PROXY.DOC 10
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
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
[X] Definitive Proxy Statementpermitted by
Rule 14a6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a11(c) or Rule 14a
12
CFC International, Inc.
(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)(1) and 011.
1)Title of each class of securities to which transaction applies:
2)Aggregate number of securities to which transaction applies:
3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 011 (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 011(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1)Amount Previously Paid:
2)Form, Schedule or Registration Statement
No.:
3)Filing Party:
4)Date Filed:
April 1, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting
of Stockholders of CFC International, Inc. to be held at
the University of Chicago, Graduate School of
Business, The Conference Center, 450 North Cityfront Plaza
Drive, Chicago, Illinois on Monday, April 27, 1998 at 1:00
p.m. Central Time.
We remain very optimistic about our business. I
remain hopeful about and dedicated to growth through
acquisition, without dilution. These are, indeed, exciting
times at CFC International.
The election of directors and related matters are more
fully described in the enclosed Proxy Statement. Please
read the Proxy Statement closely and mark, date, and sign
the enclosed proxy and return it in the enclosed envelope,
which does not require postage if mailed in the United
States.
Sincerely,
Roger F. Hruby
Chairman of the Board,
Chief Executive
Officer, and President
YOUR VOTE IS IMPORTANT
Please Sign, Date, and Return Your Proxy Card
500 State Street, Chicago Heights, Illinois 60411
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 27, 1998
You are cordially invited to attend the annual meeting
of stockholders of CFC International, Inc., which will be
held at the University of Chicago, Graduate School of
Business, The Conference Center, 450 North Cityfront Plaza
Drive, Chicago, Illinois on April 27, 1998 at 1:00 p.m.
Central Time, for the following purposes:
1. To elect directors; and
2. To transact such other business as may properly
come
before the meeting.
Only stockholders of record at the close of business
on March 20, 1998 are entitled to vote at the meeting. A
list of such stockholders will be available for
examination by any stockholder for any purpose germane
to the meeting, during normal business hours, at Harris
Trust & Savings Bank, 311 West Monroe, 14th Floor,
Chicago, Illinois for a period of ten
days prior to the meeting.
A proxy statement and a proxy card solicited by the Board of
Directors are enclosed herewith. It is important that
your shares be represented at the meeting regardless of the
size of your holdings. Whether or not you intend to be
present at the meeting in person, we urge you to mark,
date and sign the enclosed proxy card and return it in
the envelope provided for that purpose, which does not
require postage if mailed in the United States. If you
attend the meeting, you may, if you wish, withdraw your
proxy and vote in person.
Dennis W. Lakomy
Vice President,
Chief Financial Officer,
Treasurer, and Secretary
Chicago Heights, Illinois
April 1, 1998
YOU ARE URGED TO MARK, DATE, AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY. THE PROXY IS
REVOCABLE AT ANY TIME PRIOR TO ITS USE.
CFC INTERNATIONAL, INC.
PROXY STATEMENT
ANNUAL MEETING OF
STOCKHOLDERS
April 27, 1998
This Proxy Statement is furnished in connection with
the solicitation by the Board of Directors of CFC
International, Inc. (the Company) of proxies for use at the
annual meeting of stockholders of the Company to be held at
the University of Chicago, Graduate School of Business, The
Conference Center, 450 North Cityfront Plaza Drive,
Chicago, Illinois at 1:00 p.m. Central Time, on Monday,
April 27, 1998, and at any postponement or
adjournment thereof. Proxies properly
executed and returned in a timely manner will be voted at
the meeting in accordance with the directions noted
thereon. If no direction is indicated, they will be voted
for the election of the nominees named herein as
directors, and on other matters presented for a vote in
accordance with the judgment of the persons acting under
the proxies. Any stockholder giving a proxy may revoke
it at any time before it is voted, either in person at
the meeting, by written notice to the Secretary of the
Company, or by delivery of a laterdated proxy.
The Companys principal executive offices are located at
500 State Street, Chicago Heights, Illinois 60411
(telephone: 708/8913456). This Proxy Statement is dated
April 1, 1998 and it is expected that proxy materials
will be mailed to stockholders beginning on or about that
date.
SHARES OUTSTANDING AND VOTING RIGHTS
Only stockholders of record at the close of business on
March 20, 1998 are entitled to vote at the annual meeting
of stockholders. The Companys only outstanding voting stock
is its common stock, par value $.01 per share (the
Common Stock), of which 4,024,258 shares were outstanding as
of the close of business on March 20, 1998. Each share
of Common Stock is entitled to one vote.
Election of each director requires the affirmative vote of
the holders of a plurality of the shares of the
Companys Common Stock present in person or represented by
proxy and entitled to vote at the meeting. In general,
approval of any other matter submitted to the
stockholders for their consideration requires the
affirmative vote of the holders of a
majority of the shares of the Common Stock present in person
or represented by proxy. Abstentions, directions to
withhold authority, and broker nonvotes are counted as
shares present in the determination of whether the
shares of stock represented at the meeting constitute a
quorum. Abstentions, directions to withhold authority, and
broker nonvotes are not counted in tabulations of the
votes cast on proposals presented to stockholders. Thus,
an abstention, direction to withhold authority, or broker
nonvote with respect to a matter has the same legal
effect as a vote against the matter. An automated system
administered by the Companys transfer agent will tabulate
the votes.
ELECTION OF DIRECTORS
Six directors are to be elected at the meeting. The Board
of Directors has designated the persons named below
as nominees for election as directors for a term expiring at
the annual meeting of stockholders in 1999. All of the
nominees are serving as directors as of the date of
this Proxy Statement.
The six nominees for director receiving the vote of
the holders of a plurality of the shares of Common Stock
present in person or represented by proxy and entitled to
vote at the meeting will be elected. Unless otherwise
instructed, properly executed proxies that are returned in a
timely manner will be voted for election of the six
nominees. If, however, any of the nominees should be unable
or should fail to act as a
nominee by virtue of an unexpected occurrence, the proxies
will be voted for such other person as will be determined
by the holders of the proxies in their discretion, or the
Board of Directors may make an appropriate reduction in the
number of directors to be elected.
Biographical information concerning the six nominees is
presented below:
Roger F. Hruby, age 63, has been a director of the
Company since its formation. Currently, Mr. Hruby also
serves as the Companys Chairman of the Board, Chief
Executive Officer, and President. Prior thereto, Mr.
Hruby was the President and Chief Operating Officer of
the Companys predecessor, Bee Chemical, from 1977 until
the sale of that company to Morton Thiokol, Inc. in 1985,
at which time Mr. Hruby also became its Chief Executive
Officer. Mr. Hruby also organized the formation of
Bee Chemicals Japanese joint venture in 1970 and supervised
its growth from a startup venture to a significant
manufacturing company with annual sales in excess of
$40 million. In 1986, Mr. Hruby formed the Company,
which purchased Bee Chemicals specialty transferable solid
coatings division from Morton Thiokol and has been
Chairman of the Board and Chief Executive Officer of the
Company since the date of its incorporation. Mr. Hruby
has been involved in the specialty chemical industry since
1958. Mr. Hruby earned a bachelors degree in chemistry
from North Central College and a Masters of Business
Administration from the University of Chicago. Mr.
Hruby was President of the Company from its inception
until June 1995, and has held the office of
President since January 1998.
William G. Brown, age 55, has been a director of the Company
since August 1995. Mr. Brown currently is a partner of
Bell, Boyd & Lloyd, Chicago, Illinois, counsel to the
Company. He
is also a Director of the MYR Group Inc., Medicus
Systems
Corporation, Managed Care Solutions, Inc., and
Dovenmuehle Mortgage, Inc.
Robert B. Covalt, age 66, became a director of the
Company in August 1997. Mr. Covalt has been
Chief Executive Officer
of Sovereign Specialty Chemicals, Inc. since 1996.
Prior
thereto, he served in several capacities with
Morton
International, Inc., a salt and specialty chemicals
company, most recently as Executive Vice President and
President of the Specialty Chemicals Group.
Dennis W. Lakomy, age 53, has been a director of the
Company since August 1995. Mr. Lakomy also is Vice
President, Chief Financial Officer, Secretary, and
Treasurer of the Company. He
joined Bee Chemical in 1975 and served as Vice President
and Controller of that company from 1982 until cofounding
CFC with Mr. Hruby in1986. Mr. Lakomy earned a bachelors
degree
in accounting from Loyola University of Chicago and a
Masters
of Business Administration from the University of Chicago.
Richard Pierce, age 59, became a director of the Company
in August 1995. Before becoming a director, Mr. Pierce
served as an Advisory Director of the Company in 1991.
He currently is
the Managing Director of the Chicago office of
Russell Reynolds Associates, Inc., an executive recruiting
firm, which he joined in 1976.
David D. Wesselink, age 55, became a director of the
Company in August
1995. Before becoming a director, Mr. Wesselink
served as an Advisory Director of the Company since 1992.
He
was Chief Financial Officer of Advanta Corporation, a
consumer credit company, from 1993 until March 1998. Prior
thereto, he served in several capacities with Household
International, a consumer and commercial financial
services company, including Chief Financial Officer,
Treasurer and Vice President, Research and Development.
The Board of Directors unanimously recommends that the
stockholders vote
FOR the election of each of the nominees for director.
Meetings and Committees of the Board
The three standing committees of the Board of Directors
of the Company are the Audit Committee, the Stock
Option Committee, and the Compensation Committee, the
functions and membership of which are described below.
The Board of Directors does not have a standing nominating
committee. The Board of Directors held six meetings
and acted once by unanimous written consent in 1997.
The Audit Committees functions include
making recommendations to the Board of Directors on the
selection of the Companys independent auditors,
reviewing the overall scope of the independent auditors
examination, reviewing the proposed annual financial
statements of the Company with the independent auditors
and reporting a summary of the Audit Committees
conclusions to the Board of Directors; and reviewing
the Companys internal controls and accounting policies
with the independent auditors and certain officers of the
Company. The Audit Committee currently consists
of
Messrs. Brown, Pierce, and Wesselink.
The Stock Option Committee is responsible for
the
administration and interpretation of, and the granting
of options under the CFC International, Inc. Stock Option
Plan (the Stock Option Plan) and the CFC International,
Inc. Stock Purchase Plan (the Stock Purchase Plan
and, collectively with the Stock Option Plan, referred to
as the Employee Plans). Messrs. Pierce and Wesselink
currently are the members of the Stock Option Committee.
The Compensation Committee is responsible for approving
all employment contracts with, and salaries of, officers
of the Company. The Compensation Committee also is
responsible for all bonuses, other payments, plans (other
than the Employee Plans), programs, and benefits for the
Companys officers. Messrs. Hruby and Pierce currently
comprise the Compensation Committee.
Nominations for election of directors are made by the
Board of Directors and, pursuant to the Companys bylaws,
may be made by a committee appointed by the Board
or by any stockholder entitled to vote in the election
of directors. See Submission of Stockholder Proposals for
the 1999 Annual Meeting for procedures with respect to
nominations by stockholders.
During 1997, the Stock Option Committee held two
meetings, the Audit Committee held two meetings and the
Compensation Committee met once. In 1997, during the time
each director served in such capacity, no director attended
less than 75% of the aggregate of all meetings of the Board
and all meetings held by committees of the Board on which
such director served.
Other Matters
Management knows of no other matters to be brought
before the annual meeting other than those described above.
If any other business should come before the meeting, it
is intended that the persons named in the enclosed proxy
will vote the shares in accordance with their best
judgment on any such matter.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 20,
1998, certain information regarding the beneficial ownership
of the Companys Common Stock by each person known by the
Company to be the beneficial owner of 5% or more of
the outstanding Common Stock, by each director, nominee
for director, and Named Executive Officer (as defined
below), and by all directors and executive officers as a
group. As of such date, there were 127 record holders
and approximately 1,100 beneficial holders of Common
Stock and 4,024,258 shares of Common Stock outstanding.
Shares Beneficially
Owned
Name(1) Number(2)Percent
Roger F. Hruby (3) 2,416,67160.1
Dennis W. Lakomy 322,402 8.0
William G. Brown (4) 162,069 4.0
Robert B. Covalt _ _
Richard Pierce 6,000 *
David D. Wesselink 6,000 *
RFH Investments, LP (5) 964,394
24.0
T. Rowe Price Associates (6) 212,800
5.3
Royce Associates, Inc.(7) 292,900
7.3
Fidelity Management & Research Co.(8) 252,000
6.3
All directors and executive officers as a group
(6 persons) (3)(4)
2,443,64261.0
___________
* Represents less than 1% of the outstanding Common Stock.
(1) Unless otherwise indicated, the address of all of
the persons named or identified above is c/o CFC
International, Inc., 500 State Street, Chicago Heights,
Illinois 60411.
(2) The numbers and percentages of shares shown above
as owned by the directors, Named Executive Officers, and
by all directors and executive officers as a group assume
in each case that currently outstanding stock
options covering shares of Common Stock that were
exercisable within 60 days of March 20, 1998 had been
exercised by that person or group as follows: (i) Dennis
W. Lakomy 4,865; (ii) William G. Brown 5,000; (iii)
Robert B. Covalt 0; (iv) Richard Pierce 5,000; (v)
David D. Wesselink 5,000; and all directors and
executive officers as a group (including such
individuals) 19,865.
(3) Includes 964,394 shares of Common Stock owned by
RFH Investments, LP, a limited partnership of which Mr.
Hruby is the managing general partner (and of which
all of the partners are members of Mr. Hrubys
immediate family or trusts for the benefit of such
family members), but does not include 518,170 shares of
Class B Common Stock owned by RFH Investments, LP. The
shares of Common Stock shown above as beneficially owned
by Mr. Hruby also include 469,500 shares of Common Stock
which Mr. Lakomy and members of Mr. Browns family
beneficially owned immediately after the Companys
initial public offering of common stock in November
1995, which they still hold, and for which Mr. Hruby
holds an irrevocable voting proxy. In addition to the
Common Stock set forth in the table above, Mr. Hruby
owns an option to purchase 534 shares of the Companys
Voting Preferred Stock with an exercise price of $500
per share. The Voting Preferred Stock is entitled to
1,000 votes per share on all matters to be voted upon by
the Companys stockholders.
(4) Includes 157,067 shares of Common Stock which are
owned by the William Gardner Brown 1993 GST Trust, a trust
for the benefit of Mr. Browns family and of which Mr.
Brown is not a beneficiary nor is he, or a member of
his immediate family, a trustee.
(5) RFH Investments, LP also owns 518,170 shares of Class
B Common Stock, which is substantially equivalent to
the Common Stock in all respects except that the Class B
Common Stock generally is not entitled to vote on any
matters submitted to a vote of the Companys stockholders
and not included in shares owned.
(6) The number of shares of Common Stock shown
as beneficially owned is derived from a Schedule 13G
dated February 12, 1998 filed with the Securities and
Exchange Commission by the listed stockholder. Such
stockholders address is 100 E. Pratt Street, Baltimore,
Maryland 21202.
(7) The number of shares of Common Stock shown
as beneficially owned is derived from a Schedule 13G
dated February 5, 1998 filed with the Securities and
Exchange Commission by the listed stockholder. Such
stockholders address is 1414 Avenue of the Americas, New
York, New York 10019.
(8) The number of shares of Common Stock shown
as beneficially owned is derived from a Schedule 13G
dated December 30, 1997 filed with the Securities and
Exchange Commission by the listed stockholder. Such
stockholders address is 82 Devonshire Street, Boston,
Massachusetts 021093614.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The directors and executive officers of the Company
and
persons who own more than 10% of the common stock are
required to report their transactions in the Common
Stock to the Securities and Exchange Commission and the
Company within a
specified period following a transaction. Based solely on
its review of copies of such reports received by it, the
Company believes that during 1997 all such reporting
obligations applicable to its executive officers, directors,
and greater than 10% stockholders were complied with.
MANAGEMENT COMPENSATION
The following table provides certain summary
information concerning the compensation paid or accrued
during the year ended December 31, 1997 to the Companys
Chief Executive Officer and to each of the other executive
officers of the Company who received compensation in excess
of $100,000 during the last fiscal year (the Named
Executive Officers). The Company does not have a
restricted stock award program or a longterm incentive
plan.
Summary Compensation Table
LongTerm
Compensation
Annual Compensation
Awards
Other Securities
Annual UnderlyingAll
Ot
her
Name and Principal
SalaryBonusCompensationOptions/SARs Compensation
Position Year ($) ($) ($) (#)
($)*
Roger F. Hruby 1997329,240 3,000
Chairman of the Board and 1996285,00028,50024,000(1)
3,000
Chief Executive Officer 1995282,08828,500
3,000
Robert J. DuPriest 1997181,500 21,354 3,000
President and Chief 1996181,50018,1506,727(2)10,000 3,000
Operating Officer 1995165,00051,150523(2) 3,300
Dennis W. Lakomy 1997165,375 19,458 3,000
Vice President, Chief Financial 1996165,375 16,537
3,000
Officer, Treasurer, and Secretary 1995 157,500 15,750
3,000
___________
* Reflects matching contributions made by the Company
pursuant
to the Companys contributory retirement savings plan, which
covers eligible employees who qualify as to age and
length of service. Under the plan, the Company makes
matching contributions equal to 50% of the first 4% of the
employees income that the employee contributes.
(1) A $1 million life insurance policy on Mr. Hruby
was paid for by the Company during 1996, with Mr. Hrubys
estate as the beneficiary. The amount shown above was the
premium paid for such policy. The policy was not
renewed during 1997.
(2) In connection with Mr. DuPriests exercise of options
covering 31,414 shares of Common Stock on November 24,
1995, the Company loaned him $81,838 for the payment of
taxes on the gain realized upon the exercise of those
options. The Company loaned Mr. DuPriest another $28,715
to pay the final estimated taxes due on January 15, 1996.
The loan accrues no interest and is due on January 31,
2001. The amount shown above represents taxable income
from imputed interest in accordance with Internal Revenue
Service requirements. The loan was paid back on January
13, 1998 when Mr. DuPriest left the Company and the
Company repurchased all of the shares owned by Mr.
DuPriest.
The following table sets forth individual grants of stock
options made to the Named Executive Officers during 1997:
Option Grants In Last fiscal Year
Potential Realizable
Value at Assumed
Percent of Total Annual Rates of Stock
Options GrantedExercisePrice Appreciation
Date ofOptionsto Employeesor Base Expiration
for Option Term (2)
Grant Granted in Fiscal Year Price (1) Da
te 5% 10%
Roger F. Hruby _ _ _ _ _ _ _
Robert J. DuPriest 2/17/9721,354 24.5%$12.752/17/07$171,
225 $433,918
Dennis W. Lakomy 2/17/9719,45821.4 $12.752/17/07136,778395,
391
___________
(1) Under the Stock Option Plan, the exercise price must be
the fair market value of the Common Stock on the date of
grant and the options granted generally become exercisable
as to onefourth of the grant on each of the first, second,
third, and fourth anniversary of the date of grant.
(2) These amounts represent certain assumed annual rates of
appreciation calculated from the exercise price, as required
by the rules of the Securities and Exchange Commission.
Actual gains, if any, on stock option exercises and Common
Stock holdings are dependent on the future performance of
the Common Stock. There can be no assurance that the
amounts reflected in this table will be achieved.
Option Exercises and YearEnd Valuation
The following table provides certain information with
respect to the Named Executive Officers concerning the
exercise of options and/or stock appreciation rights (SARs)
during 1997 and unexercised options and SARs held on December
31, 1997:
Aggregate 1997 Option/SAR Exercises And Values
Number of SecuritiesValue of Une
xercised
Underlying Unexercised IntheMon ey
Options/
Shares AcquiredValue Options/SARs at
12/31/97 SARs at 12/31/97*
on ExerciseRealizedExercisableUnexercisableEx
ercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
Roger F. Hruby
Robert J. DuPriest 2,500 28,854 2,200
Dennis W. Lakomy 19,458
___________
* This column indicates the aggregate amount, if any, by which
the market value of the Common Stock on December 31, 1997
exceeded the options exercise price and is based on the
closing per share sale price of the Common Stock on such
date of $11.75 as quoted on the Nasdaq National Market.
Directors Compensation
Directors of the Company who are not employees of the
Company are paid $1,500 for each board meeting attended and
$750 for each board committee meeting attended which is not
held on the same day as a board meeting, but are not paid an
annual retainer. Directors of the Company who are also
employees of the Company are not paid any compensation for
serving as directors.
Upon the closing of the Companys initial public offering
of Common Stock (the IPO), each of the Companys
nonemployee directors, Messrs. Brown, Pierce and
Wesselink, were automatically granted, pursuant to the CFC
International, Inc. Directors Stock Option Plan, a
onetime option covering 10,000 shares of Common Stock.
Each of the options has a term of ten years and a per
share exercise price of $9.50. The
options become exercisable as to onefourth of the grant
on each of the first, second, third, and fourth
anniversary of the date of grant.
Compensation Committee Interlocks and Insider Participation
Until August 1995, Mr. Hruby, the Companys Chief
Executive
Officer, approved the terms of the compensation of
the Companys executive officers. In August 1995, the
Companys Board of Directors formed a Compensation
Committee, which is currently comprised of Messrs.
Hruby and Pierce, which determines the compensation
of the Companys
executive
officers in the future.
In accordance with rules promulgated by the Securities
and Exchange Commission, the information included under
the
captions Report of the Compensation Committee
and
Performance Graph will not be deemed to be filed or to be
proxy soliciting material or incorporated by reference in
any prior or future filings by the Company under the
Securities Act of 1933 as amended, or the Securities
Exchange Act of 1934, as amended (the Exchange Act).
REPORT OF THE COMPENSATION COMMITTEE
The compensation of the Companys executive officers is
generally determined by the Compensation Committee of
the Board of Directors. The Compensation Committee
currently consists of two directors of the Company.
The following report with respect to certain compensation
paid or awarded to the Companys executive officers during
1997 is furnished by the directors who then comprised the
Compensation Committee.
General Policies
The Companys compensation program is intended to enable
to the Company to attract, motivate, reward, and retain
the management talent required to achieve corporate
objectives in a
highly competitive industry, and thereby increase
stockholder value. It is the Companys policy to
provide incentives to its senior management to achieve both
shortterm and longterm objectives. To attain these
objectives, the Companys executive compensation program is
composed primarily of a base salary, bonuses, and stock
option grants.
Section 162(m) of the Internal Revenue Code of 1986,
as amended, limits the deduction for federal income tax
purposes of certain compensation paid by any publicly held
corporation to its chief executive officer and its four
other highest compensated officers to $1 million per each
such executive (the $1 million cap). The compensation
currently paid to the Companys executive officers,
including pursuant to the Employee Plans, is not expected
to exceed the $1 million cap. See Cash Compensation.
Cash Compensation
Base salaries for executive officers are determined by
a subjective assessment of the executive
officers
responsibilities and position within the Company, and
the performance of the executive officer. Base
salaries are reviewed annually and from time to time by
the Compensation Committee and adjusted appropriately.
Prior to the creation
of the Compensation Committee, Mr. Hruby reviewed
base salaries annually and adjusted them as appropriate.
In 1995 and 1996 bonuses were a part of the
Companys general
executive compensation structure. The Company did not
meet its targeted performance expectations during1997.
As a
result, none of the Companys executive officers received
a bonus for 1997.
Stock Options
Options may be granted to executive officers, as well
as other employees of the Company, upon joining the Company
and each year thereafter under the Employee Plans.
Options are granted to executive officers taking into
account factors
including salary, position, and responsibilities. In
1997,
the Stock Option Committee granted options to purchase
76,110 shares of Common Stock pursuant to the Stock Option
Plan and options to purchase 14,816 shares of Common Stock
pursuant to the Stock Purchase Plan.
Chief Executive Officer Compensation
During 1997, the Companys most highly compensated
executive officer was Roger F. Hruby, Chairman and
Chief Executive Officer of the Company since the date of
its incorporation. Prior to the creation of the Compensation
Committee, Mr. Hruby determined his annual compensation
using the same criteria used to determine compensation
levels for other corporate officers and was based on
his assessment of his overall
performance and on information regarding awards made
by similar companies. Following the creation of the
Compensation Committee, the Compensation Committee
reviewed Mr. Hrubys
compensation arrangements using the same criteria that it
uses to determine compensation levels for other corporate
officers. No specific weighting was assigned to these
factors. Based on its review, the Compensation Committee
believes that Mr. Hrubys experience, dedication and
knowledge have been of vital importance to the
successful and ongoing growth of the administration and
operations of the Company. In the
Compensation Committees view, Mr. Hrubys fiscal 1997
compensation package reflects an appropriate balance of
(i)
the Companys performance in fiscal 1997, (ii) Mr. Hrubys own
performance level, and (iii) competitive standards.
Mr.
Hrubys compensation typically consists of base salary
and bonus.
Compensation
Committee
Members
Richard Pierce
Roger F. Hruby
PERFORMANCE GRAPH
The following graph compares the percentage change in
the
cumulative total returns on the Companys Common Stock,
the Nasdaq Composite Index, and the S&P Chemical Composite
Index (assuming reinvestment of any dividends) for the
period beginning on November 16, 1995, the effective date
of the
registration of the Common Stock under Section 12 of
the
Exchange Act, and ending on December 31, 1997, the last day
of the Companys 1997 fiscal year.
Comparison of Cumulative Return
vs. Nasdaq Composite and S&P Chemical Composite Indices*
1995 1996 1997
Company/Index Name 11/1612/29 6/28 12/31 6/30
12/31
CFC International, Inc. $100.00$90.79$171.05$118.42
$102.63$123.68
Nasdaq Composite Index 100.00100.73113.46123.61138.071
50.35
S&P Chemical Composite Index 100.00
104.49116.29127.891 50.13
152.50
___________
* Assumes $100 invested on November 16, 1995 in the Companys
Common Stock, the Nasdaq Composite Index, and the S&P
Chemical Composite Index. Historical results are not
necessarily indicative of future performance.
CERTAIN TRANSACTIONS
Mr. Robert J. DuPriest was the Companys President and
Chief Operating Officer from June 1995 until January 1998,
when he left the Company. In connection with Mr.
DuPriests exercise of options covering 31,414 shares of
Common Stock on November 24, 1995, the Company loaned him
$81,838 for the payment of a portion of the taxes on the
gain realized upon the exercise of those options.
Additionally, on January 15, 1996, the Company loaned Mr.
DuPriest an additional $28,715 for the payment of the
remainder of the taxes on the gain realized upon the
exercise of those options. The loan was paid back on
January 13, 1998 when Mr. DuPriest left the Company and
the Company repurchased all the shares owned by Mr.
DuPriest at that time.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, pursuant to the recommendation of
the Audit Committee, has selected the accounting firm of
Price Waterhouse LLP to serve as the independent accountants
of the Company for its current fiscal year ending December
31, 1998. Price Waterhouse LLP has served as the Companys
independent auditors since 1986. Representatives of Price
Waterhouse LLP are expected to be present at the annual
meeting, and they will have an opportunity to make a
statement if they so desire and will be available to respond
to appropriate questions from stockholders.
SOLICITATION OF PROXIES
Proxies will be solicited by the Board of Directors through
the use of the mail. Proxies may also be solicited
by directors, officers, and a small number of other
employees of the Company personally, or by mail,
telephone, facsimile, or otherwise, but such persons will
not be compensated for such services.
Brokerage firms, banks, fiduciaries, voting
trustees, or other nominees will be requested to forward
the soliciting material to the beneficial owners of stock
held of record by them, and the Company has hired
Proxy Services Corporation to coordinate the solicitation
of proxies by and through such holders for a fee of
approximately $1,000 plus expenses.
The entire cost of the Board of Directors
solicitation will be borne by the Company.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL
MEETING
In accordance with rules promulgated by the Securities
and Exchange Commission, any stockholder who wishes to
submit a proposal for inclusion in the proxy material to be
distributed by the Company in connection with the 1999
Annual Meeting must do so no later than December 2,
1998. Any such proposal should be submitted in writing to
the Secretary of the Company at is principal executive
offices. Upon submitting a proposal, the stockholder
shall provide the Company with a written notice which
includes the stockholders name and address, the number
of shares of Common Stock that such stockholder holds
of record or beneficially, the dates upon which such
shares were acquired, and documentary support for a claim of
beneficial ownership.
GENERAL
It is important that proxies be returned promptly. If
you are unable to attend the meeting, you are urged,
regardless of the number of shares owned, to date,
sign, and return without
delay your proxy card in the enclosed addressed envelope.
By Order of the Board
of Directors
Dennis W. Lakomy
Vice President, Chief
Financial Officer,
Treasurer, and Secretary
REVOCABLE CFC INTERNATIONAL, INC.
REVOCABLE
PROXY
PROXY
This Proxy is Solicited by the Board of Directors
for The Annual Meeting of Stockholders on April 27, 1998 _ 1:00 p.m.
The undersigned hereby appoints Roger F. Hruby or Dennis W. Lakomy,
or either of them, each with full power of substitution, to act as
proxies for the undersigned, and to vote all shares of Common Stock of
CFC International, Inc. (the Company) which the undersigned would be
entitled to vote if personally present at the Annual Meeting of
Stockholders of the Company to be held on April 27, 1998, at 1:00 p.m.,
at the University of Chicago, Graduate School of Business, The
Conference Center, 450 North Cityfront Plaza Drive, Chicago, Illinois,
and at any and all postponements and adjournments thereof, as follows:
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy will be voted FOR each of the
Nominees listed. If any other business is presented at the Annual
Meeting, this proxy will be voted by those named in this proxy in their
best judgment. At the present time, the Board of Directors knows of no
other business to be presented at the Annual Meeting.
Check here if you plan to attend the Annual Meeting.
PLEASE MARK, SIGN, DATE, AND MAIL THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
CFC INTERNATIONAL, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[
]
1.Election of ForWithhold For All except Nominee(s)
written
Directors_ below
Nominees: Roger F.
Hruby, William G. Nominee Exception
Brown, Robert B.
Covalt, Dennis W.
Lakomy, Richard
Pierce, and David D.
Wesselink
2.In their discretion, The Board of Directors
recommends
on such other a vote FOR the Nominees listed.
business as may The undersigned acknowledges
properly come before receipt from the Company prior to the
execution
the meeting. of this proxy of a Notice of
Annual Meeting of Stockholders, a Proxy
Statement dated April 1, 1998,
and the
Annual Report to Stockholders.
Dated: ,
1998 Signature(s)
Please sign exactly as name
appears on this card. When
signing as attorney, executor,
administrator, trustee, guardian,
corporate officer, or general
partner, please give your full
title. If shares are held
jointly, each holder may sign but
only one signature is required.
