DEF 14A 1 0001.txt 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 THE MONARCH CEMENT COMPANY (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: ______________________________________________________________________________ 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee is calculated and state how it was determined): ______________________________________________________________________________ 4) Proposed maximum aggregate value of transaction: ______________________________________________________________________________ 5) Total fee paid: ______________________________________________________________________________ [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ______________________________________________________________________________ 2) Form, Schedule or Registration Statement No.: ______________________________________________________________________________ 3) Filing Party: ______________________________________________________________________________ 4) Date Filed: ______________________________________________________________________________ NOTICE OF ANNUAL MEETING OF STOCKHOLDERS (April 11, 2001) The annual meeting of the stockholders of The Monarch Cement Company, a Kansas corporation will be held Wednesday, April 11, 2001, at 2:00 in the afternoon of that day, at the Company's corporate offices, Humboldt, Kansas, to consider and act upon the following: 1. The election of four directors to serve until the annual meeting of the stockholders of the Company in 2004; 2. Any other business which may properly come before the meeting; 3. Adjourning the meeting from time to time. The Board of Directors has fixed the close of business on February 16, 2001 as the record date for the determination of the stockholders entitled to notice of and to vote at the meeting. Only stockholders of record at that time will be entitled to vote at the meeting, or any adjournment thereof. The Board of Directors of the Company solicits you to sign, date and return the enclosed proxy. Your proxy may be revoked at any time before it is exercised. THE MONARCH CEMENT COMPANY Lyndell G. Mosley, CPA Assistant Secretary Humboldt, Kansas March 12, 2001 P R O X Y THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Walter H. Wulf, Walter H. Wulf, Jr., Robert M. Kissick and Byron K. Radcliff as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote all of the shares of Capital Stock and Class B Capital Stock of The Monarch Cement Company held of record by the undersigned on February 16, 2001 at the annual meeting of stockholders to be held on April 11, 2001, or any adjournment or adjournments thereof, as fully and with the same effect as the undersigned might or could do if personally present, with respect to the following business proposed by the Company to be conducted at the meeting: 1. ELECTION OF DIRECTORS FOR all nominees listed WITHHOLD AUTHORITY to below (except as marked vote for all to the contrary below) [ ] nominees listed below [ ] (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.) Jack R. Callahan Ronald E. Callaway Robert M. Kissick Byron K. Radcliff 2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. A majority of said Proxies, or their substitutes, present and acting at said meeting, or any adjournment thereof (or if only one be present and act, that one) shall have and may exercise all of the powers of all of said Proxies. This proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ABOVE-NAMED NOMINEES. The undersigned hereby ratifies and confirms all that said Proxies, or any of them or their substitutes, may lawfully do or cause to be done by virtue hereof and acknowledges receipt of the notice of said meeting and the Proxy Statement accompanying it. PLEASE SIGN EXACTLY AS NAME APPEARS. When shares are held by joint tenants, both should sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. _____________________________ Signature Dated_________________, 2001. _____________________________ Signature if held jointly Please mark, sign, date and return this proxy promptly using the enclosed envelope. THE MONARCH CEMENT COMPANY P.O. Box 1000 Humboldt, Kansas 66748-1000 PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS (2:00 p.m., April 11, 2001) GENERAL INFORMATION The enclosed proxy is being solicited on behalf of the Board of Directors of The Monarch Cement Company and all expenses of the solicitation will be borne by the Company. In addition to solicitation by mail, a number of regular employees may solicit proxies in person or by telephone. The Company does not expect to pay any compensation for the solicitation of proxies. The proxy may be revoked at any time before it is exercised by giving written notice to the Secretary of the Company. The enclosed proxy and this Proxy Statement were first sent or given to the holders of Monarch stock on or about March 12, 2001. The record date with respect to this solicitation is February 16, 2001 and only holders of Capital Stock and/or Class B Capital Stock of the Company as of the close of business on that date are entitled to vote, either in person or by proxy, at the meeting. At the close of business on that date 2,293,337 shares of Capital Stock and 1,772,559 shares of Class B Capital Stock were issued and outstanding. Holders of Capital Stock are entitled to one vote per share standing in their names on the record date. Holders of Class B Capital Stock are entitled to ten votes per share standing in their names on the record date. Directors are elected by a plurality (a number greater than those cast for any other candidates) of the votes cast, in person or by proxy, by the stockholders entitled to vote at the annual meeting for that purpose. The affirmative vote of the holders of a majority of the votes of the Company's stock entitled to vote at the annual meeting is required for the approval of such other matters as properly may come before the annual meeting or any adjournment thereof. A stockholder entitled to vote in the election of directors can withhold authority to vote for all nominees for director or can withhold authority to vote for certain nominees for director. Broker non-votes are treated as shares of the Company's stock as to which voting power has been withheld by the respective beneficial holders and, therefore, as shares not entitled to vote on the proposal as to which there is the broker non-vote. To the knowledge of the Company, there are no special arrangements or understandings between any of the directors and officers other than each of them acting solely in their capacity as such. ELECTION OF DIRECTORS AND RELATED INFORMATION The Board of Directors is divided into three classes. Class I is comprised of three directors and Classes II and III are each comprised of four directors. At each annual meeting of stockholders, one class of directors is elected for a three-year term. The four directors to be elected at the forthcoming annual meeting of stockholders will serve as directors in Class III of the Board of Directors. Their term of office will commence upon election and will continue until the 2004 annual meeting of stockholders and until their successors are elected and qualified. The Board of Directors has selected the nominees for directors. Shares represented by a proxy given pursuant to this solicitation will be voted in favor of the nominees listed below. Each nominee is at present a member of Class III of the Board of Directors. If any of such nominees should unexpectedly become unavailable for election, the shares represented by the proxy will be voted for such substituted nominee or nominees as the Board of Directors may name. Each of the nominees hereinafter named has indicated his willingness to serve if elected and it is not anticipated that any of them will become unavailable for election. The names of the nominees are as follows: Jack R. Callahan Ronald E. Callaway Robert M. Kissick Byron K. Radcliff The Board of Directors recommends that you vote FOR the election of each of the four nominees named above as directors in Class III of the Board of Directors. Information Concerning Nominees for Election to Board of Directors and Directors Continuing in Office
Family relationship Present position Principal occupation Director Term between Name Age with Company last five years since expires Directors and Officers NOMINEES C L A S S III: Jack R. Callahan 69 Director President, The Monarch 1980 2001 None Cement Company, until retirement on 10-31-97 Ronald E. Callaway 65 Director Transport truck driver, 1990 2001 None Agricultural Carriers, Inc., Wichita, Kansas until retirement on 6-30-97 Robert M. Kissick 64 Vice President Chairman, Hydraulic 1972 2001 None and Director Power Systems, Inc. (manufacturer of construction equipment) N. Kansas City, Missouri Byron K. Radcliff 63 Secretary, Owner/Manager, 1960 2001 Father of Byron J. Treasurer Radcliff Ranch(9000 acres) Radcliff, Director and Director Dexter, Kansas DIRECTORS CONTINUING IN OFFICE C L A S S I: David L. Deffner 50 Director Professor of Music, 1997 2002 None American River College, Sacramento, California and Director of Music, Davis Community Church Davis, California Gayle C. McMillen 51 Director Instrumental Music 1999 2002 None Teacher, USD 305, Salina, Kansas Richard N. Nixon 59 Director Shareholder in law 1990 2002 None firm of Stinson, Mag & Fizzell, P.C., Kansas City, MO
Information Concerning Nominees for Election to Board of Directors and Directors Continuing in Office (continued)
Family relationship Present position Principal occupation Director Term between Name Age with Company last five years since expires Directors and Officers DIRECTORS CONTINUING IN OFFICE (continued) C L A S S II: Byron J. Radcliff 44 Director Rancher 1976 2003 Son of Byron K. Radcliff, Director, Secretary and Treasurer Michael R. Wachter 40 Director Civil Engineer and 1994 2003 None Director of Operations, Concrete Technology Corp. a precast/prestressed concrete producer) Tacoma, Washington Walter H. Wulf 101 Chairman of Position with Company 1923 2003 Father of Walter H. Wulf, the Board Jr., Vice Chairman of the and Director Board, President and Director Walter H. Wulf, Jr. 56 Vice Chairman Position with Company 1971 2003 Son of Walter H. Wulf, of the Board, Chairman of the Board and President and Director Director There is no arrangement or understanding between any director and any other person pursuant to which such director was selected as a director.
INFORMATION CONCERNING EXECUTIVE OFFICERS Term of Family Relationship Present Position Office Principal Occupation between Name Age with Company Began Last Five Years Directors and Officers *Walter H. Wulf 101 Chairman of the Board 1969 Position with Father of Walter H. Wulf, Jr., Director 1923 Company Vice Chairman of the Board, President and Director Walter H. Wulf, Jr. 56 President 1997 Position with Son of Walter H. Wulf, Vice Chairman Company Chairman of the Board and of the Board 1991 Director Director 1971 *Robert M. Kissick 64 Vice President 1980 See page 3 of None Director 1972 this Proxy Statement *Byron K. Radcliff 63 Secretary 1999 See page 3 of Father of Byron J. Radcliff, Treasurer 1976 this Proxy Director Director 1960 Statement Lyndell G. Mosley 70 Chief Financial 1972 Position with None Officer and Assistant Company Secretary-Treasurer Debra P. Roe 45 Principal Accounting 1998 Position with None Officer and Assistant Company Secretary-Treasurer ____________________ * Not active in the daily affairs of the Company. There is no arrangement or understanding between any executive officer and any other person pursuant to which any of such executive officers have been selected to their respective positions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth those known to the Company to be beneficial owners of more than five percent of any class of the Company's securities as of February 1, 2001:
Name and Address of Amount and Nature of Percent Beneficial Owner Title of Class Beneficial Ownership of Class Byron K. Radcliff Capital Stock 207,560 shares (a) 9.051% P.O. Box 100 Class B Capital Stock 211,960 shares (b) 11.958% Dexter, KS 67038 Walter H. Wulf Capital Stock 162,892 shares (c) 7.103% P.O. Box 188 Class B Capital Stock 162,592 shares (d) 9.173% Humboldt, KS 66748 ____________________ (a) Includes 202,315 shares owned individually, 2,495 shares owned jointly with wife and 2,750 shares owned by wife. Mr. Radcliff disclaims beneficial ownership of the 2,750 shares owned by wife. (b) Includes 207,715 shares owned individually, 2,495 shares owned jointly with wife and 1,750 shares owned by wife. Mr. Radcliff disclaims beneficial ownership of the 1,750 shares owned by wife. (c) Includes 43,592 shares held individually, 40,300 shares held in Walter H. Wulf Company, LLC for the benefit of Mr. Wulf, his children and grandchildren; 75,000 shares held by Mr. Wulf as co-trustee under three trusts for the respective benefit of Mr. Wulf=s children and as to which Mr. Wulf disclaims beneficial ownership; and 4,000 shares held in the Walter H. Wulf and May L. Wulf Charitable Foundation as to which Mr. Wulf disclaims beneficial ownership. (d) Includes 87,592 shares held individually and 75,000 shares held by Mr. Wulf as co-trustee under three trusts for the respective benefit of Mr. Wulf's children and as to which Mr. Wulf disclaims beneficial ownership.
The security ownership of management as of February 1, 2001 is as follows:
Amount and Nature of Beneficial Ownership Percent of Ownership Number of Shares Class B Class B Capital Capital Beneficial Owner Capital Stock Capital Stock Stock Stock Jack R. Callahan - 1,000 (1) - .056% Ronald E. Callaway 29,710 (2) 29,710 (2) 1.296% 1.676% David L. Deffner 17,462 17,463 .761% .985% Robert M. Kissick 39,903 (3) 39,903 (3) 1.740% 2.251% Gayle C. McMillen 11,220 (4) 11,220 (4) .489% .633% Richard N. Nixon 3,000 1,000 .131% .056% Byron J. Radcliff 2,350 (5) 1,250 (5) .102% .071% Byron K. Radcliff 207,560 (6) 211,960 (7) 9.051% 11.958% Michael R. Wachter 250 250 .011% .014% Walter H. Wulf 162,892 (8) 162,592 (9) 7.103% 9.173% Walter H. Wulf, Jr. 10,210 (10) 15,350 (11) .445% .866% Lyndell G. Mosley 49,439 (12) 15,561 2.156% .878% All directors and officers as a group, 12 persons 533,996 507,259 23.285% 28.617% ____________________ Footnotes to Security Ownership of Certain Beneficial Owners and Management ( 1) Held jointly with wife. ( 2) Includes 5,150 shares held individually. In addition, Mr. Callaway is co-trustee with his two brothers of 24,560 shares held for the benefit of his mother. Mr. Callaway disclaims beneficial ownership of the shares in his trusts. ( 3) Includes 6,428 shares in trusts of which Robert M. Kissick is sole trustee and 33,475 shares owned in wife's trust of which she is sole trustee. Mr. Kissick disclaims beneficial ownership of 33,475 shares owned by wife. ( 4) Includes 10,915 shares owned by wife as to which Mr. McMillen disclaims beneficial ownership. ( 5) Includes 250 shares owned by minor son of which Byron J. Radcliff is custodian and as to which Mr. Radcliff disclaims beneficial ownership. ( 6) See Footnote (a) to preceding Table. ( 7) See Footnote (b) to preceding Table. ( 8) See Footnote (c) to preceding Table. ( 9) See Footnote (d) to preceding Table. (10) Includes 8,310 shares held individually and 1,900 shares owned by wife. In addition, Walter H. Wulf, Jr. is co-trustee with Walter H. Wulf of 75,000 shares under three trusts for the respective benefit of Walter H. Wulf, Jr. and his two sisters, and owns 100 shares of the Walter H. Wulf Company, LLC. Mr. Wulf disclaims beneficial ownership of 50,000 shares held by him as co-trustee under two trusts for the respective benefit of Mr. Wulf's two sisters and 1,900 shares owned by wife. (11) Includes 12,950 shares held individually, 500 shares held jointly with wife and 1,900 shares owned by wife. In addition, Walter H. Wulf, Jr. is co-trustee with Walter H. Wulf of 75,000 shares under three trusts for the respective benefit of Walter H. Wulf, Jr. and his two sisters. Mr. Wulf disclaims beneficial ownership of 50,000 shares held by him as co-trustee under two trusts for the respective benefit of Mr. Wulf's two sisters and 1,900 shares owned by wife. (12) Includes 18,179 shares held in a trust of which Lyndell G. Mosley is sole trustee and 31,260 shares in wife=s trust of which she is sole trustee. Mr. Mosley disclaims beneficial ownership of shares owned by wife.
EXECUTIVE COMPENSATION The following table summarizes the total compensation of the Chief Executive Officer and the Company's other executive officer whose total compensation exceeded $100,000 for the fiscal year ended December 31, 2000, as well as the total compensation paid to each such individual for the Company's two previous fiscal years. SUMMARY COMPENSATION TABLE
Name and Annual Compensation Principal Position Year (Salary) Walter H. Wulf, Jr. 2000 $151,080 Vice Chairman of the 1999 140,970 Board and President 1998 130,815 Lyndell G. Mosley 2000 $146,985 Chief Financial Officer 1999 140,055 and Assistant 1998 132,435 Secretary-Treasurer
The officers who are directors receive a monthly salary and do not receive additional compensation for attending Board of Directors' meetings. All other directors receive $1,100 for attending each board meeting. Also, all directors are reimbursed for their actual travel expenses incurred in attending board meetings. However, if it is necessary to hold more than one board meeting on the same date, or if the board meeting takes more than one day, only $1,100 is paid. The Board of Directors held three meetings during 2000. Each director attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and all committees of the Board on which he served during 2000. The Board of Directors does not have a standing audit, compensation or nominating committee, or other committee performing similar functions. Richard N. Nixon, director, is an attorney and, during 2000, was a shareholder in the law firm of Stinson, Mag and Fizzell, P.C., Kansas City, Missouri. During 2000, the total legal fees and expenses paid by the Company to Stinson, Mag and Fizzell, P.C. did not exceed five percent of such law firm's gross revenues for 2000. DEFINED BENEFIT RETIREMENT PLAN The retirement plan available to salaried employees, including the persons named in the Summary Compensation Table above, is a defined benefit plan which provides for fixed benefits, after a specific number of years of service, for the remainder of the employee's life. The monthly retirement benefits are computed by multiplying the employee's years of service by one and six-tenths percent (1.6%) and multiplying this result by 1/60th of the employee's last sixty calendar months of earnings or the employee's highest five consecutive calendar years of earnings out of the last ten calendar years of service, whichever is greater; however, the maximum retirement benefit is limited to fifty percent (50%) of the average monthly earnings used in computing retirement benefits. Currently the maximum annual compensation for determining retirement benefits is $170,000. The normal retirement age at which retirement plan benefits become payable is age 65. The following table sets forth the estimated annual aggregate retirement benefits at normal retirement for various classifications of earnings and years of service.
PENSION PLAN TABLE Average 5 Years Years of Service Earnings 15 20 25 30 35 $100,000 $24,000 $32,000 $40,000 $48,000 $50,000 125,000 30,000 40,000 50,000 60,000 62,500 150,000 36,000 48,000 60,000 72,000 75,000 175,000 36,000 48,000 60,000 72,000 75,000 200,000 36,000 48,000 60,000 72,000 75,000
The earnings used for the purpose of determining the retirement plan benefits consists of annual compensation (salary) of the type disclosed in the Summary Compensation Table above. Pension benefits under the retirement plan are not subject to any deduction for social security benefits or other offset amounts. The persons named in the Summary Compensation Table above have the following years of credited service for pension benefits under the retirement plan: Mr. Mosley, 42 years and Mr. Wulf, 29 years. SEVERANCE PAY PLAN On July 18, 1985 the Board of Directors of the Company adopted a Severance Pay Plan for Salaried Employees (the "Plan"). The Plan is designed to recognize the past service of long-standing salaried employees and reduce their concerns, if any, if a change in control of the Company should occur. The Plan provides that if employment of any "covered employee" is terminated for any reason other than death or disability within 24 months after a "change in control", such employee is entitled to receive severance pay equal to the employee's monthly salary times the number of full years that such employee has been employed by the Company. The amount of the severance pay is subject to certain reductions where the employee is entitled to certain retirement benefits under the Company's pension plan or where the severance pay is not fully deductible by the Company for federal income tax purposes. A "covered employee" is any full-time salaried employee who has been employed for at least 10 years prior to the "change in control". A "change in control" is any merger, consolidation or disposition of all or substantially all of the assets of the Company or any acquisition by any person or group of persons acting in concert who after such acquisition would own more than 30% of the Company's outstanding voting stock. If there had been a change in control and termination of employment on December 31, 2000, Messrs. Mosley and Wulf would have been entitled to receive severance pay pursuant to the Plan equal to $260,085 and $371,200, respectively. The Plan also provides that any covered employee who, at the time of termination, has been employed on a full-time basis for 20 years or more, is entitled to receive the same life and health insurance generally made available by the Company to retired employees. The Plan may be amended or terminated by the affirmative vote of a least two-thirds of the members of the full Board of Directors of the Company except that no amendment or termination may adversely affect any right of a covered employee who is employed by the Company at the time the Board of Directors has knowledge of any change in control or a proposal for any change in control. BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION There currently is no compensation committee of the Board of Directors (or committee performing equivalent functions). Accordingly, the Board of Directors itself is responsible for the establishment of the general compensation policies of the Company and the specific compensation for executive officers. In carrying out this responsibility, however, the Board of Directors requests and considers the recommendations of the Executive Committee of the Board of Directors (consisting of Jack R. Callahan, Robert M. Kissick, Byron K. Radcliff, Walter H. Wulf and Walter H. Wulf, Jr.). Executive Compensation Policy The Board of Directors believes that the compensation of its executive officers, including Mr. Wulf, the Company's President and Chief Executive Officer (CEO), should be influenced by the Company's long-term profitability. However, the Board does not attempt to establish a direct correlation between the Company's profitability and executive compensation. Executive Officer Compensation Each year, including 2000, the Executive Committee of the Board of Directors makes its recommendations to the Board of Directors as to the salaries for the Company's executive officers. These recommendations are based on a salary adjustment percentage which the committee establishes to serve as a guideline in setting the compensation for all salaried employees of the Company. The determination of this salary adjustment is based on the Executive Committee's assessment of the change in the cost of living and of the Company's long-term profitability. The application of the salary adjustment percentage to the salaries of the Company's salaried employees results generally in the Company's executive officers as a group, including the CEO, receiving the same percentage increase as the other salaried employees of the Company. A subjective determination as to whether the individual salaried employee is performing satisfactorily is also made. In April 2000, upon the recommendation of the Executive Committee, the Board of Directors approved an overall increase in compensation of five percent. These increases are reflective of, although not directly tied to, the Company's continued good performance in 1999. Chief Executive Officer Compensation The compensation of the Company's CEO is established by the Board of Directors in the same way as compensation is established for the Company's other executive officers. As indicated in the above discussion, the increase in the CEO's salary, and that of the other executive officers, largely is determined by the application of the salary adjustment percentage selected by the Executive Committee to the CEO's salary. A subjective determination as to whether the individual salaried employee is performing satisfactorily is also made. THE BOARD OF DIRECTORS: Jack R. Callahan Ronald E. Callaway David L. Deffner Robert M. Kissick Gayle C. McMillen Richard N. Nixon Byron J. Radcliff Byron K. Radcliff Michael R. Wachter Walter H. Wulf Walter H. Wulf, Jr. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION No officer who is not also a director, and no other person, participated in deliberations of the Board of Directors concerning executive officer compensation. The members of the Board of Directors who are also executive officers have no interlocking relationships with any other entity which are required by the rules of the Securities and Exchange Commission to be reported in this Proxy Statement. COMPANY PERFORMANCE The following performance graph shows a five-year comparison of cumulative total returns for the Company, the S&P 500 composite index and an index of peer companies selected by the Company.
Comparison of Five Year Cumulative Total Return Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 MONARCH CEMENT 100.00 143.24 211.95 220.45 206.88 187.81 S&P 500 Index 100.00 122.96 163.98 210.85 255.21 231.98 Peer Group 100.00 118.76 194.87 219.15 188.15 155.70
Annual Return Percentage Years Ending Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 MONARCH CEMENT 43.24 47.97 4.01 -6.16 -9.22 S&P 500 Index 22.96 33.36 28.58 21.04 -9.10 Peer Group 18.76 64.09 12.46 -14.15 -17.25
The cumulative total return on investment for each of the periods for the Company, the S&P 500 and the peer group is based on the stock price or composite index at January 1, 1996. The performance graph assumes that the value of an investment in the Company's capital stock and each index was $100 at January 1, 1996 and that all dividends were reinvested. The information presented in the performance graph is historical in nature and is not intended to represent or guarantee future returns. The performance graph compares the performance of the Company with that of the S&P 500 composite index and an index of peer companies in the Company's industry in which the returns are weighted according to each company's market capitalization. Companies in the peer group index are Lafarge Corporation, Lone Star Industries, Southdown Inc. and Texas Industries. INDEPENDENT PUBLIC ACCOUNTANTS The Company has used the services of Arthur Andersen LLP, Kansas City, Missouri as its Independent Certified Public Accountants for 65 years and plans to continue to use them in this capacity. It is anticipated that no representative of Arthur Andersen LLP will be present at the annual meeting of the stockholders on April 11, 2001 and therefore they will not make a statement or be available to answer questions which may arise. The Board of Directors does not have an audit committee. Audit Fees-Fees for services performed by Arthur Andersen LLP during 2000 relating to the audit of the Company's financial statements aggregated approximately $69,000. Financial Information Systems Design and Implementation Fees-Fees for professional services performed by Arthur Andersen LLP during 2000 in connection with financial information systems design and implementation were $0. All Other Fees-Fees for all other services performed by Arthur Andersen LLP, including tax assistance and other consulting services (both audit and non- audit related), during 2000 aggregated approximately $35,533. The Board of Directors has determined that the other services provided by Arthur Andersen LLP do not impair their independence in auditing the Company's financial statements. DEADLINE FOR STOCKHOLDER PROPOSALS No stockholder proposal will be included in the Company's proxy statement and form of proxy relating to the annual meeting of stockholders to be held on April 10, 2002 which is not received by the Company at P.O. Box 1000, Humboldt, Kansas 66748-1000 on or before November 15, 2001. FINANCIAL STATEMENTS The annual report of the Company containing financial statements for the year ended December 31, 2000 is enclosed herewith. OTHER BUSINESS The proxy solicited confers discretionary authority with respect to the voting of the shares represented thereby on any other business that may properly come before the meeting. However, the Board of Directors has no knowledge of any other business which will be presented at the meeting and does not itself intend to present any such other business. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") generally requires the Company's directors and executive officers, and persons who own more than 10% of a class of the Company's equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership in the Company's capital stock and other equity securities. Securities and Exchange Commission regulations require directors, executive officers and greater than 10% shareholders to furnish the Company with copies of all Section 16(a) reports they file. To the Company's knowledge, based solely on review of copies of such reports and written representations that no other reports were required, during the year ended December 31, 2000, all Section 16(a) filing requirements applicable to its directors, executive officers and greater than 10% shareholders were complied with.