-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WpDeqnVu1i5+Pal0fOZvHx6I5engHZvoHEuf7tpJVjLlgalbUa8dUkd8JuUWMDEN xBQZvmxXSzb46ie4wTA1Ew== 0000067517-97-000003.txt : 19970317 0000067517-97-000003.hdr.sgml : 19970317 ACCESSION NUMBER: 0000067517-97-000003 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970314 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONARCH CEMENT CO CENTRAL INDEX KEY: 0000067517 STANDARD INDUSTRIAL CLASSIFICATION: CONCRETE GYPSUM PLASTER PRODUCTS [3270] IRS NUMBER: 480340590 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-02757 FILM NUMBER: 97556389 BUSINESS ADDRESS: STREET 1: P O BOX 1000 CITY: HUMBOLDT STATE: KS ZIP: 66748 BUSINESS PHONE: 3164732225 DEF 14A 1 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 9, 1997) The annual meeting of the stockholders of The Monarch Cement Company, a Kansas corporation will be held Wednesday, April 9, 1997, 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 2000; 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 20, 1997 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 14, 1997 P R O X Y THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Walter H. Wulf, Karl Callaway, 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 20, 1997 at the annual meeting of stockholders to be held on April 9, 1997, 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.) Byron J. Radcliff Michael R. Wachter Walter H. Wulf Walter H. Wulf, Jr. 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_________________, 1997. _____________________________ 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 9, 1997) 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 14, 1997. The record date with respect to this solicitation is February 20, 1997 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 2,228,216 shares of Capital Stock and 1,987,498 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 II of the Board of Directors. Their term of office will commence upon election and will continue until the 2000 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 II 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: Byron J. Radcliff Michael R. Wachter Walter H. Wulf Walter H. Wulf, Jr. The Board of Directors recommends that you vote FOR the election of each of the four nominees named above as directors in Class II 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 II: Byron J. Radcliff 40 Director Rancher 1976 2000 Son of Byron K. Radcliff, Director and Treasurer Michael R. Wachter 36 Director Civil Engineer and 1994 2000 None Director of Operations, Concrete Technology Corp. (a precast/prestressed concrete producer) Tacoma, Washington Walter H. Wulf 97 Chairman of Position with Company 1923 2000 Father of Walter H. Wulf, the Board Jr., Vice Chairman of the and Director Board, Executive Vice President and Director Walter H. Wulf, Jr. 52 Vice Chairman Position with Company 1971 2000 Son of Walter H. Wulf, of the Board, Chairman of the Board and Executive Director; and Cousin of Vice President Donald L. Deffner, and Director Director DIRECTORS CONTINUING IN OFFICE C L A S S I: Karl Callaway 85 Secretary and Retired Farmer 1947 1999 Uncle of Ronald E. Director Callaway, Director Donald L. Deffner 73 Director Professor of Theology, 1975 1999 Cousin of Walter H. Wulf, Concordia Seminary, Jr., Vice Chairman of the Fort Wayne, Indiana Board, Executive Vice President and Director Richard N. Nixon 55 Director Partner in law firm of 1990 1999 None Stinson, Mag & Fizzell, Kansas City, Missouri to 12/31/92; shareholder in law firm of Stinson, Mag & Fizzell, P.C., Kansas City, Missouri since 1/1/93
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 III: Jack R. Callahan 65 President Position with Company 1980 1998 None and Director Ronald E. Callaway 61 Director Transport truck driver, 1990 1998 Nephew of Karl Callaway, Agricultural Carriers, Director and Secretary Inc., Wichita, Kansas Robert M. Kissick 60 Vice President Chairman, Hydraulic 1972 1998 None and Director Power Systems, Inc. (manufacturer of construction equipment) N. Kansas City, Missouri Byron K. Radcliff 59 Treasurer Manager, 1960 1998 Father of Byron J. and Director Radcliff Ranch Radcliff, 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 97 Chairman of the Board 1969 Position with Father of Walter H. Wulf, Jr., Director 1923 Company Vice Chairman of the Board, Executive Vice President and Director Jack R. Callahan 65 President 1980 Position with None Director 1980 Company Robert M. Kissick 60 *Vice President 1980 See page 4 of None Director 1972 this Proxy Statement Karl Callaway 85 *Secretary 1990 Retired Farmer Uncle of Ronald E. Callaway, Director 1947 Director Byron K. Radcliff 59 *Treasurer 1976 Manager, Father of Byron J. Radcliff, Director 1960 Radcliff Ranch Director Lyndell G. Mosley 65 Assistant 1972 Position with None Secretary-Treasurer Company Walter H. Wulf, Jr. 52 Vice Chairman of 1991 Position with Son of Walter H. Wulf, the Board Company Chairman of the Board and Executive 1984 Director; and Cousin of Vice President Donald L. Deffner, Director Director 1971 ____________________ * 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 12, 1997:
Name and Address of Amount and Nature of Percent Beneficial Owner Title of Class Beneficial Ownership of Class Byron K. Radcliff Capital Stock 211,560 shares (a) 9.495% P.O. Box 100 Class B Capital Stock 211,960 shares (b) 10.665% Dexter, KS 67038 Walter H. Wulf Capital Stock 163,142 shares (c) 7.322% P.O. Box 188 Class B Capital Stock 162,842 shares (d) 8.193% Humboldt, KS 66748 ____________________ (a) Includes 207,315 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. (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 47,842 shares held individually, 40,300 shares held in Walter H. Wulf Company, LLC for the benefit of Mr. Wulf, his children and grandchildren; 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. (d) Includes 87,842 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 12, 1997 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 5,500 (1) 5,500 (1) .247% .277% Karl Callaway 56,000 (2) 56,000 (2) 2.513% 2.818% Ronald E. Callaway 5,150 5,150 .231% .259% Donald L. Deffner 69,500 (3) 69,500 (3) 3.119% 3.497% Robert M. Kissick 39,903 (4) 39,903 (4) 1.791% 2.008% Richard N. Nixon 1,000 1,000 .045% .050% Byron J. Radcliff 1,350 (5) 1,250 (5) .060% .063% Byron K. Radcliff 211,560 (6) 211,960 (7) 9.495% 10.665% Michael R. Wachter 250 250 .011% .012% Walter H. Wulf 163,142 (8) 162,842 (9) 7.322% 8.193% Walter H. Wulf, Jr. 15,510 (10) 19,050 (11) .696% .958% Lyndell G. Mosley 46,821 (12) 15,561 (12) 2.101% .783% All directors and officers as a group, 12 persons 615,686 587,966 27.631% 29.583% ____________________ ( 1) Held jointly with wife. ( 2) Includes 1,550 shares owned by wife as to which Mr. Callaway disclaims beneficial ownership. Footnotes to Security Ownership of Certain Beneficial Owners and Management (continued) ( 3) Includes 14,000 shares in a revocable trust of which Donald L. Deffner is co-trustee with his wife; 33,000 shares in a trust of which Mr. Deffner is trustee and has a lifetime interest in the income and of which his descendants are the remaindermen; 11,250 shares in a trust of which Mr. Deffner is co-trustee and has a lifetime interest in the income and of which his descendants are the remaindermen; and 11,250 shares in a trust of which Mr. Deffner is co-trustee and from which neither he nor his family has any financial interest. ( 4) Includes 1,128 shares held jointly with wife, 5,300 shares in trusts of which Robert M. Kissick is sole trustee and 33,475 shares owned by wife. Mr. Kissick disclaims beneficial ownership of 33,475 shares owned by wife. ( 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 9,910 shares held individually, 3,700 shares owned by minor daughter of which Walter H. Wulf, Jr. is custodian 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, 3,700 shares owned by minor daughter and 1,900 shares owned by wife. (11) Includes 12,950 shares held individually, 500 shares held jointly with wife, 3,700 shares owned by minor daughter of which Walter H. Wulf, Jr. is custodian 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, 3,700 shares owned by minor daughter and 1,900 shares owned by wife. (12) Held jointly with wife.
EXECUTIVE COMPENSATION The following table summarizes the total compensation of the Chief Executive Officer and the Company's two executive officers whose total compensation exceeded $100,000 for the fiscal year ended December 31, 1996, 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) Jack R. Callahan 1996 $155,940 President and 1995 150,240 Chief Executive 1994 145,740 Officer Lyndell G. Mosley 1996 $120,300 Assistant Secretary- 1995 114,390 Treasurer 1994 109,260 Walter H. Wulf, Jr. 1996 $115,125 Vice Chairman of the 1995 108,870 Board and Executive 1994 103,080 Vice President
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 $1,000 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 $1,000 is paid. The Board of Directors held three meetings during 1996. 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 1996, with the exception of Richard N. Nixon and Walter H. Wulf, who attended two Board of Directors' meetings. 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 1996, was a shareholder in the law firm of Stinson, Mag and Fizzell, P.C., Kansas City, Missouri. During 1996, 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 1996. 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 $150,000. 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. Callahan, 39 years; Mr. Mosley, 38 years; and Mr. Wulf, 25 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, 1996, Messrs. Callahan, Mosley and Wulf would have been entitled to receive severance pay pursuant to the Plan equal to $262,400, $197,925 and $243,125, 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, Karl Callaway, 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. Callahan, 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 1996, 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 1996, upon the recommendation of the Executive Committee, the Board of Directors approved an overall increase in compensation of five and one-half percent. These increases are reflective of, although not directly tied to, the Company's continued improved performance in 1995. 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 Karl Callaway Ronald E. Callaway Donald L. Deffner Robert M. Kissick 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 Dec91 Dec92 Dec93 Dec94 Dec95 Dec96 MONARCH CEMENT 100.00 115.90 133.48 183.27 208.98 299.34 Peer Group 100.00 110.59 185.12 148.47 183.69 217.99 S&P 500 COMP-LTD 100.00 107.61 118.41 120.01 164.95 202.72
Source: Media General Financial Services and COMPUSTAT/PC Plus 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, 1992. The performance graph assumes that the value of an investment in the Company's capital stock and each index was $100 at January 1, 1992 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 more than 60 years and plans to continue to use them in this capacity. It is not anticipated that there will be a representative of Arthur Andersen LLP at the annual meeting of the stockholders on April 9, 1997 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. 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 8, 1998 which is not received by the Company at P.O. Box 1000, Humboldt, Kansas 66748-1000 on or before November 15, 1997. FINANCIAL STATEMENTS The annual report of the Company containing financial statements for the year ended December 31, 1996 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, 1996, all Section 16(a) filing requirements applicable to its directors, executive officers and greater than 10% shareholders were complied with. -----END PRIVACY-ENHANCED MESSAGE-----