<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(c)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
OIL-DRI CORPORATION OF AMERICA
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
OIL-DRI CORPORATION OF AMERICA
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
OIL-DRI CORPORATION OF AMERICA LOGO
October 29, 1999
Dear Stockholder:
On behalf of the Board of Directors and Management, I would like to invite
you to attend Oil-Dri's Annual Meeting of Stockholders, which will be held at
10:30 a.m. on December 7, 1999, at the Standard Club, 320 South Plymouth Court,
Chicago, Illinois.
The matters expected to be acted on in the meeting are described in the
attached Proxy Statement. The slate of ten persons recommended for election as
directors includes a new nominee, Thomas D. Kuczmarski, founding partner of the
management consulting firm, Kuczmarski & Associates. His biography, and those of
other nominees, appears in the Proxy Statement.
Edgar D. Jannotta, senior director of William Blair & Co. and an Oil-Dri
director since 1969, has decided to retire from our Board. I want to extend my
sincere thanks and appreciation to Ned for his long and valued service. Ned
joined our Board as we were organizing for our initial public offering. He has
been a source of wise counsel and constant support.
In addition to the formal portion of the meeting, we will take time to
review the results of the past year and look at some of the opportunities which
lie ahead.
We hope you will be able to attend our 1999 Annual Meeting. However,
whether or not you are personally present, it is important that your shares are
represented. Accordingly, please mark, sign, date and mail your proxy card in
the enclosed envelope provided for this purpose.
Sincerely,
/S/ RICHARD M. JAFFE
RICHARD M. JAFFEE
Chairman of the Board
<PAGE> 3
OIL-DRI CORPORATION OF AMERICA
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 7, 1999
To the Stockholders of
Oil-Dri Corporation of America
Notice is hereby given that the 1999 Annual Meeting of Stockholders of
Oil-Dri Corporation of America, a Delaware corporation (the "Company") will be
held at the Standard Club, located at 320 Plymouth Court, Chicago, Illinois, on
December 7, 1999 at 10:30 a.m., local time, for the purpose of considering and
voting on:
1. The election of ten Directors;
2. An amendment to the Company's 1995 Long Term Incentive Plan to authorize
an additional 500,000 shares (consisting of Common Stock, Class A Common
Stock and/or Class B Stock) for use under the Plan.
3. Such other business as may properly come before this meeting.
The stock transfer books of the Company will remain open. The Board of
Directors has determined that only holders of record of outstanding shares of
Common Stock and Class B Stock at the close of business on October 22, 1999 are
entitled to notice of, and to vote at, the annual meeting or any adjournment
thereof. All stockholders, whether or not they now expect to be present at the
meeting, are requested to date, sign, and return the enclosed proxy, which
requires no postage if mailed in the United States.
Your attention is directed to the following pages for further information
relating to the meeting.
By Order of the Board of Directors
/s/ MICHAEL L. GOLDBERG
MICHAEL L. GOLDBERG
Secretary
Chicago, Illinois
October 29, 1999
<PAGE> 4
OIL-DRI CORPORATION OF AMERICA
410 NORTH MICHIGAN AVENUE
SUITE 400
CHICAGO, ILLINOIS 60611
------------------------
PROXY STATEMENT
------------------------
GENERAL
This Proxy Statement and the accompanying proxy are being mailed on or
about October 29, 1999, to all holders of record of outstanding shares of Common
Stock and Class B Stock at the close of business on October 22, 1999. Proxies
are being solicited on behalf of the Board of Directors for use at the 1999
Annual Meeting of Stockholders, notice of which accompanies this Proxy
Statement. Any stockholder giving a proxy has the power to revoke it at any time
prior to the exercise thereof by executing a subsequent proxy, by notifying the
Secretary of the Company of such revocation in writing (such notification to be
directed to him at the Company's offices at 410 North Michigan Avenue, Suite
400, Chicago, Illinois 60611), or by attending the annual meeting and voting in
person. IF NO CONTRARY INSTRUCTION IS INDICATED IN THE PROXY, EACH PROXY WILL BE
VOTED "FOR" THE ELECTION OF THE TEN NOMINEES NAMED BELOW TO THE BOARD OF
DIRECTORS AND "FOR" THE AMENDMENT TO THE COMPANY'S 1995 LONG-TERM INCENTIVE PLAN
(THE " '95 PLAN") TO AUTHORIZE AN ADDITIONAL 500,000 SHARES FOR USE UNDER THE
'95 PLAN. See "1. ELECTION OF DIRECTORS" and "2. AMENDMENT TO THE OIL-DRI
CORPORATION OF AMERICA 1995 LONG-TERM INCENTIVE PLAN".
The Company will pay the costs of this solicitation of proxies for the
annual meeting. In addition to using the mails, officers and certain other
regular employees of the Company may solicit proxies in person and by telephone
and facsimile. The Company may reimburse brokers and others who are record
holders of Common Stock and Class B Stock for their reasonable expenses incurred
in obtaining voting instructions from the beneficial owners of such stock.
VOTING
The record date for the determination of stockholders entitled to vote at
the meeting is October 22, 1999, at the close of business. Holders as of the
record date of outstanding shares of Common Stock and Class B Stock are entitled
to vote at the meeting. Holders of Common Stock are entitled to one vote per
share and holders of Class B Stock to ten votes per share (on a non-cumulative
basis for each director to be elected when voting for the election of directors)
and vote together without regard to class (except that any amendment to the
Company's Certificate of Incorporation changing the number of authorized shares
or adversely affecting the rights of Common Stock or Class B Stock requires the
separate approval of the class so affected as well as the approval of both
classes voting together). Holders of Class B Stock are entitled to convert any
and all of such stock into Common Stock on a share-for-share basis at any time
and are subject to mandatory conversion under certain circumstances. As of the
record date, 4,296,645 shares of Common Stock and 1,423,025 shares of Class B
Stock were outstanding.
ELECTION OF DIRECTORS
The election of directors requires a plurality of votes cast. Accordingly,
only proxies and ballots marked "FOR" all nominees listed" (including executed
proxies not marked with respect to election of directors, which will be voted
for all listed nominees), or voting for some, but not all nominees, by
specifying that votes be withheld for one or more designated nominees, are
counted to determine the total number of votes cast for the various nominees,
with the ten nominees receiving the largest number of votes being elected.
Abstentions and broker non-votes have no effect on the outcome of the election
of directors.
PROPOSED AMENDMENT TO THE '95 PLAN
An amendment to the '95 Plan is proposed to add 500,000 shares (consisting
of Common Stock, Class A Common Stock, and/or Class B Stock) for use under the
Plan (the " '95 Plan Amendment"). The '95 Plan
<PAGE> 5
was effective on August 10, 1995, and does not terminate until August 9, 2005.
An initial 500,000 shares were authorized for use under the '95 Plan in grants
and awards exercisable in Class A Common Stock if that stock is issued and
publicly traded on any securities market at the time of exercise; otherwise
grants and awards are exercisable in shares of Common Stock. At the Annual
Meeting on December 9, 1997, the stockholders voted to approve an amendment
making an additional 500,000 shares available under the '95 Plan. This amendment
also permitted Class B Stock to be used in lieu of Common Stock or Class A Stock
under the '95 Plan for grants to members of the Jaffee Family working in the
Company. Giving effect to stock options and restricted stock granted on
September 17, 1999, only 11,563 shares remain available for future grants or
awards under the '95 Plan as of that date. The Board has concluded that, over
the coming years, continued grants or awards will be needed to provide the focus
and incentive which the '95 Plan is designed to provide, and that an additional
500,000 shares should be authorized for use under the '95 Plan. Such grants or
awards would be made by the Compensation and Stock Option Committee.
Approval of the '95 Plan Amendment requires approval by a majority of the
votes of shares present in person or represented by proxy at the meeting and
entitled to vote on the '95 Plan Amendment. Proxies and ballots marked "FOR"
approval of the '95 Plan Amendment (including executed proxies not marked with
respect to the '95 Plan Amendment) will be voted in favor of the '95 Plan
Amendment approval. Abstentions and broker non-votes have no effect on the
outcome. Both outstanding classes, Common Stock and Class B Stock, vote together
as a single class. The holders of Class B Stock have indicated that they will
vote their shares for the '95 Plan Amendment, thus assuring its approval.
PRINCIPAL STOCKHOLDERS
The following table sets forth information, as of September 30, 1999,
except as noted below, regarding beneficial ownership of the Company's Common
Stock and Class B Stock by each person or group known to the Company to hold
more than five percent of either class. See "Security Ownership of Management"
for information on beneficial ownership of the Company's Common Stock and Class
B Stock by the Company's executive officers and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
------------------------------------------------------------
NUMBER OF SHARES OF PERCENTAGE OF
COMMON STOCK AND AGGREGATE VOTING
CLASS B STOCK POWER OF COMMON
OWNED PERCENTAGE OF STOCK AND CLASS B
NAME AND ADDRESS OF WITH SOLE INVESTMENT OUTSTANDING STOCK REPRESENTED BY
BENEFICIAL OWNER AND VOTING POWER STOCK OF CLASS SHARES OWNED
------------------- -------------------- -------------- --------------------
<S> <C> <C> <C> <C>
Richard M. Jaffee(10)............... Common Stock: 22,500(3)(5) .52% .12%
410 N. Michigan Ave. Class B 272,851(4) 19.17% 14.73%
Chicago, IL 60611 Stock:
Jaffee Investment Partnership, Common Stock: -- -- --
L.P.(10).......................... Class B 1,000,000(5) 70.27% 53.98%
410 N. Michigan Ave. Stock:
Chicago, IL 60611
Heartland Advisors, Inc.(2)......... Common Stock: 953,600(6) 21.98% 2.31%
790 N. Milwaukee Street Class B -- -- --
Milwaukee, WI 53202 Stock:
T. Rowe Price Assoc., Inc.(2) ...... Common Stock: 558,000(7) 12.87% 2.91%
100 East Pratt Class B -- -- --
Baltimore, MD 21202 Stock:
Tweedy Brown Co., L.P.(8)........... Common Stock: 488,900(8) 11.35% 2.61%
52 Vanderbilt Ave. Class B -- -- --
New York, NY 10017 Stock:
Dimensional Fund Advisors, Common Stock: 328,400(9) 7.57% 1.77%
Inc.(2)........................... Class B -- -- --
1299 Ocean Avenue Stock:
Santa Monica, CA 90401
</TABLE>
2
<PAGE> 6
- ---------------
(1) Beneficial ownership is defined in applicable Securities and Exchange
Commission rules as sole or shared power to vote or to direct the
disposition of a security. All beneficial ownership is with sole voting
power and sole investment power except as described in the Notes below.
(2) Information given is as of June 30, 1999.
(3) Consists of 22,500 shares of Common Stock which Mr. Jaffee has the right to
acquire within 60 days of September 30, 1999.
(4) Consists of 191,556 shares held in a revocable trust of which Richard M.
Jaffee is the grantor and, during his lifetime, the trustee and sole
beneficiary, 81,195 shares held in a revocable trust of which Richard M.
Jaffee's wife is the grantor and during her lifetime the trustee and sole
beneficiary, and 100 shares held in joint tenancy with his wife.
(5) The Jaffee Investment Partnership L.P. is managed by its general partners,
generally acting by a majority vote. Two of the general partners, Richard
M. Jaffee and Shirley H. Jaffee, each have eight votes. Each of the
remaining four general partners, Daniel S. Jaffee, Karen Jaffee Cofsky,
Susan Jaffee Hardin and Nancy E. Jaffee, all children of Richard M. and
Shirley Jaffee, have one vote. Mr. Richard M. Jaffee, as the managing
general partner, might be deemed to have, but disclaims, beneficial
ownership of the Partnership's shares, which are not reflected in his share
ownership shown in the table.
(6) Heartland Advisors, Inc. held sole dispositive power over 953,600 shares of
Common Stock and sole voting power over 428,100 shares of Common Stock.
(7) These securities are owned by various individuals and institutional
investors, including T. Rowe Price Small Cap Value Fund, Inc. (which owns
500,000 shares of Common Stock, representing 11.53% of the Common Stock
outstanding and 2.69% of the aggregate voting power), which T. Rowe Price
Associates, Inc. ("Price Associates") serves as investment adviser with
power to direct investments and/or sole power to vote the securities. Price
Associates has dispositive power over 558,000 shares of Common Stock and
sole voting power over 40,000 shares of Common Stock. For purposes of the
reporting requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities; however,
Price Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities.
(8) Tweedy Brown, Co., L.P. ("Tweedy Brown") held shared dispositive power over
474,245 shares of Common Stock and sole voting power over 470,012 shares of
Common Stock. TBK Partners, an affiliate of Tweedy Brown, held sole
dispositive and voting power over 14,655 shares of Common Stock.
Information given is as of August 4, 1999.
(9) Dimensional Fund Advisors, Inc., a registered investment advisor, is deemed
to have beneficial ownership of 328,400 shares of Common Stock with power
to dispose of such shares and power to vote 328,400 of such shares.
(10) By virtue of their direct and indirect ownership of shares of the Company's
stock, Richard M. Jaffee and the Jaffee Investment Partnership, L.P. may be
deemed to be control persons of the Company under the federal securities
laws.
3
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the number of shares of Common Stock and Class B
Stock of the Company beneficially owned as of September 30, 1999 by the
directors and nominees for directors, by the executive officers named in the
Summary Compensation Table ("Named Officers") and by the directors and executive
officers as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
NAME OF BENEFICIAL OWNER(1) OF COMMON STOCK(2) OF CLASS B STOCK(2)
--------------------------- ------------------ -------------------
<S> <C> <C>
Richard M. Jaffee(12)....................... (3) (3)
Daniel S. Jaffee(12)........................ 42,500(4) 58,765(5)(10)
J. Steven Cole.............................. 17,240(6)(18) --
Edgar D. Jannotta........................... 60,000(7)(18) --
Paul J. Miller.............................. 14,904(8)(18) --
Haydn H. Murray............................. 11,316(9)(18) --
Allan H. Selig.............................. 14,000(18) --
Joseph C. Miller............................ 27,350(11) --
Ronald B. Gordon............................ 23,200(18) --
Arnold W. Donald............................ 10,000(18) --
Thomas D. Kuczmarski........................ 800(19)
Michael L. Goldberg......................... 5,000 --
Eugene W. Kiesel............................ 2,000(16) --
Steven M. Levy.............................. 4,702(13) --
All Executive Officers and Directors as a
group (17 in group)....................... 297,365(14)(17) 361,678(10)(15)
</TABLE>
- ---------------
(1) Beneficial ownership is defined in applicable Securities and Exchange
Commission rules as sole or shared power to vote or to direct the
disposition of a security. All beneficial ownership is with sole voting
power and sole investment power except as described in the Notes below.
(2) Except for Richard M. Jaffee and Daniel S. Jaffee, none of the directors,
nominees for election to the Board of Directors, or Named Officers own any
shares of Class B stock. The number of shares of Common Stock owned
beneficially by each of the other directors (other than Mr. Jannotta),
nominees and Named Officers constitutes less than 1.0% of the number of
outstanding shares of Common Stock and represents shares having less than
1.0% of the aggregate voting power of the Common Stock and Class B Stock.
(3) For information regarding the shares owned by Richard M. Jaffee, see the
table under the heading "Principal Stockholders" and the Notes thereto.
(4) Consists of 37,500 and 5,000 shares of Common Stock which Daniel S. Jaffee
and his spouse, respectively, have the right to acquire within 60 days of
September 30, 1999, pursuant to stock options.
(5) Includes 14,392 shares of Class B Stock held by Daniel S. Jaffee as trustee
of the Richard M. Jaffee 1993 Annuity Trust, 14,405 shares of Class B Stock
held by Daniel S. Jaffee as trustee of the Shirley Jaffee 1993 Annuity
Trust, 2 shares owned by Daniel S. Jaffee's spouse, and 3,000 Class B
shares owned by Daniel S. Jaffee as trustee for his children. Daniel S.
Jaffee has beneficial ownership of .98% of the Common Stock and 4.13% of
Class B Shares which represents 3.40% of the aggregate voting power of
Common Stock and Class B Stock.
(6) Includes 967 shares of Common Stock owned by Mr. Cole's spouse.
(7) Mr. Jannotta is a senior director of William Blair & Company, L.L.C. which
has served as the Company's investment banking advisor for a number of
years. The shares of Common Stock shown above as owned by Mr. Jannotta
represent 1.39% of the outstanding shares of Common Stock, but represent
less than 1.0% of the aggregate voting power of the Common Stock and Class
B Stock. These shares do not include shares held by William Blair &
Company, L.L.C. in its proprietary or managed accounts. Mr. Jannotta, an
incumbent director, is not a current nominee for the Board of Directors.
(8) Includes 888 shares of Common Stock owned by Mr. Paul Miller's spouse.
(9) Includes 800 shares of Common Stock owned by Mr. Murray's spouse.
4
<PAGE> 8
(10) Does not include shares owned by the Jaffee Investment Partnership, L.P.
For information regarding the shares held by the partnership see the table
under the heading "Principal Stockholders" and the Notes thereto.
(11) Includes 18,750 shares of Common Stock which Mr. Joseph Miller has the
right to acquire within 60 days of September 30, 1999, pursuant to stock
options.
(12) Daniel S. Jaffee is Richard M. Jaffee's son.
(13) Includes 4,000 shares of Common Stock which Mr. Levy has the right to
acquire within 60 days of September 30, 1999, pursuant to stock options.
(14) Includes 2,500 shares of Common Stock which Mr. Richard V. Hardin has the
right to acquire within 60 days of September 30, 1999, pursuant to stock
options. Mr. Hardin, an unnamed executive officer, is Richard M. Jaffee's
son-in-law.
(15) Includes 27,062 shares of Class B Stock owned by Richard V. Hardin's spouse
and 3,000 shares of Class B Stock owned by his spouse as trustee for their
children. Richard V. Hardin has beneficial ownership of 2.11% of Class B
Shares which represents 1.62% of the aggregate voting power of Common Stock
and Class B Stock.
(16) Consists of 2,000 shares of restricted stock granted to Mr. Kiesel, which
vested on October 6, 1999 and which he has the power to vote.
(17) Includes 164,750 shares of Common Stock which constitute all such shares
that the executive officers and directors of the Company have the right to
acquire within 60 days of September 30, 1999, pursuant to stock options
(including the shares of Common Stock which may be acquired as described in
Notes above and in the Notes under the heading "Principal Stockholders").
(18) Includes 10,000 shares of Common Stock which this director has the right to
acquire within 60 days of September 30, 1999, pursuant to stock options.
(19) Includes 100 shares of Common Stock held by Mr. Kuczmarski as trustee for
his child.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During the fiscal year ended July 31, 1999, four meetings of the Board of
Directors were held. Each director, attended at least 75% of the meetings of the
Board and of any Board Committee on which he sits.
The Company has an Audit Committee presently composed of three persons who
are outside directors -- Messrs. J. Steven Cole, Allan H. Selig, and Ronald B.
Gordon. The Audit Committee makes recommendations to the Board of Directors
regarding the engagement of independent public accountants, reviews the scope of
the audit and other services rendered by independent public accountants and the
fees and other arrangements regarding the services of independent public
accountants, reviews audit results with the independent public accountants, and
receives reports on the Company's accounting systems and internal accounting
controls. In addition, the Audit Committee reviews related transactions and
potential conflicts of interest with regard to such transactions. The Audit
Committee held one meeting during the fiscal year ended July 31, 1999.
The Company has a Compensation Committee and a Stock Option Committee, each
presently composed of four persons who are outside directors -- Messrs. J.
Steven Cole, Paul J. Miller, Allan H. Selig, and Ronald B. Gordon. The
Compensation Committee is responsible for reviewing the compensation, including
benefits, of the Chief Executive Officer and other executive officers of the
Company. The Stock Option Committee is responsible for reviewing the Company's
stock option plans and granting stock options to employees, including grants to
the executive officers of the Company. The Compensation Committee and the Stock
Option Committee generally meet jointly. The Compensation Committee and the
Stock Option Committee held one joint meeting during the fiscal year ended July
31, 1999.
The Company does not have a nominating committee.
5
<PAGE> 9
1. ELECTION OF DIRECTORS
The shares represented by each proxy will be voted, if no contrary
instruction is indicated in the proxy, to elect as directors the ten nominees
named below to hold office until the next Annual Meeting of Stockholders and
until their successors have been elected and qualify. Each nominee, except for
Mr. Kuczmarski, is currently a director of the Company. If any nominee should be
unable or unwilling to serve, which is not now contemplated, the proxy holders
may, but will not be bound to, vote for a substitute nominee.
NOMINEES FOR DIRECTORS
<TABLE>
<C> <S>
PHOTO Chairman of the Board of the Company
Richard M. Jaffee
Age 63 Mr. Jaffee received a degree from the University of
Director since 1958 Wisconsin School of Business in 1957 and earned his CPA
certificate in that same year. He worked briefly for the
public accounting firm of Touche Niven et. al. After service
as an officer in the U.S. Army, he joined the Company in
1958, becoming its president in 1960, a position he held
until 1995. He has served as Chairman of the Board of the
Company since 1962. He served as Chief Executive Officer of
the Company from 1962 until 1997. Mr. Jaffee is a director
of Harris Bancorp, Inc. and Bankmont Financial, subsidiaries
of the Bank of Montreal. He is a trustee and a member of the
executive committee of Rush-Presbyterian-St. Luke's Medical
Center, the Illinois Institute of Technology, and the
Chicago Historical Society. In addition he is a trustee of
the Chicago Museum of Science and Industry and a director of
Students in Free Enterprise.
PHOTO President and Chief Executive Officer of the Company
Daniel S. Jaffee Chief Executive Officer of Favorite Products, Ltd., a
Age 35 Subsidiary of the Company
Director since 1992
Mr. Jaffee graduated from Georgetown University in 1986. Mr.
Jaffee joined the Company in 1987 after a year with Price
Waterhouse. He was a product manager in the Industrial and
Agricultural divisions of the Company until 1989. Mr. Jaffee
was Group Vice President of Canadian Operations, Management
Information Systems and Finance of the Company in 1990. In
1990 he also became Chief Financial Officer of the Company,
a position he held until 1995. From 1990 to 1992, Mr. Jaffee
was Group Vice President, Domestic and Canadian Operations
of the Company. From 1992 to 1994, Mr. Jaffee was Group Vice
President Canadian Operations and Consumer Products-Grocery
of the Company. From 1994 until 1995 he was Group Vice
President, Consumer Products of the Company. Since 1990 he
has been Chief Executive Officer of Favorite Products, Ltd.,
a Subsidiary of the Company. Mr. Jaffee became President of
the Company in 1995 and Chief Executive Officer in 1997. He
was Chief Operating Officer from 1995 to 1997. Mr. Jaffee's
civic activities include the Lawndale Community Church's
track club, the Chicago Foundation for Education, and the
Anti-Cruelty Society of Chicago.
</TABLE>
6
<PAGE> 10
<TABLE>
<C> <S>
PHOTO President, Cole and Associates
J. Steven Cole Chairman of the Board, SAV-A-LIFE Systems, Inc.
Age 65
Director since 1981 Mr. Cole graduated from the University of Wisconsin in 1957.
After serving as an officer in the United States Army, he
received a master's degree from the American Graduate School
for International Business following graduate studies at the
University of Michigan. He began his career at Abbott
Laboratories in 1962. Later, he joined G.D. Searle and
Company, where he became Vice President of the Asian and
Canadian Divisions, a position he held until 1986. In 1986,
Mr. Cole joined A.H. Robins Company, where he was a senior
vice president responsible for all international operations
until 1990. In 1990, he became president of Cole and
Associates, an international consulting firm. In 1990 Mr.
Cole also became president of SAV-A-LIFE Systems, Inc., a
firm selling specialty products to the dental and medical
professions. He held this position until 1994 when he became
Chairman of the Board. Mr. Cole is also a director of
Chapman's Partners and Wiscon Pharmacal.
PHOTO President, Nutrition and Consumer Sector and
Arnold W. Donald Senior Vice President, Monsanto Life Sciences Company
Age 44
Director since 1997 Mr. Donald received a BA degree in economics from Carleton
College in 1976, earned a BS degree in mechanical
engineering from Washington University in St. Louis in 1977,
and an MBA from the University of Chicago Graduate School of
Business in 1980. Mr. Donald joined Monsanto Company in 1977
as a senior market analyst. He joined the agricultural group
in 1981 and in 1983 became Market Manager-Canada. In 1986 he
became U.S. Product Director for Roundup, and in 1987 was
named head of the lawn and garden business. In 1991 he
became Vice President, Residential Products Division, and in
1992 he became Vice President and General Manager of the
Crop Protection Products Division. In 1993 the agricultural
group was reorganized on a geographical basis and he was
named Group Vice President of the North American Division.
In 1994 the division was expanded to include Latin America
and Mr. Donald became Group Vice President and General
Manager. In 1995 he was named President, Crop Protection; in
1997 assumed the position of Co-President, Ag Sector; and in
1998 was named to his current position of Senior Vice
President. In 1999 he also assumed the position of
President, Nutrition and Consumer Sector. Mr. Donald serves
on the executive board of Washington University Eliot
Society as well as serving on the National Advisory Council
for Washington University's School of Engineering. Mr.
Donald serves on the non-profit boards of Carleton College,
Fair St. Louis, Jackson Laboratories, Opera Theatre of St.
Louis, the Municipal Theatre Association of St. Louis, and
the St. Louis Regional Commerce and Growth Association. Mr.
Donald also serves as a board member for Strategic
Distribution, Inc., Age Wave, LLC, and Crown, Cork, & Seal
and is a member of President Clinton's Export Council. He is
also a member of the Executive Leadership Council.
</TABLE>
7
<PAGE> 11
<TABLE>
<C> <S>
PHOTO Chief Executive Officer, Beiersdorf North America
Ronald B. Gordon
Age 56 Mr. Gordon graduated from the University of Pennsylvania in
Director since 1995 1964 and received a master's degree from Columbia University
in 1966. Mr. Gordon worked in brand management and
advertising management for Procter & Gamble from 1966 to
1983. In 1983, Mr. Gordon joined International Playtex, Inc.
as Vice President and General Manager of Playtex Family
Products, U.S. He became Senior Vice President and General
Manager of U.S. and Canadian Playtex Family Products in 1985
and held that position through 1987. Mr. Gordon was
Executive Vice President of the Playtex Family Products
Corporation from 1988 through 1989. During 1990, Mr. Gordon
was an independent executive consultant. Mr. Gordon joined
Goody Products, Inc. in 1991 as President and Chief
Operating Officer and held that position until 1994. Mr.
Gordon founded Gordon Investment Group, a company which
finances and oversees start-up businesses, in 1994. In 1997,
Mr. Gordon joined Beiersdorf, Inc. as Chief Executive
Officer of their North American operations. He is a director
of Creative Products Resource, Inc. and an associate trustee
of the University of Pennsylvania.
PHOTO Senior Partner and President, Kuczmarski & Associates
Thomas D.
Kuczmarski Mr. Kuczmarski graduated from College of the Holy Cross in
Age 48 1973 and received an M.B.A. from Columbia University's
Nominee for Graduate School of Business in 1975 and a master's degree in
Director 1999 international affairs from Columbia University's Graduate
School of International Affairs, where he was named an
International Fellow of the University. Mr. Kuczmarski began
his business career as a brand manager at Quaker Oats
Company in 1976. In 1978 he joined Booz, Allen & Hamilton
where he became a Principal in 1980. In 1983 he founded
Kuczmarski & Associates, a management consulting firm
specializing in innovation, new products and services, brand
management and marketing strategies. He is the author of
three books, Managing New Products: The Power of Innovation,
2nd Edition (Prentice-Hall, 1992), Values-Based Leadership:
Rebuilding Employee Commitment, Productivity and Performance
(Prentice-Hall, 1995), co-authored with Dr. Susan Smith
Kuczmarski, and Innovation: Leadership Strategies for the
Competitive Edge (co-published by NTC Publishing and the
American Marketing Association, 1995). He is an Adjunct
Professor of New Products and Services at Northwestern
University's Kellogg Graduate School of Management and at
the University of Chicago Graduate School of Business. He is
a trustee of the Chicago Children's Museum and a member of
the Economic Club of Chicago.
PHOTO Vice-Chairman of the Board of the Company
Joseph C. Miller
Age 57 Mr. Miller graduated from the West Virginia University
Director since 1989 School of Business in 1964. After serving as an officer in
the United States Army, he joined Republic Steel Corporation
in 1966. Mr. Miller served as president of Lowes, Inc.,
Inland Distributing and Whiteford Transportation Systems. He
joined the Company in 1989 as Vice President of Corporate
Planning and Marketing. He served as Group Vice President
for Sales, Marketing and Distribution from 1990 to 1993. Mr.
Miller was Senior Vice President for the Consumer,
Industrial & Environmental and Transportation Groups of the
Company from 1993 to 1995. He became Vice Chairman of the
Board in 1995. Mr. Miller is a director of Key Bank of
Indiana and Travelmore, Inc. He is a trustee and Chairman of
St. Joseph Regional Medical Center and Co-Chairman of the
Center of Hope Campaign.
</TABLE>
8
<PAGE> 12
<TABLE>
<C> <S>
PHOTO Partner, Sonnenschein Nath & Rosenthal
Paul J. Miller
Age 70 Mr. Miller graduated from Yale University in 1950. He received his law degree from Harvard
Director since Law School in 1953. Mr. Miller served as an officer in the Judge Advocate General's Corps of
1975 the United States Army from 1954 to 1957. He joined Sonnenschein Nath & Rosenthal, attorneys
and general counsel to the Company, in 1957. He has been a partner of the firm since 1963.
PHOTO Professor Emeritus of Geology, Indiana University
Haydn H. Murray President, H. H. Murray and Associates
Age 75
Director since After serving in the military as an officer from 1943 to 1946, Dr. Murray attended the
1984 University of Illinois, from which he received a bachelor's, a master's and a doctorate. Upon
completion of his doctorate, Dr. Murray joined Indiana University, becoming Associate
Professor in 1954. Dr. Murray joined Georgia Kaolin as its Director of Research and
Development in 1957 and held several executive positions including Executive Vice President
from 1964 until 1973. He returned to Indiana University as Chairman of the Department of
Geology in 1973 and held that position until 1984. He was Professor of Geology from 1984 to
1994 and Professor Emeritus from 1994 to present. In 1986, Dr. Murray formed H.H. Murray and
Associates, a consulting firm. He is a trustee of the Grassmann Trust and the Union
Foundation and immediate past president of the International Clay Minerals Association.
PHOTO Commissioner of Major League Baseball
Allan H. Selig President and Chairman of the Board, Selig Lease Company
Age 65
Director since Mr. Selig received a bachelor's degree from the University of Wisconsin in 1956. After two
1969 years in the United States Army, Mr. Selig joined Selig Ford, Inc. He served as president of
Selig Ford (which became Selig Chevrolet in 1982) from 1959 until 1990. Since 1970 he has
served as Chairman of the Board and President of Selig Lease Company. Mr. Selig became
President and Chief Executive Officer of the Milwaukee Brewers Baseball Club, Inc. in 1970
and served in that capacity until 1998 when he was elected to the position of Commissioner of
Major League Baseball. He also served as Chairman of the Executive Council of Major League
Baseball from 1992 to 1998. Mr. Selig is a director of the Green Bay Packers, Baird Mutual
Funds, Marcus Corporation, Indus, Inc., Greater Milwaukee Committee, and the Milwaukee Club.
He is founder and Vice Chairman of Athletes for Youth and co-founder of the Child Abuse
Prevention Fund.
</TABLE>
9
<PAGE> 13
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended July 31, 1999, 1998
and 1997, the compensation of the chief executive officer, and the four other
most highly compensated executive officers of the Company serving as such at
July 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION(7)
ANNUAL COMPENSATION(1) ---------------------
------------------------------------ RESTRICTED
NAME AND FISCAL OTHER ANNUAL STOCK OPTION ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS AWARDS COMPENSATION
------------------ ------ -------- -------- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard M. Jaffee............ 1999 $275,000 -- $11,895(2) -- 27,500(9) $146,102(3)(4)
Chairman of the Board 1998 300,000 -- 10,324 -- -- 145,906
1997 300,000 $120,000 4,832 -- 7,500 155,153
Daniel S. Jaffee............. 1999 $245,000 $ 80,262 -- -- 187,500(9) $ 26,556(5)(6)
President and Chief 1998 225,000 83,250 -- -- 232,500 500
Executive Officer 1997 169,058 67,623 -- -- 15,000 375
Michael L. Goldberg.......... 1999 $184,583 $ 50,488 $ 185(2) -- 50,000(9) $ 11,775(5)(6)
Executive Vice President, 1998 178,917 57,668 -- -- 58,000 500
Chief Financial Officer and 1997 166,417 54,917 -- -- 4,500 --
Corporate Secretary
Steven M. Levy............... 1999 $161,000 $ 43,567 -- -- 70,000(9) $ 7,498(5)(6)
Vice President, 1998 148,542 42,780 $ 7,039(8) -- 95,000 500
Consumer Products Div. 1997 132,150 47,574 58,935(10) -- 3,750 375
Eugene W. Kiesel............. 1999 $137,333 $ 51,871 $ 9,386(2)(8) -- 35,000(9) $ 3,200(6)
Vice President, 1998 106,916 27,873 44,524(8) $35,250(10) 35,000 125
Global Fluids Purification
Products Group
</TABLE>
- ---------------
(1) Amounts shown include cash compensation earned during the year covered,
whether received or deferred at the election of the officer, including
amounts earned but deferred at the election of those officers pursuant to
the Oil-Dri Corporation of America Deferred Compensation Plan. In the
fiscal year ended July 31, 1999, $25,000, $7,000 and $59,044 were deferred
by Daniel S. Jaffee, Michael Goldberg and Eugene Kiesel, respectively,
under the provisions of the Oil-Dri Corporation of America Deferred
Compensation Plan. Earnings on deferred compensation under the Plan is
described under the heading, "Remuneration of Directors."
(2) Interest of $11,895, $10,324, and $4,832 accrued on income deferred by
Richard M. Jaffee under the Company's Key Employee and Director Deferred
Compensation Program in fiscal years ended July 31, 1999, 1998 and 1997,
respectively. Deferrals under this program were discontinued as of January
1, 1996. Earnings accrued on income deferred by Michael L. Goldberg and
Eugene W. Kiesel of $185 and $701, respectively, under the Oil-Dri
Corporation of America Deferred Compensation Plan. These amounts are
earnings in excess of 120% of the applicable Federal rate under Internal
Revenue Code Section 1274(d).
(3) The Company provides split dollar joint survivorship life insurance
policies in the aggregate amount of $10,000,000 on the lives of Richard M.
Jaffee and his wife, with payment to be made on the death of the last to
survive. The premiums paid by the Company on the policies, net of
dividends, are charged to an open account established by the Company. No
interest accrues on the balance of the open account. On the death of the
insured, the estate of the deceased is obligated to pay the balance of the
deceased's open account in full. The value of the premiums paid by the
Company is estimated as if such premiums were advanced to Mr. Jaffee
without interest for the actuarially determined period between the
Company's payment of the premium and its refund to the Company; such value
for the fiscal year ended July 31, 1999, was $115,773.
10
<PAGE> 14
(4) $3,200 represents payments on behalf of Mr. Jaffee by the Company to a
defined contribution plan. $21,194 constitutes the economic benefit to Mr.
Jaffee of the term life component of the split dollar policies described in
Note (3); Mr. Jaffee pays this amount directly to the insurance company as
premium and is reimbursed by the Company. $5,935 constitutes the estimated
economic benefit for fiscal year 1999 of an agreement between the Company
and Mr. Jaffee to pay Mr. Jaffee $300,000 upon his retirement.
(5) The Company also provides split dollar insurance policies on the lives of
Daniel S. Jaffee, Michael L. Goldberg and Steven M. Levy. The premiums paid
by the Company are valued at $23,356. $8,575, and $4,298, respectively. The
value of the premiums paid by the Company is estimated as if such premiums
were advanced to Messrs. Jaffee, Goldberg and Levy without interest for the
actuarially determined period between the Company's payment of the premium
and its refund to the Company.
(6) Includes payments by the Company on behalf of the following named executive
officers: Messrs. Daniel S. Jaffee, Michael L. Goldberg, Eugene W. Kiesel
and Steven M. Levy of $3,200 to a defined contribution plan.
(7) No stock appreciation rights (SARs) or other long-term incentive plan
payouts, other than restricted stock and options, were granted or earned by
the executive officers in any fiscal year covered by this table.
(8) Mr. Levy was reimbursed for relocation expenses and the associated taxes
for $7,039 and $52,635 in the fiscal years ended July 31, 1998 and 1997,
respectively. Mr. Kiesel was reimbursed for relocation expenses and the
associated taxes for $8,685 and $44,524 in fiscal years ended July 31, 1999
and 1998, respectively.
(9) All options granted were options repriced as described in the Report of the
Compensation and Stock Option Committee.
(10) Reflects the fair market on October 6, 1997, the date Mr. Kiesel joined the
Company.
STOCK OPTIONS
Shown in the table below is information with respect to (i) options to
purchase the Company's Stock (as defined below in Note (1))granted in the fiscal
year ended July 31, 1999 to the executive officers named in the "Summary
Compensation Table" ("Named Officers") and (ii) unexercised options to purchase
the Company's Common Stock or Stock as defined in Note (1) which were held as of
July 31, 1999 by the Named Officers. No options were exercised by any of the
Named Officers during the 1999 fiscal year. In addition, the "Ten Year Option
Repricing Table" furnishes information concerning repricing of options held by
executive officers during the last 10 completed fiscal years.
1999 OPTION GRANTS(4)
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE
AT ASSUMED ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SHARES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TERM(2)
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION -------------------------
NAME GRANTED(1)(3) IN FISCAL YEAR PRICE($) DATE 5%($) 10%($)
---- ------------- -------------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Jaffee(5).......... 27,500 3.12% 11.25 9/18/2008 194,564 493,064
Daniel S. Jaffee(5)........... 187,500 21.26 11.25 9/18/2008 1,326,575 3,361,801
Michael L. Goldberg........... 50,000 5.67 11.25 9/18/2008 353,753 896,480
Steven M. Levy................ 70,000 7.94 11.25 9/18/2008 495,255 1,255,072
Eugene W. Kiesel.............. 35,000 3.97 11.25 9/18/2008 247,627 627,536
</TABLE>
- ---------------
(1) All options to purchase the Company's Stock granted in the fiscal year ended
July 31, 1999 were issued under the terms of the Oil-Dri Corporation of
America 1995 Long Term Incentive Plan. "Stock" as defined in the Plan means
Class A Common Stock, except that if no Class A Common Stock is issued and
publicly traded on any securities market when options are exercised, the
shares awarded would be
11
<PAGE> 15
Common Stock and, with respect to any Award made in Class B Stock to a member of
the Jaffee Family who is an employee of the Company or one of its subsidiaries
that is more than 50% owned by the Company, Class B Stock. As of the date of
this Proxy Statement, no shares of Class A Common Stock had been issued.
(2) Potential gains are net of exercise price, but before any taxes that may be
associated with exercise. These amounts represent certain assumed rates of
appreciation only, based on the Securities and Exchange Commission's rules.
Actual gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock, overall market conditions, and the option
holders' continued employment through the term of the option. The amounts
reflected in this table may not necessarily be achieved.
(3) The Company's option plans are administered by the Stock Option Committee of
the Board of Directors. All options granted in the fiscal year ended July
31, 1999 have an exercise price equal to the fair market value on the date
of grant and, vest over a five year period with 25% vesting on the second
anniversary of the grant date and 25% vesting on each of the three
anniversary dates thereafter. The Company granted options to purchase an
aggregate of 882,000 shares of Stock to employees in fiscal 1999, of which
840,125 were options repriced under the '95 Plan. All of the options granted
to the Named Officers in the fiscal year ended July 31, 1999 were options
repriced as described in Report of the Compensation Committee and the Stock
Option Committee.
(4) No stock appreciation rights (SARs) were granted in the fiscal year covered
by this table.
(5) Options shown for Daniel S. Jaffee and Richard M. Jaffee are on shares of
Class B Stock.
OPTION FISCAL YEAR END VALUE TABLE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END OPTIONS AT FY-END($)
--------------------------- ------------------------------
NAME(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(2)
- ------- ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C>
Richard M. Jaffee......................... 18,000 4,500(3) $0 $ 0
0 27,500(4)(5) 0 137,500
Daniel S. Jaffee.......................... 33,000 4,500(3) 0 0
0 187,500(4) 0 937,500
Michael L. Goldberg....................... 0 50,000(4) 0 250,000
Steven M. Levy............................ 4,000 1,000(3) 0 0
0 70,000(4) 0 350,000
Eugene W. Kiesel.......................... 0 35,000(4) 0 175,000
</TABLE>
- ---------------
(1) No stock appreciation rights (SARs) were exercised in the fiscal year
covered by this table or outstanding at July 31, 1999.
(2) The closing price of a share of Common Stock on July 31, 1999 was $16.25.
(3) Options to purchase shares of Common Stock of the Company.
(4) Options to purchase shares of Stock as defined by the terms of the 1995 Long
Term Incentive Plan; see Note (1) under the preceding table "1999 Option
Grants". The options granted to Mr. Richard M. Jaffee and Mr. Daniel S.
Jaffee relate to Class B Stock.
On September 18, 1998, the Stock Option Committee authorized the repricing
at the market price on that date ($11.25 per share) of all options granted under
the '95 Plan. The following table contains information concerning all repricings
during the last ten years of options held by executive officers.
12
<PAGE> 16
TEN YEAR OPTION REPRICING TABLE(1)(3)
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE OPTION TERM
UNDERLYING OF STOCK AT EXERCISE PRICE REMAINING AT
OPTIONS REPRICED TIME OF AT TIME OF NEW DATE OF
DATE OF OR AMENDED REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME REPRICING (#)(1)(2) AMENDMENT($) AMENDMENT($) PRICE($) AMENDMENT
- ---- --------- ---------------- ------------ -------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Jaffee........... 9/18/98 20,000(6) $11.2500 $15.1250 $11.2500 85 months
Chairman of the Board 9/18/98 7,500(6) 11.2500 14.8750 11.2500 95 months
Daniel S. Jaffee............ 8/16/94 5,000 19.0000 22.3750 19.0000 102 months
President and Chief 8/16/94 10,000 19.0000 22.7500 19.0000 79 months
Executive Officer 6/24/98 100,000(6) 14.0625 15.9375 14.0625 118 months
9/18/98 40,000(6) 11.2500 15.1250 11.2500 85 months
9/18/98 15,000(6) 11.2500 14.8750 11.2500 95 months
9/18/98 32,500(6) 11.2500 17.6250 11.2500 108 months
9/18/98 100,000(6) 11.2500 14.0625 11.2500 117 months
Michael L. Goldberg......... 6/24/98 24,500 14.0625 15.9375 14.0625 118 months
Executive Vice President & 9/18/98 12,000 11.2500 13.6250 11.2500 91 months
Secretary 9/18/98 4,500 11.2500 14.8750 11.2500 95 months
9/18/98 9,000 11.2500 17.6250 11.2500 108 months
9/18/98 24,500 11.2500 14.0625 11.2500 117 months
Steven M. Levy.............. 6/24/98 38,750 14.0625 15.9375 14.0625 118 months
Vice President 9/18/98 10,000 11.2500 15.1250 11.2500 85 months
9/18/98 3,750 11.2500 14.8750 11.2500 95 months
9/18/98 7,500 11.2500 17.6250 11.2500 108 months
9/18/98 10,000 11.2500 14.6250 11.2500 117 months
9/18/98 38,750 11.2500 14.0625 11.2500 117 months
Eugene W. Kiesel............ 6/24/98 23,000 14.0625 15.9375 14.0625 118 months
Vice President 9/18/98 12,000 11.2500 17.6250 11.2500 108 months
9/18/98 23,000 11.2500 14.0625 11.2500 117 months
9/18/98 5,000 11.2500 15.1250 11.2500 85 months
Joseph C. Miller............ 9/18/98 1,875 11.2500 14.8750 11.2500 95 months
Vice Chairman of the Board 9/18/98 10,000 11.2500 14.6250 11.2500 117 months
Richard V. Hardin........... 9/18/98 3,000(6) 11.2500 15.1250 11.2500 85 months
Group Vice President 9/18/98 1,125(6) 11.2500 14.8750 11.2500 95 months
9/18/98 1,125(6) 11.2500 17.6250 11.2500 108 months
Daniel J. Jones............. 6/24/98 15,500 14.0625 15.9375 14.0625 118 months
Vice President 9/18/98 4,000 11.2500 15.1250 11.2500 85 months
9/18/98 1,500 11.2500 14.8750 11.2500 95 months
9/18/98 1,500 11.2500 17.6250 11.2500 108 months
9/18/98 15,500 11.2500 14.0625 11.2500 117 months
Norman B. Gershon(5)........ 9/18/98 4,000 11.2500 15.1250 11.2500 85 months
Vice President 9/18/98 1,500 11.2500 14.8750 11.2500 95 months
Herbert V. Pomerantz(4)..... 8/16/94 5,000 19.0000 22.3750 19.0000 102 months
Senior Vice President
</TABLE>
- ---------------
(1) See "Report of the Compensation Committee and the Stock Option Committee of
Oil-Dri Corporation of America on Executive Compensation -- 1995 Long Term
Incentive Plan".
(2) Repriced options were granted on a one for one basis.
(3) The Company has never issued stock appreciation rights (SARs).
(4) Mr. Pomerantz resigned October 9, 1995.
(5) Mr. Gershon is no longer considered as an executive officer, as that term is
defined under Securities and Exchange Commission Regulations.
(6) The referenced options reissued to Daniel S. Jaffee, Richard M. Jaffee and
Richard V. Hardin were for Class B Stock.
13
<PAGE> 17
PENSION PLANS
The Company's pension plan covering salaried employees is a
non-contributory, qualified, defined benefit plan. The plan provides for
pensions based on credited years of service and cash compensation (excluding
compensation paid under the Company's Incentive Bonus Plan) during the highest
paid consecutive five years during the last ten years of employment. The
following table presents estimated annual retirement benefits payable upon
normal retirement at age 65 and is computed on the basis of a 5-year certain and
life annuity. The benefits listed are not subject to a deduction for social
security or other offset amounts.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS AT YEARS OF SERVICE INDICATED
HIGHEST CONSECUTIVE 5-YEAR ---------------------------------------------------------
AVERAGE COMPENSATION 15 YRS 20 YRS 25 YRS 30 YRS 35 YRS 40 YRS
-------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$125,000.................... $17,900 $23,900 $29,800 $35,800 $35,800 $39,100
150,000.................... 22,000 29,400 36,700 44,000 44,000 48,900
175,000.................... 26,100 34,900 43,600 52,300 52,300 58,600
200,000.................... 30,300 40,400 50,500 60,500 60,500 68,400
225,000.................... 34,400 45,900 57,300 68,800 68,800 78,100
250,000.................... 38,500 51,400 64,200 77,000 77,000 87,900
300,000.................... 46,800 62,400 78,000 93,500 93,500 107,400
</TABLE>
The individuals named in the Summary Compensation Table are participants in
the Company's pension plan and had compensation as defined in the pension plan
for the fiscal year ended July 31, 1999 and number of years of service as of
August 1, 1999 under the pension plan as follows: Richard M. Jaffee, $160,000,
40 years; Daniel S. Jaffee, $160,000, 11 years; Michael L. Goldberg, $160,000, 3
years; Steven M. Levy, $160,000, 3 years; Eugene W. Kiesel, $137,333, 2 years.
Messrs. Richard M. Jaffee, Daniel S. Jaffee, Michael L. Goldberg and Steven M.
Levy are currently limited to $160,000 because of applicable Internal Revenue
Code limitations which became effective for the Company's pension plan on August
1, 1994. Benefits already accrued as of that date for Richard M. Jaffee are not
reduced by the change. The Company does not have a supplemental executive
retirement program.
REMUNERATION OF DIRECTORS
Each director of the Company who is not also an officer of the Company
receives an annual retainer of $10,000 and also receives a fee of $2,000 for
each meeting attended.
Under the Oil-Dri Corporation of America Deferred Compensation Plan, the
Company's directors were entitled to defer all or a portion of their directors'
compensation at an interest rate equal to the Company's long term cost of
borrowing from time to time. As of January 1, 1999, the plan was amended.
Participants' returns are now tied to the performance of various investment
elections. The plan is partially funded with variable life insurance policies.
During the fiscal year ended July 31, 1999, Messrs. Haydn H. Murray and Edgar D.
Jannotta deferred director compensation under this plan.
In addition to their director remuneration, during the fiscal year ended
July 31, 1999, Mr. Haydn H. Murray and Mr. Ronald B. Gordon were paid $10,500,
and $10,000 respectively for consulting services.
There are 130,000 shares of Common Stock reserved for Treasury shares for
future grants under the Oil-Dri Corporation of America Outside Directors' Stock
Plan.
14
<PAGE> 18
2. AMENDMENT TO THE OIL-DRI CORPORATION OF AMERICA
1995 LONG-TERM INCENTIVE PLAN
The Board, following a recommendation of the Compensation and Stock Option
Committee, has approved, subject to approval of stockholders at their 1999
Annual Meeting an amendment ("'95 Plan Amendment") to the 1995 Long-Term
Incentive Plan ("'95 Plan") that would authorize the addition of 500,000 shares
of Stock (as defined below) for use under the '95 Plan to meet future needs for
grants or awards.
THE '95 PLAN
The '95 Plan is designed to attract and retain key employees by motivating
them to focus on the long-term success of the Company and encouraging them to
identify with the interests of stockholders. The '95 Plan presently authorizes a
maximum of 1,000,000 shares of Stock (either (i) Class A Common Stock or, if no
Class A Common Stock is publicly traded when awards are exercised, Common Stock,
(ii) Class B Stock in the case of awards to Jaffee Family Members), for use
under the Plan. No Class A Common Stock is presently issued or publicly traded
and the Company has no present plans to issue any shares of Class A Common
Stock. Awards authorized by the '95 Plan include options (including
non-qualified and incentive options), stock appreciation rights, performance
shares/units, restricted stock, phantom stock and stock bonuses (collectively
called "Stock Awards"). The '95 Plan will terminate on August 10, 2005. The
Board can terminate it effective as of an earlier date, but termination of the
'95 Plan does not affect outstanding Stock Awards. No individual Grantee may be
granted stock options and stock appreciation rights to purchase more than
twenty-five percent (25%) of the maximum number of shares of Stock subject to
grant under the '95 Plan.
The '95 Plan as adopted by the Board of Directors on August 10, 1995 and
amended on October 31, 1995, was approved by stockholders at their 1995 Annual
Meeting. It was amended by the Board on March 14, 1997 and March 19, 1997 to
make technical changes in response to changes made after its adoption to Rule
16b-3 of the Securities and Exchange Commission relating to Section 16 of the
Securities and Exchange Act of 1934, including a change permitting certain gifts
of Stock Awards. (See "Transferability".) The Board approved a further amendment
in 1997 permitting stock options, stock grants, or other Stock Awards to Jaffee
Family members on and after September 19, 1997, to be made in Class B Stock and
authorized the addition of 500,000 shares for use under the '95 Plan to meet
future needs for grants and awards. At their Annual Meeting on December 9, 1997,
stockholders approved this amendment.
ADMINISTRATION
The '95 Plan is administered by a Committee composed of three directors of
the Company who are Non-Employee Directors within the meaning of Rule
16b-3(b)(3) under the Securities Exchange Act of 1934. These three Committee
members exercise authority with respect to Plan-related transactions involving
persons subject to Section 16(b) under the Securities Exchange Act of 1934
(generally, directors, executive officers and 10% stockholders). A fourth
member, Paul J. Miller, who is a partner of Sonnenschein Nath & Rosenthal,
General Counsel to the Company, serves as an alternate member who participates
only in other Committee actions. The members of the Committee are appointed by
the Board for such terms as the Board determines, and may be removed by the
Board at any time. Vacancies in the Committee are filled by the Board.
The Committee grants Stock Awards, determines their terms and conditions,
including performance goals, interprets the '95 Plan, and, in general makes all
determinations and rules necessary or advisable for administration of the '95
Plan. Committee determinations on all matters relating to the '95 Plan or to any
agreement reflecting a grant or award under the '95 Plan ("Award Agreement") are
final. No member of the Committee may be held personally liable for any action,
determination or interpretation made in good faith with respect to the '95 Plan
or any Stock Award.
15
<PAGE> 19
AMENDMENT OF THE PLAN
The Board can modify the '95 Plan, without approval of the Company's
stockholders, except as such stockholder approval may be required under the
listing requirements of any stock exchange on which any of the Company's equity
securities are listed, or to retain incentive stock option treatment.
ELIGIBILITY
Stock Awards may be granted, at the discretion of the Committee, under the
Plan to any employee of the Company or of any subsidiary, but it is contemplated
that Stock Awards will be made principally to approximately forty key employees,
including the eight executive officers. In selecting the individuals to whom
Stock Awards are granted, as well as in determining the number of shares subject
to each grant, the Committee takes into consideration such factors as it deems
relevant to accomplish the purpose of the Plan.
STOCK OPTIONS
The Committee may grant non-qualified options and options qualifying as
incentive stock options under Section 422 of the Internal Revenue Code. The
option price may not be less than 100% of the fair market value of the Stock on
the date of grant. The option term cannot exceed 10 years from date of option.
Options may be exercised in one or more installments, commencing not earlier
than one year after the date of grant. The option price may be paid in cash,
with shares of stock owned by the Grantee prior to the exercise of the option or
through a broker-assisted exercise, or any combination thereof. Payment of the
option price with stock simultaneously acquired by option exercise may be made
with Committee approval, which has been granted with respect to currently
outstanding options.
STOCK APPRECIATION RIGHTS
The Committee may grant stock appreciation rights ("SARs") on a stand-alone
basis or in tandem with shares of Stock subject to an option. If SARs are
granted in tandem with shares of Stock subject to an option, then, unless
otherwise specified in the applicable Award Agreement, the SARs terminate upon
the exercise, expiration, termination, forfeiture or cancellation of such
option. SARs are not generally exercisable earlier than the first anniversary of
the grant date, and, to the extent identified with an option, may be exercised
to the extent such option has become exercisable. Unless otherwise provided in
the Award Agreement, the exercise of SARs identified with options shall result
in the forfeiture of such option to the extent of the exercise.
PERFORMANCE UNITS AND PERFORMANCE SHARES
The Committee may grant Performance Units or Performance Shares conditioned
on attainment of performance goals, determined by the Committee, during a
designated measuring period of no less than one year nor more than five years.
At the time of grant the Committee determines maximum payment value of an award.
Amounts payable in connection with the exercise of Performance Units may be paid
in cash, or, at the Committee's discretion, wholly or partly in Stock.
Performance Share Awards are payable in Stock, or, at the Committee's
discretion, wholly or in part in cash.
RESTRICTED STOCK
The Committee may grant shares of restricted stock subject to forfeiture
upon termination of employment, or if specified performance goals are not met,
or upon failure to satisfy such other restrictions as the Committee may
determine.
STOCK BONUS
The Committee may grant shares of Stock as a bonus.
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<PAGE> 20
TRANSFERABILITY
In general, a Grantee may not sell or otherwise transfer any Stock Award
granted under the Plan. However, except in the case of Restricted Stock before
it has become non-forfeitable, each Stock Award may be transferred by will or
the laws of descent and distribution and each Stock Award other than Restricted
Stock or an Incentive Stock Option may be transferred by the Grantee for no
consideration to any of the following permissible transferees ("Permissible
Transferees"): any member of the Grantee's immediate family, and any general or
limited partnership each of the partners of which are members of the Grantee's
immediate family and which prohibits a transfer of all or any part of any
interest in the partnership except to the partnership or to any of the
foregoing; and to such other person or entity, and on such terms and
considerations, as the Committee, in its discretion, may permit. Any transferred
Stock Award remains subject to the same terms and conditions that applied before
the transfer and the term of an award is affected in the same manner by the
termination of employment of the Grantee regardless of whether the Grantee
transferred the award prior to such termination. Once a Stock Award has been
transferred to a Permissible Transferee, it may not be subsequently transferred
by the Permissible Transferee without the consent of the Committee.
TERMINATION OF EMPLOYMENT
The Award Agreement pertaining to each Stock Award sets forth the terms and
conditions applicable to such Stock Award upon a termination of employment of
the Grantee.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is limited to United States federal income tax
laws applicable as of September, 1999, to Grantees and Permissible Transferees
who are both citizens and residents of the United States.
A. OPTIONS
Generally, a Grantee receiving an option does not realize any taxable
income for federal income tax purposes at the time of grant. The transfer of a
non-qualified option to a Permissible Transferee will not result in taxable
income to the Grantee or the Permissible Transferee. Upon exercise of a
non-qualified option the excess of the fair market value of the Stock on the
date of exercise over the option exercise price will be taxable to the Grantee
as ordinary income, whether or not the option has been transferred to a
Permissible Transferee. Exercise of an incentive stock option ("ISO") is not
taxable to the Grantee, other than potential alternative minimum tax on the
difference between fair market value on the date of exercise and option exercise
price. Upon the sale of Stock acquired upon exercise of an ISO, a Grantee will
have long term capital gains (or losses) equal to the difference between the
sale price and the option exercise price provided the applicable holding period
requirements are met.
A Grantee who has not transferred a non-qualified option will have a long
or short term capital gain (or loss) upon the subsequent sale of the Stock in an
amount equal to the sale price reduced by the fair market value of the Stock on
the date the Grantee exercised the option. If shares acquired upon exercise of
an option by a Permissible Transferee are later sold or exchanged, then the
difference between the sales price and the Permissible Transferee's tax basis
for the shares will generally be taxable as long term or short term capital gain
or loss (if the Stock is a capital asset of the Permissible Transferee).
Whether the capital gains (or losses) are long or short term depends upon
whether the Stock has been held for the applicable long term capital gains
holding period. Generally, the long-term capital gains holding period is any
period of more than twelve months. However, for Stock sold after December 31,
2000, which is held more than five years, a more favorable, lower long term
capital gains rate applies. The tax basis for the shares in the hands of the
Permissible Transferee would be the exercise price for the Option plus the
amount of the income recognized by the Grantee (or the estate of the Grantee, as
the case may be) at the time of exercise. The holding period for purposes of
determining whether a capital gain (or loss) is a long or short term capital
gain (or loss) commences on the date the option is exercised.
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<PAGE> 21
On exercise of a non-qualified option, the Company is entitled to a tax
deduction, in the year in which the Grantee recognizes ordinary income, in the
amount of the ordinary income recognized by the Grantee.
B. SARS, PERFORMANCE UNITS, PERFORMANCE SHARES, RESTRICTED STOCK, STOCK BONUS
Generally, a Grantee receiving an SAR, performance unit or performance
share does not realize any taxable income for federal income tax purposes at the
time of grant. The gift of an SAR, performance unit or performance share to a
Permissible Transferee will not result in taxable income to the Grantee or the
Permissible Transferee. Any cash received by a Permissible Transferee in
connection with the exercise of an SAR, Performance Unit or Performance Share
and the fair market value of any Stock received in connection with the exercise
generally will be taxable as ordinary income to the Grantee at the time of
exercise.
An award of restricted stock will be taxable to a Grantee on the earliest
date that it is not subject to substantial risk of forfeiture (unless the
Grantee makes an election pursuant to Section 83(b) of the Internal Revenue Code
to be taxed immediately upon grant notwithstanding such substantial risk of
forfeiture) and, when taxed, will produce taxable income equal to the amount by
which the fair market value of the Stock on the date taxed exceeds the amount
(if any) paid by the Grantee for the Stock. A stock bonus is taxable on receipt,
unless subject to risk of forfeiture, in which event it is treated as restricted
stock.
With respect to SARs, performance units, performance shares, restricted
stock and stock bonuses, the Company is entitled to a deduction in the year the
Grantee recognizes ordinary income, in the amount of the ordinary income
recognized by the Grantee.
CHANGE IN CONTROL
In the event of a Change in Control (as defined in the Plan), all Stock
Awards become immediately and fully exercisable.
PROPOSED AMENDMENT TO '95 PLAN TO INCREASE AUTHORIZED SHARES
It is proposed to amend the '95 Plan to increase the maximum number of
shares of Stock (including Class B Stock) authorized for use under the '95 Plan
to 1,500,000, of which options on 988,437 shares, net of options on 1,282,375
shares canceled upon repricing and 89,563 shares canceled upon termination of
Grantees, have been awarded since the Plan's inception. Of the currently
outstanding options, 434,375 are held by all current executive officers as a
group. See the Ten Year Option Repricing Table for individual executive officer
grants.
OPTION GRANTS DURING THE FISCAL YEAR ENDED JULY 31, 1999, INCLUDING OPTION
REPRICING
During the fiscal year ended July 31, 1999 the Compensation and Stock
Option Committee awarded options under the '95 Plan covering 41,875 shares
(excluding the repricing as described below), at an exercise price of $11.25 per
share with respect to 31,875 shares and at an exercise price of $15.0625 per
share with respect to 10,000 shares. Of these, Richard V. Hardin, an executive
officer and Jaffee Family Member was awarded an option covering 1,125 shares of
Class B Stock at an exercise price of $11.25 and options covering 1,500 shares
of Class B stock were awarded to other Jaffee Family Members who were not
executive officers. The term of each option is ten years. The options vest over
a five year period. Twenty-five percent vests on the second anniversary of the
grant date and twenty-five percent vests on each of the three succeeding
anniversaries of the grant date.
At its meeting on September 18, 1998 the Compensation and Stock Option
Committee authorized repricing of all options previously granted under the '95
Plan (an aggregate of 873,625) to an exercise price of $11.25 per share. The
repricing was accomplished by each optionee's voluntary exchange of old options
for new on a one for one basis. Each new option has a ten year term, vests
twenty-five percent two years following the date of the new grant (September 18,
2000) and an additional twenty-five percent on each of the three succeeding
anniversaries of the grant date. Only 840,125 options were so exchanged and thus
only 840,125 were repriced. (See Ten Year Option Repricing Table, and see Report
of Compensation Committee). At that
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<PAGE> 22
meeting, the Committee also granted options to various non-executive employees
covering 31,875 shares at an exercise price of $11.25 per share. The terms of
each of these options is ten years and the vesting provisions are the same as
those of the repriced options.
OPTION GRANTS SINCE JULY 31, 1999
At its meeting on September 17, 1999 the Compensation and Stock Option
Committee granted options covering 96,875 shares of Stock. Of these, 16,625 were
awarded to executive officers of which Eugene Kiesel, one of the Named Officers,
was awarded an option covering 15,000 shares of Common Stock and Richard V.
Hardin, an executive officer and Jaffee Family Member was awarded an option
covering 1,625 shares of Class B Stock, in each case, at an exercise price of
$14.5625. Options covering 10,000 shares of Class B Stock were awarded to other
Jaffee Family Members who were not executive officers. The Committee also
granted 1,000 shares of restricted stock at the meeting.
BOARD ACTION
A maximum of 1,000,000 shares (Class A Common Stock or Common Stock, if
Class A Common Stock is not issued and publicly traded at the time of exercise;
Class B Stock in the case of awards to Jaffee Family Members) has been
authorized for use under the '95 Plan. At October 16, 1999, stock options on an
aggregate of 978,062 shares are outstanding under the '95 Plan, and grants
totaling 8,000 shares of restricted stock have been made under the '95 Plan.
There have been no exercises of options under the '95 Plan. Thus, an aggregate
of 13,938 shares remain available for use under the '95 Plan. At its meeting on
September 17, 1999, the Compensation Committee and Stock Option Committee
considered the number of shares remaining available, the fact that the '95 Plan
would not terminate until August 9, 2005, and the fact that over the coming
years continued Awards under the '95 Plan would be needed to provide the focus
and incentive which the '95 Plan is designed to provide. It concluded that an
additional 500,000 shares (consisting of Common Stock, Class A Common Stock
and/or Class B Stock) should be authorized for use under the '95 Plan and
recommended that the Board approve the addition of 500,000 shares for that use,
subject to approval by shareholders.
For the reasons set forth above the Board of Directors believes that it is
in the best interests of the Company and its stockholders to authorize an
additional 500,000 shares for use under the '95 Plan to meet future needs for
grants or awards that will fulfill the purposes of that Plan. Accordingly, at
its meeting on October 16, 1999, the Board gave its approval of the '95 Plan
Amendment, subject to approval of Stockholders at their 1999 Annual Meeting.
BOARD RECOMMENDATION
For the reasons set forth above, THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE
OIL-DRI CORPORATION OF AMERICA 1995 LONG-TERM INCENTIVE PLAN.
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<PAGE> 23
REPORT OF THE COMPENSATION COMMITTEE
AND THE
STOCK OPTION COMMITTEE
OF
OIL-DRI CORPORATION OF AMERICA
ON
EXECUTIVE COMPENSATION
COMPENSATION POLICY
Oil-Dri's compensation policy is to provide its executive officers and
other salaried employees with compensation opportunities competitive with
comparable size companies, reflecting annual incentive opportunities
commensurate with Company performance and level of responsibility, while
allowing for recognition of divisional and individual performance. In
determining the marketplace, Oil-Dri refers to salary surveys prepared and
published by several large consulting firms. The companies represented in the
surveys, which participate on a voluntary basis, are not the same group as that
included in the Peer Group on the Performance Graph. On occasion the Company
also uses the services of outside consultants. Using these sources, the Company
sets its compensation policy to reflect the median of the marketplace. Further
aligning compensation with overall Company performance, Oil-Dri makes periodic
awards of stock options and restricted stock to key management officers and
employees. This policy, the components of compensation which implement it, and
its administration, continued essentially unchanged in fiscal 1999.
At present compensation levels, and given the performance based nature of
the Company's Stock Option Plan, limitations on federal income tax deductibility
of a top officer's compensation in excess of $1,000,000 have no impact. In
general, the Company favors the preservation of tax deductibility, but reserves
the right to reconsider this position.
COMPENSATION COMPONENTS
Cash compensation for non-sales employees has two components, base salary
and annual incentive bonus. (Sales employees generally have a third
component -- bonus related to sales objective). For divisional employees, the
largest percentage of incentive bonus is based on divisional performance against
divisional objectives, the next largest on overall corporate performance against
corporate objectives, and the remainder on individual achievement of pre-agreed
individual objectives. For non-divisional employees (including five of the
executive officers) bonus is tied predominately to overall corporate performance
against corporate targets, the remainder tied to individual achievement of
pre-agreed individual objectives. The Company has a number of salary grades
reflecting differing levels of responsibility. For each salary grade, a minimum
and maximum salary range is established based on a survey of comparable-sized
companies. Incentive compensation is a target bonus equal to a percentage of the
individual's annual base salary. This percentage is determined by the salary
grade which reflects the level of responsibility and expected contribution of
the position to the Company's financial results. For the individual's target to
be fully achieved, Oil-Dri must meet projected overall corporate financial goals
which are reviewed by the Compensation Committee and the individual's divisional
and individual target goals must be met ("Plan"). Minimum and maximum payouts
are set in relation to the achievement of these combined financial thresholds.
In the fiscal year ended July 31, 1999, the Company fell slightly short of its
financial goals under the Plan and, as a result, an aggregate of approximately
$1,530,000 in bonus was paid.
The annual incentive plan is designed to require communication to employees
of expectations for Company performance and for potential individual rewards. In
fiscal 1999, it provided significant rewards to divisional employees upon
achievement of divisional sales and pretax earnings goals which affected
Oil-Dri's overall performance, to non-divisional employees (including five
executive officers) based upon achievement of overall corporate sales and pretax
earnings performance, and to all employees at higher responsibility levels
(including all executive officers) upon achievement of pre-agreed individual
goals. The fiscal 1999 Incentive Bonus program provided that no bonus is payable
(other than the component related to individual goals) unless a minimum Company
performance threshold is achieved. This plan links Company performance and
20
<PAGE> 24
total annual pay. It provides for broad based participation, so that each
salaried employee recognizes that he or she can contribute to the Company's
success.
ADMINISTRATION OF THE COMPENSATION PROGRAM
During the year there is a review of employee performance and progress. At
least once a year employee performance is documented and plans for employee
development are discussed. At that review the employee's salary is reviewed and,
based on the position of the salary within the salary range and the performance
of the individual, a base salary change may, but will not necessarily, be
recommended. On the basis of that review, any adjustment to reflect the
employee's performance in incentive bonus is also determined.
The Compensation Committee reviews and generally oversees the Company's
compensation program. The Company reviews with the Compensation Committee the
prior year's salary results for the various base salary ranges and incentive
bonus targets, and reviews the base salary ranges and the target bonus
percentages for the coming year. In reviewing target bonus percentages for the
coming fiscal year, the Company presents its earnings expectations for that
year. For the fiscal year ended July 31, 1999 (and for the fiscal year ending
July 31, 2000), the Company recommended and the Compensation Committee approved
adoption of a corporate pre-tax earnings target, after giving effect to bonus
payments, (for fiscal 2000, an additional component reflecting the cost of
capital has been added) and a corporate sales target, with no bonus payable with
respect to the earnings target unless a minimum of 90% of Plan (95% for fiscal
2000) is achieved and no bonus payable with respect to the sales target unless a
minimum of 90% of Plan (95% for fiscal 2000) is achieved. No individual bonus of
more than 200% of individual target bonus can be paid. Company recommendations
for stock option grants and restricted stock grants to be made from time to time
are reviewed with, and approved by, the Company's Stock Option Committee.
1995 LONG TERM INCENTIVE PLAN -- REPRICING OF OPTIONS
In September of 1998, by cancelling old options when voluntarily exchanged
for new ones, the Stock Option Committee repriced the options outstanding under
the '95 Plan, and, in doing so, provided that the new options issued to Jaffee
Family members are options on Class B Shares. The Stock Option Committee
determined that this repricing, which provides for an exercise price of $11.25
per share (the fair market value on the date of repricing) and first vesting of
new options two years from grant (September 18, 2000), would be effective to
retain what it regards as a successful management team and keep that management
team focused on efforts to continue to improve the Company's operating results.
In addition, during fiscal 1999, additional stock option grants were made under
the 1995 Plan by the Stock Option Committee.
COMPENSATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER; CHAIRMAN
At its September 18, 1998 meeting, the Compensation Committee reviewed and
set fiscal 1999 compensation for Mr. Daniel S. Jaffee at a base salary of
$245,000, an increase of $20,000, with continued participation in the Incentive
Bonus plan. In doing so, it considered his performance and achievements as
President and Chief Executive Officer during fiscal 1998, including his
leadership in: divesting Oil-Dri Transportation Company, the Company's
transportation division; acquiring the Mounds Plant and related business of
Amcol International; intensifying the Company's efforts to market new products
such as pet treats, and to develop and market paper litter products; and
achieving good earnings results in relation to targets despite the impact of the
Asian Crisis on the Company's business in Malaysia and the loss of a substantial
portion of the business of a major customer. At its September, 1999, meeting,
the Committee reviewed and set fiscal 2000 compensation for Mr. Daniel S. Jaffee
at $275,000, an increase of $30,000, with continued participation in the
Incentive Bonus Plan. In doing so it considered his performance and achievements
as President and Chief Executive Officer during fiscal 1999, including his
leadership in: negotiating a 20 year exclusive supply contract with Church &
Dwight Co., Inc.; the successful integration of the Mounds Plant and related
business; the successful launching of the two new consumer products, the
DustStopper(TM) and Scoop 'N Flush(TM) paper litter products and again achieving
good earnings results in relation to targets set.
21
<PAGE> 25
In setting the Chairman's compensation for fiscal 1999 at a base salary of
$275,000, the Compensation Committee reviewed the Company's strategic and
financial goals and the Chairman's efforts and performance during fiscal 1999.
It also considered the Chairman's request that, in light of the increased
responsibilities which had been assumed by the President and Chief Executive
Officer, the Chairman's base salary should be reduced and he should continue to
not participate in the Incentive Bonus program. Finally, the Committee
considered the Chairman's request that his existing 1989 employment agreement
which was to expire on July 31, 1999 should be extended so as to expire July 31,
2009, with the elimination, effective August 1, 1999 of the provision for a lump
sum payment on death. The Committee approved the request and recommended its
approval by the Board. In setting the Chairman's compensation for fiscal 2000,
the Committee considered the Chairman's efforts and performance in relation to
the Company's strategic and financial goals during fiscal 1999. The Committee
determined that Mr. Jaffee's base salary would remain at $275,000 and he should
continue to not participate in the Incentive Bonus Program.
COMPENSATION COMMITTEE AND
STOCK OPTION COMMITTEE
J. Steven Cole, Chairman, Compensation
Committee
Allan H. Selig, Chairman, Stock Option
Committee
Ronald B. Gordon
Paul J. Miller*
---------------------------------------------------------
* Mr. Miller is an alternate member of
the Stock Option Committee serving
on that committee only in the
absence of one of the other members,
but as such, does not participate in
'95 Plan actions involving
directors, executive officers or 10%
stockholders.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Paul Miller, a Director of the Company and a member of the Compensation
and Stock Option Committees, is a partner of Sonnenschein Nath & Rosenthal,
counsel to the Company. Mr. Miller does not participate in Stock Option
Committee actions involving employees subject to Section 16(b) of the Securities
Exchange Act of 1934.
22
<PAGE> 26
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly cumulative total
shareholders' return on the Company's Common Stock against the yearly cumulative
total return of the Russell 2000 and the Russell 2000 Materials and Processing
Economic Sector Index (Peer Group). The graph assumes that the value of the
investment in the Company's Common Stock, the Russell 2000 Index and the Russell
2000 Materials and Processing Economic Sector Index was $100 on July 31, 1994
and that all dividends were reinvested.
FIVE YEAR CUMULATIVE TOTAL RETURNS
OIL-DRI CORPORATION OF AMERICA
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
ODC RUSSELL 2000 PEER GROUP
--- ------------ ----------
<S> <C> <C> <C>
'1994' 100.00 100.00 100.00
'1995' 87.62 124.93 114.82
'1996' 82.31 133.56 117.56
'1997' 103.65 178.16 151.58
'1998' 82.66 182.28 143.00
'1999' 100.03 195.79 130.99
</TABLE>
23
<PAGE> 27
OTHER INFORMATION
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has selected Blackman Kallick Bartelstein as its independent
public accountants for the current fiscal year. Blackman Kallick Bartelstein
served in such capacity for the fiscal year ended July 31, 1999. Representatives
of Blackman Kallick Bartelstein will be present at the Annual Meeting with an
opportunity to make a statement if they so desire and to answer questions that
any stockholder may have.
ANNUAL REPORT ON FORM 10-K
This Proxy Statement does not include information regarding executive
officers called for by Item 401(b) of Regulation S-K because such information is
furnished in the Company's Annual Report on Form 10-K for the fiscal year ended
July 31, 1999, and such information is incorporated herein by reference thereto.
The Company's Annual Report on Form 10-K was filed with the Securities and
Exchange Commission on October 21, 1999. A COPY OF THE COMPANY'S 1999 ANNUAL
REPORT TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K AND ANNUAL REPORT
TO STOCKHOLDERS ARE BEING SENT TO EACH STOCKHOLDER ALONG WITH THIS PROXY
STATEMENT.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in proxy material for the 2000 Annual
Meeting of Stockholders should be addressed to the Office of Stockholder
Relations, Oil-Dri Corporation of America, 410 North Michigan Avenue, Suite 400,
Chicago, Illinois 60611, and must be received by July 1, 2000. In the case of
other stockholder proposals not included in the Company's proxy material, the
Company may generally exercise discretionary voting authority, conferred by
proxies, at its 2000 Annual Meeting with respect to any such proposal that is
not timely submitted (i.e., of which the Company did not have notice by
September 14, 2000.)
4. OTHER MATTERS
At this time, the Board of Directors is not aware of any matters not
referred to herein which might be presented for action at the meeting. However,
if any other business should come before the meeting, votes may be cast in
respect to such matters in accordance with the best judgment of the person or
persons acting under the proxies.
By Order of the Board of Directors
Richard M. Jaffee
RICHARD M. JAFFEE
Chairman of the Board
Chicago, Illinois
October 29, 1999
24
<PAGE> 28
PROXY PROXY
OIL-DRI CORPORATION OF AMERICA
410 NORTH MICHIGAN AVENUE, CHICAGO, ILLINOIS 60611
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard M. Jaffee, Daniel S. Jaffee and
Michael L. Goldberg as Proxies, each with the power to appoint his substitute
(the action of one, if only one be present and acting, to be in any event
controlling), and hereby authorizes them to represent and to vote, as
designated below, all of the shares of Common Stock and Class B Stock of
Oil-Dri Corporation of America held of record by the undersigned at the close
of business on October 22, 1999 at the annual meeting of stockholders to be
held on December 7, 1999 or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE NOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. EXCEPT AS OTHERWISE DIRECTED, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE> 29
OIL-DRI CORPORATION OF AMERICA
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
[ ]
<TABLE>
<S> <C> <C> <C> <C>
1. ELECTION OF DIRECTORS - FOR WITHHOLD
Nominees: J. Steven Cole, Arnold W. Donald, ALL ALL FOR ALL (EXCEPT NOMINEE(S) WRITTEN BELOW)
Ronald B. Gordon, Daniel S. Jaffee, Richard M. Jaffee,
Thomas D. Kuczmarski, Joseph C. Miller, Paul J. Miller, [ ] [ ] [ ]
Haydn H. Murray, Allan H. Selig. -----------------------------------------
2. Approval of an amendment to the Company's 1995 FOR AGAINST ABSTAIN 3. In their discretion, the Proxies are
Long Term Incentive Plan authorizing an additional authorized to vote upon such other
500,000 shares for use under the Plan. [ ] [ ] [ ] business as may properly come before the
meeting.
Please check box if you are planning to
attend the meeting. [ ]
Dated: , 1999
-----------------------------
Signature(s)
-----------------------------
-----------------------------------------
Please sign exactly as name appears on
this side of the proxy. When shares are
held by joint tenants, both should sign.
When signing as attorney, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by an authorized person.
</TABLE>
* FOLD AND DETACH HERE *
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
