<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)
- --------------------------------------------------------------------------------
(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO CALGON CARBON CORPORATION]
CALGON CARBON CORPORATION P.O. BOX 717 PITTSBURGH, PA 15230-0717
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 21, 1998 at the principal executive office of the Company, 400
Calgon Carbon Drive, Pittsburgh, Pennsylvania.
Information about the business of the meeting and the nominees for election as
Directors is set forth in the notice of the meeting and the Proxy Statement,
which are attached. This year you are asked to elect three Directors and to
vote with respect to two stockholder proposals. As you will see in the proxy
materials, the Board of Directors has recommended that you vote against the two
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/ Thomas A. McConomy
Thomas A. McConomy
President
March 20, 1998
<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 21, 1998 at 1:00 p.m., Eastern
Daylight Saving Time, for the following purposes:
(1) To elect three Directors (Proposal 1);
(2) To consider a stockholder proposal regarding a classified Board of
Directors (Proposal 2);
(3) To consider a stockholder proposal regarding maximizing value (Proposal
3); and
(4) 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 10, 1998 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 20, 1998
<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.................................................... 6
Stockholder Proposal Regarding a Classified Board of Directors (Proposal
2)....................................................................... 12
Shareholder Proposal Regarding Maximizing Value (Proposal 3).............. 14
Independent Auditors...................................................... 15
Vote Required............................................................. 15
Other Business............................................................ 16
Stockholder Proposals..................................................... 16
</TABLE>
<PAGE>
CALGON CARBON CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 21, 1998
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 21, 1998 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 20, 1998. The Company's
Annual Report to Stockholders for 1997 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 1997 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 10, 1998 are entitled to receive notice of and to vote at the meeting.
At the record date, the Company had outstanding 39,742,660 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 Benjamin F. Ward, Jr., executive officers of the Company, by Colin Bailey,
who is no longer a Director or an executive officer of the Company but who is
named in the summary compensation table, by R. Scott Keefer, who no longer is
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>
Robert W. Cruickshank(2) 9,100 *
Arthur L. Goeschel(2) 83,600 *
Thomas A. McConomy(2) 4,805,580 12.1
Nick H. Prater(2) 3,100 *
Seth E. Schofield 2,600 *
Harry H. Weil(1)(2) 6,700 *
Robert L. Yohe 3,100 *
Joseph A. Fischette(2)(3) 142,158 *
John M. MacCrum(1)(2)(3) 118,166 *
Benjamin F. Ward, Jr. 100 *
Colin Bailey 1,876,424 4.7
R. Scott Keefer(2) 0 *
All directors and executive officers
as a group (10 persons)(1)(2)(3) 5,174,204 13.0
</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 5,000 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 Mr. McConomy 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) 30,000 shares in the case of each of
Messrs. Fischette and MacCrum granted under the Company's Stock Option
Plan and (iii) 73,700 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, 1997 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. 2,460,825 6.2%
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 1,250,415 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 Corporate Governance Committee and the Pension Committee.
Executive Committee. The Executive Committee consists of Messrs. McConomy
(Chairman), 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 certain 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 and Yohe. 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.
Corporate Governance Committee. The Corporate Governance Committee consists of
Messrs. Yohe (Chairman), Cruickshank, Prater and Schofield. The Corporate
Governance Committee is responsible for the functioning of the Board and its
committees, with the goal of causing the Board and its committees to
satisfactorily address the major issues related to the performance and well-
being of the Company. Among the duties of the Corporate Governance Committee
is to review the size and composition of the Board of Directors and to make
recommendations with respect to nominations for election or appointment of
Directors. The Corporate Governance 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, 1999 with respect to nominations for election at the 1999
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.
During 1997, the Compensation Committee held four meetings, the Corporate
Governance Committee held three meetings, the Audit Committee held two
meetings, the Pension Committee held one meeting and the Executive Committee
did not meet. The Board of Directors held eight meetings during 1997.
COMPENSATION OF DIRECTORS
Board and Committee Fees. Pursuant to the fee structure which was in place
prior to October 1, 1997 and which is currently in place, Directors who are
full-time employees of the Company or a subsidiary receive no additional
3
<PAGE>
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 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.
Effective October 1, 1997, the Board increased the annual retainer and meeting
fees to be paid to Directors and committee members, but later rescinded such
increases, such that the original fees and retainer described above are now
applicable to the Board and committees.
1997 Directors' Fee Plan. On December 8, 1997, the Board approved a 1997
Directors' Fee Plan which provides Directors with payment alternatives for
retainer (but not meeting) fees payable as a member of the Board or as the
Chairman of any committee. Pursuant to the Plan, Directors are permitted to
receive their retainer fees in a current payment of cash or in a current
payment of shares of Common Stock of the Company based upon the fair market
value of the Common Stock upon the date of payment of the fee, or to defer
payment of the retainer fees for subsequent payment of shares of Common Stock
pursuant to a stock deferral election. Payment of Common Stock placed in a
deferred stock account will be made in the calendar year following the
calendar year during which a Director ceases to be a Director of the Company,
including by reason of death or disability.
1993 Non-employee Directors' Stock Option Plan. Prior to December 8, 1997, the
1993 Non-employee Directors' Stock Option Plan provided 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 was $15.50, the fair market
value of the Common Stock on April 21, 1993, the date of the first grant. In
general, stock options vested if the "income from operations" of the Company
for the fiscal year in which such options were granted was greater than that
of the prior fiscal year; otherwise such stock options were forfeited. No
options vested for 1997.
On December 8, 1997, the Board amended the 1993 Non-Employee Directors' Stock
Option Plan to provide for an annual grant of option shares based upon a
Black-Scholes calculation instead of the aforementioned calculation. The Board
later decided not to implement the amended Plan at the present time. As a
result of the foregoing, there is no active non-employee Director stock option
plan in operation at the present time and no options will be granted to
Directors until the Board decides otherwise.
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 seven at the present time. 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. In February 1998, Colin Bailey
resigned as President and Chief Executive Officer and as a Director of the
Company. Due to resignations and retirements from the Board, including Mr.
Bailey, at present the Class of 2000 does not have any members. If the Board
of Directors remains at seven members for next year's election of Directors,
the Corporate Governance Committee expects to divide the Class of 1999 into
two classes, nominating two Directors for election in the Class of 2000 and
two Directors for election in the Class of 2002.
The Board of Directors has, upon recommendation of the Corporate Governance
Committee, nominated Robert W. Cruickshank, Arthur L. Goeschel and Thomas A.
McConomy for reelection as Directors, and each of them has agreed to serve if
elected. Each Director elected at the 1998 Annual Meeting of Stockholders will
hold office until the 2001 Annual Meeting of Stockholders or until the
Director's prior death, disability, resignation or removal. Proxies are
solicited in favor of these nominees and will be voted for them unless
otherwise specified.
4
<PAGE>
If any nominee 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 the nominees for Director 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 2001
Robert W. Cruickshank 52 Director
Arthur L. Goeschel 76 Director
Thomas A. McConomy 64 Director and President and CEO
Class of 1999
Nick H. Prater 69 Director
Seth E. Schofield 58 Director
Harry H. Weil 64 Director
Robert L. Yohe 61 Director
Executive Officers
Joseph A. Fischette 51 Senior Vice President, General
Counsel and Secretary
John M. MacCrum 50 Senior Vice President
Benjamin F. Ward, Jr. 54 Senior Vice President--Technology
</TABLE>
Mr. Fischette has been an executive officer of the Company, and Mr. MacCrum
has been a key employee or an executive officer of the Company, since 1985.
Mr. Ward has been Senior Vice President--Technology since August 1997. Prior
thereto Mr. Ward was Research Director of Westvaco Corp., a pulp, paper and
chemical manufacturer.
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. Upon Mr. Bailey's resignation in February 1998, Mr. McConomy was
elected President and Chief Executive Officer of the Company. 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 and Friedmans, Inc.
Mr. Goeschel has been a Director of the Company since its formation in 1985.
Mr. Goeschel is a retired president of Calgon Corporation, formerly a
subsidiary of Merck & Co., Inc. Mr. Goeschel is a director of the Dreyfus-
Laurel Mutual Funds.
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 has been a Director of the Company since 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, Erie Indemnity Company and Erie Family Life
Insurance Company.
5
<PAGE>
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 and Erie Family Life Insurance Company.
Mr. Yohe has been a Director of the Company since 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 1997.
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 periodically
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. In the past, 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.
6
<PAGE>
Compensation policies applied to executive officers in 1997
------------------------------------------
The Company's highest-paid executive officers disclosed in the summary
compensation table are presently Messrs. Fischette, MacCrum and Ward. Mr.
Bailey resigned in February 1998, Mr. Keefer resigned in mid-1997 and Mr. Ward
was employed in mid-1997. The compensation of the Company's executive officers
has three main components: base salary, bonus and stock options.
Salary. Base salaries for the Company's 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 Compensation
Committee does not engage The Hay Group, Inc. to make this comparison every
year, and did not do so in 1997. 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.
During 1997, the salaries of Messrs. MacCrum and Fischette were slightly
increased in accordance with the Company's compensation system. These
increases were recommended by the Compensation Committee and approved by the
Board of Directors primarily to reflect increases in the responsibilities of
these executive officers. Mr. Ward was provided with an annual salary of
$205,108 upon his hiring as Senior Vice President--Technology. This salary was
viewed as competitive.
Bonus. The Officers Incentive Plan provides a bonus pool from which cash
bonuses may be granted to 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 awarded less than the total bonus award pool
in 1997.
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
7
<PAGE>
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 79.4% of its earnings per share target and 71.2% 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 21%
of the maximum available award pool. Except for Mr. Ward, who received a
normal bonus, no bonuses were granted to executive officers based on
individual performance, largely as a result of the unsatisfactory performance
of recent acquisitions which were made by the Company.
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.
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.
Upon his hiring, Mr. Ward was granted options for 60,000 shares of Common
Stock of the Company at the market value of the Common Stock on the date of
grant, with such options vesting in equal increments over the next three
years. There were no other options granted to the executive officers of the
Company in 1997.
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 1997
------------------------------------
The methods used by the Compensation Committee in fixing Mr. Bailey's
compensation for 1997 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 reported to him, and he was responsible, directly or
indirectly, for all of the operations and business of the Company.
Consequently, Mr. Bailey had a substantially larger number of "Hay points"
assigned to him than any other officer, and in his case the Committee was
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 qualified for a bonus under the Officers Incentive Plan upon the
same factors as are discussed above in connection with such plan, but no bonus
was granted to him based on his individual performance for the reasons stated
above.
No stock options were granted to Mr. Bailey in 1997.
8
<PAGE>
Tax policy
-------
If an executive officer's compensation from the Company were to exceed $1
million in any taxable year (which the Committee does not now expect), the
excess over $1 million, with certain exceptions, would not be deductible by
the Company, under Section 162(m) of the Internal Revenue Code of 1986, as
amended. The Committee is aware of this rule, and will take it into account if
the $1 million limit is ever applicable.
ROBERT W. CRUICKSHANK SETH E. SCHOFIELD
ARTHUR L. GOESCHEL HARRY H. WEIL
NICK H. PRATER ROBERT L. YOHE
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1)
- --------------------------- ---- ---------- --------- -------------------
<S> <C> <C> <C> <C>
Colin Bailey(2) 1997 375,000 50,861 1,557
Director, President 1996 359,585 146,711 2,592
and Chief Executive Officer 1995 324,996 176,776 504
John M. MacCrum 1997 214,375 29,911 423
Senior Vice President 1996 210,000 85,680 330
1995 144,252 80,141 65
Joseph A. Fischette 1997 192,378 26,533 348
Senior Vice President, 1996 190,008 79,675 282
General Counsel and Secretary 1995 140,880 78,227 59
R. Scott Keefer(3) 1997 199,375 0 0
Senior Vice President--Finance, 1996 195,000 75,151 434
Chief Financial Officer 1995 64,786 91,943 42,339
Benjamin F. Ward, Jr.(4) 1997 79,375 24,401 85,967
Senior Vice President--
Technology
</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. Ward, which includes in 1997 taxable reimbursed relocation
expenses of $85,967.
(2) Mr. Bailey left the employ of the Company effective February 18, 1998.
(3) Mr. Keefer left the employ of the Company effective August 28, 1997.
(4) Mr. Ward became employed by the Company effective August 12, 1997.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------- POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATE OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---- ------------- ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Colin Bailey............ 0 0% $ 0 -- $ 0 $ 0
Joseph A. Fischette..... 0 0 0 -- 0 0
John M. MacCrum......... 0 0 0 -- 0 0
R. Scott Keefer......... 0 0 0 -- 0 0
Benjamin F. Ward, Jr.... 60,000 100 13.6875 8/12/03 226,896 501,382
</TABLE>
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 30,000 20,000 7,500 5,000
John MacCrum............ 0 0 30,000 20,000 7,500 5,000
R. Scott Keefer......... 60,000 37,500 0 0 0 0
Benjamin F. Ward, Jr.... 0 0 0 60,000 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 December 31, 1997.
EMPLOYMENT AGREEMENTS
All the executive officers of the Company except Mr. McConomy have entered
into employment agreements with the Company. The agreements generally provide
for continued employment of the officers through December 31, 1998, with
automatic one year renewals, unless six months' prior notice is provided.
However, the agreements may be terminated by the Company for cause or for
unsatisfactory performance. The agreements provide for a base salary, and for
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) 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.
10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Harry H. Weil, a member of the Compensation Committee, is counsel to 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
<TABLE>
[GRAPH APPEARS HERE]
<CAPTION>
S&P
CALGON S&P 500 CHEMICAL
Measurement period CARBON COMPOSITE SPECIALTY
(Fiscal year Covered) CORPORATION INDEX INDEX
- --------------------- ----------- --------- ---------
<S> <C> <C> <C>
Measurement PT -
12/31/92 $100.00 $100.00 $100.00
FYE 12/31/93 $ 74.67 $110.08 $114.02
FYE 12/31/94 $ 58.22 $111.53 $ 99.54
FYE 12/31/95 $ 75.10 $153.45 $130.83
FYE 12/31/96 $ 78.74 $188.68 $134.19
FYE 12/31/97 $ 70.95 $251.63 $166.17
</TABLE>
* Assumes that the value of the investment in Calgon Carbon Common
Stock and each index was $100 on December 31, 1992 and that all
dividends were reinvested.
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 1997, 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).
11
<PAGE>
<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 $130,000 during 1998 and $125,000
during 1997 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 1998 and during 1997. 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, 1997,
Messrs. Bailey, Fischette, MacCrum, Keefer and Ward had 10, 18, 28, 2 and no
years of service, respectively, under the plans. Mr. Bailey was 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
A Form 3 was filed late with respect to Benjamin F. Ward, Jr. when Mr. Ward
joined the Company in 1997. 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 Securities and Exchange
Commission.
STOCKHOLDER PROPOSAL REGARDING A
CLASSIFIED BOARD OF DIRECTORS (PROPOSAL 2)
Mr. Charles Miller, 23 Park Circle, Great Neck, New York, 11024, who owns
900 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.
12
<PAGE>
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
its 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.
I believe that the 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 stockholders.
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 this is one of the best
methods available to stockholders to insure that the Company will be managed
in a manner that is in the best interests of the stockholders.
I believe that 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 (subject
to resignations and retirements by directors), 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.
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
13
<PAGE>
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
MAXIMIZING VALUE (PROPOSAL 3)
Mr. William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, who owns
3,400 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 Calgon Carbon Corporation urge the Calgon
Carbon Corporation Board of Directors to arrange for the prompt sale of Calgon
Carbon Corporation to the highest bidder.
SUPPORTING STATEMENT OF PROPONENT
The purpose of the Maximize Value Resolution is to give all Calgon Carbon
Corporation shareholders the opportunity to send a message to the Calgon
Carbon Corporation Board that they support the prompt sale of Calgon Carbon
Corporation to the highest bidder. A strong and/or majority vote by the
shareholders would indicate to the board the displeasure felt by the
shareholders of the financial performance of the company over many years and
the drastic action that should be taken. Even if it is approved by the
majority of the Calgon Carbon Corporation shares represented and entitled to
vote at the annual meeting, the Maximize Value Resolution will not be binding
on the Calgon Carbon Corporation Board. The proponent however believes that if
this resolution receives substantial support from the shareholders, the board
may choose to carry out the request set forth in the resolution.
The prompt auction of Calgon Carbon Corporation should be accomplished by
any appropriate process the board chooses to adopt including a sale to the
highest bidder whether in cash, stock, or a combination of both. It is
expected that the board will uphold its fiduciary duties to the utmost during
the process.
The proponent further believes that if the resolution is adopted, the
management and the board will interpret such adoption as a message from the
company's stockholders that it is no longer acceptable for the board to
continue with its current management plan and strategies.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION.
14
<PAGE>
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 part of
its duties, the Board is obligated to give due consideration to a responsible
offer from a quality source, but the Board's attention is primarily focused on
improving the Company's earnings on a sustained basis over the long-term. 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 Company plans to consult with Morgan Stanley & Co., one of its regular
financial advisors, as to financial and strategic matters, including
alternatives by which shareholder value might be enhanced. Seth Schofield will
lead the Board in working with Morgan Stanley. One of such alternatives might
be the sale of the Company, but the Board is not committed to this course at
the present time. Further, in 1997 the Company adopted "Shareholder Value
Added" ("SVA") as a measurement of Company performance. This performance
measurement standard is designed to ensure that all financial decisions are
driven by the objective of increasing stockholder value.
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.
INDEPENDENT AUDITORS
Price Waterhouse LLP has audited the Company since its formation in 1985.
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 three nominees for election as Directors at the Annual Meeting who receive
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 Directors 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 and 3 of
the accompanying Notice of 1998 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 and 3 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
15
<PAGE>
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 1999
Annual Meeting of Stockholders, the proposal must be received by the Secretary
of the Company by November 20, 1998 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 20, 1999.
Joseph A. Fischette
Secretary
March 20, 1998
16
<PAGE>
P
R
O
X
Y
CALGON CARBON CORPORATION
Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting of the Stockholders April 21, 1998
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 21, 1998, and at any adjournment
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
and 3.
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 21, 1998
1:00 P.M.
Company's Office
400 Calgon Carbon Drive
Pittsburgh, Pennsylvania
<PAGE>
[X] Please mark your 7403
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 and 3.
- ------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR proposal 1.
- ------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [ ] [ ] Nominee: Robert W. Cruickshank
Directors. Arthur L. Goeschel
Thomas A. McConomy
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote AGAINST proposals 2 and 3.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Stockholder Proposal Regarding [ ] [ ] [ ]
a Classified Board of Directors.
3. Stockholder Proposal Regarding [ ] [ ] [ ]
Maximizing Value.
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.
