<PAGE> 1
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
O.I. CORPORATION
----------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Bowne of Houston
----------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title or 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;1
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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> 2
O.I. CORPORATION
151 GRAHAM ROAD, P.O. BOX 9010
COLLEGE STATION, TEXAS 77842-9010
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1998
To the Shareholders of O.I. Corporation:
You are hereby notified that the Annual Meeting of Shareholders of O.
I. Corporation will be held on Monday, May 11, 1998 at 3:00 p.m. at the Four
Seasons Hotel, 1300 Lamar Street, Houston, Texas, for the purposes of
considering and voting upon the following matters proposed by the Board of
Directors:
(i) the election of directors;
(ii) the ratification of the appointment of independent public
accountants; and
(iii) the transaction of such other business as may properly come
before the meeting.
The stock transfer books will not be closed, but only shareholders of
record at the close of business on March 16, 1998, will be entitled to notice of
and to vote at the meeting.
After completing the business of the meeting, we will discuss fiscal
year 1997 results and the current outlook for the Company. There will be a
period for questions and discussion with the Company's officers and directors.
If you plan to be present, please notify the Secretary of the Company
so that the necessary arrangements can be made for your attendance. Regardless
of whether you plan to personally attend, it is important that your shares be
represented at the meeting; therefore, PLEASE DATE, SIGN AND IMMEDIATELY RETURN
YOUR PROXY CARD IN THE POST-PAID ENVELOPE PROVIDED. You may revoke your proxy at
any time prior to exercise.
By Order of the Board of Directors
Jane A. Smith
Vice President-Corporate Secretary
April 9, 1998
<PAGE> 3
O.I. CORPORATION
151 GRAHAM ROAD, P.O. BOX 9010
COLLEGE STATION, TEXAS 77842-9010
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of O.I. Corporation (the
"Company") in connection with the solicitation of proxies to be used in voting
at the annual meeting of shareholders to be held on May 11, 1998. It is first
being mailed to shareholders on or about April 9, 1998. The enclosed proxy is
solicited on behalf of the Board of Directors of the Company. The person giving
the enclosed proxy has the power to revoke it by giving notice to the Secretary
in person, or by written notification actually received by the Secretary, at any
time prior to its being exercised.
The Company will bear the cost of the solicitation of the proxies, including the
charges and expenses of brokerage firms and others for forwarding solicitation
material to beneficial owners of stock. It is possible that further solicitation
of proxies will be made by telephone or oral communication with some
shareholders of the Company following the original solicitation. All further
solicitations will be made by either the Company's transfer agent or by regular
employees of the Company, neither of whom will be additionally compensated
therefor.
GENERAL INFORMATION
The mailing address of the Company's principal executive offices is O.I.
Corporation, P.O. Box 9010, College Station, Texas 77842-9010. The Company's
telephone number is (409) 690-1711, and its FAX number is (409) 690-0440.
VOTING SECURITIES OUTSTANDING
As of March 16, 1998, there were 3,793,638 shares of common stock, par value
$0.10 per share, ("Common Stock"), of the Company issued and outstanding, and
each share is entitled to one vote. Only holders of Common Stock of record at
the close of business on March 16, 1998, will be entitled to vote at the
meeting. Shares not voted on matters, including broker non-votes, will not be
treated as votes cast with respect to those matters, and therefore will not
affect the outcome of any such matter. Shares abstaining from voting will be
treated as votes cast with respect to those matters, and therefore will have the
effect of votes against any such matter.
In the absence of a quorum (1,896,820 shares) at the meeting, either in person
or by proxy, the meeting may be adjourned from time to time for not more than 29
days, without notice, other than announcement at the meeting, until a quorum
shall be formed.
1
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth, as of February 27, 1998, certain information with
respect to the shares of Common Stock beneficially owned by (i) each person
known by the Company to own beneficially five percent or more of the Common
Stock, (ii) each director and director nominee of the Company, (iii) each of the
executive officers of the Company named below under "Election of
Directors-Compensation of Executive Officers," and (iv) all directors, director
nominees and executive officers of the Company as a group.
<TABLE>
<CAPTION>
==================================================================================================================
NAME AND BUSINESS ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
William W. Botts
President, Chairman of the Board, Chief Executive Officer 364,535 (1) 9.3%
P.O. Box 9010
College Station, TX 77842-9010
- ------------------------------------------------------------------------------------------------------------------
Heartland Advisors
790 North Milwaukee 403,500 (2) 10.4%
Milwaukee, WI 53202
- ------------------------------------------------------------------------------------------------------------------
Dimensional Fund Advisors, Inc. 243,900 (3) 6.29%
1299 Ocean Avenue
Santa Monica, CA 90401
- ------------------------------------------------------------------------------------------------------------------
Jack S. Anderson, Director 20,564 (4) *
- ------------------------------------------------------------------------------------------------------------------
J. Lester Heath, Director 7,564 (4) *
- ------------------------------------------------------------------------------------------------------------------
Edwin B. King, Director 15,564 (5) *
- ------------------------------------------------------------------------------------------------------------------
Craig R. Whited, Director 91,164 (6) 2.4%
- ------------------------------------------------------------------------------------------------------------------
Gary D. Sides, Vice President 13,001 (7) *
- ------------------------------------------------------------------------------------------------------------------
Mark G. Whiteman, Vice President -- --
- ------------------------------------------------------------------------------------------------------------------
Directors and executive officers as a group (8 persons) 532,926 (8) 13.39%
==================================================================================================================
</TABLE>
- ---------------------
* Beneficial ownership of less than 1% of the class is omitted.
(1) Includes 131,668 shares subject to presently exercisable options.
(2) As of January 31, 1998, Heartland Advisors, Inc. has sole voting
and dispositive power as to all 403,500 shares, which are beneficially
owned. All shares are held in investment advisory accounts of Heartland
Advisors, Inc. Included is the interest of one account, the Heartland Small
Cap Contrarian Fund, a series of Heartland Group, Inc., a registered
investment company, which relate to more than 5% of the class.
(3) As of December 31, 1997, Dimensional Fund Advisors, Inc. ("Dimensional"), a
registered investment advisor, is deemed to have beneficial ownership of
243,900 shares of Common Stock, all of which shares are held in portfolios
of DFA Investment Dimensions Group Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
(4) Includes 5,000 shares subject to presently exercisable options.
(5) Includes 3,000 shares subject to presently exercisable options.
(6) Includes 2,000 shares subject to presently exercisable options.
(7) Includes 13,001 shares subject to presently exercisable options. Dr.
Sides resigned from his position as Vice President of the Company effective
March 31, 1998.
(8) Includes 172,503 shares subject to presently exercisable options.
2
<PAGE> 5
ELECTION OF DIRECTORS
PROPOSAL 1: THE BOARD OF DIRECTORS HAS NOMINATED AND URGES YOU TO VOTE FOR THE
FIVE NOMINEES LISTED BELOW. PROXIES SOLICITED HEREBY WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES. THE AFFIRMATIVE VOTE OF THE
HOLDERS OF A PLURALITY OF THE SHARES OF COMMON STOCK PRESENT IN PERSON OR BY
PROXY AT THE MEETING AND ENTITLED TO VOTE IS REQUIRED FOR APPROVAL OF THIS
PROPOSAL.
At the meeting, five (5) directors are to be elected to serve for the ensuing
year and until their respective successors are elected and qualified, in
accordance with the provisions of the bylaws. The shareholders are being asked
to vote for the election of Messrs. Anderson, Botts, Heath, King, and Whited.
Unless otherwise marked, the shares represented by the enclosed proxy will be
voted "FOR" the election as directors of the five (5) nominees named above. The
proxy cannot be voted for a greater number of persons than the number of
nominees named. If any nominee becomes unavailable for any reason, or if a
vacancy should occur before the election (which events are not anticipated), the
shares represented by the enclosed proxy may be voted for such person as may be
determined by the holders of such proxy.
NOMINEES FOR BOARD OF DIRECTORS
The nominees to serve as directors of the Company until the next annual meeting
of shareholders and until their successors are elected and qualified, and
certain information with respect to the business experience of each nominee
during the last five years, is set forth below.
WILLIAM W. BOTTS. MR. BOTTS, age 55, has served on the Board of
Directors since 1986. Mr. Botts was Executive Vice-President and Chief Operating
Officer of The Brandt Company, a privately owned oil field service company
headquartered in Houston, Texas until it was sold to TRW, Inc. in August 1982.
At the time of such sale, he was named Vice-President and General Manager of the
Brandt Division of TRW Inc. Mr. Botts served in that position until he was
elected President and Chief Operating Officer of the Company on February 1,
1985. Mr. Botts was subsequently elected Chief Executive Officer of the Company
on July 19, 1985, and Chairman of the Board of Directors of the Company on May
26, 1986.
JACK S. ANDERSON. Mr. Anderson, age 72, has served on the Board of
Directors since 1980. Mr. Anderson was Senior Vice President of NL Petroleum
Services in Houston, Texas from June 1969 to September 1980. He was Executive
Vice President and Director of GEO International, Houston, Texas from October
1980 to October 1983, and from October 1983 until the present, he has served as
President of Jasada Corporation, an investment firm located in Houston, Texas.
Mr. Anderson has served since November 1983 as President of Anlo Energy, Inc., a
mining company. Mr. Anderson serves as a director of Califone International
located in Los Angeles, California, Shoreline, Inc. located in Taft, Texas, FMI,
Inc. located in Houston, Texas, and executive officer and director of Virosafe,
Inc. located in Houston, Texas, all of which are privately owned companies.
J. LESTER HEATH. Mr. Heath, age 76, has served on the Board of
Directors since 1985. Mr. Heath was President of the Vector Cable Company,
Sugarland, Texas from 1972 until his retirement in 1981. Vector Cable Company, a
manufacturer of cable, is a wholly-owned subsidiary of Schlumberger, Inc., a
diversified oil field service company. From 1983 to 1988, Mr. Heath served as
President of National Line Products, Inc., of Houston, Texas, an industrial
products distributor. He currently serves as Secretary of Lester Heath
Consultants, Inc., and as a Director of Virosafe, Inc., Houston, Texas.
EDWIN B. KING. Mr. King, age 70, has served on the Board of Directors
since February 1995. Mr. King was President of Gulf Chemical & Metallurgical
Co., of Texas City, Texas, a chemical and metallurgical processing company from
1969 to 1984. From 1984 to 1996, Mr. King held the position of President and
CEO, director, and majority owner of Asoma Instruments, Inc. of Austin, Texas,
an analytical instrument manufacturer. Mr. King resigned as President of Asoma
Instruments, Inc. in mid-1996, but remains CEO, director and majority owner.
From 1984 to 1997, Mr. King held the position of President, co-owner, and
director of Jumbo Mining Company, a mining company whose principal operations
are located in Winnemucca, Nevada and Delta, Utah. He
3
<PAGE> 6
also served as director and President of Asoma (Utah) Inc. from 1982 to 1997 and
WTC Engineering Inc. of Bozeman, Montana and director and Vice President of
Asoma Tower, Inc. He was elected as a director of the Company on February 13,
1995. On November 10, 1997, Jumbo Mining Company and Asoma (Utah) Inc. filed for
protection under Chapter 7 of the U.S. Bankruptcy Code. Mr. King was a majority
stockholder and executive officer of each corporation, as well as one of the
principal creditors of each corporation.
CRAIG R. WHITED. Mr. Whited, age 51, was elected to the Board of
Directors of the Company in May 1996 and has served since that time. From 1975
to the present, Mr. Whited has held numerous financial and consulting positions.
From 1975 to 1979, he was a CPA, management consultant, and supervisor for the
auditing firm of Deloitte, Haskins & Sells CPAs, Los Angeles, California. From
1979 to 1986, he served as Vice President of Finance for Penberthy Lumber
Company, a major hardwood lumber products manufacturer and importer, Los
Angeles, California. From 1986 to 1988, he served as President and Chief
Financial Officer of Connor Forest Industries, Inc., a major domestic hardwood
lumber products grower and manufacturer, with offices in California, Michigan
and Texas. From 1987 to 1988, he served as Senior Vice President and Chief
Financial Officer of Bridgewater Resources Corporation, the domestic holding
company of a European conglomerate engaged in the manufacture of lumber
products, electronics, and real estate development, with offices in California,
Michigan, New York, and Texas. From 1988 to the present, Mr. Whited has served
as President, Chief Executive Officer, and director of The Oxford Group, Inc., a
management and financial consulting firm, with offices in both Los Angeles,
California and Las Vegas, Nevada.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, no executive officer of the Company served as (i) a member
of the compensation committee (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire board of
directors) of another entity, one of whose executive officers served on the
Board of Directors of the Company, or (ii) a director of another entity, one of
whose executive officers served on the Board of Directors of the Company or its
subsidiaries.
During fiscal 1997, no member of the compensation committee (or board committee
performing equivalent functions (i) was an officer or employee of the Company,
(ii) was formerly an officer of the Company of (iii) had any business
relationship or conducted any transactions with the Company.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Directors are elected at each annual meeting of shareholders and serve until a
successor shall be elected and qualified at an appropriate annual meeting of the
shareholders. Vacancies may be filled by a majority of the remaining directors.
The Company's Board of Directors met five times during 1997. The Board of
Directors has a standing Stock Option and Compensation Committee and Finance and
Audit Committee. The Company does not have a Nominating Committee. During 1997,
the Stock Option and Compensation Committee met once, and the Finance and Audit
Committee met twice. Each member of the Board of Directors attended all the
meetings of the Board of Directors and the committees of which such person was a
member during 1997.
STOCK OPTION AND COMPENSATION COMMITTEE. The Stock Option and Compensation
Committee (the "Compensation Committee") consists of Messrs. Anderson, Heath,
King, and Whited. Functions of this committee are to approve and recommend to
the Board of Directors the approval of remuneration arrangements of directors
and senior management personnel, adopting, subject to Board approval,
compensation plans for officers and directors and administering and granting
benefits pursuant to such plans.
FINANCE AND AUDIT COMMITTEE. The Finance and Audit Committee consists of Messrs.
Anderson, Heath, King, and Whited. The function of this committee is to (A)
investigate and study matters relating to the operations and finances of the
Company, (B) meet periodically with the Company's management and its independent
public accountants to review (i) their reports relating to their examination of
the financial statements and of the internal accounting control systems of the
Company, (ii) their recommendations for strengthening internal controls and
4
<PAGE> 7
improving operating procedures and (iii) compliance by Company personnel with
Company policies relating to various governmental laws and regulations dealing
with ethics, conflicts of interest and disbursements of corporate funds, and (C)
to give advice and make recommendations with respect to such matters.
COMPENSATION OF DIRECTORS
Effective January 1, 1997, directors compensation was payable at each director's
discretion in either cash, Company Common Stock, or any combination of both,
amounting to $2,000 per meeting. With the exception of a Board meeting held in
February 1997, in which each director was compensated with 564 shares of the
Company's common stock, all non-employee directors received a fee of $2,000 for
each regular Board of Directors meeting attended and $500 for each committee
meeting and special Board of Directors meeting attended. Directors who are also
officers or employees of the Company receive no additional compensation for
attendance at such Board or committee meetings. For the fiscal year ended
December 31, 1997, directors fees paid were: Mr. Anderson, $9,000; Mr. Botts,
$0; Mr. Heath, $9,000; Mr. King, $9,000; and Mr. Whited, $9,000.
Pursuant to the Company's 1993 Incentive Compensation Plan (the "1993 Plan"),
each non-employee director shall be granted annually a stock option for 1,000
shares at an exercise price determined by the fair market value of a share of
Common Stock on the day of grant, which shall be the day of Company's Annual
Meeting of Shareholders. The options (i) vest six months from the date of grant,
(ii) are exercisable to the extent vested for a period of (a) three months
following termination of service as a director for reasons other than
retirement, disability, death or cause and (b) generally, twelve months
following termination of service as a director for retirement, disability or
death; (iii) have a term of ten years and; (iv) are exercisable in full
following a "Change in Control" event (as defined in the 1993 Plan).
On May 12, 1997, the day of the 1997 Annual Shareholders Meeting, each
non-employee director was granted options to purchase 1,000 shares of the
Company's common stock under the 1993 Plan as described above.
5
<PAGE> 8
COMPENSATION OF EXECUTIVE OFFICERS
The following table lists, for the year ended December 31, 1997, cash
compensation paid by the Company to each of the most highly compensated
executive officers whose cash compensation exceeded $100,000 during 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
SECURITIES
UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) (#)(1) ($)(2)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William W. Botts 1997 $ 138,308 $ -0- 10,000 $ 30,749
President/Chief 1996 $ 123,250 $ -0- 10,000 $ 19,462
Executive Officer 1995 $ 134,962 $ -0- 50,000 $ 19,833
- ---------------------------------------------------------------------------------------------------------------
Dr. Gary D. Sides (3) 1997 $ 99,786 $ 36,116(4) 5,000 $ 4,410
Vice President 1996 $ 94,423 $ 27,231(5) 5,000 $ 1,935
1995 $ 94,423 $ 12,231(6) 5,000 $ 1,944
- ---------------------------------------------------------------------------------------------------------------
Mark G. Whiteman 1997 $ 85,885(7) $ -0- 52,000 $ 29,936
Vice President
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------
(1) No SARs were granted to the named executives.
(2) The amounts in this column represent contributions to the 401K Plan. Also
included in this column is a life insurance premium in the amount of
$15,000 per year for Mr. Botts and relocation costs of $29,401 reimbursed
to Mr. Whiteman.
o At the end of each fiscal year, the Company makes a discretionary
contribution to its 401(k) Plan. Contributions for Mr. Botts in 1997,
1996 and 1995 were $5,759, $4,463, and $4,833, respectively.
Contributions for Dr. Sides in 1997, 1996 and 1995 were $4,440, $1,936,
and $1,944, respectively.
(3) Dr. Sides resigned from his position as Vice President of the Company
effective March 31, 1998.
(4) This amount includes $6,116 relating to the annual bonus referred to
in Note 5 and a $30,000 performance bonus for 1997.
(5) This amount includes the annual bonus referred to in Note 5 and a $15,000
performance bonus for 1996.
(6) This amount reflects an annual bonus paid quarterly to Dr. Sides in the
amount of $3,057 per quarter under an agreement with CMS Research
Corporation, so long as Dr. Sides remains an employee. The final payment
under such agreement was made on June 30, 1997.
(7) Mr. Whiteman's compensation reflects approximately nine months of
employment.
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<PAGE> 9
The following table sets forth certain information with respect to stock options
granted to the indicated persons between January 1, 1997 and December 31, 1997.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
================================================================================================================
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/ POTENTIAL
UNDERLYING SARS REALIZABLE VALUE AT
OPTIONS/ GRANTED TO EXERCISE ASSUMED ANNUAL
SARS EMPLOYEES OR BASE RATES OF STOCK
GRANTED IN FISCAL PRICE EXPIRATION PRICE APPRECIATION
NAME (#) YEAR ($/SH) DATE FOR OPTION TERM (4)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5% ($) 10% ($)
- ---------------------------------------------------------------------------------------------------------------
William W. Botts 10,000(1) 11.0% $4.25 Dec. 22, 2007 $ 26,728 $ 67,734
- ---------------------------------------------------------------------------------------------------------------
Gary D. Sides (2) 5,000(1) 5.5% $4.25 Dec. 22, 2007 $ 13,364 $ 33,867
- ---------------------------------------------------------------------------------------------------------------
Mark G. Whiteman 40,000(3) 45.0% $3.50 Mar. 5, 2007 $ 88,045 $ 223,124
12,000(1) 13.0% $4.25 Dec. 22, 2007 $ 32,074 $ 81,281
================================================================================================================
</TABLE>
- -----------------
(1) Options vest 33-1/3% annually from date of grant. No SARs were granted.
Exercisability may be accelerated upon the occurrence of a "Change in
Control Event" (as defined in the Company's 1993 Incentive Compensation
Plan).
(2) Dr. Sides resigned from his position as Vice President of the Company
effective March 31, 1998.
(3) Options vest 25% annually beginning June 8, 1998. No SARs
were granted. Exercisability may be accelerated upon the occurrence of a
"Change in Control Event" (as defined in the Company's 1993 Incentive
Compensation Plan).
(4) The Securities and Exchange Commission requires disclosure of the
potential realizable value. The disclosure assumes the option will be held
for the full ten-year term prior to exercise. Such option may be exercised
prior to the end of such ten-year term.
The following table provides information on option exercises in fiscal 1997 by
the named executive officers and the values of such officers' unexercised
options at December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
=======================================================================================================================
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY
ON VALUE OPTIONS/SARS AT OPTIONS/SARS AT
NAME EXERCISE REALIZED DECEMBER 31, 1997 DECEMBER 31, 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
William W. Botts 20,000 $ 80,625 131,668 33,333 $103,260 $39,165
</TABLE>
7
<PAGE> 10
CERTAIN TRANSACTIONS, EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
Under the terms of an employment agreement with the Company effective May 1,
1997 and terminating December 31, 1999, Mr. Botts, a Director of the Company, is
performing executive duties as President and Chief Executive Officer of the
Company. Compensation paid pursuant to this agreement includes an annual salary
as determined by the Board of Directors (such amount is included in the Summary
Compensation Table above), a life insurance policy and an automobile allowance.
The employment agreement remains in effect until its expiration date, unless Mr.
Botts dies, becomes disabled or violates his duty of loyalty to the Company, or
following a change in control of the Company. Commencing on January 1, 1998 and
on each January 1 thereafter the term of Mr. Botts' employment agreement (the
"Term") shall automatically be extended one additional year unless, not later
than September 30 of the preceding year, the Company's Board of Directors shall
give written notice to Mr. Botts that the Term shall cease to be so extended. In
no event will the Term extend beyond the end of the calendar month in which Mr.
Botts' 65th birthday occurs. If Mr. Botts is terminated for any reason other
than Misconduct or Disability (both as defined in the employment agreement), he
will continue to be compensated for the remainder of the term of the employment
agreement and to receive coverage under the Company's life, disability, accident
and group health insurance plans. Additionally, Mr. Botts may receive the same
benefits if he terminates his employment for Good Reason (as defined in the
employment agreement).
Under the terms of an employment agreement with the Company effective March 15,
1997, Mr. Whiteman is performing duties as Vice President of the Company.
Compensation paid pursuant to this agreement includes an annual salary as
determined by the Board of Directors (such amount is included in the Summary
Compensation Table above), the use of a company vehicle and a stock option grant
of 40,000 shares. The employment agreement is terminable at the option of the
Company, provided the Company gives Mr. Whiteman ten days written notice. If Mr.
Whiteman is terminated for any reason other than Cause (as defined in the
agreement), he will continue to be compensated for six months from the date of
termination.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's directors and officers, and persons who own more
than ten percent of the Common Stock, to file initial reports of ownership and
reports of changes in ownership (Forms 3, 4, and 5) of Common Stock with the
Securities and Exchange Commission (the "SEC") and the Nasdaq Stock Market.
Officers, directors and greater than 10% shareholders are required by SEC
regulation to furnish the Company with copies of all such forms that they file.
To the Company's knowledge, based solely on the Company's review of the copies
of such reports received by the Company and on written representation by certain
reporting persons that no reports on Form 5 were required, the Company believes
that during the fiscal year ended December 31, 1997, all Section 16(a) filing
requirements applicable to its officers, directors and 10% shareholders were
complied with.
COMPENSATION COMMITTEE REPORT
COMPENSATION PHILOSOPHY
The Company's primary business objective is to maximize shareholder value over
the long term. To help accomplish this objective, the Committee has developed an
overall executive compensation philosophy with goals as follows:
o Attract, retain, and motivate key executives;
o Reward performance rather than create a sense of entitlement;
o Align executive and shareholder interests by stock ownership;
o Assure that objectives for corporate and individual performance
are established and measured.
8
<PAGE> 11
For comparison of peer performance, and in order to maintain consistency in the
Company's method of determining executive compensation, the Company uses a
method for selecting comparable companies, which includes searches in various
data bases from the NASDAQ National Market System, Media General Financial
Services, and Standard Industrial Classification (SIC) Codes 382 (Laboratory and
Analytical Instruments) and 3823 (Process Control Instruments). Management
believes that SIC Code 382 contains companies that most closely represent an
established grouping of which the Company may be called a peer. The Company was
not able to obtain compensation information for all of the companies in SIC Code
382; however, certain companies within such classification (including Arizona
Instruments, CEM, Dionex, Industrial Scientific, Isco, Mesa Labs Inc., and TSI)
were compared to the Company in terms of growth in revenue, operating profit,
net income, earnings per share, average return on assets and equity and
compensation of executive management. The Committee desires to set executive
compensation to correspond to a range of what is believed to be between the
mid-to-high end of compensation ranges for executives in such companies, with
further consideration based on the Company's performance compared to such
companies. It should be noted, however, that the CEO and other executive
officers are at risk for compensation through both bonuses and stock option
appreciation, as reflected in the 1996 and 1997 compensation.
BASE SALARIES
The Committee reviews annually each executive's base salary. Base salaries are
targeted at median levels for public companies of O.I. Corporation's relative
size, as discussed above, but are determined primarily by individual performance
relative to achieving Company goals. It is believed that base salaries paid in
1997 to the named executive and the CEO were consistent with such policy.
When evaluating individual performance, the Committee considers the executive's
efforts in promoting Company values; contribution to the Company's financial
performance; developing and executing a strategic plan for growth in revenues
and net income; improving product quality; specific job responsibilities, prior
experience, job knowledge, and written performance appraisals for each
executive. No specific weights have been assigned to the various factors.
The base salary of Mr. William W. Botts (Chairman of the Board, CEO, and
President of the Company) and other executives of the Company were reviewed at
the December 1997 meeting of the Compensation Committee. In view of the Company
meeting certain predetermined financial goals relating to growth in sales, net
income, and earnings per share for the 1997 fiscal year, CEO compensation of
peer company and Mr. Botts' base salary having remained the same since December
1991, the Compensation Committee raised Mr. Botts' base salary to $150,000 per
year. Prior to December 1997, the Compensation Committee had, in a meeting on
July 14, 1997, agreed to restore Mr. Botts' base salary, effective March 24,
1997 to $145,000 per year, the level at which it existed prior to his
voluntarily reducing it to $125,000 per year as part of a cost containment
strategy implemented on July 3, 1995. Dr. Sides, President of the CMS business
unit of the Company, received a base salary increase based on performance during
1997 from $100,000 to $110,000 to become effective the first pay period of 1998.
Dr. Sides subsequently resigned from his position as Vice President of the
Company effective March 31, 1998. Mr. Whiteman, Vice President of the Company,
received a base salary increase based on performance during 1997 from $110,000
to $115,000 to become effective the first pay period of 1998.
ANNUAL CASH INCENTIVES
Annual cash bonuses provide executives with direct financial incentives to
achieve corporate and individual performance goals. Bonuses for each executive
are determined by the extent to which the Company met its financial goals for
growth in revenue, operating profit, net income, earnings per share, and average
return on assets and equity. Performance is also judged on the achievement of
business plan goals relating to improving product quality and productivity and
growth through new product development and acquisitions. No specific weights
have been assigned to the various factors.
During 1997, most markets served by the Company remained soft, and substantial
consolidation occurred among the buyers to whom the Company sells its products;
therefore, management performance was evaluated on an officer's ability to
change strategy and cope with these market conditions, including his or her
ability to hold
9
<PAGE> 12
market share, contain cost, seek new business opportunities, and
maintain customer satisfaction, as well as develop new products and acquire
additional products or businesses.
During 1997, the Company achieved sales growth; however, even though profitable,
it did not achieve consolidated operating profit goals for 1997. As shown in the
Summary Compensation Table on page 6 of this Proxy Statement, Mr. Botts did not
receive a bonus. Dr. Sides received a bonus in accordance with an agreement with
CMS, which was entered prior to the merger of CMS and the Company. Such
agreement provided that Dr. Sides receive a bonus of $3,057 per quarter with the
final payment made in June 1997. Additionally, Dr. Sides received a performance
bonus of $30,000 for managing and directing the CMS business unit and its
achievement of certain business objectives and goals for 1997.
LONG-TERM INCENTIVES (STOCK OPTIONS)
Long-term incentives are provided pursuant to the 1993 Plan. The Committee
determines annually the total amount of options that will be made available to
the Company's executives. The amount of options granted each year are based on
the executive's total compensation package and reflect the desire of the
Compensation Committee to encourage equity ownership by the Company's executives
in order to provide an appropriate link to the interest of the shareholders, to
reward prior performance, and to provide long-term incentive award
opportunities.
The stock option grants for 1997 were determined based on the performance of
each executive with respect to their contribution to the Company's financial
performance, measured as discussed above, together with an appraisal of the
extent to which pre-established objectives were achieved, as well as the
Committee's perception of the executive's ability and potential to contribute to
the growth and profitability of the Company, to identify changing business
conditions (such as market changes and competitive threats), and to respond with
appropriate business strategies. No specific weights have been assigned to the
foregoing factors. In 1997, grants covering 10,000 shares were made to Mr.
Botts, 5,000 to Dr. Sides, and 52,000 to Mr. Whiteman as reflected in the
Summary Compensation Table on page 6 of this proxy statement, and a total of
22,700 shares to other employees. This decision was based on both the Company's
achievement of certain business plan goals for the 1997 fiscal year as well as
the Committee's desire to ensure Mr. Botts', Dr. Sides', and Mr. Whiteman's
long-term perspective for Company stock price performance.
SUMMARY
The Committee believes that the incentive compensation program for the
executives of the Company is comparable to the compensation programs provided by
comparable companies and serves the best interest of the shareholders of the
Company. The Committee also believes that annual performance pay is
appropriately linked to individual performance, the Company's annual financial
performance, and shareholder value. The Company intends to continue its program
for setting executive compensation as outlined above.
The report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended (the
"Securities Act"), or under the Exchange Act, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such acts.
The foregoing report is given by the following members of the Compensation
Committee:
Jack S. Anderson
J. Lester Heath
Edwin B. King
Craig R. Whited
10
<PAGE> 13
FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG O.I. CORPORATION, NASDAQ MARKET INDEX,
AND PEER GROUP INDEX
Set forth below is a line graph comparing the yearly percentage change in the
cumulative total shareholder return (change in year-end stock price plus
reinvested dividends) on the Company's Common Stock against the cumulative total
return of the NASDAQ Market Index and a peer group index consisting of public
companies with the Company's Standard Industrial Classification ("SIC") Code
(Laboratory and Analytical Instruments) for the period of five years beginning
at the beginning of fiscal year 1993. The SIC Code for Laboratory and Analytical
Instruments includes over ninety (90) issuers, such as Arizona Instrument, CEM,
Dionex, Isco, Industrial Scientific Corp., Mesa Labs, and TSI.
<TABLE>
<CAPTION>
===========================================================================================
COMPANY 1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
O.I. CORPORATION 100 84 63 48 58 71
- -------------------------------------------------------------------------------------------
SIC CODE 382 100 115 119 176 209 239
- -------------------------------------------------------------------------------------------
NASDAQ MARKET INDEX 100 120 126 163 203 248
===========================================================================================
</TABLE>
The foregoing stock price performance comparisons shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act or under the
Exchange Act, except to the extent that the Company specifically incorporates
this graph by reference, and shall not otherwise be deemed filed under such
acts.
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted in the graph above. The
Company will not make or endorse any predictions as to future stock performance.
11
<PAGE> 14
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
PROPOSAL 2: THE BOARD OF DIRECTORS HAS UNANIMOUSLY SELECTED PRICE WATERHOUSE AND
URGES YOU TO VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF SUCH FIRM, AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE YEAR 1998. PROXIES
SOLICITED HEREBY WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY OTHERWISE IN THEIR
PROXIES. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE COMMON STOCK
PRESENT IN PERSON OR BY PROXY AT THE MEETING AND ENTITLED TO VOTE IS REQUIRED
FOR APPROVAL OF THIS PROPOSAL.
The Board of Directors has appointed the firm of Price Waterhouse LLP as the
Company's independent public accountants for the fiscal year ending December 31,
1998, subject to ratification by the Company's shareholders. Price Waterhouse
has served as the Company's independent public accountants since May, 1992.
Representatives of Price Waterhouse are expected to be present at the Annual
Meeting of Shareholders and will have an opportunity to make a statement, if
they desire to do so, and to respond to appropriate questions from those
attending the meeting.
SHAREHOLDER PROPOSALS
No shareholder proposals were received for inclusion in this Proxy Statement.
The Company has also adopted Bylaw provisions that require the nominations of
persons for election to the Board of Directors and the proposal of business by
shareholders at an annual meeting of shareholders must fulfill certain
requirements which include the requirement that notice of such nominations or
proposals must be delivered to the Secretary of the Company not less than 60
days nor more than 90 days prior to the anniversary of the prior annual meeting.
In order to be timely for next year's annual meeting such notice must be
delivered between February 10, 1999 and March 12, 1999.
OTHER MATTERS
Management knows of no other matters to be brought before the annual meeting of
shareholders at the time and place indicated in the notice thereof; however, if
any additional matters are properly brought before the meeting, the persons
named in the enclosed proxy shall vote the proxies in their discretion in the
manner they believe to be in the best interest of the Company.
The accompanying form of proxy has been prepared at the direction of the Board
of Directors of the Company, of which you are a shareholder, and is sent to you
at the request of the Board of Directors. The proxies named therein have been
designated by your Board of Directors.
The Management of the Company urges you, even if you presently plan to attend
the meeting in person, to execute the enclosed proxy and mail it immediately.
You may revoke your proxy and vote in person if you are able to attend.
O.I. CORPORATION
By Order of the Board of Directors
Jane A. Smith
Vice President-Corporate Secretary
April 9, 1998
12
<PAGE> 15
PROXY O.I. CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) William W. Botts and Jane A. Smith,
and each of them, lawful attorneys and proxies of the undersigned to vote as
Proxy at the Annual Shareholders' Meeting of O.I. Corporation (herein the
"Company") to be held on Monday, May 11, 1998, and any adjournment(s) thereof
according to the number of votes owned by the undersigned as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. If no direction is made, this proxy will be voted
for Proposals 1 and 2. Any prior proxy is hereby revoked.
<TABLE>
<S> <C> <C> <C>
PROPOSAL 1: The Election of Directors.
|_| FOR all nominees (except as marked to the contrary below)
|_| WITHHOLD AUTHORITY to vote for all nominees
Jack S. Anderson J. Lester Heath Craig R. Whited
William W. Botts Edwin B. King
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
PROPOSAL 2: The Ratification of the Appointment of |_| |_| |_|
Independent Public Accountants.
</TABLE>
In accordance with their discretion, said Attorneys and Proxies are authorized
to vote upon such other matters or proposals not known at the time of
solicitation of this proxy which may properly come before the meeting.
DATE
------------------------------------
SIGNATURE(S)
-----------------------------
-----------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS
HEREON. WHEN SHARES ARE HELD BY JOINT TENANTS,
BOTH SHOULD SIGN. WHEN SIGNING AS 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 PERSON.
IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP
NAME BY AUTHORIZED PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. THANK YOU.
