<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Calgon Carbon Corporation
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Calgon Carbon Corporation
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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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Notes:
<PAGE>
[LOGO OF CALGON]
CALGON CARBON CORPORATION
CALGON CARBON CORPORATION P.O. BOX 717 PITTSBURGH, PA 15230-0717
(412)787-6700 TELEX 671 1837 CCC PGH
PANAFAX:412-787-6713
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Calgon Carbon Corporation at 1:00 p.m., Eastern Daylight Saving Time, on
Tuesday, April 22, 1997 at the principal executive office of the Company, 400
Calgon Carbon Drive, Pittsburgh, Pennsylvania.
Information about the business of the meeting and the nominee for election as
a director is set forth in the notice of the meeting and the Proxy Statement,
which are attached. This year you are asked to elect one director and to vote
with respect to several stockholder proposals. As you will see in the proxy
materials, the Board of Directors has recommended that you vote against the
three stockholder proposals.
It is important that your shares be represented at the meeting. Even if you
plan to attend the meeting in person, we hope that you will send a proxy
voting on the matters to be considered. Please sign, date and return your
proxy in the enclosed envelope as promptly as possible.
Very truly yours,
/s/ Colin Bailey
Colin Bailey
President
March 21, 1997
<PAGE>
CALGON CARBON CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Calgon Carbon Corporation will be held
at the principal executive office of the Company, 400 Calgon Carbon Drive,
Pittsburgh, Pennsylvania, on Tuesday, April 22, 1997 at 1:00 p.m., Eastern
Daylight Saving Time, for the following purposes:
(1) To elect one director (Proposal 1);
(2) To consider a stockholder proposal regarding a classified Board of
Directors (Proposal 2);
(3) To consider a stockholder proposal regarding compensation of non-
employee Directors (Proposal 3);
(4) To consider a stockholder proposal regarding hiring investment bankers
(Proposal 4); and
(5) To transact such other business as may properly come before the
meeting.
Please refer to the accompanying Proxy Statement for a description of the
matters to be considered at the meeting.
Holders of record of the Company's Common Stock as of the close of business on
March 11, 1997 are entitled to notice of and to vote at the meeting.
Please sign, date and return the enclosed proxy promptly in the envelope
provided, which requires no United States postage.
Joseph A. Fischette
Secretary
March 21, 1997
<PAGE>
CALGON CARBON CORPORATION
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Voting Securities and Record Date......................................... 1
Security Ownership of Management and Certain Beneficial Owners............ 1
Board of Directors and Committees of the Board............................ 3
Election of Directors (Proposal 1)........................................ 4
Executive Compensation.................................................... 5
Stockholder Proposal Regarding a Classified Board of Directors (Proposal
2)....................................................................... 12
Stockholder Proposal Regarding Compensation of Non-employee Directors
(Proposal 3)............................................................. 13
Shareholder Proposal Regarding Hiring Investment Bankers (Proposal 4)..... 15
Ratification of Appointment of Independent Auditors....................... 17
Vote Required............................................................. 17
Other Business............................................................ 17
Stockholder Proposals..................................................... 17
</TABLE>
<PAGE>
CALGON CARBON CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 22, 1997
The enclosed proxy is solicited on behalf of the Board of Directors of Calgon
Carbon Corporation (the "Company") for use at the Annual Meeting of
Stockholders to be held at 1:00 p.m., Eastern Daylight Saving Time, on
Tuesday, April 22, 1997 at the principal executive office of the Company, 400
Calgon Carbon Drive, Pittsburgh Pennsylvania. The accompanying Notice of
Annual Meeting of Stockholders sets forth the purposes of the meeting.
The enclosed proxy may be revoked at any time before its exercise by giving
written notice of revocation to the Secretary of the Company. The shares
represented by proxies in the form solicited by the Board of Directors will be
voted at the meeting. If a choice is specified on the proxy with respect to a
matter to be voted upon, the shares represented by the proxy will be voted in
accordance with that specification. If no choice is specified, the shares will
be voted as stated below in this Proxy Statement.
It is expected that this Proxy Statement and the accompanying form of proxy
will first be mailed to stockholders on or about March 21, 1997. The Company's
Annual Report to Stockholders for 1996 is enclosed with this Proxy Statement
but does not form a part of the proxy soliciting material. The cost of
soliciting proxies will be borne by the Company. Following the original
mailing of the proxy soliciting material, regular employees of the Company may
solicit proxies by mail, telephone, telecopy, telegraph and personal
interview. The Company has hired D. F. King & Co., Inc. to solicit proxies on
behalf of the Company at an estimated cost of $25,000. The Company may also
request brokerage houses and other nominees or fiduciaries to forward copies
of the proxy soliciting material and 1996 Annual Report to beneficial owners
of the stock held in their names, and the Company will reimburse them for
reasonable out-of-pocket expenses incurred in doing so.
VOTING SECURITIES AND RECORD DATE
Holders of the Company's Common Stock of record as of the close of business on
March 11, 1997 are entitled to receive notice of and to vote at the meeting.
At the record date, the Company had outstanding 39,674,660 shares of Common
Stock, the holders of which are entitled to one vote per share. The Company
does not have cumulative voting.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
MANAGEMENT
The following table shows the number of shares of Common Stock beneficially
owned by each director of the Company, by Joseph A. Fischette, John M. MacCrum
and R. Scott Keefer, executive officers of the Company, by Ronald R. Tisch,
who has retired as an executive officer of the Company but who is named in the
summary compensation table, and by all directors and executive officers of the
Company as a group, as of the record date. Unless otherwise indicated in the
footnotes to the table, each person named and all directors and executive
officers as a group have sole voting power and sole investment power with
respect to the shares. As used herein, "beneficial ownership" means the sole
or shared power to vote, or to direct the voting of, a security, or the sole
or shared investment power with respect to a security (i.e., the power to
dispose of, or to direct the disposition of, the security). A person is deemed
to have "beneficial ownership" of any security that the person has the right
to acquire within 60 days after the record date.
1
<PAGE>
<TABLE>
<CAPTION>
NUMBER PERCENT
NAME OF BENEFICIAL OWNER OF SHARES OF CLASS
- - ------------------------ --------- --------
<S> <C> <C>
Colin Bailey 1,879,424 4.7%
Robert W. Cruickshank(2) 9,100 *
Arthur L. Goeschel(2) 83,600 *
Thomas A. McConomy(2) 4,828,580 12.2
Nick H. Prater(2) 3,100 *
Seth E. Schofield 2,600 *
Ronald R. Tisch 1,140,000 2.9
Harry H. Weil(1)(2) 6,700 *
Robert L. Yohe 3,100 *
Roger H. Zanitsch(2) 1,756,634 4.4
Joseph A. Fischette(2)(3) 135,708 *
John M. MacCrum(1)(2)(3) 108,566 *
R. Scott Keefer(2) 20,000 *
All directors and executive officers
as a group (12 persons)(1)(2)(3) 8,836,612 22.2
</TABLE>
- - --------
*Less than 1%
(1) Includes 200 shares held by Mr. Weil's wife and 400 shares held by Mr.
MacCrum's wife, as to which beneficial ownership is disclaimed by Mr. Weil
and Mr. MacCrum and, as to Mr. MacCrum, includes 5,400 shares held by the
children of Mr. MacCrum.
(2) Includes (i) 3,100 shares in the case of each of Messrs. Cruickshank,
Goeschel and Weil, 2,100 shares in the case of Mr. Prater, 1,100 shares in
the case of each of Messrs. McConomy and Zanitsch and 600 shares in the
case of each of Messrs. Schofield and Yohe, granted under the Company's
1993 Non-Employee Directors' Stock Option Plan, (ii) 20,000 shares in the
case of each of Messrs. Fischette, MacCrum and Keefer granted under the
Company's Stock Option Plan and (iii) 74,800 shares in the case of all
directors and executive officers as a group, in each case covered by
presently exercisable options granted under the aforementioned plans. The
"percent of class" set forth above for any individual and the group (but
not for the other individuals listed above) is computed as though such
shares optioned to such individual or the group, as the case may be, were
outstanding.
(3) Includes 9,708, 7,366 and 17,074 shares in the case of Messrs. Fischette
and MacCrum, and all directors and executive officers as a group,
respectively, held under the Company's Employees Growth Participation Plan
and allocated to the accounts of such executive officers. That plan was
terminated in 1990.
OTHER BENEFICIAL OWNERS
Information as of December 31, 1996 with respect to the only person not
otherwise disclosed in the Management table and known by the Company to be the
beneficial owner of more than 5% of the Company's Stock as of the record date
is as follows:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF COMMON STOCK
-----------------------
NUMBER PERCENT
NAME AND ADDRESS OF SHARES OF CLASS
- - ---------------- ------------- ---------
<S> <C> <C>
NM Capital Management, Inc 2,875,034 7.2%
John Hancock Place
Boston, MA 02117
</TABLE>
NM Capital Management, Inc. has sole investment power over all shares. Voting
authority has been granted to it by clients owning 1,297,362 shares.
2
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The business of the Company is under general supervision of a Board of
Directors as provided by the laws of Delaware, the Company's state of
incorporation. The Board of Directors has established committees to assist it,
consisting of the Executive Committee, the Compensation Committee, the Audit
Committee, the Nominating Committee and the Pension Committee.
Executive Committee. The Executive Committee consists of Messrs. McConomy
(Chairman), Bailey, Goeschel, Prater and Weil. The Executive Committee, during
the intervals between meetings of the Board, may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Company.
Compensation Committee. The Compensation Committee consists of Messrs.
Cruickshank (Chairman), Goeschel, Prater, Schofield, Weil and Yohe. The
Compensation Committee determines the salaries payable to all executive
officers. The Committee also determines bonuses, if any, to be paid each year
to officers and key employees. The Committee also administers the Company's
Stock Option Plan and has the authority to grant options thereunder, although
in order to permit grants under the Stock Option Plan to satisfy Rule 16b-3
under the Securities Exchange Act of 1934, as amended, Mr. Weil does not
participate in such decisions.
Audit Committee. The Audit Committee consists of Messrs. Weil (Chairman),
Cruickshank, Schofield, Yohe and Zanitsch (who has decided not to stand for
reelection to the Board). The responsibilities of the Audit Committee are to
(i) provide assistance to the Board of Directors in fulfilling its statutory
and fiduciary responsibilities for examinations of the Company and in
monitoring its accounting and financial reporting practices; (ii) determine
that the Company has adequate administrative, operational and internal
accounting controls and that the Company is operating in accordance with its
prescribed procedures and codes of conduct; (iii) serve as an independent and
objective party in the review of the financial information presented by
management for distribution to stockholders and the general public; and (iv)
provide direction and supervision over the internal audit function and the
independent accountants. One of the functions of the Audit Committee is to
recommend to the Board of Directors the selection of independent accountants
for the coming year.
Nominating Committee. The Nominating Committee consists of Messrs. Bailey
(Chairman), McConomy, Yohe and Zanitsch (who has decided not to stand for
reelection to the Board). The Nominating Committee reviews the size and
composition of the Board of Directors and makes recommendations with respect
to nominations for election or appointment of directors. The Nominating
Committee will consider nominees recommended by stockholders provided that
stockholders submit the names of nominees in writing to the Secretary of the
Company together with a statement of the nominees' qualifications. Such
information should be received no later than January 31, 1998 with respect to
nominations for election at the 1998 Annual Meeting of Stockholders.
Pension Committee. The Pension Committee consists of Messrs. Prater
(Chairman), Cruickshank and Schofield. The Pension Committee reviews and
approves the investments of the Company's defined benefit pension plans and
interacts with the investment manager for such plans.
The Board also has an Environmental Committee and has recently formed a
Corporate Governance Committee. During 1996, the Executive Committee held one
meeting, the Compensation Committee held five meetings, the Audit Committee
held two meetings and the Nominating Committee, the Pension Committee, the
Environmental Committee and the Corporate Governance Committee each held one
meeting. The Board of Directors held nine meetings during 1996.
COMPENSATION OF DIRECTORS
Board and Committee Fees. Directors who are full-time employees of the Company
or a subsidiary receive no additional compensation for services as a member of
the Board or any committee of the Board. Directors (other than the Chairman)
who are not employees of the Company receive an annual retainer of $18,000,
and the
3
<PAGE>
Chairman receives an annual retainer of $40,000, for Board service. Non-
employee Directors also receive a fee of $1,500 for each Board and committee
meeting attended, and the Chairmen of each committee receive an additional
annual retainer of $3,000. No committee meeting fees are paid for committee
meetings held by telephone or on the same day as a Board meeting.
1993 Non-employee Directors' Stock Option Plan. The 1993 Non-employee
Directors' Stock Option Plan provides for an annual grant of non-statutory
stock options to each non-employee Director in an amount equal to the sum of
500 plus 100 times the number of calendar years during which, as of April 1 of
such year, such person was a non-employee Director of the Company. The option
price for each stock option is $15.50, the fair market value of the Common
Stock on April 21, 1993, the date of the first grant. In general, stock
options will vest if the "income from operations" of the Company for the
fiscal year in which such options were granted is greater than that of the
prior fiscal year; otherwise such stock options will be forfeited.
ELECTION OF DIRECTORS (PROPOSAL 1)
The Board of Directors, acting pursuant to the bylaws of the Company, has
determined that the number of directors constituting the full Board of
Directors shall be eight effective as of the Annual Meeting. The Board is to
be divided into three classes of nearly equal size. One such class is elected
every year at the Annual Meeting for a term of three years. During 1996,
Ronald R. Tisch resigned from the Board, and Roger H. Zanitsch has decided not
to stand for reelection. Consequently, at present the Class of 2000 has only
one director.
The Board of Directors has, upon recommendation of the Nominating Committee,
nominated Colin Bailey for reelection as a director, and he has agreed to
serve if elected. Each director elected at the 1997 Annual Meeting of
Stockholders will hold office until the 2000 Annual Meeting of Stockholders or
until the director's prior death, disability, resignation or removal. Proxies
are solicited in favor of Mr. Bailey and will be voted for him unless
otherwise specified. If Mr. Bailey becomes unable or unwilling to serve as a
director, it is intended that the proxies will be voted for the election of
such other person, if any, as shall be designated by the Board of Directors.
Information concerning Mr. Bailey and the other directors who will continue in
office after the meeting is set forth below, together with information
concerning the Company's executive officers who are not directors.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- - ---- --- -------------------------
<S> <C> <C>
Class of 2000
Colin Bailey 50 President, Director
Class of 1998
Robert W. Cruickshank 51 Director
Arthur L. Goeschel 75 Director
Thomas A. McConomy 63 Director
Class of 1999
Nick H. Prater 68 Director
Seth E. Schofield 57 Director
Harry H. Weil 63 Director
Robert L. Yohe 60 Director
Executive Officers
R. Scott Keefer 49 Senior Vice President--Finance
Joseph A. Fischette 50 Senior Vice President, General
Counsel and Secretary
John M. MacCrum 49 Senior Vice President
</TABLE>
Mr. Bailey has been a director and executive officer of the Company since its
formation in 1985. Mr. Fischette has been an executive officer of the Company,
and Mr. MacCrum has been a key employee or an executive
4
<PAGE>
officer of the Company, since 1985. Mr. Keefer has been Senior Vice
President--Finance since August 1995. Prior thereto Mr. Keefer was Vice
President, Finance and Chief Financial Officer of Quaker State Corporation.
Mr. McConomy has been a director of the Company since its formation in 1985.
He retired as President effective July 1, 1994 but remains Chairman of the
Board. Mr. McConomy is also a director of PNC Bank, N.A. and Equitable
Resources, Inc.
Mr. Cruickshank has been a director of the Company since November 1985. In
1994 Mr. Cruickshank became President of R.W. Cruickshank & Co. Prior thereto
he was Chairman of the Board of Wiltek, Inc. and a private investor for more
than the past five years. He is also a director of New Canaan Bank & Trust
Company, Friedmans, Inc. and Data Documents, Inc.
Mr. Goeschel has been a director of the Company since its formation in 1985.
Since 1992, Mr. Goeschel, previously retired, has been on the Board of Rexene
Corporation, a manufacturer of polypropylene and other thermoplastic and
petrochemical products. Mr. Goeschel is also a director of the Dreyfus-Laurel
Mutual Funds and National Picture Frame.
Mr. Prater has been a director of the Company since August 1990. Until June
1990, when he retired, Mr. Prater was President and Chief Executive Officer of
Mobay Corporation (now called Bayer Corporation), a chemical producer. He is
also a director of Harsco Corp.
Mr. Schofield was elected to serve as a director of the Company in December
1995. Since February 1996, Mr. Schofield has been the Chairman of Base
International, a provider of corporate protection and security. From June 1992
until January 1996, when he retired, Mr. Schofield was Chairman and Chief
Executive Officer of USAir Group, a major air carrier. Prior thereto he was
President and Chief Executive Officer of USAir Group. Mr. Schofield is also a
director of PNC Bank, N.A., USX Corporation and Erie Indemnity Company.
Mr. Weil has been a director of the Company since its formation in 1985. Mr.
Weil is a partner in the law firm of Reed Smith Shaw & McClay, which provides
legal services to the Company. Mr. Weil is also a director of Erie Indemnity
Company.
Mr. Yohe was elected to serve as a director of the Company in December 1995.
Until March 1994, when he retired, Mr. Yohe was Vice Chairman of Olin
Corporation, a producer of chemicals, microelectronic materials, metals,
sporting ammunition and defense and aerospace products. Prior thereto he was
Executive Vice President of Olin Corporation. Mr. Yohe is also a director of
Airgas, Inc., Betz Dearborn, Inc., LaRoche Industries, Inc. and The Middleby
Corporation.
EXECUTIVE COMPENSATION
In 1985 the Board of Directors created a Compensation Committee, consisting of
at least three directors who are not employees of the Company. One of the
functions of the Compensation Committee is to review at least annually, and
more often if circumstances warrant an interim review, the compensation of the
Company's executive officers and the plans or formulas from which such
compensation is derived. The Compensation Committee then makes recommendations
to the full Board of Directors as to such matters (except for the grant of
options under the Company's Stock Option Plan, which is done by the Committee
alone so that the grants will satisfy Rule 16b-3 under the Securities Exchange
Act of 1934, as amended). In order to permit grants under the Stock Option
Plan to satisfy Rule 16b-3, Mr. Weil does not participate in stock
compensation decisions by the Committee.
Set forth below is the report of the members of the Compensation Committee,
Messrs. Cruickshank (Chairman), Goeschel, Prater, Schofield, Weil and Yohe, as
to the Committee's recommendations for the compensation of the Company's
executive officers applicable to 1996.
5
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General policies with respect to executive compensation
and the relationship between compensation and performance
-------------------------------------------
The Compensation Committee's policies with respect to executive compensation
are intended to achieve three principal goals. First, they are intended to
create base compensation levels sufficient to attract and retain talented and
dedicated executive officers. To accomplish this, the Committee compares the
Company's base salary levels with those currently being paid for similar
positions by other companies. The Committee also reviews the total
compensation package available to executive officers, to make sure it remains
competitive.
Second, the compensation policies are intended to provide a direct link
between performance during the year (both the performance of the Company as a
whole and the performance of the individual officer) and a significant part of
the officer's compensation. This is done through cash bonuses available to
executive officers based on the Company's performance as a whole and the
officer's performance as an individual. These bonuses have ranged from a high
of 100% of salary to a low of zero.
Third, the compensation policies are intended to provide executive officers
with the opportunity to acquire a significant equity stake in the Company,
through granting them stock options at full market prices and with delayed
vesting provisions. These options will become and remain important assets if,
and only if, the market price of the Common Stock increases over the period of
the options. Short-term price fluctuations up and down will not be as
important to optionees as long-term growth. In this respect, therefore, the
interests of the executive officers will be aligned directly with the
interests of the stockholders in increasing stockholder value.
Compensation policies applied to executive officers in 1996
------------------------------------------
The Company's executive officers are Messrs. Bailey, Keefer, Fischette and
MacCrum. Mr. Tisch retired as Executive Vice President on July 1, 1996. Dr.
Robert Carrubba retired as Vice President on April 1, 1996.
Salary. Base salaries for the executive officers are designed to be at levels
at or slightly lower than those of executive officers of comparable companies
under the so-called "Hay point" system. This system was designed some years
ago by The Hay Group, Inc., an independent salary consulting firm, and it has
been adopted in various forms by many companies. The Hay Group provides a
comparison to the Company's compensation with all companies participating in
the Hay system, and with those companies in the Company's same industry
sector. Under this system, a certain number of "Hay points" is assigned to
each executive position, depending on factors such as the relative importance
of the executive's functions to the overall results of the Company, the number
of employees reporting to the executive, the levels of supervision, if any,
over the executive and similar factors. Once established, the number of Hay
points applicable to a particular position is unlikely to change unless there
is a significant change in the duties and responsibilities associated with
that position.
In associating particular levels of salary with particular numbers of Hay
points, the Compensation Committee is guided primarily by information from The
Hay Group, Inc. and other sources as to competitive salaries. The other
companies compared with the Company for this purpose are selected by The Hay
Group, Inc., not by the Company, and are not necessarily the same as those
used for the Performance Graph in the Proxy Statement. The Committee also
considers the present and projected cash position of the Company, and the
availability to the executive officers of additional forms of compensation
described below. This consideration is done at the Committee's discretion and
not on any formula or objective basis. The Committee's general philosophy is
that salary levels for the Company's executive officers should be somewhat
less than the median salaries paid by other companies for comparable
positions, so that the overall compensation of an executive officer in a
particular year will be more heavily weighted toward incentive compensation,
such as bonus and stock options, than toward a fixed salary. In this way, the
executive officer's compensation will vary from year to year and will be
strongly influenced by the results achieved by the Company.
6
<PAGE>
In 1996, the salaries of Messrs. Tisch, MacCrum, Keefer and Fischette were
adjusted in accordance with the Company's compensation system as provided for
in the "Hay point" system. In reviewing the salaries of Messrs. Tisch,
MacCrum, Keefer and Fischette the Committee also determined that their
salaries, as compared to their peers at comparable companies, were at or near
the bottom of the salary range for individuals performing the job function of
the respective executive officers. This was the result of the executive
officers' salaries being frozen for two years and thereafter salary increases
being kept at a minimum due to the Company's performance level. Additionally,
the Committee determined that due to restructuring within the Company, certain
executive officers had increased their job responsibilities over the last 18
months, and that these changes had not been reflected in their base salaries.
The Committee also took into consideration the salary levels of the
individuals as they relate to the Company's ability to retain and attract
individuals for positions within the Company. The Committee, after reviewing
materials provided by The Hay Group, Inc., the Company's salary consulting
firm, and other sources of salary information, concluded that the executive
officers' salaries were low and that this would impact the Company's ability
to retain and attract individuals for key positions within the Company. The
Committee, after reviewing the entire situation concerning the executive
officers, taking into account, among other factors, the executive officers'
salaries as compared to their peers, the responsibility of each executive
officer and his performance within his position, and the 1995 performance of
the Company, recommended to the Board of Directors that the salaries of
Messrs. Tisch, MacCrum, Keefer and Fischette be adjusted, and such adjustments
were approved by the Company's Board of Directors.
Bonus. The Officers Incentive Plan provides a bonus pool from which cash
bonuses may be granted to executive officers. The total amount of bonuses that
may be awarded under the plan (the "bonus pool") cannot exceed 100% of the
annualized salaries of all the participants, measured at year-end, and the
maximum bonus for any individual officer is 100% of the officer's salary. The
100% level for the bonus pool is available if the Company meets certain
performance targets, as described below, and if the Committee chooses not to
apply a discount factor, which can be as much as 15%. The failure to meet
performance targets reduces the available bonus pool. Although the Committee
has traditionally recommended bonuses equal to the amounts calculated on an
objective basis under the plan, it retains the discretion under the plan to
reduce or to eliminate bonuses. The Committee did not award the total bonus
award pool in 1996.
The plan provides for three factors in determining the officers' bonus
payments. First, there is a "return on assets" performance target, which is
the average of the actual return on assets for the five years prior to the
award year; second, there is an "earnings per share" performance target, set
by the Board of Directors at the beginning of the year; and third, the
individual officer's performance for the plan year is assessed by the
Committee. The performance factors of return on assets and earnings per share
are weighted 40% each, and the individual officer's performance is weighted
20%. The Company achieved 86% of its earnings per share target and 88% of its
target for return on assets; this, coupled with the individual performance
factors of the officers taken collectively, resulted in an award pool of 44%
of the maximum available award pool. Each officer's bonus was then calculated
based upon his individual performance rating. Not all of the available pool
was awarded by the Committee to the individual officers.
Stock options. Under the terms of the Company's Stock Option Plan adopted in
1985, the Compensation Committee (but not including Mr. Weil) alone determines
that identity of the optionees, the number of shares to be covered by each
option, the years in which the options will become vested, and other terms and
conditions of the options. In determining whether to grant any options, the
Committee takes into account the number of options already outstanding, the
market price of the Company's Common Stock, the results achieved by the
Company in the past year or more (such as earnings, cash flow, return on
equity and other measures), and its prospects during the next several years.
Potential dilution resulting from the exercise of options in the future is
considered, as is the desirability of more closely linking the rewards of the
optionees to increases in the market price of the stock.
7
<PAGE>
These matters are at the discretion of the Committee, and are not determined
by any formula or weighting of particular factors. The Committee believes that
such a link provides an additional incentive to achieve results which are
valued by the market, and which thus may benefit stockholders through an
increased market price.
In determining whether to grant options to a particular individual, the
Committee considers, again in its discretion, the level of responsibility of
the individual within the Company, the effect which successful efforts by the
individual may have on the overall results of the Company, the need to provide
incentive compensation comparable to that available from other companies which
may compete for the individual's services, and the number of unexercised
options and shares of the Company's Common Stock already held by the
individual. In view of the fact that many of the executive officers have
substantial holdings of Common Stock, the Committee in general has granted
less stock options to its executive officers than those in its comparative
group.
There were no options granted to the executive officers of the Company in
1996.
The Stock Option Plan makes stock appreciation rights, payable in cash,
available for grant, but the Committee has not granted any.
Compensation of the chief executive officer in 1996
------------------------------------
The methods used by the Compensation Committee in fixing Mr. Bailey's
compensation for 1996 were the same as those described above for other
executive officers. As the chief executive officer of the Company, all other
officers of the Company report to him, and he is responsible, directly or
indirectly, for all of the operations and business of the Company.
Consequently, Mr. Bailey has a substantially larger number of "Hay points"
assigned to him than any other officer, and in his case the Committee is
typically guided primarily by the overall results of the Company, and less by
efforts expended or achievements at particular tasks or in particular areas.
Mr. Bailey's salary was adjusted in 1996 for the same reasons as discussed for
the other executive officers of the Company. During 1996, as the result of Mr.
Tisch's retirement on July 1, 1996 as Executive Vice President, Mr. Bailey
assumed responsibility for direct supervision of the Company's research
efforts, a function performed by Mr. Tisch prior to his retirement. The
improved performance of the Company in 1995 as compared to 1994 was also a
factor in the Committee's decision to grant Mr. Bailey a salary increase.
Mr. Bailey qualified for a bonus under the Officers Incentive Plan upon the
same factors as are discussed above in connection with such plan.
In view of Mr. Bailey's substantial holdings of Company Common Stock and his
position with the Company, the Committee did not grant him any stock options
under the Stock Option Plan in 1996.
Tax policy
-------
Section 162(m) of the Internal Revenue Code of 1986, as amended, disallows the
Company's federal income tax deductions for compensation paid to the Chief
Executive Officer and any of the other four highest compensated executive
officers in excess of $1 million each in any taxable year, subject to certain
exceptions. Compensation paid to executive officers by the Company is not at
present eligible for any exception which would permit deductibility, although
such compensation payments are currently not close to the $1 million limit.
ROBERT W. CRUICKSHANK SETH E. SCHOFIELD
ARTHUR L. GOESCHEL HARRY H. WEIL
NICK H. PRATER ROBERT L. YOHE
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1)
- - --------------------------- ---- ---------- --------- -------------------
<S> <C> <C> <C> <C>
Colin Bailey 1996 359,585 146,711 2,592
Director, President 1995 324,996 176,776 504
and Chief Executive Officer 1994 278,898 0 0
John M. MacCrum 1996 210,000 85,680 330
Senior Vice President 1995 144,252 80,141 65
1994 131,372 21,235 0
Joseph A. Fischette 1996 190,008 79,675 282
Senior Vice President, 1995 140,880 78,227 59
General Counsel and Secretary 1994 132,180 20,730 0
R. Scott Keefer 1996 195,000 75,151 434
Senior Vice President--Finance, 1995 64,786 91,943 42,339
Chief Financial Officer
Ronald R. Tisch (2) 1996 120,000 0 20,307
Director and Executive 1995 194,400 105,769 823
Vice President 1994 176,700 26,432 497
</TABLE>
- - --------
(1) Consists only of premiums paid by the Company on term life insurance
policies on the lives of the named individuals, except for (i) Mr. Keefer,
which includes in 1995 taxable reimbursed relocation expenses of $42,339
and (ii) Mr. Tisch, which compensation in 1996 is accrued vacation pay.
(2) Mr. Tisch retired from the Company effective July 1, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
SHARES UNDERLYING UNEXERCISED OPTIONS
ACQUIRED ON VALUE OPTIONS AT FY-END (#) AT FY-END ($)(1)
EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Colin Bailey............ 0 $ 0 0 0 $ 0 $ 0
Joseph Fischette........ 0 0 20,000 30,000 8,800 13,200
John MacCrum............ 0 0 20,000 30,000 8,800 13,200
R. Scott Keefer......... 0 0 20,000 40,000 0 0
Ronald R. Tisch......... 0 0 0 0 0 0
</TABLE>
- - --------
(1) Based upon the exercise price of the options and the fair market value of
the Common Stock of the Company as of February 18, 1997.
EMPLOYMENT AGREEMENTS
All the executive officers of the Company have entered into employment
agreements with the Company. The agreements generally provide, subject to
certain termination provisions, for continued employment of the officers
through December 31, 1997, with automatic one year renewals, unless six
months' prior notice is provided. The agreements provide for a base salary and
bonus compensation as determined by the Company. The agreements contain change
in control provisions pursuant to which, if a change in control (as defined in
the agreements)
9
<PAGE>
occurs, (i) the term of the employment agreement is extended to the last day
of the second full calendar year after the change in control, (ii) the
employee may only be discharged for cause, and not based solely on the
performance of such employee, and (iii) the employee is permitted to terminate
employment on a date which is within the period beginning on the first
anniversary of such change in control and ending on the second anniversary. If
the employment of an employee is terminated by the Company for cause or based
on performance, or the agreement expires by its terms, no severance is payable
to an employee. However, if an employee is otherwise terminated or an employee
terminates his or her employment as provided in (iii) above, the Company is
required to pay severance compensation to the employee for 36 months (or, if
earlier, until the employee is employed by another employer for compensation
at least equal to 90% of his prior compensation) equal to his or her monthly
compensation (including salary but not bonuses) for the calendar year
immediately prior to termination. In addition, for such period the employee
will receive equivalent benefits as were provided at the time of termination.
The agreements also contain confidentiality and non-compete provisions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Harry H. Weil, a member of the Compensation Committee, is a partner in the law
firm of Reed Smith Shaw & McClay, which provides legal services to the
Company.
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG CALGON CARBON'S COMMON STOCK, S&P 500 COMPOSITE INDEX
AND S&P CHEMICALS-SPECIALTY COMPOSITE INDEX
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG CALGON CARBON CORPORATION, S&P 500 INDEX
AND S&P CHEMICALS (SPECIALTY) INDEX
<TABLE>
<CAPTION>
Measurement period CALGON CARBON S&P 500 S&P CHEMICALS
(Fiscal year Covered) INDEX (SPECIALTY)
INDEX
- - --------------------- ------------- ------- -------------
<S> <C> <C> <C>
Measurement PT -
12/31/96 $100.00 $100.00 $100.00
FYE 12/31/92 $ 83.19 $107.62 $105.94
FYE 12/31/93 $ 62.12 $120.79 $118.46
FYE 12/31/94 $ 48.43 $120.03 $105.45
FYE 12/31/95 $ 62.47 $165.13 $138.60
FYE 12/31/96 $ 65.50 $203.05 $142.16
</TABLE>
* Assumes that the value of the investment in Calgon Carbon Common
Stock and each index was $100 on December 31, 1991 and that all
dividends were reinvested.
10
<PAGE>
PENSION BENEFITS
The Company's Retirement Plan for Salaried Employees is a non-contributory
defined benefit pension plan. In addition, the Company has a Supplemental
Retirement Plan, which is applicable to certain employees selected by the
Board of Directors, designed to supplement retirement benefits under the
Retirement Plan for Salaried Employees which have been limited by various
Internal Revenue Code provisions. At present no executive officers participate
in such Supplemental Retirement Plan. The following table shows the estimated
annual pension benefits which would be payable under the above-stated plans in
the form of a single life annuity, for various levels of average annual
compensation and years of service, based upon retirement at age 65 in the
calendar year 1996, before any reduction to take account of benefits payable
by the Company's former owner, Merck & Co., Inc. (by agreement with Merck,
benefits payable under Company plans are reduced by the benefit amounts
payable to the individual by Merck, which are computed utilizing a 2.5%
compensation increase assumption).
<TABLE>
<CAPTION>
AVERAGE ANNUAL
COMPENSATION FOR HIGHEST
FIVE CONSECUTIVE YEARS ANNUAL BENEFITS FOR YEARS OF SERVICE (1)
IN 10-YEAR PERIOD -----------------------------------------------------
PRECEDING RETIREMENT 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
-------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$150,000 $ 32,925 $ 43,900 $ 54,875 $ 65,850 $ 76,825
200,000 44,550 59,400 74,250 89,100 103,950
250,000 56,175 74,900 93,625 112,350 131,075
300,000 67,800 90,400 113,000 135,600 158,200
350,000 79,425 105,900 132,375 158,850 185,325
400,000 91,050 121,400 151,750 182,100 212,450
450,000 102,675 136,900 171,125 205,350 239,575
500,000 114,300 152,400 190,500 228,600 266,700
</TABLE>
- - --------
(1) Under Section 415 of the Internal Revenue Code of 1986, the amount of
annual benefits which may be paid under the Retirement Plan for Salaried
Employees to any employee may not exceed $125,000 during 1997 and $120,000
during 1996 and under Section 401(a)(17) of the Code the amount of annual
compensation of each employee taken into account under such plan for any
year may not exceed $160,000 during 1997 and $150,000 during 1996. These
limitations have not been reflected in the table.
Other than the reduction with respect to Merck benefits discussed above, the
benefits payable under the plans are not subject to any deduction for Social
Security or other offset amounts. Covered compensation for purposes of the
chart above includes salary and incentive awards which are reported in the
"bonus" column of the summary compensation table. As of December 31, 1996,
Messrs. Bailey, Fischette, MacCrum, Keefer and Tisch had 9, 17, 27, 1 and 18
years of service, respectively, under the plans. Mr. Bailey is also covered by
a pension plan applicable to certain of the Company's foreign employees with
respect to his years of service in the Company's Belgian and other European
operations. Pursuant to the formula used to calculate the benefits payable to
Mr. Bailey for such service he is entitled to an annual amount upon retirement
equal to the greater of (a).5% of his average compensation up to the parallel
average Belgian state pension ceiling, plus 1.5% of such compensation in
excess of this ceiling, for the period he was covered by the plan, and (b) two
times Mr. Bailey's own contributions to the plan plus interest at 4% per year.
In Mr. Bailey's case the latter calculation would apply. Upon Mr. Bailey's
retirement at age 65 he would be entitled to payment of an estimated annual
pension benefit of approximately $10,000 (based upon conversion of Belgian
francs to U.S. dollars at the exchange rates in effect at the end of 1994)
under such plan.
11
<PAGE>
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
In 1996, a report covering one transaction by the wife of John MacCrum was not
timely filed. In making this disclosure, the Company has relied solely on
written representations of its directors and executive officers and copies of
the reports that they have filed with the Commission.
STOCKHOLDER PROPOSAL REGARDING A
CLASSIFIED BOARD OF DIRECTORS (PROPOSAL 2)
Mr. Charles Miller, 23 Park Circle, Great Neck, New York, 11024, who owns
1,200 shares of the Company's Common Stock, has stated his intention to
present the following proposal at the Annual Meeting:
RESOLVED, that the stockholders of the Company request that the Board of
Directors take the necessary steps, in accordance with state law, to
declassify the Board of Directors so that all directors are elected annually,
such declassification to be effected in a manner that does not affect the
unexpired terms of directors previously elected.
SUPPORTING STATEMENT OF PROPONENT
The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable for
implementation of those policies. I believe that the classification of the
Board of Directors, which results in only a portion of the Board being elected
annually, is not in the best interests of the Company and its stockholders.
The Board of Directors of the Company is divided into three classes serving
staggered three-year terms. I believe that a Company's classified Board of
Directors maintains the incumbency of the current Board and therefore of
current management, which in turn limits management's accountability to
shareholders.
The elimination of the Company's classified Board would require each new
director to stand for election annually and allow the stockholders an
opportunity to register their views on the performance of the Board
collectively and each director individually. I believe that this is one of the
best methods available to the stockholder to insure that the Company will be
managed in a manner that is in the best interests of the stockholders.
A classified board might also be seen as an impediment to a potential
takeover of the Company's stock at a premium price. With the inability to
replace the majority of the Board at one annual meeting, an outside suitor
might be reluctant to make an offer in the first place.
I am a founding member of the Investors Rights Association of America and I
believe that the concerns expressed by companies with classified boards that
the annual election of all directors could leave companies without experienced
directors in the event that all incumbents are voted out by stockholders, are
unfounded. In
my view, in the unlikely event that stockholders vote to replace all
directors, this decision would express stockholder dissatisfaction with the
incumbent directors and reflect the need for change.
I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
BOARD OF DIRECTORS STATEMENT IN OPPOSITION TO PROPOSAL
Under the Company's system of electing directors by classes, each director
serves a three-year term, each class is as nearly equal as possible and one of
the three classes is elected each year. This staggered election of directors
is a common practice which has been adopted by the stockholders of many major
corporations. It is specifically permitted by the laws of many states,
including the State of Delaware as well as the rules of the New York Stock
Exchange.
12
<PAGE>
The Board of Directors of the Company believes that a classified Board of
Directors promotes a continuity of policy and a stability of leadership by
assuring that experienced personnel familiar with the Company and its business
will be on the Board of Directors at all times. A classified Board of
Directors is intended to prevent precipitous changes in the composition of the
Board of Directors by preventing the election of an entire new Board of
Directors in a single year. Preventing such a precipitous change in control
serves to provide informed oversight of corporate policies, business
strategies and operations because a majority of the directors at all times
will have had prior experience in the operation of the Company's business.
In addition, the Board of Directors believes that a classified Board serves
as an obstacle to any sudden and disruptive attempts to obtain control of the
Company. For example, throughout the 1980s there were a number of attempts by
various individuals and entities to acquire significant minority positions in
certain companies with the intent of obtaining actual control of the companies
by electing their own slate of directors, or of achieving some other goal,
such as the repurchase of their shares at a premium, by threatening to obtain
such control. The mere attempt to obtain control or to further some other
personal goal, even if unsuccessful, can seriously disrupt the conduct of the
business of a company and cause it to incur substantial expense to the
detriment of the stockholders. These insurgents often threaten to elect a
company's entire board of directors through a proxy contest or otherwise, even
though they do not own a majority of the company's outstanding shares entitled
to vote. The Company's classified Board of Directors may discourage such
purchases because its provisions operate to delay the purchaser's ability to
obtain control of the Board of Directors. For this reason, a person seeking to
acquire control of the Company also is encouraged to initiate such action
through arm's length negotiations with members of the Board of Directors, who
are in a position to negotiate a transaction that is fair to all of the
Company's stockholders.
Further, the Board does not believe that a classified board limits
management's accountability and responsiveness to the Company's stockholders.
The stockholders retain their ability to replace incumbent directors or to
propose alternate nominees for the class of directors to be elected at an
annual meeting. By altering the composition of the Board, the stockholders can
properly and effectively express their views with respect to, and thus
influence, the Company's policies. The Board believes that incumbent directors
who continue in office will be aware of and influenced by such stockholder
action.
Under the corporation law of the State of Delaware, the state in which the
Company is incorporated, the action recommended in the proposal could be taken
only if the Board of Directors recommended an amendment relating to the
Company's Restated Certificate of Incorporation and directed that the amendment
be submitted to a vote of the Company's stockholders. Under the terms of the
Company's By-Laws, an affirmative vote of 75% of the outstanding shares of
Common Stock entitled to vote would be required at a future meeting of the
Company's stockholders in order to amend the staggered election of directors.
The Board of Directors has not recommended, and does not recommend, such an
amendment. Therefore, a vote in favor of this stockholder proposal is only an
advisory recommendation to the Board of Directors that it take steps to initiate
such an amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
STOCKHOLDER PROPOSAL REGARDING
COMPENSATION OF NON-EMPLOYEE DIRECTORS (PROPOSAL 3)
Mr. William Steiner, 4 Radcliff Drive, Great Neck, New York, 11024, who owns
2,200 shares of the Company's common stock, has stated his intention to
present the following proposal at the Annual Meeting:
RESOLVED, that the shareholders recommend that the board of directors take
the necessary steps to ensure that from here forward all non-employee
directors should receive a minimum of fifty percent (50%) of their total
compensation in the form of Company stock which cannot be sold for three
years.
13
<PAGE>
SUPPORTING STATEMENT OF PROPONENT
A significant equity ownership by non-employee directors is probably the
best motivator for facilitating identification with shareholders.
Traditionally, non-employee directors were routinely compensated with a
fixed fee, regardless of corporate performance. In today's competitive global
economy, outside directors must exercise critical oversight of management's
performance in fostering corporate profitability and shareholder value. All
too often, outside directors' oversight has been too lax, and their actions
were too late to effect any meaningful change.
The history of public corporations in America has too many examples of
directors passively allowing strategic management errors to occur. This
results in eroding corporate and shareholder value.
When compensation takes the form of company stock, there is a greater
likelihood that outside directors will exercise greater diligence in
protecting their own, as well as corporate, and shareholder interests.
What is being recommended in this proposal is neither novel nor untried. A
number of corporations have already established versions of such practices,
namely, Alexander & Alexander, Baxter International, Hartford Steam Boiler,
James River, McGraw Hill, NYNEX, RJR Nabisco, Sunbeam Corporation, The
Travelers, Westinghouse, Woolworth and Zurn Industries.
In June, 1995, the National Association of Corporate Directors' (NACD) Blue
Ribbon Commission on Director Compensation issued a report urging that public
company directors be paid their annual fees primarily in company stock to more
closely align their interests with those of shareholders. Several widely-
reported empirical studies have confirmed the potential efficacy of this
approach. Albert J. Dunlap, a Commission member and Chairman and Chief
Executive Officer of Sunbeam Corporation has stated:
"What kind of contribution will the directors ever make if they don't have
a vested interest in the company's financial success. They've got to show
that they believe in the company, that they're willing to stand behind
their choices ...Any director who isn't willing to be paid [one hundred]
percent in stock doesn't believe in the company."
It can be argued that awarding stock options to outside directors
accomplishes the same purpose of insuring director's allegiance to a company's
profitability as paying them in stock. However, it is my contention that stock
options entail no downside risk, i.e., while stock options offer rewards
should the stock increase, if the stock price decreases, no penalties ensue.
There are few strategies that are more likely to align the interests of
outside directors with those of shareholders than one which results in their
sharing of the same bottom line.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION!
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
BOARD OF DIRECTORS STATEMENT IN OPPOSITION TO PROPOSAL
The Company's Board of Directors shares the proponent's belief in the
importance of incentive-based compensation for directors. The Board also
believes that directors should have a financial stake in the Company. Indeed,
as indicated by the table on page 2, which sets forth the ownership of the
Company's Common Stock by management, all of the Company's non-employee
directors are beneficial owners of Common Stock.
The Company has a 1993 Non-Employee Directors' Stock Option Plan which
encourages ownership in the Company by providing for annual option grants to
non-employee directors. The stock options granted under the Plan to non-
employee directors align those directors' long term interests in the growth of
stockholder value with
14
<PAGE>
the stockholders of the Company. The Plan has another feature which aligns the
financial compensation interests of the non-employee directors with the
interests of stockholders of the Company in a direct and meaningful way.
Unlike most non-employee director stock option plans, the stock options
granted each year to non-employee directors do not vest unless the income from
operations of the Company is greater for that year than for the prior year.
Thus, a portion of each non-employee director's compensation (the stock option
grant) is tied to promoting the short-term success of the Company as well as
to promoting the long-term value through enhancement of the stock price of the
Company. The options are not transferable and thus provide long-term
incentive, consistent with continuity in service on the Board. The only value
directors derive from these options is based on appreciation in the price of
the Company's Common Stock, a result all stockholders desire.
The Board believes that the existing director compensation structure offers
directors the flexibility to balance stock-related and cash compensation in a
manner compatible with their individual circumstances. The directors and the
Compensation Committee periodically review the compensation of the Company's
non-employee directors to ensure that it remains consistent with industry
standards and continues to be fair and appropriate in light of the obligations
and responsibilities of corporate directors. Mr. Steiner's proposal removes
the flexibility to determine the optimum form of compensation in order to
attract and retain the best directors possible. This can vary from time to
time based on general trends in directors' compensation. The proposed mandate
that one-half of non-employee director compensation be in common stock may
result in well-qualified individuals declining to serve as directors of the
Company because they consider a greater proportion of cash or other forms of
compensation offered by other corporations more desirable. The Board believes
that the non-employee directors' stock option plan already approved by the
Company's stockholders is a more appropriate means of accomplishing directors'
identification with stockholder interests than merely paying half of their
compensation in stock as suggested by Mr. Steiner.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
STOCKHOLDER PROPOSAL REGARDING
HIRING INVESTMENT BANKERS (PROPOSAL 4)
Mr. Kenneth Steiner, 14 Stoner Avenue, Great Neck, New York, 11021, who owns
800 shares of the Company's Common Stock, has stated his intention to present
the following proposal at the Annual Meeting:
RESOLVED: that the shareholders of the Company recommend and deem it
desirable and in their best interest that the board of directors immediately
engage the services of a nationally recognized investment banker to explore
all alternatives to enhance the value of the Company. These alternative should
include, but not be limited to, the possible sale, merger or other transaction
involving the Company.
SUPPORTING STATEMENT OF PROPONENT
In support of the above resolution, the proponent believes that in view of
the unacceptable performance of the Company over the past five years, the
deplorable stock price, and in my opinion, ineffective management, the board
of directors should take immediate action to engage the services of an
investment banker to explore all alternatives to enhance the value of the
Company.
I am a co-founder of the Investors Rights Association of America and it is
my opinion that the value of the Company can be enhanced if the above
resolution is carried out and the shareholders would at long last be able to
salvage meaningful monetary rewards for their patience and long suffering.
15
<PAGE>
Nell Minow, a highly acclaimed corporate governance specialist, and
principal of the LENS Fund, which specializes in increasing the value of
under-performing companies, has stated:
"Companies can only justify asking investors to take the risk of investing
in equities by delivering a competitive rate of return on the invested
capital. When a company's management and board cannot meet that goal, they
owe it to their investors to submit themselves to an independent evaluation
by an outside firm, to insure that all options are objectively evaluated.
If a company's performance lags over a sustained period, it is time for the
shareholders to send a message of no confidence to the board, reminding
them that they have to hold management--and themselves--to a higher
standard."
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
BOARD OF DIRECTORS STATEMENT IN OPPOSITION TO PROPOSAL
The Board of Directors of the Company reviews on a regular basis strategic
alternatives and opportunities available to it, remains committed to
maximizing value for stockholders and will pursue whichever course of action
that will, in the Board's judgment, best achieve that objective. As a result,
adoption of the proposal submitted by Mr. Steiner is not necessary. The Board
also believes that stockholder value will not be enhanced by adoption of the
proposal, but rather that it could seriously prejudice stockholders' financial
interests.
The Board regularly seeks to enhance stockholder value through internal
growth, acquisitions of businesses which are complementary to the Company's
business and other strategic agreements and alliances. In the course of doing
such it engages and relies upon the advice of, as necessary, nationally
prominent investment banking firms. During the past year, the Company has made
four significant acquisitions designed to achieve corporate growth and
increase profitability. In February, 1996, the Company purchased the assets of
Vulcan Peroxidation Systems, Inc. In June, 1996, the Company purchased the
stock of Solarchem Enterprises, Inc. In December, 1996, the Company purchased
the stock of Advanced Separation Technologies, Inc. and the stock of Charcoal
Cloth (International) Ltd, an English company. The Advanced Separation
Technologies acquisition was completed with the assistance of a nationally
prominent investment banking firm.
The Company recently adopted "Shareholder Value Added" ("SVA") as a
measurement of Company performance, effective, January 1, 1997. This
performance measurement standard is designed to ensure that all financial
decisions are driven by the objective of increasing stockholder value.
In 1995, the Company adopted a new "Vision Statement" in order to guide the
Company into the next century. The Vision Statement, and the "Strategic
Initiatives" adopted to implement the Vision Statement, among other things
call for the acquisition of synergistic companies and technology which will
enable the Company to increase its revenues and profits. Moreover, the
Strategic Initiatives also drive the development of new products and the
reduction of manufacturing costs.
The Board believes that adoption of the proposal would not increase
stockholder value and could seriously prejudice stockholders' financial
interests. Although the proposal only requests certain action by the Board and
does not obligate the Board to take any action, the Board believes that an
announcement that the proposal has been adopted could severely damage the
Company's long-term relationships with its principal customers, and could have
an adverse impact on the Company's ability to effectively compete in the short
and long term, resulting in a possible decline in revenues and a corresponding
decline in stockholder value.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
16
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
In the past the Company has sought the approval of stockholders concerning the
appointment of independent auditors. No approval is sought this year because
the Board of Directors has asked the Audit Committee to determine whether the
Board should change independent auditors (currently Price Waterhouse LLP) for
1997. Price Waterhouse LLP has audited the Company since its formation in 1985
and the Board wishes to determine whether sound corporate and fiscal policy
dictates a periodic change in auditors. The Company intends to again seek the
ratification of its independent auditors for 1998.
Representatives of Price Waterhouse LLP are expected to be present at the
Annual Meeting. They will have the opportunity to make statements if they
desire to do so and will be available to respond to appropriate questions.
VOTE REQUIRED
The nominee for election as director at the Annual Meeting who receives the
greatest number of votes cast for the election of directors at that meeting by
the holders of the Company's Common Stock, present in person or represented by
proxy at the meeting and entitled to vote at that meeting, a quorum being
present, shall become a director at the conclusion of the tabulation of votes.
The affirmative vote of the holders of a majority of the votes cast of the
Company's Common Stock, present in person or represented by proxy at the
meeting and entitled to vote at that meeting, a quorum being present, is
necessary to approve the actions proposed in proposals 2, 3 and 4 of the
accompanying Notice of 1997 Annual Meeting of Stockholders. Under Delaware law
and the Company's Restated Certificate of Incorporation and By-laws, the total
number of votes cast "for" or "against" will be counted for purposes of
determining the minimum number of affirmative votes required for approval of
proposals 2, 3 and 4 and the total number of votes cast "for" any of these
matters will be counted for purposes of determining whether sufficient
affirmative votes have been cast. An abstention from voting on a matter by a
stockholder present in person or represented by proxy at the meeting or any
broker non-vote shall not be counted in such voting.
OTHER BUSINESS
The Board of Directors does not know of any other business to be presented to
the Annual Meeting of Stockholders. If any other matters properly come before
the meeting, however, the persons named in the enclosed form of proxy will
vote the proxy in accordance with their best judgment.
STOCKHOLDER PROPOSALS
If any stockholder wishes to present a proposal to be acted upon at the 1998
Annual Meeting of Stockholders, the proposal must be received by the Secretary
of the Company by November 21, 1997 to be considered for inclusion in the
Company's Proxy Statement and form of proxy relating to the 1998 Annual
Meeting. The 1998 Annual Meeting is tentatively scheduled for April 21, 1998.
Joseph A. Fischette
Secretary
March 21, 1997
17
<PAGE>
CALGON CARBON CORPORATION
Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting of the Stockholders April 22, 1997
P R O X Y
Thomas A. McConomy and Joseph A. Fischette, or either of them, are hereby
appointed proxies for the undersigned, with full power of substitution, to vote
all the shares of Common Stock of Calgon Carbon Corporation (the "Company")
which the undersigned may be entitled to vote, at the Annual Meeting of
Stockholders of the Company scheduled for April 22, 1997, and at any adjourment
thereof, as directed on the reverse side of this proxy card and, in their
discretion, on any other matters which may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS and will be voted as
specified on the reverse side hereof. If not specified, the shares represented
by this proxy will be voted FOR Proposal 1 and AGAINST Stockholder
Proposals 2, 3, and 4.
Please mark, sign and date this proxy card on the reverse side hereof and return
it in the enclosed envelope.
SEE REVERSE SIDE
FOLD AND DETACH HERE
ANNUAL MEETING OF STOCKHOLDERS
OF
CALGON CARBON CORPORATION
APRIL 22, 1997
1:00 P.M.
COMPANY'S OFFICE
400 CALGON CARBON DRIVE
PITTSBURGH, PENNSYLVANIA
<PAGE>
[X] Please mark votes as in this example
This proxy when properly executed will be voted in the manner directed
herein, if no direction is made, this proxy will be voted FOR election of
directors and AGAINST Stockholder proposals 2,3, and 4.
_______
The Board of Directors recommends a vote FOR proposal 1.
FOR WITHHELD
1. Election of Directors [_] [_] Nominee: Colin Bailey
The Board of Directors Recommend a vote AGAINST proposals 2,3 and 4.
FOR AGAINST ABSTAIN
2. Stockholder Proposal Regarding
a classified Board of Directors. [_] [_] [_]
3. Stockholder Proposal Regarding [_] [_] [_]
Compensation of Non-Employee
Directors.
4. Stockholder Proposal Regarding [_] [_] [_]
hiring Investment Bankers.
YES NO
I plan to attend the annual meeting. [_] [_]
SIGNATURE(S)_________________________________ DATE_________________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
FOLD AND DETACH HERE
CALGON CARBON CORPORATION
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE.
