the
Board of Directors may name. Each of the nominees hereinafter named has
indicated his willingness to serve if elected and it is not anticipated that
any of them will become unavailable for election. The names of the nominees
are as follows:
Jack R. Callahan Ronald E. Callaway Robert M. Kissick Byron K. Radcliff
The Board of Directors recommends that you vote FOR the election of each
of the four nominees named above as directors in Class III of the Board of
Directors.
<PAGE>
<TABLE>
Information Concerning Nominees for Election to Board of Directors
and Directors Continuing in Office
<CAPTION>
Family relationship
Present position Principal occupation Director Term between
Name Age with Company last five years since expires Directors and Officers
NOMINEES
C L A S S III:
<S> <C> <C> <C> <C> <C> <C>
Jack R. Callahan 66 Director President, The Monarch 1980 2001 None
Cement Company
Ronald E. Callaway 62 Director Transport truck driver, 1990 2001 Nephew of Karl Callaway,
Agricultural Carriers, Director and Secretary
Inc., Wichita, Kansas
Robert M. Kissick 61 Vice President Chairman, Hydraulic 1972 2001 None
and Director Power Systems, Inc.
(manufacturer of
construction equipment)
N. Kansas City, Missouri
Byron K. Radcliff 60 Treasurer Manager, 1960 2001 Father of Byron J.
and Director Radcliff Ranch Radcliff, Director
DIRECTORS CONTINUING IN OFFICE
C L A S S I:
Karl Callaway 86 Secretary and Retired Farmer 1947 1999 Uncle of Ronald E.
Director Callaway, Director
David L. Deffner 47 Director Professor of Music, 1997 1999 None
American River College,
Sacramento, California
and Director of Music,
Davis Community Church
Davis, California, since
August 1996; Music
Director, St. John's
Lutheran Church,
Sacramento, California
(1/1/93 to 12/31/95)
Richard N. Nixon 56 Director Shareholder in law firm of 1990 1999 None
Stinson, Mag & Fizzell,P.C.,
Kansas City, Missouri
</TABLE>
<PAGE>
<TABLE>
Information Concerning Nominees for Election to Board of Directors
and Directors Continuing in Office (continued)
<CAPTION>
Family relationship
Present position Principal occupation Director Term between
Name Age with Company last five years since expires Directors and Officers
DIRECTORS CONTINUING IN OFFICE (continued)
C L A S S II:
<S> <C> <C> <C> <C> <C> <C>
Byron J. Radcliff 41 Director Rancher 1976 2000 Son of Byron K. Radcliff,
Director and Treasurer
Michael R. Wachter 37 Director Civil Engineer and 1994 2000 None
Project Manager,
Concrete Technology Corp.
(a precast/prestressed
concrete producer)
Tacoma, Washington
Walter H. Wulf 98 Chairman of Position with Company 1923 2000 Father of Walter H. Wulf,
the Board Jr., Vice Chairman of the
and Director Board, President and Director
Walter H. Wulf, Jr. 53 Vice Chairman Position with Company 1971 2000 Son of Walter H. Wulf,
of the Board, Chairman of the Board and
President and Director
Director
There is no arrangement or understanding between any director and any other person pursuant to which such director was
selected as a director.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INFORMATION CONCERNING EXECUTIVE OFFICERS
Term of Family Relationship
Present Position Office Principal Occupation between
Name Age with Company Began Last Five Years Directors and Officers
<S> <C> <C> <C> <C> <C>
Walter H. Wulf 98 Chairman of the Board 1969 Position with Father of Walter H. Wulf, Jr.,
Director 1923 Company Vice Chairman of the Board,
President and Director
Walter H. Wulf, Jr. 53 President 1997 Position with Son of Walter H. Wulf,
Vice Chairman Company Chairman of the Board and
of the Board 1991 Director
Vice President
Director 1971
Robert M. Kissick 61 *Vice President 1980 See page 3 of None
Director 1972 this Proxy
Statement
Karl Callaway 86 *Secretary 1990 Retired Farmer Uncle of Ronald E. Callaway,
Director 1947 Director
Byron K. Radcliff 60 *Treasurer 1976 Manager, Father of Byron J. Radcliff,
Director 1960 Radcliff Ranch Director
Lyndell G. Mosley 66 Assistant 1972 Position with None
Secretary-Treasurer Company
____________________
* Not active in the daily affairs of the Company.
There is no arrangement or understanding between any executive officer and any other person pursuant to which any of
such executive officers have been selected to their respective positions.
</TABLE>
<PAGE>
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth those known to the Company to be
beneficial owners of more than five percent of any class of the Company's
securities as of February 20, 1998:
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner Title of Class Beneficial Ownership of Class
<S> <C> <C> <C>
Byron K. Radcliff Capital Stock 210,760 shares (a) 9.213%
P.O. Box 100 Class B Capital Stock 211,960 shares (b) 11.051%
Dexter, KS 67038
Walter H. Wulf Capital Stock 163,142 shares (c) 7.132%
P.O. Box 188 Class B Capital Stock 162,842 shares (d) 8.490%
Humboldt, KS 66748
____________________
(a) Includes 206,315 shares owned individually, 2,495 shares owned jointly
with wife and 1,950 shares owned by wife. Mr. Radcliff disclaims beneficial
ownership of the 1,950 shares owned by wife.
(b) Includes 207,715 shares owned individually, 2,495 shares owned jointly
with wife and 1,750 shares owned by wife. Mr. Radcliff disclaims beneficial
ownership of the 1,750 shares owned by wife.
(c) Includes 43,842 shares held individually, 40,300 shares held in Walter H.
Wulf Company, LLC for the benefit of Mr. Wulf, his children and grandchildren;
75,000 shares held by Mr. Wulf as co-trustee under three trusts for the
respective benefit of Mr. Wulf's children and as to which Mr. Wulf disclaims
beneficial ownership; and 4,000 shares held in the Walter H. Wulf Charitable
Foundation as to which Mr. Wulf disclaims beneficial ownership.
(d) Includes 87,842 shares held individually and 75,000 shares held by Mr.
Wulf as co-trustee under three trusts for the respective benefit of Mr. Wulf's
children and as to which Mr. Wulf disclaims beneficial ownership.
</TABLE>
<TABLE>
The security ownership of management as of February 20, 1998 is as
follows:
<CAPTION>
Amount and Nature of
Beneficial Ownership
Percent of Ownership
Number of Shares Class B
Class B Capital Capital
Beneficial Owner Capital Stock Capital Stock Stock Stock
<S> <C> <C> <C> <C>
Jack R. Callahan - 1,000 (1) - .052%
Karl Callaway 58,000 (2) 58,000 (2) 2.535% 3.024%
Ronald E. Callaway 5,150 5,150 .225% .269%
David L. Deffner 5,712 (3) 5,713 (4) .250% .298%
Robert M. Kissick 39,903 (5) 39,903 (5) 1.744% 2.080%
Richard N. Nixon 1,000 1,000 .044% .052%
Byron J. Radcliff 1,550 (6) 1,250 (6) .068% .065%
Byron K. Radcliff 210,760 (7) 211,960 (8) 9.213% 11.051%
Michael R. Wachter 250 250 .011% .013%
Walter H. Wulf 163,142 (9) 162,842 (10) 7.132% 8.490%
Walter H. Wulf, Jr. 14,810 (11) 19,050 (12) .647% .993%
Lyndell G. Mosley 46,821 (13) 15,561 (13) 2.047% .811%
All directors and
officers as a group,
12 persons 547,098 521,679 23.916% 27.198%
____________________
Footnotes to Security Ownership of Certain Beneficial Owners and Management
( 1) Held jointly with wife.
( 2) Includes 11,550 shares owned by wife as to which Mr. Callaway disclaims
beneficial ownership.
( 3) Includes 2,900 shares in the David L. Deffner Trust of which Mr. Deffner
is trustee and 2,812 shares in the David L. Deffner and Lynn Ellen Deffner
Family Trust of which Mr. Deffner is co-trustee with his wife.
( 4) Includes 2,900 shares in the David L. Deffner Trust of which Mr. Deffner
is trustee and 2,813 shares in the David L. Deffner and Lynn Ellen Deffner
Family Trust of which Mr. Deffner is co-trustee with his wife.
( 5) Includes 6,428 shares in trusts of which Robert M. Kissick is sole
trustee and 33,475 shares owned by wife. Mr. Kissick disclaims beneficial
ownership of 33,475 shares owned by wife.
( 6) Includes 250 shares owned by minor son of which Byron J. Radcliff is
custodian and as to which Mr. Radcliff disclaims beneficial ownership.
( 7) See Footnote (a) to preceding Table.
( 8) See Footnote (b) to preceding Table.
( 9) See Footnote (c) to preceding Table.
(10) See Footnote (d) to preceding Table.
(11) Includes 9,210 shares held individually, 3,700 shares owned by minor
daughter of which Walter H. Wulf, Jr. is custodian and 1,900 shares owned by
wife. In addition, Walter H. Wulf, Jr. is co-trustee with Walter H. Wulf of
75,000 shares under three trusts for the respective benefit of Walter H. Wulf,
Jr. and his two sisters, and owns 100 shares of the Walter H. Wulf Company,
LLC. Mr. Wulf disclaims beneficial ownership of 50,000 shares held by him as
co-trustee under two trusts for the respective benefit of Mr. Wulf's two
sisters, 3,700 shares owned by minor daughter and 1,900 shares owned by wife.
(12) Includes 12,950 shares held individually, 500 shares held jointly with
wife, 3,700 shares owned by minor daughter of which Walter H. Wulf, Jr. is
custodian and 1,900 shares owned by wife. In addition, Walter H. Wulf, Jr. is
co-trustee with Walter H. Wulf of 75,000 shares under three trusts for the
respective benefit of Walter H. Wulf, Jr. and his two sisters. Mr. Wulf
disclaims beneficial ownership of 50,000 shares held by him as co-trustee
under two trusts for the respective benefit of Mr. Wulf's two sisters, 3,700
shares owned by minor daughter and 1,900 shares owned by wife.
(13) Held jointly with wife.
</TABLE>
EXECUTIVE COMPENSATION
The following table summarizes the total compensation of the Chief
Executive Officer and the Company's two executive officers whose total
compensation exceeded $100,000 for the fiscal year ended December 31, 1997, as
well as the total compensation paid to each such individual for the Company's
two previous fiscal years. Jack R. Callahan, President and Chief Executive
Officer, retired October 31, 1997. Walter H. Wulf, Jr. was elected President
and Chief Executive Officer effective November 1, 1997. Prior to November 1,
1997, Mr. Wulf served as Vice Chairman of the Board and Executive Vice
President.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Name and Annual Compensation
Principal Position Year (Salary)
<S> <C> <C>
Jack R. Callahan 1997 $163,153
President and 1996 155,940
Chief Executive 1995 150,240
Officer
Lyndell G. Mosley 1997 $126,300
Assistant Secretary- 1996 120,300
Treasurer 1995 114,390
Walter H. Wulf, Jr. 1997 $121,650
Vice Chairman of the 1996 115,125
Board and President 1995 108,870
</TABLE>
The officers who are directors receive a monthly salary and do not receive
additional compensation for attending Board of Directors' meetings. All other
directors receive $1,050 for attending each board meeting. Also, all
directors are reimbursed for their actual travel expenses incurred in
attending board meetings. However, if it is necessary to hold more than one
board meeting on the same date, or if the board meeting takes more than one
day, only $1,050 is paid.
The Board of Directors held three meetings during 1997. Each director
attended at least 75% of the aggregate of the total number of meetings of the
Board of Directors and all committees of the Board on which he served during
1997, with the exception of Donald L. Deffner. The Board of Directors does
not have a standing audit, compensation or nominating committee, or other
committee performing similar functions.
Richard N. Nixon, director, is an attorney and, during 1997, was a
shareholder in the law firm of Stinson, Mag and Fizzell, P.C., Kansas City,
Missouri. During 1997, the total legal fees and expenses paid by the Company
to Stinson, Mag and Fizzell, P.C. did not exceed five percent of such law
firm's gross revenues for 1997.
On February 19, 1998, the Company finalized the cash purchase of 5,500
shares of the Company's Capital Stock and 4,500 shares of its Class B Capital
Stock from Jack R. Callahan, a director of the Company, at a price of $20.50
per share, for an aggregate of $205,000. On February 12, 1998, the closing
bid and ask price for the Company's stock was $21.00 and $22.00, respectively,
as reported by Fahnestock & Co., Inc.
DEFINED BENEFIT RETIREMENT PLAN
The retirement plan available to salaried employees, including the persons
named in the Summary Compensation Table above, is a defined benefit plan which
provides for fixed benefits, after a specific number of years of service, for
the remainder of the employee's life. The monthly retirement benefits are
computed by multiplying the employee's years of service by one and six-tenths
percent (1.6%) and multiplying this result by 1/60th of the employee's last
sixty calendar months of earnings or the employee's highest five consecutive
calendar years of earnings out of the last ten calendar years of service,
whichever is greater; however, the maximum retirement benefit is limited to
fifty percent (50%) of the average monthly earnings used in computing
retirement benefits. Currently the maximum annual compensation for
determining retirement benefits is $150,000. The normal retirement age at
which retirement plan benefits become payable is age 65.
The following table sets forth the estimated annual aggregate retirement
benefits at normal retirement for various classifications of earnings and
years of service.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Average
5 Years Years of Service
Earnings 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$100,000 $24,000 $32,000 $40,000 $48,000 $50,000
125,000 30,000 40,000 50,000 60,000 62,500
150,000 36,000 48,000 60,000 72,000 75,000
175,000 36,000 48,000 60,000 72,000 75,000
200,000 36,000 48,000 60,000 72,000 75,000
</TABLE>
The earnings used for the purpose of determining the retirement plan
benefits consists of annual compensation (salary) of the type disclosed in the
Summary Compensation Table above. Pension benefits under the retirement plan
are not subject to any deduction for social security benefits or other offset
amounts.
The persons named in the Summary Compensation Table above have the
following years of credited service for pension benefits under the retirement
plan: Mr. Callahan, 40 years; Mr. Mosley, 39 years; and Mr. Wulf, 26 years.
SEVERANCE PAY PLAN
On July 18, 1985 the Board of Directors of the Company adopted a
Severance Pay Plan for Salaried Employees (the "Plan"). The Plan is designed
to recognize the past service of long-standing salaried employees and reduce
their concerns, if any, if a change in control of the Company should occur.
The Plan provides that if employment of any "covered employee" is
terminated for any reason other than death or disability within 24 months
after a "change in control", such employee is entitled to receive severance
pay equal to the employee's monthly salary times the number of full years that
such employee has been employed by the Company. The amount of the severance
pay is subject to certain reductions where the employee is entitled to
certain retirement benefits under the Company's pension plan or where the
severance pay is not fully deductible by the Company for federal income tax
purposes. A "covered employee" is any full-time salaried employee who has
been employed for at least 10 years prior to the "change in control". A
"change in control" is any merger, consolidation or disposition of all or
substantially all of the assets of the Company or any acquisition by any
person or group of persons acting in concert who after such acquisition
would own more than 30% of the Company's outstanding voting stock. If there
had been a change in control and termination of employment on December 31,
1997, Messrs. Mosley and Wulf would have been entitled to receive severance
pay pursuant to the Plan equal to $213,000 and $267,150, respectively. The
Plan also provides that any covered employee who, at the time of termination,
has been employed on a full-time basis for 20 years or more, is entitled to
receive the same life and health insurance generally made available by the
Company to retired employees. The Plan may be amended or terminated by the
affirmative vote of a least two-thirds of the members of the full Board of
Directors of the Company except that no amendment or termination may adversely
affect any right of a covered employee who is employed by the Company at the
time the Board of Directors has knowledge of any change in control or a
proposal for any change in control.
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION
There currently is no compensation committee of the Board of Directors
(or committee performing equivalent functions). Accordingly, the Board of
Directors itself is responsible for the establishment of the general
compensation policies of the Company and the specific compensation for
executive officers. In carrying out this responsibility, however, the Board
of Directors requests and considers the recommendations of the Executive
Committee of the Board of Directors (consisting of Jack R. Callahan, Karl
Callaway, Robert M. Kissick, Byron K. Radcliff, Walter H. Wulf and Walter H.
Wulf, Jr.).
Executive Compensation Policy
The Board of Directors believes that the compensation of its executive
officers, including Mr. Wulf, the Company's President and Chief Executive
Officer (CEO), should be influenced by the Company's long-term profitability.
However, the Board does not attempt to establish a direct correlation between
the Company's profitability and executive compensation.
Executive Officer Compensation
Each year, including 1997, the Executive Committee of the Board of
Directors makes its recommendations to the Board of Directors as to the
salaries for the Company's executive officers. These recommendations are
based on a salary adjustment percentage which the committee establishes to
serve as a guideline in setting the compensation for all salaried employees
of the Company. The determination of this salary adjustment is based on the
Executive Committee's assessment of the change in the cost of living and of
the Company's long-term profitability. The application of the salary
adjustment percentage to the salaries of the Company's salaried employees
results generally in the Company's executive officers as a group, including
the CEO, receiving the same percentage increase as the other salaried
employees of the Company. A subjective determination as to whether the
individual salaried employee is performing satisfactorily is also made. In
April 1997, upon the recommendation of the Executive Committee, the Board of
Directors approved an overall increase in compensation of five and one-half
percent. These increases are reflective of, although not directly tied to, the
Company's continued improved performance in 1996.
Chief Executive Officer Compensation
The compensation of the Company's CEO is established by the Board of
Directors in the same way as compensation is established for the Company's
other executive officers. As indicated in the above discussion, the increase
in the CEO's salary, and that of the other executive officers, largely is
determined by the application of the salary adjustment percentage selected by
the Executive Committee to the CEO's salary. A subjective determination as to
whether the individual salaried employee is performing satisfactorily is also
made.
THE BOARD OF DIRECTORS:
Jack R. Callahan Karl Callaway
Ronald E. Callaway Robert M. Kissick
Richard N. Nixon Byron J. Radcliff
Byron K. Radcliff Michael R. Wachter
Walter H. Wulf Walter H. Wulf, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No officer who is not also a director, and no other person, participated
in deliberations of the Board of Directors concerning executive officer
compensation. The members of the Board of Directors who are also executive
officers have no interlocking relationships with any other entity which are
required by the rules of the Securities and Exchange Commission to be reported
in this Proxy Statement.
COMPANY PERFORMANCE
The following performance graph shows a five-year comparison of
cumulative total returns for the Company, the S&P 500 composite index and an
index of peer companies selected by the Company.
<TABLE>
<CAPTION>
Comparison of Five Year Cumulative Total Return
12/31/92 12/31/93 12/30/94 12/29/95 12/31/96 12/31/97
<S> <C> <C> <C> <C> <C> <C>
MONARCH CEMENT 100.00 115.17 158.13 180.31 258.27 382.17
Peer Group 100.00 163.60 134.40 165.80 196.80 322.90
S&P 500 100.00 109.80 111.30 153.10 188.80 252.00
</TABLE>
Source: Center for Research in Security Prices/Media General
The cumulative total return on investment for each of the periods for the
Company, the S&P 500 and the peer group is based on the stock price or
composite index at January 1, 1993. The performance graph assumes that the
value of an investment in the Company's capital stock and each index was $100
at January 1, 1993 and that all dividends were reinvested. The information
presented in the performance graph is historical in nature and is not intended
to represent or guarantee future returns.
The performance graph compares the performance of the Company with that
of the S&P 500 composite index and an index of peer companies in the Company's
industry in which the returns are weighted according to each company's market
capitalization. Companies in the peer group index are Lafarge Corporation,
Lone Star Industries, Southdown Inc. and Texas Industries.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has used the services of Arthur Andersen LLP, Kansas City,
Missouri as its Independent Certified Public Accountants for more than 60
years and plans to continue to use them in this capacity. It is not
anticipated that there will be a representative of Arthur Andersen LLP at the
annual meeting of the stockholders on April 8, 1998 and therefore they will
not make a statement or be available to answer questions which may arise. The
Board of Directors does not have an audit committee.
DEADLINE FOR STOCKHOLDER PROPOSALS
No stockholder proposal will be included in the Company's proxy statement
and form of proxy relating to the annual meeting of stockholders to be held on
April 14, 1999 which is not received by the Company at P.O. Box 1000,
Humboldt, Kansas 66748-1000 on or before November 16, 1998.
FINANCIAL STATEMENTS
The annual report of the Company containing financial statements for the
year ended December 31, 1997 is enclosed herewith.
OTHER BUSINESS
The proxy solicited confers discretionary authority with respect to the
voting of the shares represented thereby on any other business that may
properly come before the meeting. However, the Board of Directors has no
knowledge of any other business which will be presented at the meeting and
does not itself intend to present any such other business.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
generally requires the Company's directors and executive officers, and persons
who own more than 10% of a class of the Company's equity securities, to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership in the Company's capital stock and other
equity securities. Securities and Exchange Commission regulations require
directors, executive officers and greater than 10% shareholders to furnish the
Company with copies of all Section 16(a) reports they file. To the Company's
knowledge, based solely on review of copies of such reports and written
representations that no other reports were required, during the year ended
December 31, 1997, with the exception of the Form 3 filing for David L.
Deffner, all Section 16(a) filing requirements applicable to its directors,
executive officers and greater than 10% shareholders were complied with. Mr.
Deffner's initial report of ownership was filed with the SEC a few weeks late
following his initial election to the Board of Directors on December 12, 1997.
