DEF 14A
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ddef14a.txt
DEFINITIVE 14A FOR FMC CORPORATION
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
FMC Corporation
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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[LOGO OF FMC]
Corporation
William G. Walter
Chairman, President and
Chief Executive Officer
March 15, 2002
Dear Stockholder:
It is my pleasure to invite you to attend FMC's 2002 Annual Meeting of
Stockholders. The meeting will be held on Tuesday, April 23, 2002 at 2:00 p.m.
local time at the Top Of The Tower, 1717 Arch Street, 50th Floor, Philadelphia,
Pennsylvania. The Notice of Annual Meeting and Proxy Statement accompanying
this letter describe the business to be conducted at the meeting.
During the meeting, I will report to you on the Company's earnings, results and
other achievements during 2001 and on our outlook for 2002. We welcome this
opportunity to have a dialogue with our stockholders and look forward to your
comments and questions.
If you are a stockholder of record who plans to attend the meeting, please mark
the appropriate box on your proxy card. If your shares are held by a bank,
broker or other intermediary and you plan to attend, please send written
notification to the Company's Investor Relations Department, 1735 Market
Street, 23rd Floor, Philadelphia, Pennsylvania 19103, and enclose evidence of
your ownership (such as a letter from the bank, broker or intermediary
confirming your ownership or a bank or brokerage firm account statement). The
names of all those indicating they plan to attend will be placed on an
admission list held at the registration desk at the entrance to the meeting.
It is important that your shares be represented at the meeting, regardless of
the number you may hold. Whether or not you plan to attend, please sign, date
and return your proxy card as soon as possible. This will not prevent you from
voting your shares in person if you are present.
I look forward to seeing you on April 23rd.
Sincerely,
/s/ WILLIAM WALTER
[LOGO OF FMC]
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Tuesday, April 23, 2002
2:00 p.m.
Top of the Tower
Fiftieth Floor
1717 Arch Street
Philadelphia, Pennsylvania 19103
March 15, 2002
Dear Stockholder:
You are invited to the Annual Meeting of Stockholders of FMC Corporation. We
will hold the meeting at the time and place noted above. At the meeting, we
will ask you to:
. Re-elect two directors, Edward J. Mooney and Enrique J. Sosa, each for a
term of three years
. Ratify the appointment of KPMG LLP as our independent public accountants
for 2002
. Vote on any other business properly brought before the meeting
MANAGEMENT RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS.
Your vote is important. To be sure your vote counts and assure a quorum, please
vote, sign, date and return the enclosed proxy card whether or not you plan to
attend the meeting.
By order of the Board of Directors
Andrea E. Utecht
Vice President,
General Counsel and Secretary
[LOGO OF FMC]
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Table of Contents
I. Information About Voting
II. The Proposals To Be Voted On
. Election of Directors
. Nominees for Directors
. Ratification of Appointment of Independent Public Accountants
III. Board of Directors
. Nominees for Director
. Directors Continuing in Office
IV. Information About the Board of Directors
. Meetings
. Committees
. Board of Directors Compensation
V. Security Ownership of FMC
. Management Ownership
. Other Security Ownership
VI. Executive Compensation
. Summary Compensation Table
. Option Grants in 2001
. Aggregated Option Exercises in 2001 and Year-End Option Values
. Retirement Plans
. Termination and Change of Control Arrangements
. Report of the Compensation Committee on Executive Compensation
. Stockholder Return Performance Presentation
VII. Related Party Transactions
VIII. Other Matters
. Section 16(a) Beneficial Ownership Reporting Compliance
. Audit Committee Report
. Proposals for the 2003 Annual Meeting
. Expenses Relating to this Proxy Solicitation
[LOGO OF FMC]
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I. Information About Voting
Solicitation of Proxies. The Board of Directors of FMC Corporation ("FMC") is
soliciting proxies for use at the 2002 Annual Meeting of FMC and any
adjournments of that meeting. FMC first mailed this proxy statement, the
accompanying form of proxy and the FMC Annual Report for 2001 on or about March
15, 2002.
Agenda Items. The agenda for the Annual Meeting is to:
1. Re-elect two directors;
2. Ratify the appointment of KPMG LLP as our independent public accountants
for 2002; and
3. Conduct other business properly brought before the meeting.
Who Can Vote. You can vote at the Annual Meeting if you are a holder of FMC's
common stock, par value of $0.10 per share ("Common Stock"), on the record
date. The record date is the close of business on March 1, 2002. You will have
one vote for each share of Common Stock. As of March 1, 2002, there were
31,573,929 shares of Common Stock outstanding and entitled to vote.
How to Vote. You may vote in one of two ways:
. You can come to the Annual Meeting and cast your vote there.
. You can vote by signing and returning the enclosed proxy card. If you do,
the individuals named on the card will vote your shares in the way you
indicate.
Use of Proxies. Unless you tell us on the proxy card to vote differently, we
plan to vote signed and returned proxies FOR the Board nominees for director
and FOR agenda item 2. We do not now know of any other matters to come before
the Annual Meeting. If they do, proxy holders will vote the proxies according
to their best judgment.
Revoking a Proxy. You may revoke your proxy at any time before it is exercised.
You can revoke a proxy by:
. Sending a written notice to the Secretary of FMC;
. Delivering a properly executed, later-dated proxy; or
. Attending the Annual Meeting and voting in person.
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The Quorum Requirement. We need a quorum of stockholders to hold a valid Annual
Meeting. A quorum will be present if the holders of at least a majority of the
outstanding Common Stock entitled to vote at the meeting either attend the
Annual Meeting in person or are represented by proxy. Abstentions and broker
non-votes are counted as present for the purpose of establishing a quorum. A
broker non-vote occurs when a broker votes on some matters on the proxy card
but not on others because the broker has not received instructions from the
beneficial owner on how to vote and the broker does not have the authority to
vote in the absence of instructions.
Vote Required for Action. Directors are elected by a plurality vote of shares
present in person or represented by proxy at the meeting. Other actions require
the affirmative vote of the majority of shares present in person or represented
by proxy at the meeting. Abstentions and broker non-votes have the effect of a
no vote on matters other than director elections.
II. The Proposals To Be Voted On
Election of Directors
FMC has three classes of directors which are intended to be as nearly equal in
size as possible. The term for each class is three years. Class terms expire on
a rolling basis, so that one class of directors is elected each year. The term
for Class I directors will expire at the 2002 Annual Meeting.
Nominees for Director
The nominees for director this year are Edward J. Mooney and Enrique J. Sosa.
Information about the nominees, the continuing directors and the Board of
Directors is contained in the next section of this proxy statement entitled
"Board of Directors."
Robert N. Burt, a director since 1989, will retire from the Board on April 23,
2002. Asbjorn Larsen, a director since 1999, and Joseph H. Netherland, a
director since 1999, retired as of December 31, 2001. The Board thanks all of
them for their counsel and service.
The Board of Directors expects that both of the nominees will be able and
willing to serve as directors. If any nominee is not available, the proxies may
be voted for another person nominated by the current Board of Directors to fill
the vacancy or the size of the Board of Directors may be reduced.
The Board of Directors recommends a vote FOR the election of Edward J. Mooney
and Enrique J. Sosa.
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[LOGO OF FMC]
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Ratification of Appointment of Independent Public Accountants
The Audit Committee of the Board of Directors has recommended that KPMG LLP
continue to serve as FMC's independent public accountants for 2002. KPMG LLP
has served as FMC's independent public accountants since 1928. During 2001,
KPMG's fees were as follows:
($000)
FMC FTI* Total
----- ----- -----
. Audit Fees 485 670 1,155
----- ----- -----
. Financial Information Systems Design and
Implementation Fees 0 0 0
----- ----- -----
. All Other Fees
- Foreign Statutory Audits, Audits of Other
Functions not Required for Certification,
Form S-1 Filing, and Audit for Separation of
FTI 370 1,298 1,668
- Tax Services 1,052 1,178 2,230
- Other Services 184 230 414
----- ----- -----
Total All Other Fees 1,606 2,706 4,312
----- ----- -----
. TOTAL 2,091 3,376 5,467
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* FMC's chemical and machinery businesses became two independent companies in
2001, through the spin-off of the machinery business, now called FMC
Technologies, Inc. ("FTI"). This transaction is referred to throughout as the
"FTI spin-off".
The Audit Committee has determined that the independence of KPMG LLP has not
been adversely impacted as a result of the non-audit services performed by such
accountants.
We expect a representative of KPMG LLP to attend the Annual Meeting. The
representative will have an opportunity to make a statement if he or she
desires and also will be available to respond to appropriate questions.
The Board of Directors recommends a vote FOR ratification of the appointment of
KPMG LLP as independent public accountants for 2002.
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III. Board of Directors
Nominees for Director
Class I--Term Expiring in 2002
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Edward J. Mooney
Principal Occupation: Retired Chairman and Chief Executive
Officer Nalco Chemical Company
Age: 60
Director Since: 1997
[Photo]
Since March 2000, Mr. Mooney has served as Delegue General--North America, Suez
Lyonnaise des Eaux. He was Chairman and Chief Executive Officer of Nalco
Chemical Company from 1994 to 2000. He serves as a director of The Northern
Trust Company and FMC Technologies, Inc.
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Enrique J. Sosa
Principal Occupation: Former President BP Amoco Chemicals
Age: 61
Director Since: 1999
[Photo]
Mr. Sosa was President of BP Amoco Chemicals from January 1, 1999 to April
1999. From 1995 to 1998, he was Executive Vice President of Amoco Corporation.
Prior to joining Amoco, Mr. Sosa served as Senior Vice President of The Dow
Chemical Company, President of Dow North America and a member of its Board of
Directors. Mr. Sosa joined Dow in 1964 and he was elected Vice President of Dow
in 1990, Senior Vice President of Dow in 1991 and President of Dow North
America in 1993. Mr. Sosa has served on the Board of Directors of Electronic
Data Systems, Dow Corning Corporation and Destec Energy. He also served as
Chairman of the Executive Committee of the American Plastics Council, a member
of the Executive Committee of the American section of the Society of Chemical
Industry and a member of the Executive Committee and Board of Directors of the
Chemical Manufacturers Association. Mr. Sosa is currently a director of DSM of
the Netherlands.
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[LOGO OF FMC]
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Directors Continuing in Office
Class II--Term Expiring in 2003
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Patricia A. Buffler
Principal Occupation: Dean Emerita and Professor of
Epidemiology, School of Public Health, University of
California, Berkeley
Age: 63
Director Since: 1994
[Photo]
Dr. Buffler served as Dean of the School of Public Health, University of
California, Berkeley, from 1991 to 1998 and as a Professor since 1991. She
received her BSN from Catholic University of America in 1960, and a master's
degree in health administration and epidemiology and a Ph.D. in epidemiology
from the University of California, Berkeley in 1965 and 1973, respectively. She
currently serves as an advisor to the World Health Organization, the National
Institutes of Health, the U.S. Public Health Service Centers for Disease
Control and Prevention, the U.S. Environmental Protection Agency and the
National Research Council. She was elected as a Fellow of the American
Association for the Advancement of Science in 1992 and served as an officer for
the Medical Sciences section from 1994-2000. She has served as President for
the Society for Epidemiological Research (1986), the American College of
Epidemiology (1992), and the International Society for Environmental
Epidemiology (1992-1993). She is a Board member of the Lovelace Respiratory
Research Institute. From 1993 to 1998, she served on the University of
California President's Council on National Laboratories and chaired the
Council's Panel on Environment, Health and Safety. In 1994, she was elected to
the Institute of Medicine, National Academy of Sciences.
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Albert J. Costello
Principal Occupation: Retired Chairman, Chief Executive Officer
and President, W. R. Grace & Co.
Age: 66
Director Since: 1995
[PHOTO]
Since May 1995, Mr. Costello served as Chairman, President and Chief Executive
Officer of W.R. Grace & Co. He retired from W.R. Grace & Co. on December 31,
1998. Before joining W.R. Grace & Co., he served as chairman of the board of
directors and chief executive officer of American Cyanamid Company from April
1993 through December 1994, when it was acquired by American Home Products. Mr.
Costello is a director of Becton Dickinson and Company and a director of St.
Joseph's Hospital & Medical Center System Board, located in Paterson, NJ.
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Class III--Term Expiring in 2004
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B. A. Bridgewater, Jr.
Principal Occupation: Retired Chairman of the Board of
Directors and Chief Executive Officer, Brown Group, Inc., a
diversified marketer and retailer of footwear
Age: 68
Director Since: 1979
[PHOTO]
Mr. Bridgewater held the following positions at Brown Group, Inc.: President,
1979-1989 and again from 1990-1999; Chief Executive Officer, 1982-1999; and
Chairman of the Board of Directors, 1985-1999. Brown Group is a diversified
marketer and retailer of footwear. From 1975 to 1979, he was Executive Vice
President of Baxter Travenol Laboratories. From 1964 to 1975, Mr. Bridgewater
was associated with McKinsey & Company Inc., as a director from 1972 to 1975.
He also served as Associate Director of National Security and International
Affairs in the Office of Management and Budget in the Executive Office of the
President of the United States. He is currently a director of EEX Corporation
(Houston, TX), ThoughtWorks, Inc. (Chicago, IL) and FMC Technologies, Inc.
(Chicago, IL); and a trustee of Mitretek Systems (McLean, VA); and Washington
University (St. Louis, MO). He is an Advisory Director of Schroder Venture
Partners, LLC (New York, NY).
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William F. Reilly
Principal Occupation: Founder of PRIMEDIA Inc., and Founding
Partner of Aurelian Communications, both diversified media
companies
Age: 63
Director Since: 1992
[PHOTO]
Mr. Reilly is the Founder of PRIMEDIA Inc. He served as Chairman and Chief
Executive Officer of the firm from 1990 to 1999. From 1980 to 1990, he was with
Macmillan, Inc., where he served as President and Chief Operating Officer since
1981. Prior to that, he was with W.R. Grace beginning in 1964, serving as
Assistant to the Chairman from 1969 to 1971 and serving successively from 1971
to 1980 as President and Chief Executive Officer of its Textile, Sporting Goods
and Home Center Divisions. Mr. Reilly serves on the Board of Trustees of The
University of Notre Dame and the Board of Directors of FMC Technologies, Inc.,
Barnes & Noble.com, City Meals on Wheels and as a Trustee of WNET, the public
television station serving the New York area.
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[LOGO OF FMC]
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James R. Thompson
Principal Occupation: Chairman, Chairman of the Executive
Committee and Partner, Law Firm of Winston & Strawn, Chicago,
Illinois
Age: 65
Director Since: 1991
[PHOTO]
Governor Thompson was named Chairman of the Chicago law firm of Winston &
Strawn in January 1993. He joined the firm in January 1991 as Chairman of the
Executive Committee after serving four terms as Governor of the State of
Illinois from 1977 until January 14, 1991. Prior to his terms as Governor, he
served as U.S. Attorney for the Northern District of Illinois from 1971-1975.
Governor Thompson served as the Chief of the Department of Law Enforcement and
Public Protection in the Office of the Attorney General of Illinois, as an
Associate Professor at Northwestern University School of Law, and as an
Assistant State's Attorney of Cook County. He is a former Chairman of the
President's Intelligence Oversight Board and a member of the Board of Directors
of the Chicago Board of Trade; Prime Retail, Inc.; Navigant Consulting Group,
Inc.; Jefferson Smurfit Group, plc; Prime Group Realty Trust; Hollinger
International, Inc; Maximus, Inc.; and FMC Technologies, Inc. He also serves on
the Boards of the Museum of Contemporary Art and the Lyric Opera of Chicago.
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William G. Walter
Principal Occupation: Chairman, Chief Executive Officer and
President, FMC Corporation
Age: 56
Director Since: 2000
[PHOTO]
Mr. Walter was elected Chairman, Chief Executive Officer and President of FMC
in 2001. He had been Executive Vice President of FMC since 2000. Mr. Walter
joined FMC in 1974 as a Business Planner in corporate headquarters. He held
several management positions over the next few years. He became General Manager
of FMC's former Defense Systems International Division in 1986, Director of
Commercial Operations of FMC's Agricultural Chemicals Group in 1991, General
Manager of FMC's Alkali Chemicals Division in 1992 and Vice President and
General Manager of FMC's Specialty Chemicals Group in 1997.
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IV. Information About the Board of Directors
Meetings
During 2001, the Board of Directors held six regular meetings. All incumbent
directors attended at least 75% of the total number of meetings of the Board
and all committees on which they served.
Committees
The Board of Directors has five standing committees: an Audit Committee, a
Compensation and Organization Committee, an Executive Committee, a Nominating
and Board Procedures Committee, and a Public Policy Committee.
Audit Committee
The Board of Directors has adopted a written charter that outlines the duties
of the Audit Committee. The principal duties of this Committee, among other
things, include:
. Review the effectiveness and adequacy of FMC's financial organization and
internal controls
. Review the annual report, proxy and other financial representations and
ensure that FMC's financial reports fairly represent its operations
. Review the effectiveness and the scope of activities of the independent
public accountants and internal auditors
. Review significant changes in accounting policies
. Recommend the selection of the independent public accountants and review the
independence of such accountants
. Review potentially significant litigation
. Review Federal income tax issues
. Pre-approve any individual non-audit service provided by the independent
auditing firm that is projected to cost in excess of $200,000 (or
approximately one-half of that year's expected audit fee); also inquire as
to whether the Company's Chief Financial Officer approved any such service
over $100,000.
Members: Mr. Reilly (Chair), Dr. Buffler, Mr. Mooney and Mr. Sosa--all of these
members are outside directors. All of the members of the Audit Committee are
"independent" as defined in the listing requirements for the New York Stock
Exchange.
Number of Meetings in 2001: 4
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Compensation and Organization Committee
The Board of Directors has adopted a written charter that outlines the duties
of the Compensation and Organization Committee. The principal duties of this
Committee, among other things, include:
. Review and approve compensation policies and practices for top executives
. Establish the total compensation for the Chief Executive Officer and
President
. Review and approve major changes in FMC's employee benefit plans
. Review short and long term incentive plans and equity grants
. Review significant organizational changes and management succession planning
. Recommend to the Board of Directors candidates for officers of FMC
Members: Mr. Costello (Chair), Mr. Bridgewater, Mr. Mooney and Mr. Reilly--all
of these members are outside directors.
Number of Meetings in 2001: 3
Executive Committee
The Executive Committee acts in place of the Board of Directors when the full
Board of Directors is not in session.
Members: Mr. Walter (Chair), Mr. Bridgewater, Mr. Burt, who is retiring after
the Annual Meeting, and Mr. Reilly--all of these members are outside directors
except for Mr. Walter.
Number of Meetings in 2001: 1
Nominating and Board Procedures Committee
The Board of Directors has adopted a written charter that outlines the duties
of the Nominating and Board Procedures Committee. The principal duties of this
Committee, among other things, include:
. Review and recommend candidates for director
. Recommend Board of Directors meeting formats and processes
. Oversee corporate governance
. Review and approve director compensation policies
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If a stockholder wishes to recommend a nominee for director, the recommendation
should be sent in a timely manner as described in the section entitled
"Proposals for 2003 Annual Meeting" page 25 to the Corporate Secretary at the
address appearing in such section. All recommendations should be accompanied by
a complete statement of such person's qualifications and an indication of the
person's willingness to serve. All appropriately qualified recommendations will
be considered by the Committee.
Members: Mr. Thompson (Chair), Mr. Bridgewater and Mr. Costello--all of these
members are outside directors.
Number of Meetings in 2001: 3
Public Policy Committee
The Board of Directors has adopted a written charter that outlines the duties
of the Public Policy Committee. The principal duties of this Committee, among
other things, include:
. Review FMC's government and legislative programs and relations
. Monitor FMC's legal compliance efforts
. Assess FMC's efforts to improve employee involvement in local plant
communities
. Review the activities of FMC's charitable foundation
. Review FMC's public relations initiatives and its environment, safety and
process safety compliance
Members: Dr. Buffler (Chair), Mr. Sosa, Mr. Thompson and Mr. Walter--all of
these members are outside directors except for Mr. Walter.
Number of Meetings in 2001: 2
Board of Directors Compensation
Compensation Plan The Company maintains the FMC Corporation Compensation Plan
for Non-Employee Directors to provide for the compensation described below.
Retainer and Fees Each director who is not also an employee is paid an annual
retainer of $40,000. At least $25,000 of the annual retainer is paid in
deferred stock units, which are payable in Common Stock upon death or
retirement from the Board of Directors. The remainder is paid in quarterly
installments in cash, or, at the election of a non-employee director, may be
paid in deferred stock units ("elective units"). In connection with the FTI
spin-off, Directors Bridgewater, Reilly and Thompson converted 50% of their
accrued deferred stock units into FTI deferred stock units effective as of
January 1, 2002.
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Directors Buffler, Costello and Sosa were granted dividend equivalents of FTI
common stock on their accrued elective units effective as of January 1, 2002.
Each non-employee director also receives $1,000 for each Board of Directors'
meeting and Board of Directors' committee meeting attended, and each director
is reimbursed for reasonable incidental expenses. Each non-employee director
who chairs a Committee is paid an additional $4,000 per year.
Restricted Stock Units Each non-employee director of FMC was entitled to
receive 625 units of restricted stock units in 2001. In connection with the FTI
spin-off, Directors Bridgewater, Reilly and Thompson elected to take 50% of
this allotment, as well as 50% of their prior year's allotment, in restricted
stock units of FTI. On December 31, 2001, the restricted stock units of FMC
were adjusted by a conversion factor to account for the effect of the FTI spin-
off. These restricted stock units are payable in Common Stock upon retirement
from the Board of Directors or death.
Options Non-employee directors of FMC had been granted options to purchase
shares of Common Stock in 1997, 1998 and 1999. In connection with the FTI spin-
off, Directors Bridgewater, Reilly and Thompson elected to convert 50% of these
options into options to purchase shares of common stock of FTI. On December 31,
2001, the options that were not converted were adjusted by a conversion factor
to account for the effect of the FTI spin-off.
Other Compensation Directors who are also employees of FMC do not receive any
additional compensation for their service as directors. No other remuneration
is paid to directors for services as a director of FMC. (However, see Related
Party Transactions section, page 24). Directors who are not FMC employees do
not participate in FMC's employee benefit plans. During 2001, Directors Burt,
Bridgewater, Mooney, Reilly and Thompson, who are also directors of FTI, were
also entitled to receive from FTI a pro-rata annual retainer and meeting fees
on the same basis as described above for FMC directors, for their service as
directors of FTI (in the case of Mr. Burt, solely for the period he was no
longer an employee). The total compensation such directors received from FTI
during 2001, excluding the conversion of the restricted stock units and
deferred stock units described above, is as follows: Mr. Bridgewater received a
grant of 2,390 restricted stock units of FTI common stock, 1,250 deferred stock
units of FTI common stock and $17,000; Mr. Mooney received a grant of 2,390
restricted stock units of FTI common stock, 2,000 deferred stock units of FTI
common stock and $5,000; Mr. Reilly received a grant of 2,390 restricted stock
units of FTI common stock, 2,000 deferred stock units of FTI common stock and
$7,000; Mr. Thompson received a grant of 2,390 restricted stock units of FTI
common stock, 1,250 deferred stock units of FTI common stock and $15,000; and
Mr. Burt received $1,000.
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V. Security Ownership of FMC
Management Ownership
The following table shows, as of December 31, 2001 (except as otherwise stated
below), the number of shares of Common Stock beneficially owned by each current
director, the two individuals who held the position of Chief Executive Officer
during the reporting year, the four other most highly compensated executive
officers and all current directors and executive officers as a group. Except
for Mr. Burt, each director and each executive officer named in the Summary
Compensation Table beneficially owns less than one percent of the Common Stock.
Beneficial Ownership on
December 31, 2001
Name FMC Common Stock (1) Percent of Class
---- ----------------------- ----------------
B. A. Bridgewater, Jr. (3)(4).. 11,737
Patricia A. Buffler (3)........ 13,718
Robert N. Burt (2)(4).......... 349,194 1.1%
Albert J. Costello (3)......... 16,253
Stephen F. Gates (2)........... 8,007
Robert I. Harries (2).......... 220,771
Edward J. Mooney (3)........... 11,055
Joseph H. Netherland (2)(4).... 4,693
William F. Reilly (3)(4)....... 21,059
William H. Schumann III (2)(4). 9,318
Enrique Sosa (3)............... 4,993
James R. Thompson (3)(4)....... 8,284
William G. Walter (2).......... 150,338
All current directors and
executive officers as a
group--15 persons (2)(3)(4)... 992,539 3.1%
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(1) In connection with the FTI spin-off, after the close of business on
December 31, 2001, the number of outstanding options and shares of
restricted stock of FMC, and the exercise price of outstanding FMC stock
options, were adjusted based on the relative market price of the FMC Common
Stock pre and post FTI spin-off. The table reflects these adjustments.
(2) Shares "beneficially owned" include: (i) shares owned by the individual;
(ii) shares held by the FMC Corporation Savings and Investment Plan
("Savings Plan") for the account of the individual as of December 31, 2001;
(iii) restricted stock shares; and (iv) shares subject to options that are
exercisable within 60 days of December 31, 2001. Item (iv) in the aggregate
are 270,728 shares for Mr. Burt; 0 shares for Mr. Gates; 195,024 shares for
Mr. Harries; 0 shares for Mr. Netherland; 0 shares for Mr. Schumann;
120,675 shares for Mr. Walter; and 728,530 shares for all current directors
and executive officers as a group.
(3) Includes shares subject to options granted, vested restricted stock units
and deferred stock units credited to individual accounts of non-employee
directors under the FMC Corporation Compensation Plan for Non-Employee
Directors and predecessor plans (See "Compensation Plan," page 10 of this
Proxy Statement).
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As of December 31, 2001, the number of units credited to directors under
those plans were as follows: Mr. Bridgewater, 10,737; Dr. Buffler, 13,718;
Mr. Costello, 15,553; Mr. Mooney, 10,555; Mr. Reilly, 8,861; Mr. Sosa
4,993 and Mr. Thompson 8,284. Directors have no power to vote or dispose
of shares representing such units until distributed after the director
retires from the Board of Directors and, until such distribution,
directors have only an unsecured claim against FMC.
(4) These numbers do not include shares of Messrs. Netherland, Schumann and
Burt which were converted into shares of FTI common stock and options to
purchase shares of FTI common stock effective January 1, 2002, nor do they
include the deferred stock units, restricted stock units or options which
were converted into FTI deferred and restricted stock units and options,
respectively, by Messrs. Bridgewater, Reilly and Thompson effective
January 1, 2002.
Other Security Ownership
FMC knows that the persons listed below own more than five percent of FMC's
Common Stock as of December 31, 2001:
Amount and Nature of Percent of
Name and Address of Beneficial Owner Beneficial Ownership Class
------------------------------------ -------------------- ----------
FMC Corporation Savings and 2,568,483 shares held in trust for 8.2%
Investment Trust participants in the employee 401(k)
c/o Fidelity Management plans (1)
Trust Company
82 Devonshire Street
Boston, MA 02109
FMC Technologies, Inc. 1,945,930 shares held in trust for 6.2%
Savings and Investment participants in employee 401(k)
Trust plans of FMC Technologies, Inc. (2)
c/o Fidelity Management
Trust Company
82 Devonshire Street
Boston, MA 02109
AXA Financial, Inc. 2,836,448 shares (3) 9.0%
1290 Avenue of the Americas
New York, NY 10104
------
(1) These shares are held in trust for the beneficial owners (the participants
in FMC's 401(k) plan) and shall be voted by the trustee in proportion to
the votes received by participants, if the beneficial owners do not
exercise their right to direct such vote. In response to a tender or
exchange offer, the trustee may tender or sell shares only in accordance
with the written instructions of the participants.
(2) These shares are held in trust for the beneficial owners (the participants
in FTI's 401(k) plans) and may be voted by the trustee in proportion to
the votes received by participants, if the beneficial owners do not
exercise their right to direct such vote. In response to a tender or
exchange offer, the trustee may tender or sell shares only in accordance
with the written instructions of the participants.
(3) The number of shares of stock beneficially owned was determined by a
review of Schedules 13G, as amended, filed with the Securities and
Exchange Commission.
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VI. Executive Compensation
The following tables, charts and narrative show all compensation awarded, paid
to or earned by the two individuals who served as the Chairman and Chief
Executive Officer during 2001 and each of the four other most highly
compensated executive officers during 2001.
Summary Compensation Table
Long-Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ------------------------ ---------
Securities
Restricted Underlying
Other Annual Stock Options/ LTIP All Other
Salary Bonus Compensation Award SARs Payouts Compensation
Name and Principal (1) (1)(2) (3) (4)(5) (5) (2) (6)
Position Year $ $ $ $ # $ $
(A) (B) (C) (D) (E) (F) (G) (H) (I)
----------------------- ---- ------- --------- ------------ ---------- ---------- --------- ------------
ROBERT N. BURT 2001 909,357 750,000 98,416 0 50,519(7) 0 2,168,386
Chairman 2000 928,175 1,439,042 535,669 94,748(8) 0 193,655
Chief Executive Officer 1999 883,986 371,275 106,059 145,497(8) 1,087,034 94,007
WILLIAM G. WALTER 2001 567,419 310,699 -- 0 154,113 0 51,269
Chairman, President and 2000 341,185 341,301 405,875 17,158 0 29,841
Chief Executive Officer 1999 311,644 64,822 9,923 26,308 206,563 32,558
JOSEPH H. NETHERLAND 2001 669,663 590,125 62,190 0 (9) 0 566,792
President 2000 583,533 735,076 350,438 61,958(10) 0 140,222
1999 530,828 187,341 337,767 76,256(11) 596,632 106,797
WILLIAM H. SCHUMANN III 2001 416,176 264,818 -- 0 (9) 0 340,923
Senior Vice President & 2000 372,294 352,339 140,175 24,211(10) 0 34,244
Chief Financial Officer 1999 309,948 104,607 294,875 26,309(11) 199,359 100,703
STEPHEN F. GATES 2001 524,250 231,000 -- 0 0 0 1,119,132
Senior Vice President 2000 300,000(12) 246,000 585,000(13) 20,000 0 99,373
ROBERT I. HARRIES 2001 380,362 208,052 -- 0 42,131 0 34,464
Senior Vice President 2000 362,244 299,975 115,144 20,208 0 31,890
1999 341,736 82,017 373,455 30,884 253,704 24,322
------
(1) The employment of Messrs. Burt, Netherland, Schumann and Gates ended
during 2001. During 2001, Mr. Burt became a director of FTI and Messrs.
Netherland and Schumann became executive officers of FTI. One half of all
compensation received by Messrs. Burt, Netherland, Schumann, Walter and
Gates for 2001 was borne by FTI, except for the options set forth in
Column G and the transaction bonuses described in footnote 6.
(2) Beginning in 2000, the FMC Corporation Incentive Compensation and Stock
Plan provided for annual bonuses to be paid based on performance against
specified objectives for individual and overall corporation results
(Column D). Previously, the plan provided for bonuses to be paid based
upon individual performance (Column D) and for FMC's achievement of
specified objectives during multi-year periods that commenced annually
(Column H). The amount of the long-term payouts was not determined until
the applicable performance period ended. Prior to 2000, those payouts
could have been paid in cash and/or Common Stock; currently, those
payouts are only paid in cash.
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(3) These amounts include $59,497 for Mr. Burt for personal use of FMC's
aircraft; and a payment of $37,165 to Mr. Netherland for relocation
expenses in 2001. The amount incurred in 2000 for Mr. Burt's personal use
of FMC's aircraft was $51,527 and the amount paid in 2000 for Mr.
Netherland's relocation expenses was $44,749. In addition, a payment of
$83,480 was paid to Mr. Schumann for relocation expenses in 1999. The
foregoing payments made in 2000 and 1999 are included in the amounts
reflected in Column I for the respective years.
(4) The six officers listed in the table held FMC restricted shares on December
31, 2001 with a value based on the closing market price per share of FMC
Common Stock on December 31, 2001, the last trading day of the year
(adjusted to reflect the FTI spin-off), as follows: Mr. Burt, 0 shares; Mr.
Gates, 0 shares; Mr. Harries, 19,932 shares at $622,073; Mr. Netherland, 0
shares; Mr. Schumann, 0 shares and Mr. Walter, 15,837 shares at $494,267.
The holders of these restricted shares are entitled to receive additional
payments for additional shares of restricted stock equal to the value of
any dividends paid by FMC on its Common Stock. Three of the officers listed
in the table held FTI restricted shares on December 31, 2001 with a value
based on the closing market price of FTI common stock on December 31, 2001
as follows: Mr. Burt, 40,917 shares at $673,081; Mr. Netherland, 111,523
shares at $1,834,556; and Mr. Schumann, 37,475 shares at $616,467.
(5) See footnote 1 to the Management Ownership Table on page 12.
(6) These amounts include the following: for Mr. Burt, $2,000,000 for a
transaction bonus relating to the FTI spin-off ("transaction bonus");
$101,720 for annual FMC matching contributions to the Savings Plan and the
FMC Corporation Non-Qualified Savings and Investment Plan ("matching
contributions"), and $66,666 for consulting services subsequent to his
retirement on October 31, 2001; for Mr. Walter, $44,562 for matching
contributions; and $6,707 for life insurance; for Mr. Netherland, $500,000
for the transaction bonus; $61,048 for matching contributions; and $5,744
for life insurance; for Mr. Schumann, $300,000 for the transaction bonus;
$37,819 for matching contributions; and $3,103 for life insurance; for Mr.
Gates, $585,000 for severance pay; $292,500 for a severance target bonus;
$200,000 for the transaction bonus; $38,812 for matching contributions; and
$2,818 for life insurance; for Mr. Harries, $34,464 for matching
contributions.
(7) In addition to these options, Mr. Burt was granted in 2001 FMC options
which were converted into options to purchase 95,851 shares of FTI common
stock effective January 1, 2002 at an exercise price of $20.48 per share.
These converted options are not included in the table. Mr. Burt also
received options to purchase 100,000 shares of FTI common stock at an
exercise price of $20.00 per share.
(8) One half of these options were converted into options to purchase shares of
FTI common stock effective January 1, 2002 as follows: for the grant year
2000, 89,883 shares at an exercise price of $13.84 per share; for the grant
year 1999, 138,026 shares at an exercise price of $13.27 per share.
(9) For the year 2001, Mr. Netherland received options to purchase 660,000
shares of FTI common stock and Mr. Schumann received options to purchase
162,000 shares of FTI common stock, each at an exercise price of $20.00 per
share.
(10) All of these options were converted into options to purchase shares of FTI
common stock effective January 1, 2002 at an exercise price of $13.84 per
share as follows: for Mr. Netherland, 117,553 shares; for Mr. Schumann,
45,936 shares.
(11) All of these options were converted into options to purchase shares of FTI
common stock effective January 1, 2002 at an exercise price of $13.27 per
share as follows: for Mr. Netherland, 144,681 shares; for Mr. Schumann
49,915 shares.
(12) Mr. Gates began his employment with FMC on May 1, 2000.
(13) Mr. Gates' 2000 restricted stock award vested as of December 31, 2001.
15
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Option Grants in 2001
The table below shows information on grants of FMC and FTI stock options in
2001 made to the officers named in the Summary Compensation Table. FMC did not
grant stock appreciation rights during 2001.
Number of
Securities Percent of
Underlying Total Options
Options Granted to Exercise or Base Grant Date Present
Granted in 2001 Employees in Price Expiration Value
Name # 2001 $/SH Date $
(A) (B) (C) (D) (E) (F)
---- --------------- ------------- ----------------- ---------- -------------------
FMC FTI FMC FTI FMC FTI FMC FTI
------- ------- ------ ------ -------- -------- --------- ---------
Robert N. Burt (1)...... 50,519 100,000 6.4 4.2 38.85 20.00 2/15/11 1,083,633 1,104,000
Stephen F. Gates........ 0 0 0 0 -- -- -- -- --
Robert I. Harries....... 42,131 0 5.3 0 38.85 -- 2/15/11 903,710 --
Joseph H. Netherland.... 0 660,000 0 27.6 -- 20.00 2/15/11 -- 7,286,400
William H. Schumann III. 0 162,000 0 6.8 -- 20.00 2/15/11 -- 1,788,480
William G. Walter....... 154,113 0 19.5 0 38.85 -- 2/15/11 3,305,724 --
------
(1) Mr. Burt also received FMC options which were converted into options to
purchase 95,851 shares of FTI common stock at an exercise price of $20.48
per share effective January 1, 2002. These options accounted for 4.0% of
all FTI options granted in 2001, carry an expiration date of February 15,
2011 and have a value as of the date of conversion of $1,060,112. These
converted options are not included in the table.
The Black-Scholes option-pricing model was used to value these options as of
the date granted, June 14, 2001. For FMC options, the model assumed: an
exercise price of $38.85, equal to the fair market value of FMC common stock on
the date of grant; an option term of 10 years; an interest rate of 5.28% that
represents the interest rate on a U.S. Treasury security on the date of grant
with a maturity date corresponding to that of the option term; an assumed
annual volatility of underlying stock of 32.34%; and no dividends being paid.
For FTI options, the model assumed: an exercise price of $20.00, equal to the
fair market value of FTI common stock on the date of grant; an option term of
10 years; an interest rate of 5.28% that represents the interest rate on a U.S.
Treasury security on the date of grant with a maturity date corresponding to
that of the option term; an assumed annual volatility of underlying stock of
32.34%; and no dividends being paid.
The ultimate values of the options will depend on the future market price of
FMC's or FTI's common stock (as applicable), which cannot be forecast with
reasonable accuracy. The actual value, if any, an option holder will realize
when exercising an option will depend on the excess of the market value of
FMC's or FTI's common stock over the exercise price on the date the option is
exercised.
The number of shares underlying FMC stock options and exercise prices of FMC
stock options set forth in the foregoing table reflect the adjustment described
in footnote 1 to the Management Ownership Table on page 12.
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Aggregated Option Exercises in 2001 and Year-End Option Values
Shown below is information with respect to options to purchase FMC's Common
Stock exercised in 2001 by the officers named in the Summary Compensation Table
and the value of FMC and FTI unexercised options held by them at December 31,
2001, except as otherwise stated below.
Number of Securities
Underlying Unexercised Value of Unexercised in-the
Shares Acquired Options/SARs at 12/31/2001 Money Options at 12/31/2001
On Exercise Exercisable/Unexercisable Exercisable/Unexercisable
(1) Value Realized (2) (3)
Name (#) ($) (#) ($)
(A) (B) (C) (D) (E)
---- --------------------------------------------------------------- -------------------------------
FMC FTI FMC FTI FMC FTI(4) FMC FTI(4)
--------- ---------------- -------------------- --------------- --------------- ---------------
Robert N. Burt.......... 165,700 0 6,580,603 0 197,980/170,642 375,628/423,760 0/673,361 0/673,361
Stephen F. Gates........ 0 0 0 0 0/0 0/0 0/0 0/0
Robert I. Harries....... 0 0 0 0 164,140/93,224 0/0 681,213/286,338 0/0
Joseph H. Netherland.... 14,400 0 732,528 0 0/0 338,191/922,234 0/0 455,411/766,718
William H. Schumann III. 0 0 0 0 0/0 204,362/257,851 0/0 271,912/278,556
William G. Walter....... 0 0 0 0 94,367/197,580 0/0 429,838/243,638 0/0
------
(1) Column B reflects the number of shares of FMC stock acquired on the
exercise of options prior to December 31, 2001 and therefore does not
reflect the adjustment described in footnote 1 to the Management Ownership
Table on page 12.
(2) Column D reflects the number of FMC shares underlying options adjusted as
described in footnote 1 to the Management Ownership Table on page 12.
(3) The value of the FMC options in Column E was calculated using the adjusted
number of shares multiplied by the excess of the adjusted closing price of
FMC stock on December 31, 2001 over the adjusted exercise price of the
options.
(4) These options were converted from FMC options to FTI options on January 1,
2002.
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Retirement Plans
The following table shows the estimated annual retirement benefits under FMC's
pension plan (and its supplements) for eligible salaried employees (including
officers) payable upon retirement at age 65 (normal retirement age) in 2002 at
various levels of salary and years of service. Payment of benefits shown is
contingent on the continuation of the present plan (and its supplements) until
the employee retires.
Pension Plan Table
Estimated Annual Retirement Benefits for Years of
Service Indicated
-------------------------------------------------------
15 20 25 30 35 40
Final Average Earnings Years Years Years Years Years Years
---------------------- -------- -------- -------- -------- -------- ----------
$ 150,000 $ 30,792 $ 41,056 $ 51,320 $ 61,583 $ 71,847 $ 83,097
$ 250,000 $ 53,292 $ 71,056 $ 88,820 $106,583 $124,347 $ 143,097
$ 350,000 $ 75,792 $101,056 $126,320 $151,583 $176,847 $ 203,097
$ 450,000 $ 98,292 $131,056 $163,820 $196,583 $229,347 $ 263,097
$ 550,000 $120,792 $161,056 $201,320 $241,583 $281,847 $ 323,097
$ 650,000 $143,292 $191,056 $238,820 $286,583 $334,347 $ 383,097
$ 900,000 $199,542 $266,056 $332,570 $399,083 $465,597 $ 533,097
$1,150,000 $255,792 $341,056 $426,320 $511,583 $596,847 $ 683,097
$1,300,000 $289,542 $386,056 $482,570 $579,083 $675,597 $ 773,097
$1,450,000 $323,292 $431,056 $538,820 $646,583 $754,347 $ 863,097
$1,850,000 $413,292 $551,056 $688,820 $826,583 $964,347 $1,103,097
------
1. "Final Average Earnings" in the table means the average of covered
compensation for the highest 60 consecutive calendar months out of the 120
calendar months immediately before retirement. Covered compensation
includes amounts appearing in Columns (C), (D), and (H) of the Summary
Compensation Table on page 14 .
2. At December 31, 2001, Messrs. Burt, Walter, Netherland, Schumann, and
Harries had, respectively, 28, 28, 29, 21 and 25 years of credited service
under the pension plan (and its supplements). Mr. Gates had no credited
years of service.
3. Applicable benefits for employees whose years of service and earnings
differ from those shown in the table are equal to (A + B) times C where:
(A) equals 1% of allowable Social Security covered compensation ($39,444
for a participant retiring at age 65 in 2002) times years of credited
service (up to a maximum of 35 years) plus 1.5% of the difference between
Final Average Earnings and allowable Social Security compensation times
years of credited service (up to a maximum of 35 years); (B) equals 1.5% of
Final Average Earnings times years of credited service in excess of 35
years; and (C) equals the ratio of credited service at termination to
credited service projected to age 65.
4. The amounts shown will not be reduced by Social Security benefits or other
offsets. As the Code limits the annual benefits that may be paid from a
tax-qualified retirement plan, FMC has adopted permitted supplemental
arrangements to maintain total benefits during retirement at the levels
shown in the table.
Termination and Change of Control Arrangements
Plan and Participants. FMC maintains an Executive Severance Plan which includes
approximately 22 officers and managers including the individuals listed in the
Summary Compensation Table, except Messrs. Burt, Netherland, Schumann and
Gates.
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Benefits. If a change in control (as described below) of FMC occurs and if,
within two years of that change of control, a participant's employment is
terminated without cause or a participant voluntarily terminates his or her
employment because his or her duties, location, salary, compensation or
benefits are changed or are reduced, then the participant is entitled to
benefits from FMC. In general, those benefits include: (i) a lump sum payment
of three, two or one (depending on position) times salary and highest target
management incentive award; (ii) immediate vesting of long-term incentive
awards, restricted stock and stock options; (iii) continuation of medical and
other benefits for up to three years; and (iv) distribution of accrued
retirement and 401(k) plan benefits. FMC will compensate the participant for
any excise tax liability as a result of payments under the plan. The Chairman,
Chief Executive Officer and President can also receive these benefits if he
voluntarily terminates his employment with FMC within the thirteenth month
after a change in control of FMC. Under the specific provisions of Mr. Walter's
and Mr. Harries' executive severance agreements, each will receive a lump sum
payment of three times his salary and highest target management incentive
award.
Change in Control. In general, the following transactions are considered as
changes in control under the plan: (a) a third party's acquisition of 20
percent or more of FMC's Common Stock; (b) a change in the majority of the
Board of Directors; (c) completing certain reorganization, merger or
consolidation transactions or a sale of all or substantially all of FMC's
assets; or (d) the complete liquidation or dissolution of FMC.
Report of the Compensation Committee on Executive Compensation
The Report of the Compensation Committee on Executive Compensation that follows
shall not be deemed to be incorporated by reference into any filing made by FMC
under the Securities Act of 1933 or the Securities Exchange Act of 1934,
notwithstanding any general statement contained in any such filing
incorporating this proxy statement by reference, except to the extent FMC
incorporates such Report by specific reference.
Goals. FMC's executive compensation program is designed to align total
compensation with stockholder interests. The program is intended to:
. Incent and reward executives for sound business management and achieve
improvements in stockholder value
. Balance variable pay components so that both short and longer-term
operating and strategic objectives are recognized
. Require the achievement of objectives within a "high-performance"
environment to be rewarded financially
. Attract, motivate and retain executive talent necessary for the long-term
success of FMC
19
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The program consists of three different compensation components: base salary;
variable cash incentive awards (annual bonuses); and long-term incentive awards
(stock options and restricted stock).
Base salary. FMC uses external surveys to set competitive compensation levels
(salary ranges) for its executives. In order to obtain the most comprehensive
survey data for review, the group of companies in the surveys is broader than
the Dow Jones Diversified Industrials Index and includes a majority of
comparable companies at the Fortune 500 level. Performance graph companies are
well represented.
Salary ranges for FMC executives are established based on similar positions in
other companies of comparable size and complexity. Generally, FMC sets its
competitive salary midpoint for an executive officer at the median level
compared with the companies surveyed. Performance levels within the ranges are
delineated to recognize different levels of performance ranging from "needs
improvement" to "exceptional". As a result, although nominally targeted to fall
at or near the 50th percentile of such comparable organizations, compensation
may range anywhere within the salary bracket based on performance.
Starting placement in a salary range is a function of an employee's skills,
experience, expertise and anticipated job performance. Each year performance is
evaluated against mutually agreed upon objectives and performance standards
that may, in part, be subjective; a performance rating is established; and a
salary increase may be granted. Performance factors used may include timely
responses to downturns in major markets, setting strategic direction, making
key management changes; divesting businesses and acquiring new businesses,
continuing to improve operating efficiency; and developing people and
management capabilities. The relative importance of each of these factors
varies based on the strategic thrust and operating requirements of each of the
businesses.
Mr. Walter was elected President and Chief Executive Officer August 24, 2001,
and Chairman on December 31, 2001. He received a base salary increase of 30
percent effective August 24, 2001.
Mr. Burt, who retired October 31, 2001, received a base salary increase of 5
percent in 2001.
Management Incentive Awards. The FMC Corporation Incentive Compensation and
Stock Plan ("Plan") provides for annual cash incentives for achievement of both
individual performance targets and business performance targets based on
performance goals, which for 2001 included net operating income and working
capital. The Committee oversees Plan objectives and design as well as the
setting of performance targets and approval of Plan results. Participation in
the Plan is based on opportunity to influence performance and growth at FMC,
position level, competitive practice for similar positions,
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performance and potential. Achieving high standards of business and individual
performance are rewarded financially, and significant compensation is at risk
if these high standards are not met. For participating managers, target
incentives approximate 24 percent to 75 percent of base salary, while actual
payments for business performance can range from zero to three times target
incentive.
The annual performance incentive (the "API") is the individual performance
target, and generally comprises 30 to 50 percent of the total target incentive.
It is awarded based on achieving annual objectives set for the individual's
most important business responsibilities. In 2001, the Committee recommended to
increase the API performance factor to 70% for corporate staff functions
involved in the distribution of FTI. The API is less quantitative than the
business performance incentive. It varies by individual performance and can be
rewarded in a range from zero to two times the target percentage.
For Mr. Burt in 2001, these included such wide-ranging objectives as evaluating
and recommending alternatives to create greater stockholder value, executing
FMC's initial public offering of FTI and ultimately, the distribution of FTI,
increasing earnings and return on investment, management of FMC's portfolio of
businesses, improving operating performance and market position, leadership and
people development, executive succession planning, corporate strategy
development, diversity and safety performance. Mr. Burt's bonus for 2001, shown
in Column D of the Summary Compensation Table, was $750,000.
Mr. Walter's 2001 broad objectives focused on improving operating performance,
including net operating income and working capital, establishing key external
relationships with institutional investors and investment bankers,
organizational and leadership issues, diversity and people development,
corporate and business unit strategy development, evaluation of the business
portfolio, environmental, process safety performance, and broad-based
improvements in physical security. Mr. Walter's bonus for 2001, shown in Column
D of the Summary Compensation Table, was $310,699.
Equity Awards. The Plan is designed to closely link the long-term reward of
executives with increases in stockholder value, and give the Committee broad
discretion to select the appropriate types of rewards. Equity awards under the
Plan in 2001 consisted of nonqualified stock options, with a vesting period of
three years. Stock options have a term of 10 years and generally expire upon
termination of employment, unless such termination is a result of death,
disability or retirement, or not for cause, in which case the option may be
exercised for periods beyond termination of employment, but not beyond the term
of the option. The exercise price of options is the fair market value of Common
Stock on the date of the grant. To determine the number of options and/or
shares of restricted stock to be granted to an executive, we establish an award
level based on an executive's salary grade while considering competitive
industry practice as provided by
21
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an independent consultant. In approving grants under the Plan, the number of
options and shares of restricted stock previously awarded to and held by
executive officers is considered, but is not regarded as a significant factor
in determining the size of the current awards. Messrs Burt and Walter each
received 2001 option grants as indicated on page 16 in this Proxy Statement in
the section headed "Option Grants in 2001." Restricted stock grants appear in
Column F of the Summary Compensation Table.
Section 162(m) Deductibility. The Committee is advised that the Plan meets the
requirements for deductibility under Section 162(m) of the Code. However, not
all grants that may be made under the Plan or that have been made under the
Plan meet all requirements for deductibility under Section 162(m) of the Code.
However, unless the amounts involved become material, the Committee believes
that it is more important to preserve its flexibility under the Plan to craft
appropriate incentive awards. The Committee continues to believe that this is
not a currently significant issue and will continue to monitor the issue
prospectively.
Stock Ownership Policy. FMC has established guidelines setting expectations for
the ownership of FMC stock by officers and management. The guidelines for stock
retention are based on a multiple of two to five times the employee's total
cash compensation (salary grade midpoint and target bonus). The Plan includes
incentives and enhancements to help executives meet these guidelines. All of
the current FMC executives named in this proxy meet or exceed their respective
stock retention guidelines.
The preceding report has been furnished by the following members of the
Compensation and Organization Committee:
Albert J. Costello, Chairman
B.A. Bridgewater
Edward J. Mooney
William F. Reilly
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Stockholder Return Performance Presentation
The following Stockholder Return Performance Graph compares the five-year
cumulative return on FMC's Common Stock for the period from January 1, 1997 to
December 31, 2001, with the S&P Midcap 400 Index, the S&P 400 Diversified
Chemicals Index, the S&P Composite--500 Stock Index and the Dow Jones
Diversified Industrials Index. The comparison assumes $100 was invested on
January 1, 1997 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends.
As a result of the FTI spin-off, FMC is now included in the S&P Midcap 400
Index and the S&P 400 Diversified Chemicals Index and is no longer included in
the S&P Composite--500 Stock Index or the Dow Jones Diversified Industrials
Index. All four of these comparative indices are presented in this year's proxy
statement in order for our stockholders to be able to compare the cumulative
return of FMC's Common Stock with that of both our former broad market index
and industry group index and our new broad market index and industry group
index.
[GRAPH]
------------------------------------------------------------------------------
December 31 1996 1997 1998 1999 2000 2001
------------------------------------------------------------------------------
FMC Corp 100 95.99 79.86 81.73 102.23 84.85
S&P Midcap 400 Index 100 132.25 157.52 180.71 212.35 196.42
SP400 Diversified Chemicals 100 125.16 80.19 93.29 109.42 79.60
S&P 500 Index 100 133.36 171.48 207.56 188.66 166.24
DJDI 100 139.45 176.87 236.89 235.86 208.90
------------------------------------------------------------------------------
23
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VII. Related Party Transactions
Mr. Thompson is chairman of the law firm of Winston & Strawn, which provides
legal services to FMC. The amount of the fees paid by FMC to Winston & Strawn
was not material to either party.
FMC and Mr. Burt entered into a Consulting Agreement, dated October 31, 2001,
pursuant to which Mr. Burt will provide advisory services concerning the
business, affairs and management of FMC. The term of the agreement is November
1, 2001 through October 31, 2003. Under the agreement, Mr. Burt will receive
annual compensation of $400,000, together with certain fringe benefits.
FMC and Stephen F. Gates, FMC's Senior Vice President and General Counsel, who
terminated his employment in December 2001, entered into a Consulting Agreement
pursuant to which Mr. Gates will provide legal counseling and consulting
services for a period of one year. Mr. Gates will be paid a fee of $270,000 for
the services provided.
VIII. Other Matters
Section 16(a) Beneficial Ownership Reporting Compliance
FMC has undertaken responsibility for preparing and filing the stock ownership
forms required under Section 16(a) of the Securities Exchange Act of 1934 on
behalf of its officers and directors. Based on a review of forms filed and
information provided by officers and directors to FMC, FMC believes that all
Section 16(a) reporting requirements were fully met, with the exception of one
late report filed by Mr. Reilly involving the purchase of an aggregate of 198
shares of FMC Common Stock over five transactions.
Audit Committee Report
The Audit Committee Report that follows shall not be deemed to be incorporated
by reference into any filing made by FMC under the Securities Act of 1933 or
the Securities Exchange Act of 1934, notwithstanding any general statement
contained in any such filing incorporating this proxy statement by reference,
except to the extent FMC incorporates such Report by specific reference.
The Audit Committee of the Board of Directors has:
. Reviewed and discussed the audited financial statements with management;
. Discussed with KPMG LLP, FMC's independent public accountants, the matters
required to be discussed by the Statement on Auditing Standards No. 61;
and
. Received the written disclosures and the letter from KPMG LLP as required
by Independence Standards Board Standard No. 1, and has discussed with
KPMG LLP its independence.
24
[LOGO OF FMC]
--------------------------------------------------------------------------------
In reliance upon the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in FMC's Annual Report on Form 10-K for the year ended
December 31, 2001.
The preceding report has been furnished by the following members of the Audit
Committee:
William F. Reilly, Chairman
Patricia A. Buffler
Edward J. Mooney
Enrique J. Sosa
Stockholder Proposals for the 2003 Annual Meeting
Stockholders may make proposals to be considered at the 2003 Annual Meeting. To
be included in the proxy statement and form of proxy for the 2003 Annual
Meeting, stockholder proposals for the 2003 Annual Meeting must be received not
later than November 15, 2002, at FMC's corporate offices, 1735 Market Street,
Philadelphia, Pennsylvania 19103.
FMC's By-Laws provide that no business may be brought before an annual meeting
by a stockholder unless such stockholder has delivered notice to FMC
(containing certain information specified in the By-Laws) not less than 60 or
more than 90 days before the date of the meeting. If FMC provides less than 70
days notice or public disclosure of the date of the annual meeting, then a
stockholder may bring business before that meeting if FMC receives notice from
that stockholder within 10 days of FMC's notice or public disclosure.
In accordance with FMC's By-Laws, any stockholder nominations of one or more
candidates for election as directors at the 2003 Annual Meeting must be given
to FMC, together with certain information specified in the By-Laws, not later
than December 16, 2002.
A copy of the full text of the By-Law provisions discussed above may be
obtained by writing to the Corporate Secretary, FMC Corporation, 1735 Market
Street, Philadelphia, Pennsylvania 19103.
25
--------------------------------------------------------------------------------
Expenses Relating to this Proxy Solicitation
FMC will pay all expenses relating to this proxy solicitation. In addition to
this solicitation by mail, FMC officers, directors, and employees may solicit
proxies by telephone or personal call without extra compensation for that
activity. FMC also expects to reimburse banks, brokers and other persons for
reasonable out-of-pocket expenses in forwarding proxy material to beneficial
owners of FMC stock and obtaining the proxies of those owners. FMC has retained
Georgeson Shareholder Communications Inc. of Carlstadt, New Jersey to assist in
the solicitation of proxies. FMC will pay the cost of such assistance, which is
estimated to be $7,000, plus reimbursement for out-of-pocket fees and expenses.
Andrea E. Utecht
Vice President,
General Counsel and Secretary
26
[LOGO OF FMC]
[LOGO OF FMC]
--------------------------------------------------------------------------------
FMC Corporation
1735 Market Street
Philadelphia, PA 19103
Notice of
Annual Meeting of Stockholders
April 23, 2002
and Proxy Statement
FMC Corporation
PROXY
FMC CORPORATION
[LOGO OF FMC]
This Proxy is Solicited on Behalf of the Board of Directors.
FIDELITY MANAGEMENT TRUST COMPANY, Trustee
You are instructed to vote in the manner indicated on the reverse side, and
with discretionary authority as to any other matters that may properly come
before the meeting, all shares of stock represented by my interest in the FMC
Stock Fund of the FMC Technologies, Inc. Non-Qualified Savings and Investment
Plan at the annual meeting of stockholders of FMC Corporation to be held on
April 23, 2002, at the Top of the Tower, 50th Floor, 1717 Arch Street,
Philadelphia, Pennsylvania at 2:00 P.M. or any adjournment or postponement
thereof.
NOT VALID UNLESS DATED AND SIGNED ON REVERSE SIDE
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. Unless otherwise instructed prior to April 19,
2002, the Trustee WILL VOTE your shares in proportion to the votes received by
participants.
FMC CORPORATION
--------------------------------------------------------------------------------
[_] Mark this box with an X if you have made changes to your name or
address details below.
A575
--------------------------------------------------------------------------------
Proxy Card
--------------------------------------------------------------------------------
Please mark vote in box in the [X]
following manner using dark ink
only.
----------------------------------- --------------------------------------
The Board of Directors recommends The Board of Directors recommends a
a vote FOR the listed nominees. vote FOR the following proposal.
----------------------------------- --------------------------------------
For Withheld
1. Election of two Directors to
serve in Class I for a term
expiring in 2005 as set forth in
the Proxy Statement--Nominees:
01 Edward J. Mooney [_] [_]
02 Enrique J. Sosa [_] [_]
For Against Abstain
2. Ratification of the Appointment of Independent Public Accountants. [_] [_] [_]
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears hereon, if the stock is registered in
the names of two or more persons each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If the
signer is a corporation, please give the full corporate name and have a duly
authorized officer sign stating such officers' title. If the signer is a
partnership, please sign the partnership name by an authorized person.
Signature Signature Date
/ /
PROXY
FMC CORPORATION
[LOGO OF FMC]
This Proxy is Solicited on Behalf of the Board of Directors.
FIDELITY MANAGEMENT TRUST COMPANY, Trustee
You are instructed to vote in the manner indicated on the reverse side, and
with discretionary authority as to any other matters that may properly come
before the meeting, all shares of stock represented by my interest in the FMC
Stock Fund of the FMC Corporation Savings and Investment Plan at the annual
meeting of stockholders of FMC Corporation to be held on April 23, 2002, at the
Top of the Tower, 50th Floor, 1717 Arch Street, Philadelphia, Pennsylvania at
2:00 P.M. or any adjournment or postponement thereof.
NOT VALID UNLESS DATED AND SIGNED ON REVERSE SIDE
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. Unless otherwise instructed prior to April 19,
2002, the Trustee WILL VOTE your shares in proportion to the votes received by
participants.
FMC CORPORATION
--------------------------------------------------------------------------------
[_] Mark this box with an X if you have made changes to your name or
address details below.
A575
--------------------------------------------------------------------------------
Proxy Card
--------------------------------------------------------------------------------
Please mark vote in box in the [X]
following manner using dark ink
only.
----------------------------------- --------------------------------------
The Board of Directors recommends The Board of Directors recommends a
a vote FOR the listed nominees. vote FOR the following proposal.
----------------------------------- --------------------------------------
For Withheld
1. Election of two Directors to
serve in Class I for a term
expiring in 2005 as set forth in
the Proxy Statement--Nominees:
01 Edward J. Mooney [_] [_]
02 Enrique J. Sosa [_] [_]
For Against Abstain
2. Ratification of the Appointment of Independent Public Accountants. [_] [_] [_]
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears hereon, if the stock is registered in
the names of two or more persons each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If the
signer is a corporation, please give the full corporate name and have a duly
authorized officer sign stating such officers' title. If the signer is a
partnership, please sign the partnership name by an authorized person.
Signature Signature Date
/ /
PROXY
FMC CORPORATION
[LOGO OF FMC]
This Proxy is Solicited on Behalf of the Board of Directors.
FIDELITY INVESTMENTS CANADA LIMITED, Trustee
You are instructed to vote in the manner indicated on the reverse side, and
with discretionary authority as to any other matters that may properly come
before the meeting, all shares of stock represented by my interest in the FMC
Corporation Share Account of the FMC Canada Limited Non-Bargaining Employees'
Retirement Plan and the FMC Canada Limited Retirement Savings Program at the
annual meeting of stockholders of FMC Corporation to be held on April 23, 2002,
at the Top of the Tower, 50th Floor, 1717 Arch Street, Philadelphia,
Pennsylvania at 2:00 P.M. or any adjournment or postponement thereof.
NOT VALID UNLESS DATED AND SIGNED ON REVERSE SIDE
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. Unless otherwise instructed prior to April 19,
2002, your vote will be considered neither for nor against the proposals.
FMC CORPORATION
--------------------------------------------------------------------------------
[_] Mark this box with an X if you have made changes to your name or
address details below.
A575
--------------------------------------------------------------------------------
Proxy Card
--------------------------------------------------------------------------------
Please mark vote in box in the [X]
following manner using dark ink
only.
----------------------------------- --------------------------------------
The Board of Directors recommends The Board of Directors recommends a
a vote FOR the listed nominees. vote FOR the following proposal.
----------------------------------- --------------------------------------
For Withheld
1. Election of two Directors to
serve in Class I for a term
expiring in 2005 as set forth in
the Proxy Statement--Nominees:
01 Edward J. Mooney [_] [_]
02 Enrique J. Sosa [_] [_]
For Against Abstain
2. Ratification of the Appointment of Independent Public Accountants. [_] [_] [_]
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears hereon, if the stock is registered in
the names of two or more persons each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If the
signer is a corporation, please give the full corporate name and have a duly
authorized officer sign stating such officers' title. If the signer is a
partnership, please sign the partnership name by an authorized person.
Signature Signature Date
/ /
PROXY
FMC CORPORATION
[LOGO OF FMC]
This Proxy is Solicited on Behalf of the Board of Directors.
Banco Popular de Puerto Rico, Trustee
You are instructed to vote in the manner indicated on the reverse side, and
with discretionary authority as to any other matters that may properly come
before the meeting, all shares of stock represented by my interest in the FMC
Stock Fund of the FMC Puerto Rico Savings and Investment Plan at the annual
meeting of stockholders of FMC Corporation to be held on April 23, 2002, at the
Top of the Tower, 50th Floor, 1717 Arch Street, Philadelphia, Pennsylvania at
2:00 P.M. or any adjournment or postponement thereof.
NOT VALID UNLESS DATED AND SIGNED ON REVERSE SIDE
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. Unless otherwise instructed prior to April 19,
2002, the Trustee WILL VOTE your shares FOR Proposals 1 and 2.
FMC CORPORATION
--------------------------------------------------------------------------------
[_] Mark this box with an X if you have made changes to your name or
address details below.
A575
--------------------------------------------------------------------------------
Proxy Card
--------------------------------------------------------------------------------
Please mark vote in box in the [X]
following manner using dark ink
only.
----------------------------------- --------------------------------------
The Board of Directors recommends The Board of Directors recommends a
a vote FOR the listed nominees. vote FOR the following proposal.
----------------------------------- --------------------------------------
For Withheld
1. Election of two Directors to
serve in Class I for a term
expiring in 2005 as set forth in
the Proxy Statement--Nominees:
01 Edward J. Mooney [_] [_]
02 Enrique J. Sosa [_] [_]
For Against Abstain
2. Ratification of the Appointment of Independent Public Accountants. [_] [_] [_]
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears hereon, if the stock is registered in
the names of two or more persons each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If the
signer is a corporation, please give the full corporate name and have a duly
authorized officer sign stating such officers' title. If the signer is a
partnership, please sign the partnership name by an authorized person.
Signature Signature Date
/ /
PROXY
FMC CORPORATION
[LOGO OF FMC]
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints William G. Walter, W. Kim Foster and Andrea E.
Utecht, and each of them, proxy for the undersigned, with full power of
substitution, to vote in the manner indicated on the reverse side, and with
discretionary authority as to any other matters that may properly come before
the meeting, all shares of common stock of FMC Corporation which the
undersigned is entitled to vote at the annual meeting of stockholders of FMC
Corporation to be held on April 23, 2002, at the Top of the Tower, 50th Floor,
1717 Arch Street, Philadelphia, Pennsylvania at 2:00 P.M. or any adjournment or
postponement thereof.
NOT VALID UNLESS DATED AND SIGNED ON REVERSE SIDE
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 Proposals 1 and 2.
FMC CORPORATION
--------------------------------------------------------------------------------
[_] Mark this box with an X if you have made changes to your name or
address details below.
A575
--------------------------------------------------------------------------------
Proxy Card
--------------------------------------------------------------------------------
Please mark vote in box in the [X]
following manner using dark ink
only.
----------------------------------- --------------------------------------
The Board of Directors recommends The Board of Directors recommends a
a vote FOR the listed nominees. vote FOR the following proposal.
----------------------------------- --------------------------------------
For Withheld
1. Election of two Directors to
serve in Class I for a term
expiring in 2005 as set forth in
the Proxy Statement--Nominees:
01 Edward J. Mooney [_] [_]
02 Enrique J. Sosa [_] [_]
For Against Abstain
2. Ratification of the Appointment of Independent Public Accountants. [_] [_] [_]
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears hereon, if the stock is registered in
the names of two or more persons each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If the
signer is a corporation, please give the full corporate name and have a duly
authorized officer sign stating such officers' title. If the signer is a
partnership, please sign the partnership name by an authorized person.
Signature Signature Date
/ /
PROXY
FMC CORPORATION
[LOGO OF FMC]
This Proxy is Solicited on Behalf of the Board of Directors.
FIDELITY MANAGEMENT TRUST COMPANY, Trustee
You are instructed to vote in the manner indicated on the reverse side, and
with discretionary authority as to any other matters that may properly come
before the meeting, all shares of stock represented by my interest in the FMC
Stock Fund of the FMC Technologies, Inc. Savings and Investment Plan at the
annual meeting of stockholders of FMC Corporation to be held on April 23, 2002,
at the Top of the Tower, 50th Floor, 1717 Arch Street, Philadelphia,
Pennsylvania at 2:00 P.M. or any adjournment or postponement thereof.
NOT VALID UNLESS DATED AND SIGNED ON REVERSE SIDE
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. Unless otherwise instructed prior to April 19,
2002, the Trustee WILL VOTE your shares in proportion to the votes received by
participants.
FMC CORPORATION
--------------------------------------------------------------------------------
[_] Mark this box with an X if you have made changes to your name or
address details below.
A575
--------------------------------------------------------------------------------
Proxy Card
--------------------------------------------------------------------------------
Please mark vote in box in the [X]
following manner using dark ink
only.
----------------------------------- --------------------------------------
The Board of Directors recommends The Board of Directors recommends a
a vote FOR the listed nominees. vote FOR the following proposal.
----------------------------------- --------------------------------------
For Withheld
1. Election of two Directors to
serve in Class I for a term
expiring in 2005 as set forth in
the Proxy Statement--Nominees:
01 Edward J. Mooney [_] [_]
02 Enrique J. Sosa [_] [_]
For Against Abstain
2. Ratification of the Appointment of Independent Public Accountants. [_] [_] [_]
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears hereon, if the stock is registered in
the names of two or more persons each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If the
signer is a corporation, please give the full corporate name and have a duly
authorized officer sign stating such officers' title. If the signer is a
partnership, please sign the partnership name by an authorized person.
Signature Signature Date
/ /