<PAGE>
NCH CORPORATION AND SUBSIDIARIES
DEFINITIVE PROXY STATEMENT
REGARDING THE COMPANY'S 2000 ANNUAL MEETING OF STOCKHOLDERS
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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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
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NCH Corporation
-------------------------------------------------------------------------------
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<PAGE>
[LOGO]
2727 Chemsearch Boulevard
Irving, Texas 75062
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held July 27, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of NCH
Corporation will be held in the Gourmet Room II of the Crescent Club, 17th
Floor, 200 Crescent Court (at the corner of Pearl and Cedar Springs Streets),
Dallas, Texas, on Thursday, the 27th day of July, 2000, at 10:00 a.m., Central
Daylight Time, for the following purposes:
1. To elect four Class III directors of NCH to hold office until the next
annual election of Class III directors by stockholders or until their respective
successors are duly elected and qualified.
2. To ratify the appointment of KPMG LLP, Certified Public Accountants, to
be the independent auditors of NCH for the fiscal year ending April 30, 2001.
3. To consider and act upon a proposal submitted by a stockholder.
4. To transact such other business as may properly come before the
meeting or any adjournments of the meeting.
The Board of Directors has fixed the close of business on Thursday, June
1, 2000, as the record date for determining stockholders entitled to vote at and
to receive notice of the annual meeting.
Whether or not you expect to attend the meeting in person, you are urged
to complete, sign, and date the enclosed form of proxy and return it promptly so
that your shares of stock may be represented and voted at the meeting. If you
are present at the meeting, your proxy will be returned to you if you so
request.
Joe Cleveland,
Secretary
Dated: June 27, 2000
<PAGE>
1
[LOGO]
2727 Chemsearch Boulevard
Irving, Texas 75062
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July 27, 2000
Dated: June 27, 2000
SOLICITATION AND REVOCABILITY OF PROXIES
The accompanying proxy is solicited by the management of, and on behalf
of, NCH Corporation, a Delaware corporation ("NCH"), to be voted at the Annual
Meeting of the Stockholders of NCH, to be held Thursday, July 27, 2000 (the
"Meeting"), at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting. When properly executed proxies in the
accompanying form are received, the shares represented thereby will be voted at
the Meeting in accordance with the directions noted on the proxies; if no
direction is indicated, then such shares will be voted for the election of the
directors and in favor of the second proposal and against the third proposal set
forth in the Notice of Annual Meeting attached to this Proxy Statement.
The enclosed proxy confers discretionary authority to vote with respect to
any and all of the following matters that may come before the Meeting: (1)
matters that NCH's Board of Directors does not know a reasonable time before the
Meeting are to be presented at the Meeting; and (2) matters incidental to the
conduct of the Meeting. Management does not intend to present any business for a
vote at the Meeting other than the matters set forth in the accompanying Notice
of Annual Meeting, and it has no information that others will do so. If other
matters requiring the vote of the stockholders properly come before the Meeting,
then, subject to the limitations set forth in the applicable regulations under
the Securities Exchange Act of 1934, it is the intention of the persons named in
the attached form of proxy to vote the proxies held by them in accordance with
their judgment on such matters.
Any stockholder giving a proxy has the power to revoke that proxy at any
time before it is voted. A proxy may be revoked by filing with the Secretary of
NCH either a written revocation or a duly executed proxy bearing a date
subsequent to the date of the proxy being revoked. Any stockholder may attend
the Meeting and vote in person, whether or not such stockholder has previously
submitted a proxy.
<PAGE>
2
In addition to soliciting proxies by mail, officers and regular employees
of NCH may solicit the return of proxies. Brokerage houses and other custodians,
nominees, and fiduciaries may be requested to forward solicitation material to
the beneficial owners of stock.
This Proxy Statement and the accompanying proxy are first being sent or
given to NCH's stockholders on or about June 27, 2000.
NCH will bear the cost of preparing, printing, assembling, and mailing the
Notice of Annual Meeting, this Proxy Statement, the enclosed proxy, and any
additional material, as well as the cost of forwarding solicitation material to
the beneficial owners of stock.
VOTING RIGHTS
The record date for determining stockholders entitled to notice of and to
vote at the Meeting is the close of business on June 1, 2000. On that date there
were 5,408,223 shares issued and outstanding of NCH's $1.00 par value common
stock ("Common Stock"), which is NCH's only class of voting securities
outstanding. Each share of NCH's Common Stock is entitled to one vote in the
matter of election of directors and in any other matter that may be acted upon
at the Meeting. Neither NCH's certificate of incorporation nor its bylaws
permits cumulative voting. The presence, in person or by proxy, of the holders
of a majority of the outstanding shares of Common Stock entitled to vote at the
Meeting is necessary to constitute a quorum at the Meeting, but in no event will
a quorum consist of less than one-third of the shares entitled to vote at the
Meeting. The affirmative vote of a plurality of the shares of Common Stock
represented at the Meeting and entitled to vote is required to elect directors.
All other matters to be voted on will be decided by a majority of the shares of
Common Stock represented at the meeting and entitled to vote. Abstentions and
broker nonvotes are each included in determining the number of shares present at
the meeting for purposes of determining a quorum. Abstentions and broker
nonvotes have no effect on determining plurality, except to the extent that they
affect the total votes received by any particular candidate.
ELECTION OF DIRECTORS
Effective June 1, 2000, NCH's Board of Directors unanimously voted to
increase the number of directors serving on the Board from seven members to ten
members, divided into three classes: Class I (three directors), Class II (three
directors), and Class III (four directors). Only the Class III positions are due
for nomination and election at the Meeting. The Class I and Class II positions
will be due for nomination and election at the annual meetings of stockholders
to be held in 2001 and 2002, respectively.
<PAGE>
NCH expects Mssrs. Milton P. Levy, Jr. and Lester A. Levy to tender their
resignations from the Board of Directors at the meeting of the Board of
Directors scheduled to take place on July 27, 2000. In accordance with NCH's
bylaws, the two vacant Class I director positions created by the expansion of
the Board of Directors and the resignation of Lester A. Levy, and the vacant
Class II director position created by the resignation of Milton P. Levy, Jr.
shall be filled by appointment by the existing directors, to occur at the July
27, 2000 meeting of the Board of Directors. At such time, the Board of Directors
expects to appoint Robert M. Levy and Lester A. Levy, Jr. as the new Class I
directors and John I. Levy as the new Class II director. At the April 28, 2000
meeting of the Board of Directors, the directors elected Irvin L. Levy to serve
as the Chairman of the Board of Directors, effective upon his re-election as a
Class III director by the NCH stockholders at the Meeting on July 27, 2000.
The intention of the persons named in the enclosed proxy, unless such
proxy specifies otherwise, is to vote the shares represented by such proxy
for the election of Jerrold M. Trim, Irvin L. Levy, Walter M. Levy and Ronald
G. Steinhart as the Class III directors. Messrs. Jerrold M. Trim, Irvin L.
Levy, Walter M. Levy and Ronald G. Steinhart have been nominated to stand for
election by the Board of Directors until their terms expire or until their
respective successors are duly elected and qualified. Messrs. Jerrold M.
Trim and Irvin L. Levy are presently directors of NCH.
Messrs. Irvin, Lester, and Milton Levy are brothers. Walter M. Levy
and Lester A. Levy, Jr. are the sons of Mr. Lester A. Levy. Robert M. Levy
and John I. Levy are the sons of Irvin L. Levy. Robert L. Blumenthal is a
first cousin of Messrs. Irvin, Lester, and Milton Levy. Certain information
regarding each nominee and director is set forth below. The number of shares
beneficially owned by each nominee is listed under "Security Ownership of
Principal Stockholders and Management."
Class I Directors
Rawles Fulgham, 72, has been a director of NCH since 1981. Mr. Fulgham
was an executive director of Merrill Lynch Private Capital Inc. from 1982
until 1989, and served as a Senior Advisor to Merrill Lynch & Co., Inc. from
1989 until 1998. He was also a director, the Chairman of the Board and Chief
Executive Officer of Global Industrial Technologies, Inc., located in Dallas,
Texas, until it was acquired by RHI-AG, located in Vienna, Austria, on
December 31, 1999. Mr. Fulgham also served on the Board of Directors of
BancTec, Inc. and currently serves on the Audit and Advisory Committees of
Dorchester Hugoton, Ltd. From 1975 through October 1998, he served on the
Board of Directors of Dresser Industries, Inc. until it was merged with
Halliburton Company. Mr. Fulgham is a member of the Audit Committee and the
Compensation Committee.
Lester A. Levy, 77, has been a director and officer of NCH since 1947, and
since 1965 has served as Chairman of the Board of Directors of NCH. He is either
the president or a vice president of substantially all of NCH's subsidiaries.
Mr. Levy is a member of the Stock Option Committee and the Executive Committee.
At the meeting of the Board of Directors scheduled to take place on July
27, 2000, the directors expect to appoint Robert M. Levy and Lester A. Levy, Jr.
as new Class I directors. These appointments will fill the vacant Class I
director positions created by the expansion of the Board of Directors and the
resignation of Lester A. Levy, as described above.
<PAGE>
Robert M. Levy, 41, joined NCH in 1985 after attending business school at
the University of Texas at Austin. His initial responsibility was in domestic
chemical marketing, after which he served in management positions with
increasing responsibility in Europe and the United States. He is an officer
and/or director of several of NCH's subsidiaries.
Lester A. Levy, Jr., 39, joined NCH in 1985 after attending business
school at Northwestern University. His initial responsibility was in
domestic chemical sales, after which he served in management positions with
increasing responsibility in Europe and the United States. Mr. Levy is an
officer and/or director of several of NCH's subsidiaries.
Class II Directors
Robert L. Blumenthal, 69, has engaged in the practice of law since 1957.
He is a partner at the Dallas law firm of Carrington, Coleman, Sloman &
Blumenthal, L.L.P., which serves as NCH's legal counsel.
Thomas B. Walker, Jr., 76, has been a director of NCH since 1987. Mr.
Walker was a general partner of Goldman, Sachs & Co. from 1968 until 1984 and
a limited partner of The Goldman Sachs Group, L.P. ("Goldman Sachs") from
1984 through May 1999, when he assumed his current position as a Senior
Director to Goldman Sachs. Mr. Walker is also a director of Sysco
Corporation and Riviana Foods, Inc. He is a member of the Audit Committee
and the Compensation Committee.
Milton P. Levy, Jr., 74, has been a director and officer of NCH since
1947, and since 1965 has served as Chairman of the Executive Committee of
NCH. He is either the president or a vice president of substantially all of
NCH's subsidiaries. Mr. Levy is a member of the Stock Option Committee and
the Executive Committee.
At the meeting of the Board of Directors scheduled to take place on July
27, 2000, the directors expect to appoint John I. Levy as a new Class II
director in order to fill the vacant Class II director position created by the
resignation of Milton P. Levy, Jr., as described above.
John I. Levy, 38, joined NCH in 1985 after attending business school at
Southern Methodist University. His initial responsibility was in corporate
planning, after which he served in management positions with increasing
responsibility in Europe and the United States. Mr. Levy is currently an officer
and/or director of several of NCH's subsidiaries.
Class III Directors and Nominees
Jerrold M. Trim, 63, has been a director of NCH since 1980 and is the
President and majority shareholder of Windsor Association, Inc., which is
engaged primarily in investment consulting services. He is a member of the Audit
Committee and the Compensation Committee.
Irvin L. Levy, 71, has been a director and an officer of NCH since 1950,
and has served as NCH's President since 1965. He is either president or a vice
president of substantially all of NCH's subsidiaries. Mr. Levy is a member of
the Stock Option Committee and the Executive Committee. If re-elected as a Class
III director by the NCH stockholders at the Meeting on July 27, 2000, Mr. Levy
shall serve as Chairman of the Board of Directors of NCH.
<PAGE>
Walter M. Levy, 45, joined NCH in 1980 after attending business school at
the University of Virginia. His initial responsibility was in field sales, after
which he served in management positions with increasing responsibility in
Europe, Asia and the United States. He is currently an officer and/or director
of several of NCH's subsidiaries.
Ronald G. Steinhart, 60, is the Vice Chairman of the Board of Directors of
Bank One, Texas. He served as President and Chief Operating Officer of
InterFirst Corporation from 1981 through 1988, at which time he became Chairman
and Chief Executive Officer of Deposit Guaranty Bank (later renamed Team Bank).
After Team Bank's merger with Bank One, Texas in 1992, Mr. Steinhart was named
President and Chief Operating Officer. In 1995, Mr. Steinhart was appointed
Chairman and Chief Executive Officer of Bank One, Texas, and in 1996, he was
appointed Chairman and Chief Executive Officer of Bank One Corporation's
Commercial Banking Group. After the merger of Bank One Corporation with First
Chicago NBD Corporation in 1998, Mr. Steinhart was named to the Management
Committee, in which capacity he served until his retirement in January 2000. Mr.
Steinhart also serves as a Trustee of Prentiss Properties Trust, a
publicly-traded real estate investment trust.
If any of the above nominees for Class III directors should become
unavailable to serve as a director, then the shares represented by proxy will be
voted for such substitute nominees as may be nominated by the Board of
Directors. NCH has no reason to believe that any of the above nominees are, or
will be, unavailable to serve as a director.
Meeting Attendance and Committees of the Board
NCH has audit, compensation, executive, and stock option committees of the
Board, whose members are noted above. During the last fiscal year, the Board of
Directors met on five occasions, the Compensation Committee met once, the Audit
Committee met once, the Executive Committee met at least 25 times, and the Stock
Option Committee met once. NCH does not have a standing nominating committee of
the Board. Nominees to the Board are selected by the entire Board.
The Audit Committee of the Board reviews the scope of the independent
auditors' examinations and the scope of activities of NCH's internal auditors.
Additionally, it receives and reviews reports of NCH's independent auditors and
internal auditors. The Audit Committee also meets (without management's
presence, if the Audit Committee so desires) with the independent auditors and
members of the internal auditing staff, receives recommendations or suggestions
for change, and may initiate or supervise any special investigations it may
choose to undertake.
The Compensation Committee recommends to the Board of Directors the
salaries of the members of the Executive Committee.
The Executive Committee possesses all of the powers of the Board of
Directors between meetings of the Board.
The Stock Option Committee of the Board determines those employees of NCH
and its subsidiaries who will receive stock options and the amount of such
options.
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Compensation
Directors who are not executive officers of NCH receive compensation of
$25,000 per annum and $1,000 for each meeting of the Board of Directors or Board
committee attended. All other directors receive $1,000 for each such meeting
attended. Members of the Stock Option Committee and Executive Committee are not
compensated separately for their services on such committees.
Report on Executive Compensation
Responsibility for Executive Compensation
Three outside directors, as the Compensation Committee of NCH (Messrs.
Fulgham, Trim, and Walker), have primary responsibility for recommending to the
Board the executive compensation program for the members of the Executive
Committee. The Compensation Committee recommends to the Board annual base
compensation for the members of the Executive Committee and is responsible for
administering and approving incentive compensation for the members of the
Executive Committee. The Executive Committee is responsible for setting the
compensation for all other officers of NCH.
Executive Compensation Strategy
With respect to compensation of all key executives other than those
executives whose compensation is determined by the Compensation Committee, NCH's
strategy is generally as follows:
* Attract and retain key executives by delivering a market
competitive rate of base pay. Market competitive rates of pay
are determined by reviewing compensation data from other
companies that resemble NCH in terms of lines of business,
size, scope, and complexity.
* Provide salary increases to key executives based on their
individual effort and performance. In addition to the
individual's experience, job duties, and performance, annual
increases are influenced by NCH's overall performance.
* Provide annual incentive opportunities based on objectives
that NCH feels are critical to its success during the year.
Target incentive levels are set on an individual basis and
actual awards are made at the Executive Committee's
discretion.
<PAGE>
* Provide long-term incentives to key employees so that
employees are focused on activities and decisions that
promote NCH's long-term financial and operational success.
To meet this objective, NCH offers stock options to
certain key employees. Options are generally granted for
a period of five years at a price that is at least equal
to the fair market value of the Common Stock at the time
of grant. Options vest in equal increments over a three-year
period from the time of grant.
Compensation for the Members of the Executive Committee
In 1994, the Compensation Committee, with assistance from an outside
consulting firm, determined the competitiveness of the compensation for the
Office of the Executive Committee. Based on survey and proxy analyses performed
by the consulting firm, the Compensation Committee adopted the incentive bonus
plan described below. All of the companies in the peer group in NCH=s
performance graph on page 9 of this Proxy Statement, other than Lilly Industries
and Lubrizol Corporation, were included in the analysis performed by the
consulting firm. Although no formula or preset goal is used in setting the base
salary for the Office of the Executive Committee, performance in sales and
earnings as well as the current economic and competitive environment is
considered.
NCH has adopted a separate strategy with respect to the incentive
compensation of the Office of the Executive Committee, as currently composed.
Since these individuals are very significant long-term stockholders of NCH, some
of the typical approaches to executive compensation that exist in the
marketplace have not necessarily been relevant at NCH. Long-term incentive
programs are implemented for senior executives to create a link between the
corporation's performance and the executive's own personal wealth. In light of
the shareholding of Messrs. Irvin and Lester Levy, they are already
significantly impacted financially by NCH's overall performance. The
Compensation Committee generally feels that in this situation any long-term
incentive program should be tied to salary or bonus.
To qualify all compensation paid to the Executive Committee of the Board
of Directors as a deductible expense under ss. 162 of the Internal Revenue Code
(the "Code"), on April 28, 1994, the Compensation Committee of the Board of
Directors adopted an incentive bonus plan (the "Bonus Plan"), for the Office of
the Executive Committee, which was approved by the stockholders at the 1994
Annual Meeting.
The Bonus Plan provides a formula for determining the amounts of annual
bonuses to be paid to each member of the Executive Committee. Bonus amounts will
depend on the amount by which NCH's net income after taxes, but before accrual
for any bonus under the Bonus Plan, for a particular fiscal year increases over
its net income before accrual for any bonus for the preceding fiscal year. An
amendment to the original formula for determining the amounts of annual bonuses
was adopted by the Compensation Committee on June 7, 1996, which was approved by
the stockholders at the 1996 Annual Meeting, because the formula could have
resulted in a member receiving over $1 million in annual compensation, which
amount in excess of $1 million would not have been deductible by NCH under ss.
162(m) of the Code. As amended, the formula provides as follows. Increases from
10% to less than 15% will result in payment of a $225,000 bonus to each member
of the Executive Committee. Increases of 15% or greater will result in payment
of a $325,000 bonus to each Executive Committee member. For fiscal 2000, no
bonus was payable because NCH's net income did not increase by 10% or more over
its net income for fiscal 1999.
<PAGE>
The Bonus Plan prohibits amendment of its terms to increase the cost of
the Bonus Plan to NCH or to change the persons to whom bonuses will be paid
under the Bonus Plan without a vote of NCH's stockholders.
Conclusion
The Compensation Committee believes that current compensation arrangements
in place at NCH are reasonable and competitive given NCH's size and status and
the current regulatory environment surrounding executive compensation. The base
salary program allows NCH to attract and retain management talent. In addition,
for those employees who are incentive eligible, such systems continue to provide
the necessary link between the attainment of NCH's performance objectives and
the compensation received by executives.
Executive Committee &
Compensation Committee Stock Option Committee
Rawles Fulgham Irvin L. Levy
Jerrold M. Trim Lester A. Levy
Thomas B. Walker, Jr. Milton P. Levy, Jr.
The report on executive compensation will not be deemed to be incorporated
by reference into any filing by NCH under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that NCH specifically
incorporates the above report by reference.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
Messrs. Irvin, Lester, and Milton Levy are members of the Executive
Committee of NCH's Board of Directors, which committee determines most salaries
and promotions with respect to officers of NCH and its subsidiaries, and of the
Stock Option Committee, which determines those employees of NCH and its
subsidiaries who will receive stock options and the amount of such options.
Messrs. Irvin, Lester, and Milton Levy are executive officers and employees of
NCH.
NCH's Board of Directors (with the subject members abstaining) determines
the salaries of the members of the Executive Committee after recommendation of
the Compensation Committee, whose members are Rawles Fulgham, Jerrold M. Trim,
and Thomas B. Walker, Jr.
Executive Compensation
The following table summarizes the compensation paid to Messrs. Irvin,
Lester, and Milton Levy, who together comprised the Executive Committee, and to
NCH's two other most highly compensated executive officers (whose compensation
exceeded $100,000 in fiscal 2000) for services rendered in all capacities to NCH
during the fiscal years ended April 30, 2000, 1999, and 1998.
<PAGE>
SUMMARY COMPENSATION TABLE
Annual Compensation(1)
Name and Fiscal ---------------------- All Other
Principal Positions Year Salary(2) Bonus Compensation (3)
------------------------ ----- -------- ----- ----------------
Irvin L. Levy, President 2000 $916,505 -- $4,200
1999 913,106 -- 4,000
1998 889,420 -- 4,000
Lester A. Levy, 2000 $918,264 -- $3,200
Chairman of the Board 1999 918,667 -- 3,200
1998 894,087 -- 3,200
Milton P. Levy, Jr., 2000 $920,355 -- $3,200
Chairman of the Executive 1999 920,636 -- 3,200
Committee 1998 896,074 -- 3,200
Thomas F. Hetzer, 2000 $250,918 -- $4,200
Vice President - Finance 1999 235,995 $11,000 4,000
1998 221,331 28,000 4,000
Glen L. Scivally, 2000 $215,603 -- $4,200
Vice President and 1999 205,765 $6,000 4,000
Treasurer 1998 195,846 27,000 4,000
--------------------
(1) Certain of NCH's executive officers receive personal benefits in addition to
annual salary and bonus. The aggregate amounts of the personal benefits,
however, do not exceed the lesser of $50,000 or 10% of the total of the annual
salary and bonus reported for the named executive officer.
(2) Includes compensation for services as a director (other than Mr. Hetzer
and Mr. Scivally).
(3) The amounts included in this column were contributed to the accounts of the
executives included in the table under NCH's qualified profit sharing and
savings plan.
Retirement Agreements
NCH has entered into retirement agreements allowing retirement at any time
after age 59-1/2 with Messrs. Irvin, Lester, and Milton Levy that provide for
lifetime monthly payments and guarantee 120 monthly payments beginning at death,
retirement, or disability. Payment under these agreements is $500,000 per year
for each of Messrs. Irvin, Lester and Milton Levy, subject to adjustment each
year for increases in the United States Consumer Price Index for the preceding
year. The Board of Directors expects that Lester Levy shall retire as Chairman
of the Board of Directors effective as of the Meeting, and that Milton Levy
shall retire as Chairman of the Executive Committee effective as of the Meeting.
<PAGE>
Executive Vice Presidents
Mssrs. John I. Levy, Lester A. Levy, Jr., Robert M. Levy and Walter M.
Levy were each elected to serve as an Executive Vice-President of NCH by the
Board of Directors effective as of May 1, 2000.
FIVE YEAR COMPARISON OF CUMULATIVE TOTAL RETURN
The following graph presents NCH's cumulative stockholder return during
the period beginning April 30, 1995, and ending April 30, 2000. NCH is compared
to the S&P 500 and a peer group consisting of companies that collectively
represent lines of business in which NCH competes. The companies included in the
peer group index are Betz Laboratories, Inc. ("Betz"), The Dexter Corporation,
Ecolab Inc., Lawson Products, Inc., Lilly Industries, Lubrizol Corporation,
Nalco Chemical Company ("Nalco"), National Service Industries, Inc., Petrolite
Corporation ("Petrolite"), Premier Industrial Corporation ("Premier"), Quaker
Chemical Corporation, Safety-Kleen Corporation, and Snap-On Tools Corporation.
During fiscal year 1997, Premier was acquired by another corporation. Since
Premier's shareholder return is no longer available, they were excluded from the
peer group for performance after 1996. During fiscal year 1998, Petrolite was
acquired by another corporation, and was excluded from the peer group for
performance after 1997. During fiscal year 1999, Betz was acquired by another
corporation, and was excluded from the peer group for performance after 1998.
During fiscal year 2000, Nalco was acquired by another corporation, and was
excluded from the peer group for performance after 1999. Each index assumes $100
invested at the close of trading on April 30, 1995, and is calculated assuming
quarterly reinvestment of dividends and quarterly weighting by market
capitalization.
[STOCK PERFORMANCE GRAPH FILED UNDER COVER OF FORM S-E]
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
NCH Corporation 100 94 106 109 96 79
S&P 500 Index 100 130 163 230 280 308
Peer Group 100 114 143 174 170 140
Data source: S&P Compustat, a division of McGraw-Hill, Inc.
The stock price performance depicted in the graph above is not necessarily
indicative of future price performance. The graph will not be deemed to be
incorporated by reference in any filing by NCH under the Securities Act of 1933
or the Securities Exchange Act of 1934, except to the extent that NCH
specifically incorporates the graph by reference.
<PAGE>
SECURITY OWNERSHIP OF
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of NCH's Common Stock as of June 1, 2000, by: (i) persons
known to management to beneficially own more than 5% of NCH's Common Stock; (ii)
each director and nominee for director; (iii) the three persons holding the
office of the Executive Committee and NCH's two other most highly compensated
executive officers (whose compensation exceeded $100,000 in fiscal 2000); and
(iv) all directors and executive officers of NCH as a group. Also included in
the table is the beneficial ownership of NCH's Common Stock as of June 1, 2000
by Mssrs. John I. Levy, Lester A. Levy, Jr., Robert M. Levy and Walter M. Levy,
who were each elected to serve as an Executive Vice-President of NCH by the
Board of Directors effective as of May 1, 2000. Except as noted below, each
person included in the table has sole voting and investment power with respect
to the shares that the person beneficially owns.
Name of Amount & Nature
Beneficial Owner of Beneficial Ownership Percent of Class
----------------------- ----------------------- ----------------
Robert L. Blumenthal 2,683 *
Rawles Fulgham (1) 2,000 *
Thomas F. Hetzer 0 -
Irvin L. Levy (2)(3) 1,444,576 26.7%
Lester A. Levy (2)(4) 1,437,612 26.6%
Milton P. Levy, Jr. (2)(5) 44,000 *
John I. Levy (6) 84,234 1.6%
Lester A. Levy, Jr. (7) 23,942 *
Robert M. Levy (8) 69,220 1.3%
Walter M. Levy (9) 24,218 *
Glen L. Scivally 0 -
Ronald G. Steinhart 0 -
Jerrold M. Trim (10) 0 -
Thomas B. Walker, Jr. 10,000 *
All directors and executive 3,142,485 58.1%
officers as a group (14 people)
Dimensional Fund Advisors, Inc.(11) 340,200 6.3%
--------------------
* Less than 1% of class.
(1) Of these shares, 700 are held by a Dallas bank in trust for the
retirement plan and benefit of Mr. Fulgham.
(2) The address of Messrs. Irvin, Lester, and Milton Levy is P.O. Box
152170, Irving, Texas 75015. The definition of beneficial ownership
under the rules and regulations of the Securities and Exchange
Commission requires inclusion of the same 29,000 shares held as
cotrustees by Messrs. Irvin, Lester, and Milton Levy for a family
trust in the totals listed above for each of Messrs. Irvin, Lester,
and Milton Levy.
<PAGE>
(3) Irvin L. Levy owns a life estate interest in 1,000,000 shares
included in the table over which he has sole voting and investment
power, and his children own a remainder interest in such 1,000,000
shares. The table includes 29,000 shares held as cotrustee with his
brothers for a family trust over which he shares voting and
investment power, the beneficial ownership of which Mr. Levy
disclaims.
(4) Lester A. Levy owns a life estate interest in 685,194 shares
included in the table over which he has sole voting and investment
power, and his children own a remainder interest in such 685,194
shares. The table includes 29,000 shares held as cotrustee with his
brothers for a family trust over which he shares voting and
investment power, the beneficial ownership of which Mr. Levy
disclaims.
(5) The table includes 29,000 shares held by Milton P. Levy, Jr. as
cotrustee with his brothers for a family trust over which he
shares voting and investment power, the beneficial ownership of
which Mr. Levy disclaims.
(6) The table includes 1,353 shares held by the wife of John I. Levy,
the beneficial ownership of which Mr. Levy disclaims, and 1,798
shares held by the children of John I. Levy, the beneficial
ownership of which Mr. Levy disclaims. The table also includes
options held by John I. Levy exercisable within 60 days to acquire
9,220 shares. John I. Levy and a trust for the benefit of Mr. Levy's
family additionally hold, in the aggregate, a remainder interest in
500,000 shares held by his father, Irvin L. Levy (see footnote (3)
above).
(7) The table includes options held by Lester A. Levy, Jr.
exercisable within 60 days to acquire 9,220 shares. Lester A.
Levy, Jr. additionally holds a remainder interest in 228,398
shares held by his father, Lester A. Levy (see footnote (4)
above).
(8) The table includes options held by Robert M. Levy exercisable within
60 days to acquire 9,220 shares. Robert M. Levy and a trust for the
benefit of Mr. Levy's family additionally hold, in the aggregate, a
remainder interest in 500,000 shares held by his father, Irvin L.
Levy (see footnote (3) above).
(9) The table includes 1,445 shares held by the wife of Walter M. Levy,
the beneficial ownership of which Mr. Levy disclaims, and 6,005
shares held by Walter M. Levy as trustee for family trusts for the
benefit of his children, the beneficial ownership of which Mr. Levy
disclaims. The table also includes options held by Walter M. Levy
exercisable within 60 days to acquire 9,220 shares. Walter M. Levy
(and entities controlled by Walter M. Levy) additionally holds a
remainder interest in 228,398 shares held by his father, Lester A.
Levy (see footnote (4) above).
(10) Windsor Association, Inc., of which Mr. Trim is President, has a
corporate policy against its employees owning any publicly traded
securities.
(11) The table sets forth Dimensional Fund Advisors, Inc.'s stockholding
based on its latest Schedule 13G filed with the SEC as of February
3, 2000. Dimensional Fund Advisors, Inc. reports its address as 1299
Ocean Avenue, 11th Floor, Santa Monica, California 90401. It has
sole dispositive power over 340,200 shares, shared dispositive power
over 0 shares, sole voting power over 340,200 shares, and shared
voting power over 0 shares.
INFORMATION WITH RESPECT TO STOCKHOLDER PROPOSAL
<PAGE>
William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, a
stockholder of NCH , has notified NCH of his intention to introduce the
following proposal at the Meeting. Mr. Steiner's proposed resolution and
supporting statement, for which the Board of Directors and NCH accept no
responsibility, are set forth below. THE BOARD OF DIRECTORS OPPOSES THIS
PROPOSAL FOR THE REASONS STATED BELOW.
MAXIMIZE VALUE RESOLUTION
Resolved that the shareholders of NCH Corporation urge the NCH
Corporation Board of Directors to arrange for the prompt sale of NCH
Corporation to the highest bidder.
The purpose of the Maximize Value Resolution is to give all NCH
Corporation shareholders the opportunity to send a message to the NCH
Corporation Board that they support the prompt sale of the NCH Corporation
to the highest bidder. A strong and or majority vote by the shareholders
would indicate to the board the displeasure felt by the shareholders of
the shareholder returns over many years and the drastic action that should
be taken. Even if it is approved by the majority of the NCH Corporation
shares represented and entitled to vote at the annual meeting, the
Maximize Value Resolution will not be binding on NCH Corporation Board.
The proponent, however, believes that if this resolution receives
substantial support from the shareholders, the board may choose to carry
out the request set forth in the resolution:
The prompt auction of NCH Corporation should be accomplished by any
appropriate process the board chooses to adopt including a sale to the
highest bidder whether in cash, stock, or a combination of both. It is
expected that the board will uphold its fiduciary duties to the utmost
during the process.
The proponent further believes that if the resolution is adopted,
the management and the board will interpret such adoption as a message
from the company's stockholders that it is no longer acceptable for the
board to continue with its current management plan and strategies.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION.
----------------------------------------------
The Board of Directors recommends a vote against this proposal. In the
judgement of the directors, the proposed action would not be timely nor in the
best interest of all of the stockholders.
SELECTION OF AUDITORS
The Board of Directors has appointed KPMG LLP, Certified Public
Accountants, to continue to be the principal independent auditors of NCH,
subject to stockholder ratification at the Meeting. A representative of that
firm has been requested to be present at the Meeting and will have an
opportunity to make a statement if the representative desires to do so and to
respond to appropriate questions.
PROPOSALS OF STOCKHOLDERS
Stockholders of NCH who intend to present a proposal for action at the
2001 Annual Meeting of Stockholders of NCH must notify NCH's management of such
intention by notice received at NCH's principal executive offices not less than
120 days in advance of June 27, 2001, for such proposal to be included in NCH's
proxy statement and form of proxy relating to such meeting.
ANNUAL REPORT
The Annual Report for the year ended April 30, 2000, is being mailed to
stockholders with this Proxy Statement. The Annual Report is not to be regarded
as proxy soliciting material. NCH will provide without charge to each
stockholder to whom this Proxy Statement and the accompanying form of proxy are
sent, on the written request of such person, a copy of NCH's annual report on
Form 10-K for the fiscal year ended April 30, 2000, including the financial
statements and the financial statement schedules, required to be filed with the
Securities and Exchange Commission. Requests should be directed to NCH
Corporation, Attention: Secretary, P. O. Box 152170, Irving, Texas 75015.
Irvin L. Levy,
President
Irving, Texas
Dated: June 27, 2000
<PAGE>
PROXY CARD
NCH CORPORATION
ANNUAL MEETING OF STOCKHOLDERS-JULY 27, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints James H. Stone,
Tom Hetzer, and Joe Cleveland, and any one or more of them, proxy or
proxies, with full power of substitution in each, and hereby authorizes
them to vote for the undersigned and in the undersigned's name, all shares
of common stock of NCH Corporation (the "Company") standing in the name of
the undersigned on June 1, 2000, as if the undersigned were personally
present and voting at the Company's annual meeting of stockholders to be
held on July 27, 2000, in Dallas, Texas, and at any adjournment thereof,
upon the matters set forth on the reverse side hereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THEN THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND AGAINST PROPOSAL 3, AND IN THE
PROXIES' DISCRETION ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
ANNUAL MEETING, INCLUDING MATTERS INCIDENT TO THE CONDUCT OF SUCH MEETING.
(Continued and to be signed on reverse side)
<PAGE>
FOR WITHHOLD AUTHORITY
1. Election of Directors / / / /
Nominees: Jerrold M. Trim, Irvin L. Levy, Walter M. Levy, and Ronald G.
Steinhart
---------------------------------------------------------------------
Instruction: To withhold authority to vote for all nominees, mark the
Withhold Authority box. To withhold authority to vote for any individual
nominees, write the nominee's name on the line above.
2. Proposal to ratify the appointment of KPMG LP as independent auditors
of NCH Corporation.
FOR / / AGAINST / / ABSTAIN / /
3. Proposal submitted by a stockholder.
FOR / / AGAINST / / ABSTAIN / /
4. In their discretion, the proxies are authorized to vote upon any other
matters that may properly come before the meeting or any adjournment
thereof, subject to the limitations set forth in the applicable regulations
under the Securities Exchange Act of 1934.
Dated: , 2000
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-------------------------------------------
Signature
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Signature if held jointly
NOTE: Please sign exactly as name appears hereon. Joint owner should each
sign. When signing as attorney, executor, administrator, trustee, guardian,
officer or partner, please indicate full title and capacity.
<PAGE>
