<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
[ ] 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
O.I. CORPORATION
-----------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Bowne of Houston
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(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] 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 (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:
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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 10, 2000
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 Wednesday, May 10, 2000 at 2:00 p.m. at the Houston
Airport Marriott, 18700 Kennedy Blvd., 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 13, 2000, will be entitled to notice of and to
vote at the meeting.
After completing the business of the meeting, we will discuss fiscal year 1999
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 10, 2000
<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 10, 2000. It is first
being mailed to shareholders on or about April 10, 2000. 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 (979) 690-1711, and its fax number is (979) 690-0440.
VOTING SECURITIES OUTSTANDING
As of March 13, 2000, there were 3,003,846 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 13, 2000, 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 (1,501,924 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.
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<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth, as of March 13, 2000, 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 373,734 (1) 11.91%
President, Chairman of the Board, Chief Executive Officer
P.O. Box 9010
College Station, TX 77842-9010
Heartland Advisors, Inc. 326,500 (2) 10.4%
789 North Water Street
Milwaukee, WI 53202
Dimensional Fund Advisors, Inc. 262,200 (3) 8.33%
1299 Ocean Avenue
Santa Monica, CA 90401
Jack S. Anderson, Director 24,564 (4) *
Edwin B. King, Director 17,564 (5) *
Craig R. Whited, Director 94,664 (6) 3.1%
Mark G. Whiteman, Vice President 40,000 (7) 1.3%
Directors and executive officers as a group (7 persons) 576,359 (8) 17.95%
===========================================================================================================
</TABLE>
- ----------
* Beneficial ownership of less than 1% of the class is omitted.
(1) Includes 131,667 shares subject to presently exercisable options.
(2) As of January 27, 2000, Heartland Advisors, Inc. has sole dispositive
power as to all 326,500 shares, which are beneficially owned. All
shares are held in investment advisory accounts of Heartland Advisors,
Inc. As a result, various persons have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from
the sale of, the securities. The interests of one such account,
Heartland Value Fund, a series of Heartland Group, Inc., a registered
investment company, relates to more than 5% of the class.
(3) As of February 4, 2000, Dimensional Fund Advisors, Inc.
("Dimensional"), a registered investment advisor, is deemed to have
beneficial ownership of 262,200 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 Participating 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 7,000 shares subject to presently exercisable options.
(5) Includes 5,000 shares subject to presently exercisable options.
(6) Includes 4,000 shares subject to presently exercisable options.
(7) Presently exercisable options.
(8) Includes 205,500 shares subject to presently exercisable options.
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<PAGE> 5
ELECTION OF DIRECTORS
PROPOSAL 1: THE BOARD OF DIRECTORS HAS NOMINATED AND URGES YOU TO VOTE FOR THE
FOUR 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, four (4) 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, King, and Whited. Unless
otherwise marked, the shares represented by the enclosed proxy will be voted
"FOR" the election as directors of the four (4) 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 (57). Mr. Botts has served as President of the Company since
February 1, 1985, Chief Executive Officer of the Company since July 19, 1985,
and Chairman of the Board of Directors of the Company since May 26, 1986.
JACK S. ANDERSON (74). Mr. Anderson has served on the Board of Directors since
1980. From October 1983 until the present, he has served as President of Jasada
Corporation, an investment firm located in Houston, Texas. Mr. Anderson serves
as a director of Shoreline, Inc. located in Taft, Texas, and as Chief Executive
Officer of FMI, Inc. located in Houston, Texas, each of which are privately
owned companies.
EDWIN B. KING (72). Mr. King has served on the Board of Directors since February
1995. From 1984 to present, Mr. King has served as Vice President and Director
of Scientific Management, Inc., which has been engaged in management consulting
and personnel testing and evaluation. From September 1999 to the present, Mr.
King has served as an officer and director of PayMate.net Corporation, an
Internet-based point of sale system. From June 1999 to the present, he has
served as an officer and director of Analytical Magnetic Instruments, Inc., a
magnetic instruments manufacturer. From January 2000 to the present, he has
served as an officer and director of SafeFood Technologies, Inc., a research and
development firm for sterilization equipment and processes. 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, and
remained CEO, director and majority owner until he sold the company in 1998.
From 1984 to 1997, Mr. King held the position of President, co-owner, and
director of Jumbo Mining Company, a gold mining company whose principal
operations are located in Winnemucca, Nevada and Delta, Utah. He 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. 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 (53). Mr. Whited has served on the Board of Directors of the
Company since May 1996. 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.
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<PAGE> 6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, 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 1999, 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 or (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 an affirmative vote of the majority of
the remaining directors. The Company's Board of Directors met six times during
1999. 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 1999, 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 1999.
STOCK OPTION AND COMPENSATION COMMITTEE. The Stock Option and Compensation
Committee (the "Compensation Committee") consists of Messrs. Anderson, 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, 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
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
During 1999, 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, 1999,
directors fees paid were: Mr. Anderson, $13,500; Mr. Botts, $0; Mr. King,
$13,500; and Mr. Whited, $13,500. In addition, Mr. Anderson and Mr. King
received consulting fees of $4,000 and $8,250, respectively for assistance
provided to the Company in conducting due diligence and evaluating a potential
acquisition being considered by the Company. After evaluation, the Company
decided it would not pursue such potential acquisition.
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 until (a) three months following
termination of service as a director for reasons other than retirement,
disability, death
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<PAGE> 7
or cause or (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 10, 1999, the day of the 1999 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.
COMPENSATION OF EXECUTIVE OFFICERS
The following table lists, for the year ended December 31, 1999, cash
compensation paid by the Company to each of the most highly compensated
executive officers whose cash compensation exceeded $100,000 during 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
============================================================================================
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
--------------------------- -------------
SECURITIES
UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) (#)(1) ($)(2)
- --------------------- ---- ---------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C>
William W. Botts 1999 $ 159,767 $ -0- 30,000 $ 19,901
President/Chief 1998 $ 155,385 $ 50,000 30,000 $ 22,651
Executive Officer 1997 $ 138,308 $ -0- 10,000 $ 20,759
Mark G. Whiteman 1999 $ 120,355 $ -0- 4,000 $ 4,357
Vice President 1998 $ 119,039 $ 28,750 8,000 $ 3,049
1997 $ 85,885(3) $ -0- 52,000 $ 29,936
============================================================================================
</TABLE>
- ----------
(1) No SARs were granted to the named executives.
(2) The amounts in this column represent contributions to the 401K Plan. At the
end of each fiscal year, the Company makes a discretionary contribution to
its 401(k) Plan. Contributions for Mr. Botts in 1999, 1998, and 1997 were
$4,532, $7,651, and $5,759, respectively. Contributions for Mr. Whiteman in
1999 and 1998 were $4,174 and $3,049, respectively. 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 $29,401 reimbursed to Mr. Whiteman in
1997.
(3) Mr. Whiteman's compensation reflects approximately nine months of
employment.
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The following table sets forth certain information with respect to stock options
granted to the indicated persons between January 1, 1999 and December 31, 1999.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
===========================================================================================================================
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
- ----------------------------------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARs PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM (2)
OPTIONS/SARS EMPLOYEES IN BASE PRICE -------------------------------
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) EXPIRATION DATE 5%($) 10%($)
- -------------------- -------------- -------------- ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
William W. Botts 30,000(1) 42% $ 5.625 Jan. 25, 2009 $ 106,126 $ 268,944
Mark G. Whiteman 8,000(2) 11% $ 5.625 Jan. 25, 2009 $ 28,300 $ 71,718
===========================================================================================================================
</TABLE>
- ----------
(1) Options vest 25% 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) 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 1999 by
the named executive officers and the values of such officers' unexercised
options at December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
======================================================================================================================
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARs AT OPTIONS/SARs AT
ACQUIRED DECEMBER 31, 1999 DECEMBER 31, 1999
ON VALUE ----------------------------- --------------------------------
NAME EXERCISE REALIZED Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William W. Botts 15,000 $ 9,375 131,667 33,333 $ 82,113 $ -0-
======================================================================================================================
</TABLE>
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,
1999 and terminating December 31, 2001, Mr. Botts 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 the use of a company vehicle. 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, 2000 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
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<PAGE> 9
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/General Manager 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), and the use of a company vehicle. 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.
In addition to the above, Mr. Botts and Mr. Whiteman have entered agreements
with the Company relating to a split dollar life insurance policy owned by the
Company and on which the Company is entitled to full repayment of any premiums
paid at the time of their termination or death.
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, 1999, its officers and directors
were in compliance with all applicable Section 16(a) filing requirements.
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.
For comparison of peer company 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 (AZIC), CEM (CEMX), Barringer (BARR), Isco (ISKO), Mesa Labs Inc.
(MLAB), Modern Controls (MOCO), and TSI, Inc. (TSII)] 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-
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<PAGE> 10
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 1998 and 1999 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
1999 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 performance appraisals for each executive. No
specific weights have been assigned to the various factors.
During 1999, 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 market share, contain cost, seek new business opportunities, and
maintain customer satisfaction, as well as develop new products and acquire
additional products or businesses.
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 January 31, 2000 meeting of the Compensation Committee. In view of the
Company not meeting certain predetermined financial goals relating to growth in
sales, net income, and earnings per share for the 1999 fiscal year, the
Compensation Committee decided there would be no increase in Mr. Botts' base
salary of $165,000 per year, which was set by the Compensation Committee on
January 25, 1999.
Mr. Whiteman, Vice President/General Manager of the Company, received no base
salary increase because of the Company not meeting certain predetermined
financial goals relating to growth in sales, net income, and earnings per share
for the 1999 fiscal year. Therefore, the Compensation Committee decided that Mr.
Whiteman's salary would continue at $125,000, which was set by the Compensation
Committee on January 25, 1999.
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 1999, the Company achieved sales growth; however, even though profitable,
it did not achieve consolidated operating profit goals for 1999. As shown in the
Summary Compensation Table on page 5 of this Proxy Statement, Mr. Botts and Mr.
Whiteman did not receive a bonus.
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.
8
<PAGE> 11
The stock option grants for 1999 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.
As compensation for performance in 1999, grants covering 30,000 shares were made
to Mr. Botts and 4,000 to Mr. Whiteman as reflected in the Summary Compensation
Table on page 5 of this proxy statement. This decision was based on the
Committee's desire to ensure Mr. Botts' and Mr. Whiteman's long-term perspective
for Company stock price performance. A total of 25,400 shares were granted to
other employees.
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
Edwin B. King
Craig R. Whited
9
<PAGE> 12
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 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 1994. The SIC Code for Laboratory and Analytical
Instruments includes over ninety (90) issuers, such as Arizona Instruments,
Barringer Technologies, Bioanalytical, CEM, Isco, Mesa Labs, Modern Controls,
and TSI.
[GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
OI Corporation 100 76 92 113 144 102
SIC Code 382 100 148 176 202 192 281
NASDAQ Market Index 100 130 161 197 278 490
</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.
10
<PAGE> 13
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
PROPOSAL 2: THE BOARD OF DIRECTORS HAS UNANIMOUSLY SELECTED
PRICEWATERHOUSECOOPERS AND URGES YOU TO VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF SUCH FIRM, AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR
THE YEAR 2000. 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 PricewaterhouseCoopers LLP as
the Company's independent public accountants for the fiscal year ending December
31, 2000, subject to ratification by the Company's shareholders.
PricewaterhouseCoopers has served as the Company's independent public
accountants since May 1992. Representatives of PricewaterhouseCoopers 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's proposals were received for inclusion in this Proxy Statement.
The Company has adopted Bylaw provisions which 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 9, 2001 and March 11, 2001. If timely notice is given
but is not accompanied by a written statement to the extent required by
applicable securities laws, the Company may exercise discretionary voting
authority over proxies with respect to such proposal if presented at the
Company's 2001 annual meeting of Stockholders.
A proposal of a stockholder intended to be presented at the next annual meeting
must be received at the Company's principal executive offices no later than
January 10, 2001 if the stockholder making the proposal desires such proposal to
be considered for inclusion in the Company's proxy statement and form of proxy
relating to such meeting.
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 10, 2000
11
<PAGE> 14
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 Wednesday, May 10, 2000, 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.
PROPOSAL 1: The Election of Directors.
[ ] FOR all nominees [ ] FOR all nominees (except as listed below)
[ ] WITHHOLD AUTHORITY to vote for all nominees
Jack S. Anderson Edwin B. King
William W. Botts Craig R. Whited
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
PROPOSAL 2: The Ratification of the Appointment of [ ] [ ] [ ]
independent public accountants.
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.
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.
, 2000
-----------------------------------------
------------------------------------------------
Signature
------------------------------------------------
Signature if held jointly
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS AT THE
LEFT. 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.
