SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-12
OIL-DRI CORPORATION OF AMERICA
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(Name of Registrant as Specified in Its Charter)
OIL-DRI CORPORATION OF AMERICA
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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)(1) 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.
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[ ] 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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(4) Date Filed:
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[OIL DRI CORPORATION LOGO]
November 1, 2004
Dear Stockholder:
You are cordially invited to attend Oil-Dri Corporation of America's
Annual Meeting of Stockholders, which will be held at 9:00 a.m. on December 7,
2004, at The Standard Club, 320 South Plymouth Court, Chicago, Illinois.
The matters expected to be acted on in the meeting are described in the
attached Proxy Statement. A slate of seven directors is being recommended for
re-election. Their biographies appear in the Proxy Statement. In addition, you
are being asked to ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent auditor for the year ending July 31, 2005. Included with
the Proxy Statement is a copy of the Company's Annual Report on Form 10-K for
fiscal year 2004. We encourage you to read the Form 10-K. It includes
information on the Company's operations, markets, products and services, as well
as the Company's audited financial statements.
Paul J. Miller is retiring from the Board in accordance with the Company's
policy. Paul has been a valued member of the Board of Directors since 1975, and
I want to extend my sincere appreciation to him for his wise counsel and valued
service. We are delighted that in the years ahead we will continue to have the
benefit of his wisdom and experience as one of the company's legal advisors.
Thomas D. Kuczmarski will also not be standing for re-election to the
Board. I want to thank him for his five years of service as director.
Immediately following adjournment of the meeting, we will take time to
review the results of the past year and look at some of the opportunities for
the Company which lie ahead.
We look forward to seeing you at the annual meeting. Whether or not you
plan to attend, you can be sure your shares are represented at the meeting by
promptly voting and submitting your proxy card in the enclosed envelope provided
for this purpose.
Sincerely,
/s/ Daniel S. Jaffee
DANIEL S. JAFFEE
President and Chief Executive Officer
OIL-DRI CORPORATION OF AMERICA
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 7, 2004
To the Stockholders of
Oil-Dri Corporation of America:
Notice is hereby given that the 2004 Annual Meeting of Stockholders of
Oil-Dri Corporation of America, a Delaware corporation (the "Company"), will be
held at The Standard Club, located at 320 South Plymouth Court, Chicago,
Illinois, on December 7, 2004, at 9:00 a.m., local time, for the purpose of
considering and voting on:
1. The election of seven directors;
2. Ratification of the selection of PricewaterhouseCoopers LLP as the
Company's independent auditor for the year ending July 31, 2005; and
3. Such other business as may properly come before this meeting.
The stock transfer books of the Company will remain open. The Board of
Directors has determined that only holders of record of outstanding shares of
Common Stock and Class B Stock at the close of business on October 22, 2004, are
entitled to notice of, and to vote at, the annual meeting or any adjournment
thereof. All stockholders, whether or not they now expect to be present at the
meeting, are requested to date, sign and return the enclosed proxy, which
requires no postage if mailed in the United States.
Your attention is directed to the following pages for further information
relating to the meeting.
By Order of the Board of Directors,
/s/ Charles P. Brissman
CHARLES P. BRISSMAN
Secretary
Chicago, Illinois
November 1, 2004
OIL-DRI CORPORATION OF AMERICA
410 NORTH MICHIGAN AVENUE
SUITE 400
CHICAGO, ILLINOIS 60611-4213
PROXY STATEMENT
GENERAL
This Proxy Statement and the accompanying proxy are being mailed on or
about November 1, 2004, to all holders of record of outstanding shares of the
Company's Common Stock and Class B Stock at the close of business on October 22,
2004. Proxies are being solicited on behalf of the Board of Directors for use at
the 2004 Annual Meeting of Stockholders, notice of which accompanies this Proxy
Statement. Any stockholder giving a proxy has the power to revoke it at any time
prior to the exercise thereof by executing a subsequent proxy, by notifying the
Secretary of the Company of such revocation in writing (such notification to be
directed to him at the Company's offices at 410 North Michigan Avenue, Suite
400, Chicago, Illinois 60611-4213), or by attending the annual meeting and
voting in person. IF NO CONTRARY INSTRUCTION IS INDICATED IN THE PROXY, EACH
PROXY WILL BE VOTED "FOR" THE ELECTION OF THE SEVEN NOMINEES NAMED BELOW TO THE
BOARD OF DIRECTORS AND "FOR" THE RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITOR.
The Company will pay the costs of this solicitation of proxies for the
annual meeting. In addition to using the mails, officers and certain other
regular employees of the Company may solicit proxies in person or by telephone,
electronic mail or facsimile. The Company may reimburse brokers and others who
are record holders of Common Stock and Class B Stock for their reasonable
expenses incurred in obtaining voting instructions from the beneficial owners of
such stock.
VOTING
The record date for the determination of stockholders entitled to vote at
the meeting is October 22, 2004, at the close of business. Holders as of the
record date of outstanding shares of Common Stock and Class B Stock are entitled
to vote at the meeting. Holders of Common Stock are entitled to one vote per
share and holders of Class B Stock to ten votes per share (on a non-cumulative
basis for each director to be elected when voting for the election of directors)
and vote together without regard to class (except that any amendment to the
Company's Certificate of Incorporation changing the number of authorized shares
or adversely affecting the rights of Common Stock or Class B Stock requires the
separate approval of the class so affected as well as the approval of both
classes voting together). Holders of Class B Stock are entitled to convert any
and all of such stock into Common Stock on a share-for-share basis at any time
and are subject to mandatory conversion under certain circumstances. As of the
record date, 4,051,639 shares of Common Stock and 1,450,342 shares of Class B
Stock were outstanding.
ELECTION OF DIRECTORS
The election of directors requires a plurality of votes cast. Accordingly,
only proxies and ballots marked for all nominees listed (including executed
proxies not marked with respect to election of directors, which will be voted
for all listed nominees), or voting for some, but not all nominees, by
specifying that votes be withheld for one or more designated nominees, are
counted to determine the total number of votes cast for the various nominees,
with the seven nominees receiving the largest number of votes being elected.
Abstentions and broker non-votes have no effect on the outcome of the election
of directors.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
The affirmative vote of the majority of the votes present in person or
represented by proxy is necessary for the ratification of the selection of
PricewaterhouseCoopers LLP as the Company's independent auditor. Thus an
abstention will effectively be treated as a vote against the ratification while
a broker non-vote will have no effect on the outcome.
PRINCIPAL STOCKHOLDERS
The following table sets forth information, as of September 30, 2004,
except as noted below, regarding beneficial ownership of the Company's Common
Stock and Class B Stock by each person or group known to the Company to hold
more than five percent of either class. See "Security Ownership of Management"
for information on beneficial ownership of the Company's Common Stock and Class
B Stock by the Company's executive officers and directors as a group.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
--------------------------------------------
PERCENTAGE OF
NUMBER OF SHARES OF PERCENTAGE OF AGGREGATE VOTING
NAME AND ADDRESS OF COMMON STOCK AND OUTSTANDING POWER OF COMMON
BENEFICIAL OWNER CLASS B STOCK STOCK OF CLASS STOCK AND CLASS B STOCK
---------------- ------------- -------------- -----------------------
Richard M. Jaffee(7)(10)(16)....... Common Stock: -- --
410 N. Michigan Ave. Class B Stock: 324,561 (2) (3) (6) 22.38% 17.48%
Chicago, IL 60611
Daniel S. Jaffee(7)................ Common Stock: 5,566 (4) .14% .03%
410 N. Michigan Ave. Class B Stock: 236,305 (5) (6) 14.30% 11.48%
Chicago, IL 60611
Karen Jaffee Cofsky(10)............ Common Stock: 469 (8) .01% --
410 N. Michigan Ave. Class B Stock: 101,917 (9) (6) 6.70% 5.29%
Chicago, IL 60611
Jaffee Investment ................. Common Stock: -- -- --
Partnership, L.P.(16) Class B Stock: 1,000,000 (3) 68.95% 53.87%
410 N. Michigan Ave.
Chicago, IL 60611
Heartland Advisors, Inc. .......... Common Stock: 833,300 (11) 20.70% 3.94%
789 North Water Street. Class B Stock: -- -- --
Milwaukee, WI 53202
T. Rowe Price Assoc., Inc.......... Common Stock: 471,800 (12) 11.72% 2.57%
100 East Pratt Class B Stock: -- -- --
Baltimore, MD 21202
Tweedy, Brown Co. LLC.............. Common Stock: 346,991 (13) 8.62% 1.90%
350 Park Avenue Class B Stock: -- -- --
New York, NY 10022
Dimensional Fund Advisors, Inc..... Common Stock 252,750 (14) 6.28% 1.38%
1299 Ocean Avenue Class B Stock: -- -- --
Santa Monica, CA 90401
Gabelli Asset Management, Inc...... Common Stock: 612,000 (15) 15.07% 3.30%
One Corporate Center Class B Stock: -- -- --
Rye, NY 10580
(1) Beneficial ownership is defined in applicable Securities and Exchange
Commission rules as sole or shared power to vote or to direct the
disposition of a security. All beneficial ownership is with sole voting
power and sole investment power except as described in the notes below.
(2) Consists of 231,181 shares held in a revocable trust of which Richard M.
Jaffee is the grantor and, during his lifetime, the trustee and sole
beneficiary and 93,280 shares held in a revocable trust of which Richard
M. Jaffee's spouse is the grantor and during her lifetime the trustee and
sole beneficiary, and 100 shares held in joint tenancy with his spouse.
2
(3) The Jaffee Investment Partnership, L.P. is managed by its general
partners, generally acting by a majority vote. Two of the general
partners, Richard M. Jaffee and Shirley H. Jaffee, each have eight votes.
Each of the remaining four general partners, Daniel S. Jaffee, Karen
Jaffee Cofsky, Susan Jaffee Hardin and Nancy E. Jaffee, all children of
Richard M. and Shirley H. Jaffee, have one vote. Richard M. Jaffee, as the
managing general partner, might be deemed to have, but disclaims,
beneficial ownership of the Partnership's shares, which are not reflected
in his share ownership shown in the table.
(4) Includes 666 shares of Common Stock owned by Daniel S. Jaffee's spouse.
(5) Includes 1,536 shares of Class B Stock held by Daniel S. Jaffee as trustee
of the Richard M. Jaffee 1993 Annuity Trust, 1,551 shares of Class B Stock
held by Daniel S. Jaffee as trustee of the Shirley H. Jaffee 1993 Annuity
Trust, 2 shares of Class B Stock owned by Daniel S. Jaffee's spouse, and
4,500 shares of Class B Stock owned by Daniel S. Jaffee as trustee for his
children. Also includes 197,500 and 4,250 shares of Class B Stock, which
Daniel S. Jaffee and his spouse, respectively, have the right to acquire
within 60 days of September 30, 2004, pursuant to stock options.
(6) Does not include shares owned by the Jaffee Investment Partnership, L.P.
(7) Daniel S. Jaffee is Richard M. Jaffee's son.
(8) Consists of 59 shares of Common Stock owned by Mrs. Cofsky and 410 shares
of Common Stock owned by Mrs. Cofsky's spouse. Mr. Cofsky has voted his
shares consistently with Mrs. Cofsky's voting.
(9) Consists of 22,366 shares of Class B Stock owned by Mrs. Cofsky, 7,500
shares of Class B Stock owned by Mrs. Cofsky as trustee for her children,
301 shares of Class B Stock owned by Mrs. Cofsky's spouse, and 6,750 and
65,000 shares of Class B Stock which Mrs. Cofsky and her spouse,
respectively, have the right to acquire within 60 days of September 30,
2004, pursuant to stock options. Mr. Cofsky has voted his shares
consistently with Mrs. Cofsky's voting.
(10) Mrs. Cofsky is Richard M. Jaffee's daughter and the spouse of Thomas F.
Cofsky, an executive officer of the Company.
(11) Heartland Advisors, Inc. held shared dispositive power over 833,300 shares
of Common Stock and shared voting power over 720,000 shares of Common
Stock. Information is as provided by the holder in its Schedule 13G filed
with the Securities and Exchange Commission as of December 31, 2003, which
also names an affiliated individual who may be deemed to have beneficial
ownership of some or all of these shares.
(12) T. Rowe Price Associates, Inc. ("Price Associates"), held sole dispositive
power over 471,800 shares of Common Stock and sole voting power over
470,000 shares of Common Stock. These securities are owned by various
individuals and institutional investors, including T. Rowe Price Small Cap
Value Fund, for which Price Associates serves as investment adviser with
power to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities Exchange Act of
1934, as amended, Price Associates is deemed to be a beneficial owner of
such securities; however, Price Associates expressly disclaims that it is,
in fact, the beneficial owner of such securities. Information is as
provided by the holder in its Schedule 13G filed with the Securities and
Exchange Commission as of December 31, 2003.
(13) Tweedy, Brown Co. LLC held sole dispositive power over 346,991 shares of
Common Stock and sole voting power over 346,551 shares of Common Stock.
Information is as provided by the holder in its Schedule 13G filed with
the Securities and Exchange Commission as of December 31, 2003.
(14) Information is as provided by the holder in its Schedule 13G filed with
the Securities and Exchange Commission as of December 31, 2003.
(15) Information is as provided by the holder in its Schedule 13D filed with
the Securities and Exchange Commission as of September 20, 2004, which
also names an affiliated individual who may be deemed to have beneficial
ownership of some or all of these shares.
(16) By virtue of their direct and indirect ownership of shares of the
Company's stock, Richard M. Jaffee and the Jaffee Investment Partnership,
L.P. may be deemed to be control persons of the Company under the federal
securities laws.
3
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the number of shares of Common Stock and Class B
Stock of the Company beneficially owned as of September 30, 2004, by the
directors, by the executive officers named in the Summary Compensation Table
("Named Officers") and by the directors and executive officers as a group.
NUMBER OF SHARES NUMBER OF SHARES
NAME OF BENEFICIAL OWNER(1) OF COMMON STOCK(2) OF CLASS B STOCK(2)
--------------------------- ------------------ -------------------
Richard M. Jaffee (16)......................................... (3) (3)
Daniel S. Jaffee............................................... (3) (3)
Thomas F. Cofsky (16).......................................... (4) (4)
J. Steven Cole................................................. 32,240 (5)(9) --
Arnold W. Donald............................................... 25,000 (9) --
Ronald B. Gordon............................................... 38,200 (9) --
Thomas D. Kuczmarski........................................... 26,300 (6)(9) --
Joseph C. Miller............................................... 27,000 (7)(9) --
Paul J. Miller................................................. 29,904 (8)(9) --
Allan H. Selig................................................. 29,000 (9) --
Wade R. Bradley................................................ 42,506 (10) --
Eugene W. Kiesel............................................... 67,500 (11) --
Charles P. Brissman............................................ 17,548 (12) --
All Executive Officers and Directors as a group
(15 in group)(17)........................................ 408,616 (13) 662,783 (14)(15)
(1) Beneficial ownership is defined in applicable Securities and Exchange
Commission rules as sole or shared power to vote or to direct the
disposition of a security. All beneficial ownership is with sole voting
power and sole investment power except as described in the notes below.
(2) Except for Richard M. Jaffee, Daniel S. Jaffee and Thomas F. Cofsky, none
of the directors, nominees for election to the Board of Directors, or
executive officers, including the Named Officers, own any shares of Class
B stock. The number of shares of Common Stock owned beneficially by each
of the directors and Named Officers constitutes less than 1.0% of the
number of outstanding shares of Common Stock and represents shares having
less than 1.0% of the aggregate voting power of the Common Stock and Class
B Stock.
(3) For information regarding the shares owned by Richard M. Jaffee and Daniel
S. Jaffee, see the table under the heading "Principal Stockholders" and
the notes thereto.
(4) For information regarding the shares owned by Thomas F. Cofsky, see the
ownership of Mr. Cofsky's spouse, Karen Jaffee Cofsky, in the table under
the heading "Principal Stockholders" and the notes thereto.
(5) Includes 967 shares of Common Stock owned by Mr. Cole's spouse.
(6) Includes 100 shares of Common Stock held by Mr. Kuczmarski as trustee for
his child. Mr. Kuczmarski is not standing for re-election.
(7) Includes 2,000 shares of Common Stock held by Joseph C. Miller as trustee
for the benefit of his spouse.
(8) Includes 888 shares of Common Stock owned by Paul J. Miller's spouse. Mr.
Miller is not standing for re-election.
(9) Includes 25,000 shares of Common Stock which this director has the right
to acquire within 60 days of September 30, 2004, pursuant to stock
options.
(10) Includes 42,500 shares of Common Stock which Mr. Bradley has the right to
acquire within 60 days of September 30, 2004, pursuant to stock options.
4
(11) Consists of 67,500 shares of Common Stock which Mr. Kiesel has the right
to acquire within 60 days of September 30, 2004, pursuant to stock
options. Mr. Kiesel has resigned from the Company, effective October 31,
2004.
(12) Includes 7,500 shares of Common Stock which Mr. Brissman has the right to
acquire within 60 days of September 30, 2004, pursuant to stock options.
(13) Includes 359,875 shares of Common Stock which constitute all such shares
that the executive officers and directors of the Company have the right to
acquire within 60 days of September 30, 2004, pursuant to stock options
(including the shares of Common Stock which may be acquired as described
in the notes above and in the notes under the heading "Principal
Stockholders"). Also includes 5,000 shares of restricted stock which
became non-forfeitable on October 21, 2004.
(14) Includes 273,500 shares of Class B Stock which constitute all such shares
that the executive officers and directors of the Company have the right to
acquire within 60 days of September 30, 2004, pursuant to stock options
(including the shares of Class B Stock which may be acquired as described
in the notes under the heading "Principal Stockholders").
(15) Does not include shares owned by the Jaffee Investment Partnership, L.P.
For information regarding the shares held by the partnership, see the
table under the heading "Principal Stockholders" and the notes thereto.
(16) Thomas F. Cofsky is Richard M. Jaffee's son-in-law.
(17) Jeffrey M. Libert, who is included in this group as an executive officer,
ceased to be an executive officer on October 8, 2004.
CORPORATE GOVERNANCE MATTERS
Board Committee Membership and Meetings
The members of the Board of Directors as of the date of this Proxy Statement,
and the Committees of the Board on which they serve, are indicated below.
NAME AUDIT COMPENSATION EXECUTIVE
---- ----- ------------ ---------
J. Steven Cole X* X
Arnold W. Donald X
Ronald B. Gordon X
Daniel S. Jaffee X
Richard M. Jaffee X*
Thomas D. Kuczmarski
Joseph C. Miller
Paul J. Miller X (1) X
Allan H. Selig X X*
Number of Meetings FY 04 5 3 0
* Chairperson.
(1) Alternate Member serving on the committee only in the absence of one of the
other members.
Mr. Kuczmarski and Mr. Paul J. Miller are not standing for re-election.
During the fiscal year ended July 31, 2004, the Board of Directors held
four meetings. Each director attended all of the meetings of the Board and at
least 75% of the aggregate of the total number of meetings of all Board
committees on which he sits.
5
Controlled Company Status
The Board of Directors has determined that the Company is a "controlled
company" within the meaning of the New York Stock Exchange's Corporate
Governance Standards. This determination is based on the fact that Class B Stock
having more than 50% of the aggregate voting power of the Company's Common Stock
and Class B Stock is owned by the Jaffee Investment Partnership, L. P., a
Delaware limited partnership of which Richard M. Jaffee, his spouse Shirley H.
Jaffee and Daniel S. Jaffee are general partners. The remaining three general
partners are all children of Richard M. and Shirley H. Jaffee. Richard M. Jaffee
has eight of the 20 total votes of the general partners and his spouse also has
eight votes.
As a controlled company, the Company is entitled to rely on exemptions
from the Corporate Governance Standards that would otherwise require the Company
(a) to maintain a board of directors having a majority of independent directors,
(b) to maintain a nominating/corporate governance committee composed entirely of
independent directors and (c) to maintain a compensation committee composed
entirely of independent directors. The Company has elected to rely on all three
of these exemptions.
Director Independence
The Board has determined that Messrs. Cole, Donald and Selig are
independent from the Company's management within the meaning of the Securities
and Exchange Commission's rules and the New York Stock Exchange's Corporate
Governance Standards. While the Board has not adopted any categorical standards
for independence, in making these determinations the Board noted that none of
Messrs. Cole, Donald and Selig (a) receives direct compensation from the Company
other than director annual retainers and meeting fees, (b) has any relationship
with the Company or a third party that would preclude independence under the New
York Stock Exchange's Corporate Governance Standards or (c) has any other
material relationship with the Company and its management.
Under the Company's Corporate Governance Guidelines, the chairman of the
Audit Committee (currently Mr. Cole) presides at all executive sessions of
non-management and independent directors unless otherwise determined by the
directors attending any given executive session.
The Audit Committee
The Audit Committee has the duties and responsibilities set out in the
Audit Committee Charter. Those include: selection and appointment of the
independent auditor, review of its independence and of other services provided
by it, and of the fees and other arrangements regarding its services; review
with the independent auditor and management of the scope of the audit, and of
significant financial reporting issues and judgments; review with the
independent auditor and management of the annual audited financial statements
and of the quarterly financial statements and press releases; review with the
independent auditor and management of the quality and adequacy of internal
controls; and preparation of the report required by the rules of the Securities
and Exchange Commission to be included in this Proxy Statement. A copy of the
Audit Committee Charter, as revised and approved by the Board of Directors on
October 7, 2004, appears as Exhibit A to this Proxy Statement and is available
on the Company's website at www.oildri.com.
The Board of Directors has determined that each member of the Audit
Committee meets the independence and experience requirements of the New York
Stock Exchange. The Board also has determined that Mr. Cole is an "audit
committee financial expert" within the meaning of the rules of the Securities
and Exchange Commission and that he meets the accounting or related financial
management expertise standard required by the New York Stock Exchange.
6
The Compensation Committee
The Compensation Committee is responsible for review and general oversight
of the Company's compensation programs, including all programs in which the
Company's executive officers participate. The Compensation Committee is
responsible for determining the compensation, including benefits, of the Chief
Executive Officer and other executive officers of the Company. The Compensation
Committee is also responsible for administration of the Company's stock option
plans and granting stock options or restricted stock to employees, including
grants to the executive officers of the Company. The members of the Compensation
Committee are all disinterested persons within the meaning of Rule 16b-3 under
the Securities Exchange Act of 1934, as amended. Paul J. Miller, who served as
an alternate member of the Committee and is a partner of Sonnenschein Nath &
Rosenthal LLP, special counsel to the Company, did not participate in Committee
actions involving grants of stock options or restricted stock to employees
subject to Section 16(b) and is not standing for re-election. As allowed by the
controlled company exemption from the New York Stock Exchange's Corporate
Governance Standards, the Compensation Committee does not have a charter.
Executive Committee
The Executive Committee has all of the powers and authority of the Board
of Directors in the management of the business and affairs of the Company,
subject only to any limitations provided for in the Company's Certificate of
Incorporation and By-Laws (each as amended from time to time) or imposed by
applicable law or New York Stock Exchange Corporate Governance Standards. The
Executive Committee does not have a charter. The Executive Committee did not
hold any meetings during the past year and historically has only exercised its
authority to act on behalf of the Board of Directors in limited circumstances.
Corporate Governance
The Company has adopted Corporate Governance Guidelines and a Code of
Ethics and Business Conduct, which Code applies to all Company employees,
officers and directors. The Corporate Governance Guidelines and the Code of
Ethics and Business Conduct are available on the Company's website at
www.oildri.com. The Company will also provide without charge a copy of either or
both documents to any person upon request submitted to Investor Relations,
Oil-Dri Corporation of America, 410 North Michigan Avenue, Suite 400, Chicago,
Illinois 60611-4213, telephone (312) 706-3232.
As allowed by the controlled company exemption from the New York Stock
Exchange Corporate Governance Standards, the Company does not have a
nominating/corporate governance committee.
Director Nominations
The Company does not have a standing nominating committee or other
committee of the Board performing a similar function. As a controlled company,
and with six of the Company's nine current directors having served on the Board
for at least 10 years, the Board believes it is appropriate for the Company not
to have a nominating committee. It has been the Company's practice, as now
reflected in the Company's Corporate Governance Guidelines, that the Chairman
recommends to the entire Board candidates for nomination to the Board. It is the
Company's policy not to consider director candidates recommended by
stockholders.
Communication with the Board of Directors
The Company's annual meeting of stockholders provides an opportunity each
year for stockholders to ask questions of or otherwise communicate directly with
members of the Board of Directors. It has been the Company's practice, as now
reflected in the Company's Corporate Governance Guidelines, that all directors
attend in person each annual meeting of the Company's stockholders. All nine
directors attended in person the 2003 annual meeting.
In addition, any stockholder or other interested party may communicate in
writing with the Board of Directors, the Audit Committee, the non-management
directors, or a particular director by sending a letter addressed to: Board of
Directors, Audit Committee, Non-Management Directors, or a particular director
at Oil-Dri Corporation of America, c/o Corporate Secretary, 410 North Michigan
Avenue, Suite 400, Chicago, Illinois 60611-4213. Stockholders may also report
concerns anonymously in this manner.
7
Remuneration of Directors
Each director of the Company who is not also an officer of the Company
received an annual retainer of $10,000 and also a fee of $2,000 for each Board
and Compensation Committee meeting attended in person and $1,000 for each
meeting attended by telephone. Meeting fees for Audit Committee meetings only
are $2,500 for each meeting attended in person and $1,500 for each meeting
attended by telephone. No fees are paid for attendance at Executive Committee
meetings. Richard M. Jaffee, a retired officer of the Company, did not receive
an annual retainer or any meeting fees.
Allan H. Selig received an annual retained of $2,500 for his service as
chairman of the Compensation Committee and J. Steven Cole received an additional
retainer of $5,000 for his service as chairman of the Audit Committee.
In addition to their director remuneration, during the fiscal year ended
July 31, 2004, Ronald B. Gordon, Thomas D. Kuczmarski and Joseph C. Miller were
paid $10,000, $2,500 and $ 22,500, respectively, for consulting services.
Richard M. Jaffee relinquished an immediate lump sum payment of $300,000
due to him from the Company at his retirement as a full-time employee of the
Company on January 31, 2001 and agreed to serve as a consultant to the Company
for a period of five years at an annual fee of $185,000. In addition, Mr. Jaffee
earns during the consulting period an annuity payable to him as a benefit of
$3,810 monthly at the end of the consulting period, with payment at his death of
the remaining value of this annuity to his wife, or if she should predecease
him, to his designee or estate. The economic benefit to Mr. Jaffee of this
agreement to pay an annuity was estimated to be $127,120 for the fiscal year
ended July 31, 2004.
The Company had provided split dollar joint survivorship life insurance
policies in the aggregate amount of $10,000,000 on the lives of Richard M.
Jaffee and his wife, with payment to be made on the death of the last to
survive. The premiums paid by the Company on the policies were charged to an
open account established by the Company. No interest accrued on the balance of
the open account. No premiums were paid on these policies during the fiscal year
ended July 31, 2004. Mr. Jaffee received a payment of $1,245 to cover taxes on
the economic benefit of the term life component of the policy that Mr. Jaffee
recognized as income in the fiscal year. On December 11, 2003, Mr. Jaffee paid
to the Company an amount equal to the aggregate premiums which had been paid by
the Company for these life insurance polices and the Company transferred
ownership of the policies to a trust established by Mr. Jaffee.
Under the Oil-Dri Corporation of America Deferred Compensation Plan, the
Company's directors are eligible to defer all or a portion of their directors'
compensation and consulting fees with a return equal to one percent more than
the Company's long term cost of borrowing. Richard M. Jaffee deferred $185,000
of his compensation for consulting into the plan during the fiscal year ended
July 31, 2004.
There are 25,000 shares of Common Stock reserved from treasury shares for
future grants under the Oil-Dri Corporation of America Outside Director Stock
Plan.
8
1. ELECTION OF DIRECTORS
The shares represented by each proxy will be voted, if no contrary
instruction is indicated in the proxy, to elect as directors the seven nominees
named below to hold office until the next Annual Meeting of Stockholders and
until their successors have been elected and qualify. Each nominee is currently
a director of the Company. If any nominee should be unable or unwilling to
serve, which is not now contemplated, the proxy holders may, but will not be
bound to, vote for a substitute nominee.
NOMINEES FOR DIRECTORS
[PHOTO OF Richard M. Jaffee Age 68 Director since 1958
RICHARD M. JAFFEE] Chairman of the Board of the Company
Mr. Jaffee received a degree from the University of
Wisconsin School of Business in 1957 and earned his CPA
certificate in that same year. He worked briefly for the
public accounting firm of Touche Niven et al. After
service as an officer in the U.S. Army, he joined the
Company in 1958, becoming its president in 1960, a
position he held until 1995. He served as Chief
Executive Officer of the Company from 1962 until 1997.
Mr. Jaffee retired as an employee of the Company in
2001. He has served as Chairman of the Board of the
Company since 1962. Mr. Jaffee is a director of Harris
Financial Corp., a subsidiary of Bank of Montreal, and a
member of the advisory board of Gold Eagle Corporation.
He is a trustee, vice chairman and a member of the
executive committees of Rush-Presbyterian-St. Luke's
Medical Center and the Illinois Institute of Technology.
In addition he is a trustee of the Chicago Museum of
Science and Industry and the Chicago Historical Society.
Mr. Jaffee received an honorary Doctor of Human Letters
degree from the Illinois Institute of Technology in
2001.
[PHOTO OF Daniel S. Jaffee Age 40 Director since 1992
DANIEL S. JAFFEE] President and Chief Executive
Officer of the Company
Mr. Jaffee graduated from Georgetown University in 1986.
Mr. Jaffee joined the Company in 1987, after a year with
Price Waterhouse. He was a product manager in the
Industrial and Agricultural divisions of the Company
until 1989. In 1990, he became Chief Financial Officer
of the Company, a position he held until 1995. From 1990
to 1995, he held group vice presidential positions in
the areas of Canadian and domestic operations, finance,
management information systems and consumer products.
Mr. Jaffee became President of the Company in 1995, and
Chief Executive Officer in 1997. He was Chief Operating
Officer from 1995 to 1997. Mr. Jaffee received a
master's degree in business administration from the
Kellogg Graduate School of Management of Northwestern
University in 2004. Mr. Jaffee's civic activities
include the Chicago Foundation for Education and the
Anti-Cruelty Society of Chicago.
9
[PHOTO OF J. Steven Cole Age 70 Director since 1981
J.STEVEN COLE] President, Cole and Associates
Mr. Cole graduated from the University of Wisconsin in
1957. After serving as an officer in the United States
Army, he received a master's degree from the American
Graduate School for International Business following
graduate studies at the University of Michigan. He began
his career at Abbott Laboratories in 1962. Later, he
joined G.D. Searle and Company, where he became Vice
President of the Asian and Canadian Divisions, a
position he held until 1986. In 1986, Mr. Cole joined
A.H. Robins Company, where he was a senior vice
president responsible for all international operations
until 1990. In 1990, he joined SAV-A-LIFE Systems, Inc.,
a firm selling specialty products to the dental and
medical professions, where he served as President until
1994, and then Chairman of the Board until 2000. In
1990, Mr. Cole also became president of Cole and
Associates, an international consulting firm. Mr. Cole
is also a director of Aculux, Inc. He serves on the
board of Beat-The-Streets, an organization providing
opportunity and direction to under-privileged youth.
[[PHOTO OF Arnold W. Donald Age 49 Director since 1997
ARNOLD W. DONALD] Chairman, Merisant Company
Mr. Donald received a B.A. degree in economics from
Carleton College in 1976, earned a B.S. degree in
mechanical engineering from Washington University in St.
Louis in 1977, and an M.B.A. from the University of
Chicago Graduate School of Business in 1980. Mr. Donald
joined Monsanto Company in 1977, and became President of
Monsanto's Agricultural Group in 1995. In 1998, he was
named Corporate Senior Vice President and in 1999, he
also assumed the position of President, Nutrition and
Consumer Sector. He served in these positions until
2000, when he became Chairman and Chief Executive
Officer of Merisant Company, whose products include
tabletop sweeteners. He served as CEO of Merisant until
July, 2003. Mr. Donald serves on the non-profit boards
of Carleton College, Washington University, Dillard
University, Barnes-Jewish Hospital, Opera Theatre of St.
Louis, St. Louis Art Museum, and the St. Louis Science
Center. Mr. Donald also serves as a director of Carnival
Corporation, The Scotts Company, Crown Cork & Seal
Company, Russell Corporation and The Laclede Group. In
1998, Mr. Donald was appointed by the President to serve
on the President's Export Council for international
trade; he was reappointed to a second term in February
2003.
[PHOTO OF Ronald B. Gordon Age 61 Director since 1995
RONALD B. GORDON President and Chief Operating
Officer, Nice-Pak Products, Inc.
Mr. Gordon graduated from the University of Pennsylvania
in 1964 and received a master's degree from Columbia
University in 1966. Mr. Gordon worked in brand
management and advertising management for Procter &
Gamble from 1966 to 1983. In 1983, Mr. Gordon joined
International Playtex, Inc. as Vice President and
General Manager of Playtex Family Products, U.S. He
became Senior Vice President and General Manager of U.S.
and Canadian Playtex Family Products in 1985 and held
that position through 1987. Mr. Gordon was Executive
Vice President of the Playtex Family Products
Corporation from 1988 through 1989. During 1990, Mr.
Gordon was an independent executive consultant. Mr.
Gordon joined Goody Products, Inc. in 1991, as President
and Chief Operating Officer and held that position until
1994. Mr. Gordon founded Gordon Investment Group, a
company which finances and oversees start-up businesses,
in 1994. Mr. Gordon served as Chief Executive Officer of
North American operations for Beiersdorf, Inc., from
1997 through 2001. In 2002, Mr. Gordon joined Nice-Pak
Products, Inc., as its President and Chief Operating
Officer. He serves as a director of La Dove, Inc. and
the Cosmetic, Toiletry and Fragrance Association.
10
[PHOTO OF Joseph C. Miller Age 62 Director since 1989
JOSEPH C. MILLER Vice Chairman of the Board of the
Company Independent Consultant
Mr. Miller graduated from the West Virginia University
School of Business in 1964. After serving as an officer
in the United States Army, he joined Republic Steel
Corporation in 1966. Mr. Miller served as president of
Lowes, Inc., Inland Distributing and Whiteford
Transportation Systems. He joined the Company in 1989 as
Vice President of Corporate Planning and Marketing. He
served as Group Vice President for Sales, Marketing and
Distribution from 1990 to 1993. Mr. Miller was Senior
Vice President for the Consumer, Industrial &
Environmental and Transportation Groups of the Company
from 1993 to 1995. He became Vice Chairman of the Board
in 1995. Mr. Miller served as an employee of the Company
until 2000, when he became an independent consultant
specializing in strategic planning. Mr. Miller is a
director of Prandium, Inc., Statewide Aluminum and
Powell Klienschmid. He is a trustee of St. Joseph
Regional Medical Center.
[PHOTO OF Allan H. Selig Age 70 Director since 1969
ALLEN H. SELIG] Commissioner of Major League Baseball
President and Chairman of the Board, Selig Lease Company
Mr. Selig received a bachelor's degree from the
University of Wisconsin in 1956. After two years in the
United States Army, Mr. Selig joined Selig Ford, Inc. He
served as president of Selig Ford (which became Selig
Chevrolet in 1982) from 1959 until 1990. Since 1970 he
has served as Chairman of the Board and President of
Selig Lease Company. Mr. Selig became President and
Chief Executive Officer of the Milwaukee Brewers
Baseball Club, Inc. in 1970 and served in that capacity
until 1998 when he was elected to the position of
Commissioner of Major League Baseball. He also served as
Chairman of the Executive Council of Major League
Baseball from 1992 to 1998. Mr. Selig is a director of
the Green Bay Packers and Marcus Corporation. In
addition, he is a director of the Greater Milwaukee
Committee and the Milwaukee Club and a trustee of the
Boys and Girls Clubs of Greater Milwaukee. He is a
founder and vice chairman of Athletes for Youth and
co-founder of the Child Abuse Prevention Fund.
11
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended July 31, 2004, 2003
and 2002, the compensation of the chief executive officer and the four other
most highly compensated executive officers of the Company serving as such at
July 31, 2004.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION (2)
ANNUAL COMPENSATION (1) -----------------
----------------------- RESTRICTED
NAME AND FISCAL OTHER ANNUAL STOCK OPTION ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS AWARDS COMPENSATION
------------------ ---- ------ ----- ------------ ------ ------ ------------
Daniel S. Jaffee........... 2004 $ 300,000 $ 190,500 -- -- 12,500 $ 8,090 (3)
President and Chief 2003 285,000 178,125 53,848 -- -- 6,310
Executive Officer 2002 275,000 110,000 55,890 -- 30,000 48,635
Thomas F. Cofsky........... 2004 $ 172,000 $ 87,372 -- -- 5,000 $ 4,799 (4)
Vice President of 2003 165,867 68,420 -- -- -- 3,596
Manufacturing and 2002 160,000 52,800 -- -- 20,000 2,900
Logistics
Wade R. Bradley............ 2004 $ 156,300 $ 79,392 -- -- 5,000 $ 4,495 (5)
Vice President, 2003 147,700 55,388 -- -- 10,000 3,363
Consumer Products Group 2002 140,000 42,050 -- -- 20,000 2,800
Eugene W. Kiesel(6)........ 2004 $ 163,600 $ 62,325 -- -- -- $ 6,857 (4)
Vice President, 2003 158,500 59,438 -- -- -- 3,790
Specialty Products Group 2002 153,000 45,900 -- -- 20,000 2,830
Charles P. Brissman(7)..... 2004 $ 147,500 $ 56,197 -- -- 10,000 $ 3,211 (5)
Vice President 2003 110,000 41,192 -- 5,000 30,000 1,867
General Counsel, Secretary
(1) Amounts shown include cash compensation earned during the year covered,
whether received or deferred at the election of the officer, including
amounts earned but deferred at the election of the officer pursuant to the
Oil-Dri Corporation of America Deferred Compensation Plan. In the fiscal
year ended July 31, 2004, $44,583, $35,833, and $5,094 were deferred by
Daniel S. Jaffee, Thomas F. Cofsky, and Eugene W. Kiesel, respectively,
under the provisions of the Plan. Earnings on deferred compensation under
the Plan is described under the heading "Remuneration of Directors."
(2) No stock appreciation rights or other long-term incentive plan payouts,
other than options and restricted stock, were granted to or earned by the
executive officers named in this table in any fiscal year covered by the
table.
(3) Consists of payment by the Company of $6,482 on behalf of Mr. Jaffee to a
defined contribution plan and $1,608 that Mr. Jaffee earned in excess of
120% of the applicable federal rate on his balance in the deferred
compensation plan.
(4) Includes $1,146 and $2,225 which Thomas F. Cofsky and Eugene W. Kiesel
earned, respectively, in excess of 120% of the applicable federal rate on
their balances in the deferred compensation plan during the fiscal year
ended July 31, 2004. Also, includes payments by the Company of $3,653 and
$4,632 on behalf of Mr. Cofsky and Mr. Kiesel, respectively, to a defined
contribution plan.
(5) Payment by the Company on behalf of this executive officer to a defined
contribution plan.
(6) Mr. Kiesel has resigned from the Company, effective October 31, 2004.
(7) Mr. Brissman joined the Company on October 21, 2002.
12
STOCK OPTIONS
Shown in the tables below is information with respect to (i) options to
purchase the Company's Stock (as defined below in note 2) granted in the fiscal
year ended July 31, 2004 to the Named Officers, (ii) exercises of options to
purchase the Company's Stock during the 2004 fiscal year and the value realized
from those exercises and (iii) unexercised options to purchase the Company's
Common Stock or Stock as defined in note 2 which were held as of July 31, 2004
by the Named Officers.
2004 OPTION GRANTS (1)
POTENTIAL REALIZED
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SHARES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED OPTION TERM (4)
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION ------------------
NAME GRANTED (2)(3) IN FISCAL YEAR PRICE ($) DATE 5% ($) 10% ($)
---- -------------- -------------- --------- ---- ------ -------
Daniel S. Jaffee.......... 12,500 6.38% $11.79 9/23/2013 $92,683 $234,878
Thomas F. Cofsky.......... 5,000 2.55% 11.79 9/23/2013 37,073 93,951
Eugene W. Kiesel.......... -- -- -- -- -- --
Wade R. Bradley........... 5,000 2.55% 11.79 9/23/2013 37,073 93,951
Charles P. Brissman....... 10,000 5.10% 11.79 9/23/2013 74,147 187,902
(1) No stock appreciation rights were granted in the fiscal year covered by
this table.
(2) All options to purchase the Company's Stock granted in the fiscal year
ended July 31, 2004 were issued under the terms of the Oil-Dri Corporation
of America 1995 Long-Term Incentive Plan. "Stock" as defined in the plan
means Class A Common Stock, except that if no Class A Common Stock is
issued and publicly traded on any securities market when options are
exercised, the shares awarded would be Common Stock and, with respect to
any award made in Class B Stock to a member of the Jaffee family who is an
employee of the Company or one of its subsidiaries that is more than 50%
owned by the Company, Class B Stock. As of the date of this Proxy
Statement, no shares of Class A Common Stock had been issued.
(3) The Company's option plans are administered by the Compensation Committee
of the Board of Directors. All options granted in the fiscal year ended
July 31, 2004 have an exercise price equal to the fair market value on the
date of grant. Twenty-five percent of the options will vest on the second
anniversary of the grant; and an additional 25% will vest on the third,
fourth and fifth anniversaries of the grant. The Company granted options
to purchase an aggregate of 196,000 shares of Stock to employees in fiscal
2004.
(4) Potential gains are net of exercise price, but before any taxes that may
be associated with exercise. These amounts represent certain assumed rates
of appreciation only, based on the Securities and Exchange Commission's
rules. Actual gains, if any, on stock option exercises are dependent on
the future performance of the Stock, overall market conditions, and the
option holder's continued employment through the term of the option. The
amounts reflected in this table may not necessarily be achieved.
13
FISCAL YEAR OPTION EXPENSES AND FISCAL YEAR-END VALUE TABLE
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END ($) (2)
-------------------------- ----------------------------------
SHARES
ACQUIRED VALUE
NAME (1) ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------- ----------- -------- ----------- ------------- ----------- -------------
Daniel S. Jaffee -- -- 37,500 0 (3) $ 0 $ 0
5,000 $ 29,775 197,500 27,500 (4) $1,091,650 $211,100
Thomas F. Cofsky -- -- 7,500 0 (3) $ 0 $ 0
2,500 $ 15,000 62,500 20,000 (4) $ 367,094 $149,381
Wade R. Bradley 10,000 $104,720 37,500 37,500 (4) $ 217,094 $264,181
Eugene W. Kiesel (5) -- -- 63,750 16,250 (4) $ 361,097 $128,666
Charles P. Brissman -- -- -- 40,000 (4) -- $316,900
(1) No stock appreciation rights were exercised in the fiscal year covered by
this table or outstanding at July 31, 2004.
(2) The closing price of a share of Common Stock on July 29, 2004 was $16.39.
There was no activity in Oil-Dri Corporation of America stock on July 30,
2004, the last business day of the fiscal year.
(3) Options to purchase shares of Common Stock of the Company. These options
expired unexercised in August 2004.
(4) Options to purchase shares of Stock as defined by the terms of the 1995
Long-Term Incentive Plan; see note 2 under the preceding table "2004
Option Grants." The options granted to and exercised by Daniel S. Jaffee
and Thomas F. Cofsky relate to Class B Stock.
(5) Mr. Kiesel has resigned from the Company, effective October 31, 2004.
PENSION PLANS
The Company's pension plan covering salaried employees is a
non-contributory, qualified, defined benefit plan. The plan provides for
pensions based on credited years of service and cash compensation (excluding
compensation paid under the Company's incentive bonus plan) during the highest
paid consecutive five years during the last ten years of employment. The
following table presents estimated annual retirement benefits payable under the
pension plan and a supplemental executive retirement plan upon normal retirement
at age 65 and is computed on the basis of a five-year certain and life annuity.
The benefits listed are not subject to a deduction for social security or other
offset amounts.
ESTIMATED ANNUAL BENEFITS AT YEARS OF SERVICE INDICATED
HIGHEST CONSECUTIVE 5-YEAR -------------------------------------------------------
AVERAGE COMPENSATION 15 YRS 20 YRS 25 YRS 30 YRS 35 YRS 40 YRS
-------------------- ------ ------ ------ ------ ------ ------
$125,000 $16,800 $22,400 $28,000 $33,600 $33,600 $33,600
150,000 20,900 27,900 34,900 41,900 41,900 41,900
175,000 25,100 33,400 41,800 50,100 50,100 50,100
200,000 29,200 38,900 48,600 58,400 58,400 58,400
225,000 33,300 44,400 55,500 66,600 66,600 66,600
250,000 37,400 49,900 62,400 74,900 74,900 74,900
300,000 45,700 60,900 76,100 91,400 91,400 91,400
14
The Named Officers are participants in the Company's pension plan and had
compensation as defined in the pension plan for the fiscal year ended July 31,
2004 and number of years of service as of August 1, 2004 under the pension plan
as follows: Daniel S. Jaffee, $280,417, 16 years; Thomas F. Cofsky, $156,158, 17
years; Eugene W. Kiesel, $158,489, 6 years; Wade R. Bradley, $156,283, 14 years;
Charles P. Brissman, $147,500, 1 year. Daniel S. Jaffee is currently limited to
$200,000 under the Company's plan because of applicable Internal Revenue Code
limitations which became effective for the Company's pension plan on August 1,
1994.
The Company has established a supplemental executive retirement plan to
provide retired participants in the Company's pension plan with the amount of
benefits that would have been provided under the pension plan but for the
limitations on benefits and/or the limitation on compensation for purposes of
calculating benefits imposed by the Internal Revenue Code. All pension plan
participants whose benefits are affected by those limitations will be
participants in the supplemental executive retirement plan. Daniel S. Jaffee is
currently the only participant.
15
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors oversees the
Company's cash and stock based compensation programs. The Compensation Committee
reviews and approves compensation for the executive officers and other senior
management employees and sets compensation for the Chief Executive Officer. The
Compensation Committee also reviews and oversees the Company's compensation
program for all salaried employees.
COMPENSATION POLICY
The Company's compensation policy is to provide its executive officers and
other salaried employees with compensation opportunities which:
- Are competitive with comparable size companies;
- Align compensation with overall Company performance by including
annual incentive opportunities based on Company performance or other
pre-determined performance goals and employees' level of
responsibility;
- Align management actions with stockholder interests by periodic
awards of stock options and restricted stock to key officers and
employees.
When comparing the Company's executive compensation with other companies,
the Company refers to salary surveys prepared and published by several large
consulting firms. The companies represented in the surveys participate on a
voluntary basis and are not the same group as that included in the Peer Group on
the Performance Graph which is included later in this Proxy Statement. On
occasion the Company also uses the services of outside consultants. Using these
sources, the Company sets its compensation policy to reflect the median of the
marketplace.
At present compensation levels, and given the performance based nature of
the Company's stock option plan, limitations on federal income tax deductibility
of a top officer's compensation in excess of $1,000,000 have no impact. In
general, the Company favors the preservation of tax deductibility, but reserves
the right to reconsider this position.
COMPENSATION COMPONENTS
Cash compensation for non-sales employees, including the executive
officers, has two components, base salary and annual incentive bonus. Sales
employees generally have a third compensation component, bonus related to sales
objectives. The Company has a number of salary grades reflecting differing
levels of responsibility. For each salary grade, a minimum and maximum base
salary range is established as well as a percentage of compensation which serves
as an incentive opportunity. The Company reviews with the Compensation Committee
the prior year's actual salaries for the various base salary ranges, and reviews
the base salary ranges for the coming year.
ANNUAL BASE SALARY: The Company annually reviews with the Compensation
Committee any proposed salary increases for executive officers and other senior
managers. Any increases are generally based upon changes in base salary range,
the individual's performance during the previous year, and any significant
change in responsibilities for the upcoming year.
ANNUAL INCENTIVE COMPENSATION: The Company's incentive bonus plan provides
an opportunity for all salaried employees (including the executive officers) to
earn a performance related cash bonus. The annual incentive plan is designed to
involve communication to employees of expectations for Company performance, thus
linking Company performance and total annual pay. It provides for broad based
participation, so that each salaried employee recognizes that he or she can
contribute to the Company's success.
The incentive plan provides for a target bonus equal to a percentage of
the individual's annual base salary. This percentage is determined by salary
grade which reflects the level of responsibility and expected contribution of
the employee's position to the Company's financial results. For employees in the
higher salary grades (including the executive officers) a larger proportion of
their total pay package takes the form of incentive compensation than is the
case for employees in the lower salary grades.
16
At the beginning of each fiscal year, the Compensation Committee reviews
management's proposal for the targets which will determine payment of the
incentive bonus for that year and makes the final determination as to those
targets. For fiscal 2004, the performance target used in determining the payment
of incentive bonus was corporate pre-tax income in a pre-approved amount with a
requirement for attainment of certain minimums, including meeting all debt
covenants, before any bonus could be paid. The Company has determined that at
the present time corporate pre-tax income is the preferred performance target as
it unites all salaried employees to work together to improve the Company's
performance. Corporate pre-tax income has been the sole measure used under the
incentive plan since fiscal 2001. In determining the numerical goal to be
achieved in pre-tax income, the Compensation Committee seeks to establish a goal
which is attainable but only with sustained effort by the employees.
If the Company meets its performance target, the full target bonus is paid
to each salaried employee. If the Company fails to meet its target but meets
certain performance and other minimums, a bonus of less than 100% of target
bonus is paid. If the Company exceeds its target, bonuses above 100% of target
are paid; however, no employee can receive a bonus greater than 200% of target.
In fiscal 2004, the Company exceeded its target for pre-tax income under
the incentive bonus plan, resulting in bonus payments above 100% of target for
exempt employees. Non-exempt employees receive a 100% bonus whenever the Company
meets its minimum performance target and any bonus is paid under the plan.
For fiscal 2005, the Company recommended, and the Compensation Committee
approved, that the incentive bonus be based solely on a corporate pre-tax income
target considerably higher than the previous year's target, with a requirement
for attainment of certain minimums, including meeting all debt covenants, before
any incentive bonus could be paid.
STOCK OPTIONS The Compensation Committee awards grants of stock options
and restricted stock to Oil-Dri employees, including grants to executive
officers, after reviewing management's recommendations. These grants serve to
align the interest of the executive officers and other key employees with that
of the stockholders by giving employees an ownership mentality and the resulting
focus on long-term stockholder value creation. In addition, at the
recommendation of the Compensation Committee, the Chief Executive Officer, as a
director of the Company, was authorized by the Board of Directors at its March
2004 meeting to award grants for a limited number of shares of stock to newly
hired employees, as a way to attract key employees. The Chief Executive Officer
does not have authority to grant stock options to executive officers.
During fiscal 2004, the Compensation Committee made stock option grants,
including grants to executive officers, under the Company's 1995 Long-Term
Incentive Plan. In determining these grants, the Compensation Committee
considered the grantee's level of responsibility, the performance of the grantee
in the previous year, the number of stock options previously granted to the
grantee, and the importance of the grantee's ongoing long-term investment in
stockholder value creation. The vesting period for the options granted was five
years with 25% of the shares becoming exercisable on the second anniversary of
the grant date and an additional 25% on the third, fourth and fifth
anniversaries.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Chairman of the Board recommends and the Compensation Committee
determines the compensation of the Chief Executive Officer following the general
policies and guidelines described above for the compensation of executive
officers.
At its September 2003 meeting, the Compensation Committee reviewed and set
fiscal 2004 compensation for the President and Chief Executive Officer, Daniel
S. Jaffee, at a salary of $300,000 (effective August 1, 2003) and continued his
incentive bonus plan opportunity at 50% of base salary if a 100% bonus is paid
under the incentive plan. Under the terms of the incentive plan the maximum
incentive bonus which Mr. Jaffee could receive would be 100% of base salary. The
actual incentive bonus paid to Mr. Jaffee for fiscal 2004 was $190,500. In
addition, Mr. Jaffee received a grant of stock options to purchase 12,500 shares
of the Company's Class B Stock at an exercise price of $11.79 per share. In
setting Mr. Jaffee's compensation, the Compensation Committee considered his
performance and achievements as President and Chief Executive Officer during
fiscal 2003, which included his leadership in increasing the Company's sales by
7% over the previous fiscal year and pre-tax income (after adjustment for
extraordinary items) by 500% while generating cash and reducing long-term debt.
The Compensation Committee also considered that under Mr. Jaffee's leadership
the Company was well positioned to continue positive growth in fiscal 2004.
17
At its September 2004 meeting, the Committee determined that Mr. Jaffee's
compensation for fiscal 2005 should be set at $325,000, with continued
participation in the incentive bonus plan at the same level as the prior fiscal
year. In determining this salary increase the Committee considered Mr. Jaffee's
performance and achievements as President and Chief Executive Officer including
the Company's continued growth in sales and income and its reduction in net
debt, particularly in fiscal 2004 but also in the three previous years. The
Committee also noted the specific changes and improvements implemented under Mr.
Jaffee's leadership which led to the Company's strong performance in fiscal
2004.
COMPENSATION COMMITTEE
Allan H. Selig, Chairman
J. Steven Cole
Ronald B. Gordon
Paul Miller *
-------------
*Mr. Miller served as an alternate member of the
Compensation Committee, serving on the committee only in
the absence of one of the other members, but as such,
did not participate in 1995 Long-Term Incentive Plan
actions involving directors, executive officers or 10%
stockholders.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Paul J. Miller, a director of the Company and an alternate member of
the Compensation Committee, is a partner of Sonnenschein Nath & Rosenthal LLP,
special counsel to the Company. Mr. Miller did not participate in Compensation
Committee actions involving grants of stock options or restricted stock to
employees subject to Section 16(b) of the Securities Exchange Act of 1934 and he
is not standing for re-election.
18
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The Audit Committee consists of directors J. Steven Cole (Chairman),
Arnold W. Donald and Allan H. Selig. Each member meets the independence
standards presently prescribed by the Securities and Exchange Commission and the
New York Stock Exchange. The Board has also determined that Mr. Cole is an
"audit committee financial expert" within the meaning of the rules of the
Securities and Exchange Commission and that he meets the accounting or related
financial management expertise standard presently required by the New York Stock
Exchange.
The Company's management is primarily responsible for the Company's
financial statements and reporting process, including its system of internal
controls. The Company's independent auditor is responsible for auditing the
Company's consolidated financial statements and for issuing a report on those
statements. The Audit Committee oversees the financial reporting process on
behalf of the Board.
The Audit Committee met five times during the fiscal year ended July 31,
2004. In three of those meetings, it reviewed the fiscal 2004 quarterly
financial statements and related news releases with management and with
Pricewaterhouse Coopers LLP, the Company's independent auditor. At these
meetings, the Audit Committee also reviewed the specific disclosures to be
included under "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Quarterly Reports on Form 10-Q.
At its meeting on September 22, 2004, the Audit Committee discussed the
audited financial statements for fiscal year ended July 31, 2004 and any related
major accounting and auditing issues with management, including the Company's
chief financial officer, and with the Company's independent auditor. In those
discussions, the Audit Committee reviewed with the independent auditor, to the
extent applicable, the matters required to be discussed by Statement of Auditing
Standards Nos. 61 and 90 (Required Communications with Audit Committees) and
relevant new Financial Accounting Standards affecting the audited financial
statements. The Audit Committee also reviewed and discussed with the independent
auditor its independence from the Company, including the effect of non-audit
services it performed. The Audit Committee received from the independent auditor
the written statement required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees). The independent auditor
advised the Audit Committee that its audit included procedures designed to
provide reasonable assurance for detection of illegal acts that would have a
direct and material effect on the determination of financial statement amounts
and procedures designed to identify related party transactions that are material
to the financial statements or otherwise require disclosure in those statements.
The Audit Committee also received a report on pending litigation and other legal
matters from the Company's general counsel. The Audit Committee also discussed
with management and the independent auditor their comments on the Company's
internal controls and compliance with those controls. It met separately with the
independent auditor and then separately with management, including the Company's
chief financial officer, to discuss their respective views of the conduct of the
audit and of any problems encountered. Based on the foregoing, the Audit
Committee recommended to the Board of Directors that the audited financial
statements for fiscal year 2004 be included in the Company's Annual Report on
Form 10-K for the fiscal year ended July 31, 2004. The Audit Committee also
appointed PricewaterhouseCoopers LLP as the Company's independent auditor for
the fiscal year ending July 31, 2005 and resolved that the appointment be
presented to the Company's stockholders for ratification at the 2004 annual
meeting. The Audit Committee reviewed and discussed a draft of the Company's
proposed news release announcing its fiscal 2004 results, and reviewed a draft
of the Company's Annual Report on Form 10-K (including the specific disclosures
to be included under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in that report), copies of which had
previously been furnished to the Audit Committee.
At its September 22, 2004 meeting, the Audit Committee also reviewed and
approved revisions to the Audit Committee Charter and recommended those
revisions to the Board of Directors. At its October 7, 2004 regular meeting, the
Board approved the Audit Committee's recommended revisions. A copy of the Audit
Committee Charter, as revised, appears as Exhibit A to this Proxy Statement.
AUDIT COMMITTEE
J. Steven Cole, Chairman
Arnold W. Donald
Allan H. Selig
19
AUDITOR FEES
AUDIT FEES
The aggregate fees, including expenses reimbursed, billed by
PricewaterhouseCoopers LLP for professional services rendered for the audit of
the Company's annual financial statements for the fiscal years ended July 31,
2004 and 2003, respectively, and for the reviews of the financial statements
included in the Company's quarterly reports on Form 10-Q for those fiscal years
are shown below.
The aggregate fees for professional services by PricewaterhouseCoopers LLP
in the fiscal years ended July 31, 2004 and 2003, respectively, were:
TYPE OF FEES 2004 2003
------------ ---- -----
Audit Fees $256,075 $247,100
Audit-related fees - 15,000
Tax fees 307,000 200,780
All other fees - -
-------- --------
TOTAL $563,075 $462,880
-------- --------
PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES
No services will be provided to the Company that are specifically
prohibited by the Sarbanes-Oxley Act of 2002. Permitted services will be
pre-approved by the Audit Committee of the Board of Directors.
PricewaterhouseCoopers LLP did not render any services relating to financial
information systems design and implementation for the fiscal year ended July 31,
2004.
II. RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
The Audit Committee of the Board of Directors has selected
PricewaterhouseCoopers LLP as the Company's independent auditor for the year
ending July 31, 2005, and has further directed that management submit the
selection of the independent auditor for ratification by the stockholders at the
annual meeting. PricewaterhouseCoopers LLP audited the Company's financial
statements for the fiscal year ended July 31, 2004. A representative of
PricewaterhouseCoopers LLP is expected to be present at the annual meeting and
will have an opportunity to make a statement if he or she so desires and will be
available to respond to appropriate questions.
Stockholder ratification of the selection of PricewaterhouseCoopers LLP as
the Company's independent auditor is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers LLP to the stockholders for ratification as a matter of
responsible corporate practice. If the stockholders fail to ratify the
selection, the Audit Committee will reconsider whether to retain that firm. Even
if the selection is ratified, the Audit Committee in its discretion may direct
the appointment of a different independent auditor at any time during the year
if the Audit Committee determines that such a change would be in the best
interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the votes present in
person or represented by proxy at the annual meeting will be required to ratify
the selection of PricewaterhouseCoopers LLP.
The Board of Directors recommends a vote "FOR" Proposal 2 to ratify the
selection of PricewaterhouseCoopers LLP.
20
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly cumulative total
stockholders' return on the Company's Common Stock against the yearly cumulative
total return of the Russell 2000 and the Russell 2000 Materials and Processing
Economic Sector Index (Peer Group). The graph assumes that the value of the
investment in the Company's Common Stock, the Russell 2000 Index and the Russell
2000 Materials and Processing Economic Sector Index was $100 on July 31, 1999
and that all dividends were reinvested.
COMPARATIVE FIVE-YEAR TOTAL RETURNS
OIL-DRI CORPORATION OF AMERICA, RUSSELL 2000, RUSSELL 2000 - MATERIALS
& PROCESSING
(Performance results through 7/31/2004)
[PERFORMANCE GRAPH]
1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ----
ODC $100.00 $ 50.86 $ 53.18 $ 52.21 $ 86.75 $121.69
RUSSELL 2000 INDEX $100.00 $113.77 $111.82 $ 91.74 $112.93 $132.20
RUSSELL 2000-MATERIALS & PROCESSING $100.00 $ 91.51 $ 99.48 $ 94.13 $100.25 $134.36
21
OTHER INFORMATION
ANNUAL REPORT ON FORM 10-K
This Proxy Statement does not include information regarding executive
officers called for by Item 401(b) of Regulation S-K because such information is
furnished in the Company's Annual Report on Form 10-K for the fiscal year ended
July 31, 2004, and such information is incorporated herein by reference thereto.
The Company's Annual Report on Form 10-K was filed with the Securities and
Exchange Commission on October 28, 2004. A COPY OF THE COMPANY'S 2004 ANNUAL
REPORT ON FORM 10-K IS BEING SENT TO EACH STOCKHOLDER ALONG WITH THIS PROXY
STATEMENT.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in proxy material for the 2005 Annual
Meeting of Stockholders should be addressed to the Investor Relations, Oil-Dri
Corporation of America, 410 North Michigan Avenue, Suite 400, Chicago, Illinois
60611-4213, and must be received by July 5, 2005. In the case of other
stockholder proposals of which the Company receives notice by September 14,
2005, generally the Company may exercise discretionary authority as to proposals
covered by the notice if the Company includes in its proxy statement for the
annual meeting advice on the nature of the proposal and how the Company intends
to exercise its discretion. In the case of other stockholder proposals not
included in the Company's proxy material, the Company may generally exercise
discretionary voting authority, conferred by proxies, at its 2005 annual meeting
with respect to any such proposal that is not timely submitted (i.e., of which
the Company did not have notice by September 14, 2005).
STOCKHOLDERS WITH MULTIPLE ACCOUNTS
If your household received more than one copy of the Company's Annual
Report on Form 10-K and Proxy Statement, and you wish to reduce the number you
receive, the Company will discontinue the mailing of stockholder information
statements on accounts you select. Check the box "Stop Multiple Mailings" on the
enclosed proxy card, for all but one of your stockholder accounts. By checking
this box, you are consenting to the mailing of proxy statements, annual reports
and other stockholder information only to the one account in your household for
which the box was not checked. The Company will continue to separately mail a
proxy card for each registered stockholder account.
You may revoke your consent at any time by calling 312-360-5257, or
writing to Computershare Investor Services, Attn: Proxy Unit, P.O. Box 1878,
Chicago, Illinois 60690-1878. If you revoke your consent, the Company will begin
sending you individual copies of these documents within 30 days after receipt of
your revocation notice.
22
3. OTHER MATTERS
At this time, the Board of Directors is not aware of any matters not
referred to herein which might be presented for action at the meeting; however,
if any other business should come before the meeting, votes may be cast in
respect to such matters in accordance with the best judgment of the person or
persons acting under the proxies.
By Order of the Board of Directors,
/s/ Richard M. Jaffee
RICHARD M. JAFFEE
Chairman of the Board
Chicago, Illinois
November 1, 2004
23
EXHIBIT A
As Adopted October 7, 2004
OIL-DRI CORPORATION OF AMERICA
AUDIT COMMITTEE CHARTER
PURPOSE
The Audit Committee is appointed by the Board of Directors (the "Board") of
Oil-Dri Corporation of America to assist the Board in monitoring (1) the
accounting and financial reporting processes underlying, and the integrity of,
the financial statements of Oil-Dri Corporation of America and its subsidiaries
(collectively, "Oil-Dri" or the "Company"), (2) the compliance by Oil-Dri with
legal and regulatory requirements and Oil-Dri policies, (3) the qualifications
and independence of Oil-Dri's independent auditor and (4) the performance of
Oil-Dri's internal audit function and independent auditor.
ORGANIZATION
The Audit Committee shall be comprised of three members of the Board. The
members of the Audit Committee shall meet the independence and experience
requirements of the Securities and Exchange Commission and the New York Stock
Exchange. The members and the Chairman of the Audit Committee shall be appointed
by the Board. The Audit Committee shall meet when called by the Chairman, but at
least four times a year.
DUTIES AND RESPONSIBILITIES
While the Audit Committee has the responsibilities and powers set forth in this
Audit Committee Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that Oil-Dri's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct investigations
(unless otherwise authorized to do so by the Board), to resolve disagreements,
if any, between management and the independent auditor or to assure compliance
with laws and regulations and Oil-Dri's policies.
The Board and Audit Committee have the ultimate authority and responsibility to
select, appoint, evaluate and, where appropriate, replace the independent
auditor. The Board and the Audit Committee may nominate the independent auditor
for stockholder approval, or may submit their appointment of the independent
auditor for stockholder ratification, in any proxy statement. The independent
auditor is ultimately accountable to the Board and the Audit Committee, as
representatives of Oil-Dri's stockholders.
To fulfill its duties and responsibilities, the Audit Committee shall:
General Responsibilities
- Make regular reports to the Board with such recommendations as the
Audit Committee may deem appropriate.
- Prepare the report required by the rules of the Securities and
Exchange Commission to be included in Oil-Dri's annual proxy
statement.
- Review and reassess the adequacy of this Charter at least annually
and recommend any desired changes to the Board for approval.
- Meet at least quarterly with the Chief Financial Officer, the
Principal Accounting Officer, representatives of Oil-Dri's internal
audit function and the independent auditor, and periodically with
each in separate executive sessions.
- Assist the Board in satisfying its responsibilities to the
stockholders with respect to matters relating to Oil-Dri's
accounting, financial reporting, internal audit function,
independent auditor, legal compliance and internal control over
financial reporting.
- Annually evaluate its own performance.
24
Internal Control Over Financial Reporting
- Review with management and the independent auditor the quality and
adequacy of the Company's internal control over financial reporting,
and report the results of the review to the Board.
- Review, and advise the Board with respect to, Oil-Dri's policies and
procedures regarding compliance with applicable laws and regulations
and with the Company's Code of Ethics and Business Conduct.
Financial Reporting Process
- Meet to review the annual audited financial statements and quarterly
financial statements with management and the independent auditor,
including the specific disclosures under "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
- Review with management and the independent auditor any major issues
regarding accounting and auditing principles and practices and any
audit problems or difficulties.
- Review with management and the independent auditor significant
financial reporting issues and judgments made in connection with the
preparation of Oil-Dri's financial statements.
- Discuss with management and the independent auditor Oil-Dri's
earnings press releases prior to release, as well as financial
information and earnings guidance provided to analysts and ratings
agencies.
- Discuss with management and the independent auditor Oil-Dri's risk
assessment and risk management policies, as well as Oil-Dri's major
financial risk exposures and the steps management has taken to
monitor and control such exposures.
- Review major changes to Oil-Dri's accounting principles and
practices as suggested by the independent auditor, internal audit
function or management.
Review of Process for Company Compliance with Laws, Regulations and Policies
- Review with Oil-Dri's General Counsel, at least quarterly, legal
matters that may have a material impact on the financial statements,
Oil-Dri's compliance policies and any material reports or inquiries
received from regulators or governmental agencies.
- Receive from the Company's Chief Executive Officer and Chief
Financial Officer the quarterly certifications of financial
statements and their certification of their report on their
evaluation of internal control over financial reporting.
- Establish procedures by which the Audit Committee can receive
confidentially and address complaints regarding accounting, internal
control over financial reporting or auditing issues.
- Review with management and the independent auditor any
correspondence with regulators or governmental agencies, any
employee complaint, or any published report, that raises any
material issue regarding the Company's financial statements or
accounting policies.
Independent Auditor
- Appoint the independent auditor, which firm is ultimately
accountable to the Audit Committee and the Board.
- Review the experience and qualifications of the senior members of
the independent auditor team, the quality control procedures of the
independent auditor, and material claims, litigation, governmental
or administrative proceedings involving the independent auditor.
- Review the appointment and replacement of the senior auditing
executives.
25
- Set clear policies for Oil-Dri's hiring of employees or former
employees of the independent auditor.
- Approve the fees to be paid to the independent auditor for audit
services.
- Approve, specifically and in advance or pursuant to written
pre-approval policies and procedures established by the Audit
Committee, all auditing and (except as exempted by law or
regulation), any non-auditing service, including tax services, for
which the independent auditor or other registered public accounting
firm is engaged.
- Obtain and review at least annually a formal written statement from
the independent auditor delineating all relationships between the
independent auditor and Oil-Dri (consistent with Independence
Standards Board Standard 1).
- Obtain and review at least annually a report from the independent
auditor regarding the auditor's independence, discuss such reports
with the independent auditor, including discussion of any disclosed
relationships or non-audit services that may impact the objectivity
and independence of the auditor, and take appropriate action to
satisfy itself of the independence of the auditor.
- Review with management and the independent auditor, prior to the
commencement of the audit, proposed planning, staffing and budget
for the audit.
- Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit.
- Obtain reports from the independent auditor with respect to any
audit of all critical accounting policies and practices to be used;
all alternative treatments of financial information within generally
accepted accounting principles that have been discussed with
management officials of the Company, ramifications of the use of
such alternative disclosures and treatments, and the treatment
preferred by the independent auditor; and other material written
communications between the independent auditor and the management of
the Company, such as any management letter or schedule of unadjusted
differences.
- Obtain reports from management and the independent auditor that the
Company's subsidiary/foreign affiliated entities are in conformity
with legal requirements and the Company's Code of Ethics and
Business Conduct.
- Obtain reports from management and the independent auditor with
regard to any transactions with Oil-Dri insiders or affiliates.
- Review with the independent auditor any problems or difficulties
encountered in the course of the audit work, including any
restrictions on the scope of activities or access to required
information, any disagreement with management, and any management
letter provided by the auditor and Oil-Dri's response to that
letter.
- Obtain from the independent auditor assurance that Section 10A of
the Private Securities Litigation Reform Act of 1995 has not been
implicated.
- Evaluate the performance of the independent auditor and, if
replacement is decided, replace.
- Observe and implement all other requirements concerning the
independence, internal quality control procedures and peer review of
the independent auditor that may be established from time to time by
the Securities and Exchange Commission, the New York Stock Exchange
or applicable law.
26
ADDITIONAL AUTHORITY
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants or experts to advise the Audit Committee. The Audit
Committee may request any officer or employee of Oil-Dri or Oil-Dri's outside
counsel or independent auditor to attend a meeting of the Committee or to meet
with any members of, or consultants to or experts retained by, the Audit
Committee.
27
PROXY - OIL-DRI CORPORATION OF AMERICA
410 NORTH MICHIGAN AVENUE, SUITE 400, CHICAGO, ILLINOIS 60611-4213
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard M. Jaffee, Daniel S. Jaffee and Charles
P. Brissman as Proxies, each with the power to appoint his substitute (the
action of one, if only one be present and acting, to be in any event
controlling), and hereby authorizes them to represent and to vote, as designated
below, all of the shares of Common Stock and Class B Stock of Oil-Dri
Corporation of America held of record by the undersigned at the close of
business on October 22, 2004, at the annual meeting of stockholders to be held
on December 7, 2004, and any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. EXCEPT AS OTHERWISE DIRECTED, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2 TO RATIFY THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITOR.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse side.)
IMPORTANT NOTICE
MULTIPLE COPIES OF MAILINGS
To Our Stockholders:
If your household is receiving multiple copies of our stockholder information
statements, such as proxy statements and annual reports, we ask that you check
the box "Stop Multiple Mailings" on the reverse of this card. This will allow us
to save money by reducing the number of documents we must print and mail, and
will help protect the environment as well.
By checking this box, you are consenting to our mailing of proxy statements,
annual reports and other stockholder information only to the one account in your
household for which the box was not checked. We will continue to separately mail
a proxy card for each registered stockholder account. Your consent will be
perpetual unless you revoke it, which you may do at any time by calling us at
312-360-5257, or writing us at Computershare Investor Services, Attn: Proxy
Unit, P.O. Box 1878, Chicago, Illinois 60690-1878. If you revoke your consent,
we will begin sending you individual copies of these documents within 30 days
after we receive your revocation notice.
WE ENCOURAGE YOU TO PARTICIPATE IN THIS PROGRAM BY CHECKING THE "STOP MULTIPLE
MAILINGS" BOX ON THE PROXY CARD, FOR ALL BUT ONE OF YOUR STOCKHOLDER ACCOUNTS.
OIL-DRI
CORPORATION OF AMERICA
MR A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2
ADD 3 Holder Account Number
ADD 4
ADD 5 C 1234567890 J N T
ADD 6
[Barcode] [Barcode]
[ ] Mark this box with an X if you have made
changes to your name or address details
above.
ANNUAL MEETING PROXY CARD
A. ELECTION OF DIRECTORS
1. The Board of Directors Recommends a Vote FOR the listed nominees.
For Withhold
01-J. Steven Cole [ ] [ ]
02-Arnold W. Donald [ ] [ ]
03-Ronald B. Gordon [ ] [ ]
04-Daniel S. Jaffee [ ] [ ]
05-Richard M. Jaffee [ ] [ ]
06-Joseph C. Miller [ ] [ ]
07-Allan H. Selig [ ] [ ]
B. ISSUES
2. The Board of Directors recommends a
vote for ratification of the selection
of PricewaterhouseCoopers LLP as our
independent auditor for our fiscal
year ending July 31, 2005. For Against Abstain
[ ] [ ] [ ]
3. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come before the
meeting.
Please mark this box with an X if you are [ ]
planning to attend the meeting.
MARK THIS BOX WITH AN X TO STOP MULTIPLE [ ]
MAILINGS.
Please stop mailing of
stockholder publications for this
account, since multiple copies
come to our household at this address.
C. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.
Please sign exactly as your name appears on this proxy. When shares are held by
joint tenants, both should sign. When signing as attorney, 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 an authorized person.
Signature 1 - Please keep signature within the box Signature 2 - Please keep signature within the box Date (mm/dd/yyyy)
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