SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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(as permitted by Rule 14a-6(e)(2))
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[ ] Soliciting Material Pursuant to Section 240.14a-12
HARSCO CORPORATION
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[Harsco Logo]
NOTICE OF
2002 MEETING
AND PROXY
STATEMENT
HARSCO CORPORATION
[Harsco Logo]
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HARSCO CORPORATION
350 Poplar Church Road
Camp Hill, PA 17011 USA
Mail: P.O. Box 8888
Camp Hill, PA 17001-8888 USA
Telephone: 717.763.7064
Fax: 717.763.6424
Web: www.harsco.com
March 26, 2002
To Our Stockholders:
You are cordially invited to attend the 2002 Annual Meeting of Stockholders of
your Company, which will be held on Tuesday, April 30, 2002, beginning at 10
a.m. at the Radisson Penn Harris Hotel and Convention Center, Camp Hill,
Pennsylvania.
Information about the Annual Meeting, including a listing and discussion of the
various matters on which you, as our stockholders, will act, may be found in the
formal Notice of Annual Meeting of Stockholders and Proxy Statement which
follow. We look forward to greeting as many of our stockholders as possible.
The Company is providing you with the opportunity to vote your shares by calling
a toll-free number or via the Internet as explained in the instructions on your
Proxy Card.
Whether you plan to attend the Annual Meeting or not, we urge you to fill in,
sign, date and return the enclosed Proxy Card, in the postage-paid envelope
provided, or vote by telephone or via the Internet, in order that as many shares
as possible may be represented at the Annual Meeting. The vote of every
stockholder is important and your cooperation in returning your executed Proxy
promptly will be appreciated.
Sincerely,
/s/ Derek C. Hathaway
Derek C. Hathaway
Chairman, President and Chief
Executive Officer
HARSCO CORPORATION
P.O. Box 8888
Camp Hill, Pennsylvania 17001-8888
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Harsco Corporation will be held on
Tuesday, April 30, 2002, at 10 a.m. at the Radisson Penn Harris Hotel and
Convention Center, Camp Hill, Pennsylvania to consider and act upon the
following matters:
1. Election of four Directors to serve until the 2005 Annual Meeting of
Stockholders, and until their successors are elected and qualified and
one Director to serve until the 2004 Annual Meeting of Stockholders, and
until his successor is elected and qualified;
2. Approval of the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as independent accountants to audit the
accounts of the Company for the fiscal year ending December 31, 2002;
and
3. Such other business as may properly come before the Annual Meeting.
The Board of Directors has fixed the close of business on March 6, 2002, as the
record date for the determination of stockholders who are entitled to notice of,
and to vote at, the Annual Meeting and at any adjournments thereof. The polls
will open at 9:30 a.m. on the date of the Annual Meeting and will close at
approximately 10:15 a.m. Proxies will be accepted continuously from the time of
mailing until the closing of the polls.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE
REQUESTED TO FILL IN, DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD IN THE
ENVELOPE PROVIDED, TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED
STATES, OR VOTE BY TELEPHONE OR VIA THE INTERNET, FOLLOWING THE INSTRUCTIONS ON
THE PROXY CARD.
By Order of the Board of Directors,
/s/ Paul C. Coppock
Paul C. Coppock
Senior Vice President, Chief Administrative Officer,
General Counsel and Secretary
March 26, 2002
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement has been prepared in connection with the solicitation
by the Board of Directors of Harsco Corporation, a Delaware corporation (the
"Company"), of Proxies in the accompanying form to be used at the Annual Meeting
of Stockholders of the Company, to be held April 30, 2002, or at any adjournment
or adjournments of the Annual Meeting.
The record date for stockholders of the Company entitled to notice of, and
to vote at, the Annual Meeting is the close of business on March 6, 2002. On the
record date, there were issued and outstanding 40,091,257 shares of the
Company's common stock, $1.25 par value (the "common stock"). This figure does
not include 26,498,422 shares reacquired and held by the Company as treasury
stock which will not be voted. All such shares are one class, with equal voting
rights, and each holder thereof is entitled to one vote on all matters voted on
at the Annual Meeting for each share registered in such holder's name. The
presence, in person or by proxy, of a majority of the issued and outstanding
shares of common stock is necessary to constitute a quorum at the Annual
Meeting. Assuming that a quorum is present, the affirmative vote by the holders
of a plurality of the shares cast at the Annual Meeting will be required to act
on the election of directors. Assuming that a quorum is present, the affirmative
vote of the holders of at least a majority of the outstanding shares of common
stock of the Company entitled to vote, present in person or by proxy, will be
required with respect to the appointment of PricewaterhouseCoopers LLP as
independent accountants for the current fiscal year and on all other matters to
come before the Annual Meeting.
In certain circumstances, a stockholder will be considered to be present at
the Annual Meeting for quorum purposes but will not be deemed to have cast a
vote on a matter. Such circumstances exist when a stockholder is present but
specifically abstains from voting on a matter or when shares are represented at
the Annual Meeting by a proxy conferring authority to vote only on certain
matters ("broker non-votes"). In conformity with Delaware law, abstentions and
broker non-votes will not be treated as votes cast with respect to election of
directors, and therefore will not affect the outcome of such matter. With
respect to each other matter presented at the Annual Meeting, abstentions will
be treated as negative votes on such matters, while broker non-votes will not be
counted in determining the outcome.
The shares of common stock represented by each properly executed proxy
received by the Board of Directors will be voted at the Annual Meeting in
accordance with the instructions specified therein. If no instructions are
specified, such shares of common stock will be voted FOR the election of
nominees for Directors and FOR the adoption of the appointment of
PricewaterhouseCoopers LLP as independent accountants for the current fiscal
year. The Board of Directors knows of no other business to come before the
Annual Meeting. However, if any other matters are properly presented at the
Annual Meeting, or any adjournment of the Meeting, the persons voting the
proxies will vote them in accordance with their best judgment. Any proxy may be
revoked by notifying the Secretary of the Company in writing at any time prior
to the voting of the proxy.
The principal executive offices of the Company are located at 350 Poplar
Church Road, Camp Hill, Pennsylvania (mailing address: P.O. Box 8888, Camp Hill,
Pennsylvania 17001-8888). This Proxy Statement and accompanying Notice of
Meeting and Proxy Card are first being mailed to stockholders on or about March
26, 2002.
2
ELECTION OF DIRECTORS
The Company currently has eleven Directors, of whom five have a term of
office which will expire at the 2002 Annual Meeting. The Company's By-laws
authorize the Board of Directors to fix the number of Directors from time to
time, provided that such number will not be less than five nor more than twelve.
In accordance with the By-laws, the Board of Directors has fixed the number of
Directors at eleven as of the 2002 Annual Meeting.
At the 1986 Annual Meeting of Stockholders, a classified Board was adopted
and elected by the Company's stockholders. Under this system, the Board of
Directors is divided into three classes. One class is elected each year for a
three-year term. The class whose term will expire at the 2002 Annual Meeting of
Stockholders consists of five Directors. In order to keep the three classes of
Directors as nearly equal in number as practicable, Mr. Butler, who presently
has a term expiring in 2002, has been nominated to stand for reelection this
year to the class whose term will expire in 2004.
The stockholders are asked to vote FOR Messrs. S. D. Fazzolari, A. J.
Sordoni, III, J. P. Viviano and Ms. C. F. Scanlan, all of whom have been duly
nominated by the Board of Directors, upon the recommendation of the Nominating
Committee, to serve a term of office until the 2005 Annual Meeting of
Stockholders and Mr. G. D. H. Butler, duly nominated by the Board of Directors,
upon the recommendation of the Nominating Committee, to serve a term of office
until the 2004 Annual Meeting of Stockholders, until their respective successors
have been elected and qualified. However, should any nominee become unavailable
or prove unable to serve for any reason, Proxies will be voted for the election
of such other person or persons as the Board of Directors may select to replace
such nominee. No circumstance is presently known which would render any nominee
named herein unavailable to serve.
Each person named as a nominee for Director has advised the Company of the
nominee's willingness to serve if elected. The information set forth below
states the name of each nominee for Director and of each Director continuing in
office, his or her age, a description of present and previous positions, the
year in which he or she first became a Director of the Company, business
experience, other directorships held and the Committees of the Board on which
the individual serves.
3
NOMINEE FOR TERM EXPIRING IN 2004
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
G. D. H. Butler 55 Senior Vice President -- Operations of the Corporation 2002
since 2000. Concurrently serves as President of the
Heckett MultiServ -- East Division and President of the
SGB Division. Was President of the Heckett
MultiServ -- East Division from 1994 to 2000. Served as
Managing Director -- Eastern Region of the Heckett
MultiServ Division in 1994. Served in various officer
positions within MultiServ International, N.V. prior to
1994 and prior to Harsco's acquisition of that corporation
in 1993.
NOMINEES FOR TERMS EXPIRING IN 2005
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
S. D. Fazzolari 49 Senior Vice President, Chief Financial Officer and 2002
Treasurer of the Corporation since 1999. Served as Senior
Vice President and Chief Financial Officer from January
1998 to August 1999. Served as Vice President and
Controller from January 1994 to December 1997 and as
Controller from January 1993 to January 1994.
C. F. Scanlan 54 Since 1996, President and Chief Executive Officer of The 1998
Health Alliance of Pennsylvania (representation and
advocacy organization) and Executive Vice President and
Chief Operating Officer since 1995. President and Chief
Executive Officer of The Hospital and Healthsystem
Association of Pennsylvania since 1995. Director of Health
Forum (knowledge transfer and e-commerce company), a
subsidiary of American Hospital Association. Served as
Chairman of the Board of PHICO Group (a medical
malpractice insurance company) since 1998, and served as
Chairman of PHICO Insurance Company, a wholly-owned
subsidiary of PHICO Group from 1998 to November 2001. On
August 16, 2001, the Commonwealth Court of Pennsylvania
issued an Order of Rehabilitation for PHICO Insurance
Company which gave the Pennsylvania Insurance Department
statutory control over that company. On December 14, 2001,
PHICO Insurance Company's parent, PHICO Group, filed a
Chapter 11 bankruptcy petition in the U.S. Bankruptcy
Court in Harrisburg, Pennsylvania. On February 1, 2002,
the Pennsylvania Insurance Department declared the PHICO
Insurance Company insolvent and the Pennsylvania
Commonwealth Court issued an order authorizing the
Insurance Department to liquidate that company. The
decision of the Commonwealth Court has been appealed.
Member of the Management Development and Compensation and
Audit Committees.
A. J. Sordoni, 58 Chairman of Sordoni Construction Services, Inc. (building 1988
III construction and management services company) and has been
employed by that company since 1967. Former Chairman and
Director of C-TEC Corporation and Mercom, Inc. Chairman of
the Nominating Committee; Member of the Management
Development and Compensation and Executive Committees.
4
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
J. P. Viviano 63 Retired Vice Chairman of Hershey Foods Corporation. Was 1999
President and Chief Operating Officer of Hershey Foods
Corporation from 1994 to 1998 (confectionery and grocery
products). Mr. Viviano is a director of Chesapeake
Corporation, Huffy Corporation, R. J. Reynolds Tobacco
Holdings, Inc. and RPM, Inc. Member of the Audit
Committee.
DIRECTORS WHOSE TERMS EXPIRE IN 2003
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
D. C. Hathaway 57 Chairman, President and Chief Executive Officer since July 1991
31, 2000 and also from April 1, 1994 to January 1, 1998.
Was Chairman and Chief Executive Officer from January 1,
1998 to July 31, 2000. Was President and Chief Executive
Officer from January 1, 1994 to April 1, 1994. Was
President and Chief Operating Officer of the Company from
May 1, 1991 to January 1, 1994. Held various executive
positions with the Company prior to 1991. Chairman of the
Executive Committee.
J. J.Jasinowski 63 President of the National Association of Manufacturers 1999
(business advocacy and policy association) since 1990. Mr.
Jasinowski is also an author and commentator on economic,
industrial and governmental issues. Mr. Jasinowski is a
director of Phoenix Home Life Insurance and WebMethods.
Member of the Audit and Nominating Committees.
D. H. Pierce 60 President and CEO of ABB Inc., the US subsidiary of global 2001
industrial, energy and automation provider ABB from 1999
until his retirement in June 2001. Between 1998 and 1999
he was president of Steam Power Plants and Environmental
Systems of ABB Inc. Between 1996 and 1998 he was Group
Executive Vice President -- The Americas Region and Member
of ABB Ltd. Group Executive Committee. Between 1994 and
1996 he was President of ABB China Ltd.
DIRECTORS WHOSE TERMS EXPIRE IN 2004
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
J. I. Scheiner 57 President and Chief Operating Officer of Benatec 1995
Associates, Inc. (architectural and engineering consulting
company) since 1991. Previously, he was President of Stoner
Associates, Inc. and Vice President of Huth Engineers.
Served as Secretary of Revenue for the Commonwealth of
Pennsylvania, and served as Deputy Secretary for
Administration, Pennsylvania Department of Transportation.
He is a member of the Pennsylvania Chamber of Business and
Industry Board. Chairman of the Audit Committee and member
of the Executive and the Management Development and
Compensation Committees.
5
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
I. C. Strachan 58 Deputy Chairman of Invensys plc (a controls and automation 2001
company) from 1999 to 2000. Chief Executive Officer of BTR
plc (an industrial manufacturing company) from 1996 and
1999. He was with Rio Tinto plc (formerly RTZ plc) (a
mining company) as Deputy Chief Executive Officer from 1991
to 1995 and as Chief Financial Officer from 1987 to 1991.
He serves on the boards of Transocean Sedco Forex Inc.,
Instinet Group Inc., Reuters PLC and Johnson Matthey plc.
R. C. Wilburn 58 President of the Gettysburg National Battlefield Museum 1986
Foundation since 2000. Former President and Chief Executive
Officer of the Colonial Williamsburg Foundation (historic
preservation and educational outreach organization) between
1992 and 1999. Other former positions include Distinguished
Service Professor at Carnegie Mellon University; President
of Carnegie Institute and Carnegie Library and Secretary of
Education for the Commonwealth of Pennsylvania. He is a
Director of Erie Indemnity Company, Erie Family Life, and
CoManage. Chairman of the Management Development and
Compensation Committee; Member of the Nominating and
Executive Committees.
BOARD COMMITTEES AND MEETING ATTENDANCE
The Board of Directors met seven times during the fiscal year ended
December 31, 2001. Each of the Directors of the Board attended at least 75% of
the meetings of the Board and all Committees on which the Director served.
The Nominating Committee recommends periodically to the Board prospective
Director candidates in light of resignations, retirements, or other changes in
the composition of the Board; proposes to the Board by January of each year a
slate of Directors for submission to the stockholders at the Annual Meeting; and
represents the Board in discussions with prospective Director candidates. The
Nominating Committee met four times in 2001.
The Management Development and Compensation Committee administers the
Company's executive compensation policies and programs, advises the Board
concerning election of officers and executive salaries, and reviews and consults
with appropriate members of management with respect to organizational matters.
Areas of responsibility include, but are not necessarily limited to, planning
for management succession at the corporate and division level, particularly in
senior executive ranks, recommending to the Board the annual base salary of
corporate officers and division presidents, authorizing awards under the
Company's 1995 Executive Incentive Compensation Plan and advising the Board
regarding the institution or amendment of any incentive or contingent
compensation plan applicable to officers of the Company. The Management
Development and Compensation Committee met six times in 2001. For additional
information regarding the policies and mission of the Compensation Committee see
the "Board Compensation Committee Report on Executive Compensation" which
appears beginning on page 11 of this Proxy Statement.
The Audit Committee meets with members of management, the independent
accountants and internal auditors, reviews and approves the scope of audit and
non-audit services, and
6
considers the possible effect of non-audit services on the outside accountant's
independence. The Committee reviews the results of the annual audit and any
accounting or disclosure questions encountered in the course of the annual audit
and reviews the adequacy of internal controls and other financial issues. The
Committee provides a recommendation to the Board of Directors concerning
inclusion of the audited financial statements in the Company's Annual Report on
Form 10-K. The Chairman of the Committee or a member of the Committee designated
by the Chairman meets quarterly with management and the independent accountants
to review financial matters. The Audit Committee met three times in 2001.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors (the "Committee") is composed
of four Directors each of whom is independent as defined by the Rules of the New
York Stock Exchange. The Audit Committee operates under a written charter that
was adopted by the Board of Directors in 1992 and was revised on September 25,
2001. A copy of the charter, as revised, is included in this Proxy Statement as
Appendix A.
The Audit Committee reports to and acts on behalf of the Board of Directors
by monitoring the Company's financial reporting processes and system of internal
controls, the independence and performance of the independent accountants and
the performance of the Company's internal auditors. The Company's management is
responsible for the Company's financial reporting process, including the
Company's system of internal controls and the preparation of the financial
statements. The independent accountants are responsible for performing an audit
of the Company's financial statements and issuing a report thereon.
The Audit Committee has reviewed and discussed the consolidated financial
statements with management and the independent accountants. These discussions
focused on the quality, not just the acceptability, of the accounting principles
used by the Company and the reasonableness of significant judgments made by
management in the preparation of the financial statements. Management has
represented to the Audit Committee that the Company's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles.
The Audit Committee also discussed with the Company's internal auditors and
independent accountants the overall scope and plans for their respective audits.
In addition, the Audit Committee discussed with the independent accountants
their independence from the Company and its management and the matters required
to be discussed by Statement on Auditing Standards No. 61 (Communications with
Audit Committees). PricewaterhouseCoopers, LLP, the Company's independent
accountants, has provided the Audit Committee written disclosures and the letter
required by Independence Standards Board Standard No. 1 concerning the
accountant's independence from the Company.
Based on the review and discussions referred to above, the Audit
Committee's review of the representations of management and the report of the
independent accountants, the Audit Committee recommended to the Board of
Directors that the Company's audited financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2001.
SUBMITTED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS:
J. I. Scheiner, Chairman
J. J. Jasinowski
C. F. Scanlan
J. P. Viviano
7
FEES BILLED BY THE ACCOUNTANTS FOR AUDIT AND NON-AUDIT SERVICES
The following table sets forth the amount of audit fees, financial
information systems design and implementation fees, and all other fees billed or
expected to be billed by PricewaterhouseCoopers LLP, the Company's principal
accountant for the year ended December 31, 2001.
AMOUNT
----------
Audit Fees(1)............................................... $1,620,000
Financial Information Systems Design and Implementation
Fees(2)................................................... $ --
All Other Fees(3)........................................... $1,318,000
Total Fees.................................................. $2,938,000
---------------
(1) Includes annual financial statement audit and limited quarterly review
services.
(2) No such services were provided by PricewaterhouseCoopers LLP for the most
recent fiscal year.
(3) Includes fees of $502,000 related to audits of statutory financial
statements. The remaining amount primarily represents services performed in
connection with income tax services other than those directly related to the
audit of the income tax accrual, audits of employee benefit plans and
internal control and other attestation-type services.
The Committee has considered the possible effect of non-audit services on
the accountants' independence and approved the type of non-audit services to be
rendered.
DIRECTORS' COMPENSATION
Non-employee Directors ("Outside Directors") of the Company currently
receive compensation of $31,500 per year plus $1,000 for participation at each
meeting of the Board and $1,000 for each committee meeting. Outside Directors
who are chairmen of the Audit and Nominating Committees receive additional
compensation of $4,000 per year and the Chairman of the Management Development
and Compensation Committee receives additional compensation of $5,000 per year.
Certain Outside Directors also receive compensation for special assignments in
their capacity as Director at the rate of $1,000 per day.
Outside Directors are eligible to receive grants of nonqualified stock
options. Individuals who are Outside Directors on the first business day of May
of each year will automatically be granted on that date a nonqualified stock
option to purchase 2,000 shares of the Company's common stock at a price equal
to the market value on the date of grant. The Compensation Committee has no
discretion as to the eligibility, exercise price or size of awards to Outside
Directors. On May 1, 2001, the Company granted stock options in the amount of
2,000 shares each to the Outside Directors. The options permit the holders to
purchase shares at the price of $27.925 per share, exercisable in whole or in
part commencing one year after the date of grant and expiring on April 30, 2011.
The Company maintains a Deferred Compensation Plan for Non-Employee
Directors ("Deferred Compensation Plan") which allows each Outside Director to
elect to defer receipt of all or any portion of the director compensation until
a future date selected by the Director. The Director elects to hold the
accumulated deferred compensation in either an interest-bearing account or a
Harsco phantom share account. The interest-bearing deferred account accumulates
notional interest on the account balance at a rate equal to the five-year United
States Treasury Note yield rate in effect from time to time. Contributions to
the phantom stock account
8
are recorded as notional shares of the Company's common stock based upon the
number of shares of common stock that compensation payable on a given date would
have purchased at the market price of the stock on that date. Dividends that
would be earned on the phantom shares are credited to the account as additional
phantom shares. All phantom shares are non-voting and payments out of the
account are made solely in cash based upon the market price of the common stock
on the date of payment. Under certain circumstances, the accounts may be paid
out early upon termination of directorship following a change in control.
Directors are also permitted to make early withdrawals of their deferred
accounts subject to a 10% forfeiture.
Directors who are actively employed by the Company receive no additional
compensation for serving as Directors and by policy, the Company does not pay
consulting or professional service fees to Directors.
SHARE OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 6, 2002, information with
respect to the beneficial ownership of the Company's outstanding voting
securities, stock options and other stock equivalents by (a) each Director (b)
the Company's Chief Executive Officer and the Company's four most highly
compensated other executive officers (the "Named Executives") and (c) all
Directors and executive officers as a group. All of the Company's outstanding
voting securities are common stock.
NUMBER OF NUMBER OF NUMBER OF OTHER
NAME SHARES(1) EXERCISABLE OPTIONS(2) STOCK EQUIVALENTS
---- --------- ---------------------- -----------------
G. D. H. Butler................... -0- 68,000 24,000(5)
P. C. Coppock..................... 52,720(3) 155,000 26,453(5)
S. D. Fazzolari................... 10,461 124,000 25,261(5)
D. C. Hathaway.................... 110,182 395,000 108,053(5)
J. J. Jasinowski.................. 1,200 6,000 4,337(6)
R. W. Kaplan...................... 17,719 127,200 25,786(5)
D. H. Pierce...................... 2,000 2,000 937(6)
C. F. Scanlan..................... 1,500 8,000 -0-
J. I. Scheiner.................... 3,526 14,000 2,219(6)
A. J. Sordoni, III................ 107,500(4) 20,000 -0-
I. C. Strachan.................... 500 -0- -0-
J. P. Viviano..................... 5,400 6,000 4,205(6)
R. C. Wilburn..................... 3,500 20,000 55
All Directors and executive
officers as a group. (14 persons
in total, including those listed
above).......................... 318,816 974,500 227,604
---------------
(1) Includes, in the case of Messrs. Butler, Coppock, Fazzolari, Hathaway,
Kaplan and all Directors and executive officers as a group, -0- shares,
11,909 shares, 8,096 shares, 24,623 shares, 11,359 shares and 57,252 shares,
respectively, pursuant to the Company's Savings Plan in respect of which
such persons have shared voting power.
(2) Represents all stock options exercisable within 60 days of March 6, 2002
awarded under the 1986 Stock Option Plan, the 1995 Executive Incentive
Compensation Plan and the 1995 Non-Employee Directors' Stock Plan.
Unexercised stock options have no voting power.
9
(3) Includes 18,480 shares owned by his wife as to which Mr. Coppock disclaims
beneficial ownership.
(4) Includes 18,000 shares owned by his wife and children as to which Mr.
Sordoni disclaims beneficial ownership.
(5) Includes stock options not exercisable within 60 days of March 6, 2002 and
non-voting phantom shares held under the Supplemental Retirement Benefit
Plan which will ultimately be paid out in cash based upon the value of
shares of common stock at the time of the payout.
(6) Certain Directors have elected to defer a portion of their Directors' fees
in the form of credits for non-voting phantom shares under the terms of the
Company's Deferred Compensation Plan for Non-Employee Directors. These
amounts will ultimately be paid out in cash based upon the value of the
shares at the time of payout.
Except as otherwise stated, each individual has sole voting and investment
power over the shares set forth opposite his name. As of March 6, 2002, none of
the Directors and executive officers individually beneficially owned more than
1% of the Company's common stock, and the Directors and executive officers of
the Company as a group beneficially owned approximately 2.5% of the Company's
outstanding common stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and certain of its officers to send reports of their ownership of
Harsco Corporation stock and changes in ownership to the Company and the
Securities and Exchange Commission (the "SEC"), The New York Stock Exchange,
Inc. and The Pacific Exchange, Inc. SEC regulations also require the Company to
identify in this Proxy Statement any person subject to this requirement who
failed to file any such report on a timely basis and the Company is not aware of
any such failure during 2001.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Shown below is information with respect to each person or group known to
the Company to beneficially own more than five percent of the Company's common
stock. This information is derived from Schedules 13D and 13G filed by such
persons with the Securities and Exchange Commission during February 2002.
NAME AMOUNT
AND ADDRESS AND NATURE OF
TITLE OF OF BENEFICIAL BENEFICIAL PERCENT
CLASS OWNERS OWNERSHIP OF CLASS
-------- --------------------- ------------------------------- --------
Common Stock............ Atlantic Investment 2,031,300 shares 5.10
Management, Inc. Sole dispositive and voting
666 Fifth Avenue power over 2,031,300 shares
New York, NY 10103
Common Stock............ Barclays Global 2,210,338 shares 5.53
Investors, Ltd. Sole dispositive power over
Murray House 2,210,338 shares and sole
1 Royal Mint Court voting power over 2,128,758
London, England shares
EC3 NHH
10
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Management Development and Compensation Committee ("Compensation Committee"), a
Committee of the Board of Directors composed of the non-employee Directors
listed below this Report. The Company considers all of the members of the
Compensation Committee to be independent and none of these Directors have any
interlocking or other relationships with the Company that are subject to
disclosure under the Securities and Exchange Commission rules relating to proxy
statements. All decisions of the Compensation Committee relating to the salaries
and grade levels of the Company's Executive Officers are approved by the full
Board.
Set forth below is a report prepared by the members of the Compensation
Committee whose names appear below this Report, addressing the Company's
compensation policies for 2001 as they affected the Company's executive
officers, including the Named Executives.
EXECUTIVE OFFICER COMPENSATION POLICIES
The Compensation Committee's executive compensation policies are designed
to:
- Provide incentives for achievement of the Company's annual and long-term
performance goals;
- Reinforce the common interest of management and the stockholders in
enhancing shareholder value;
- Reward individual initiative and achievement;
- Provide levels of compensation that are fair, reasonable and competitive
with comparable industrial companies; and
- Attract and retain qualified executives who are critical to the Company's
long-term success.
At the 1995 Annual Meeting of Stockholders, the Board of Directors
proposed, and the stockholders overwhelmingly approved the 1995 Executive
Incentive Compensation Plan which the Board believes has provided an improved
basis for achieving these goals. The current compensation program is applicable
to all corporate and divisional officers of the Company and is composed
primarily of:
- Salary based upon grade levels that reflect the degree of responsibility
associated with the executive's position and the executive's past
achievement;
- Annual incentive compensation awarded under the 1995 Executive Incentive
Compensation Plan, based upon achievement of specific goals established
for the relevant business unit which are financial objectives (return on
capital, earnings per share, and cash flow provided by operations);
- Stock option grants under the 1995 Executive Incentive Compensation Plan
made annually by the Compensation Committee on the basis of the
Committee's evaluation of each unit's strategic performance and the
contribution of the executive, at its discretion with exercise prices
equal to the market price at the date of grant; and
- Various retirement and other benefits commonly found in similar
companies.
11
The Compensation Committee believes that the Company benefits from a broad
based executive compensation program that extends the program's incentives to
approximately 38 division officers in addition to the six executive officers and
one other corporate officer. However, as an executive's level of responsibility
increases, a greater portion of his or her potential total compensation
opportunity should be based on performance incentives and a lesser portion on
salary, causing greater variability in the individual's total compensation from
year to year. This is achieved under the Company's current 1995 Executive
Incentive Compensation Plan by using the executive's numeric grade level and
annual salary as multipliers along with the proportion of target achievement
when computing annual incentive compensation awards.
The Compensation Committee also believes that as executives rise to
positions that can have a greater impact on the Company's performance, the
compensation program should place more emphasis on the value of the common
stock. This objective is met by granting stock options for the Company's common
stock. The quantity of stock options granted to an individual in any year is
based upon the executive's grade level and the strategic performance of the
executive and the executive's business unit. The Company has not reset the
exercise price on any existing stock options in the past, and as a matter of
sound compensation policy, does not foresee doing so in the future.
Section 162(m) of the Internal Revenue Code limits the deductibility of
executive compensation for individuals in excess of $1 million per year paid by
publicly traded corporations to the chief executive officer and the four other
executives named in the compensation table of the Proxy Statement. The Company
has determined that given the rates of compensation currently in effect and the
exemption under Internal Revenue Service regulations applicable to income
derived from stock options granted under the Harsco 1986 Stock Option Plan or
the 1995 Executive Incentive Compensation Plan, and the exemption applicable to
the performance based incentive compensation bonuses under the 1995 Executive
Incentive Compensation Plan, the Company's exposure to any nondeductibility of
executive compensation expense under Section 162(m) in the 2001 tax year should
be limited to approximately $75,000 for compensation paid to the Chairman,
President and Chief Executive Officer. In 1995, the Company obtained stockholder
approval of the 1995 Executive Incentive Compensation Plan, which was designed
to preserve the deductibility to the extent possible, of executive compensation
resulting from performance based awards under that Plan. The Company obtained
renewal of that approval by the stockholders in 1998 and again in 2001.
COMPENSATION STUDY AND REVISIONS TO OFFICER COMPENSATION STRUCTURE FOR 2001
In 2000, the Committee conducted an in-depth review of the Company's
officer compensation structure with the assistance of compensation consultant,
Towers Perrin. The study confirmed that while total cash compensation (salary
plus target annual bonus) for the officer corps approximated the median of the
comparative survey data, the Company's officer compensation scheme was
structured to pay salaries that were generally below the median paid at
comparable companies, and that the annual incentive compensation opportunity was
higher. The study also indicated that long-term incentive compensation was below
the median at the upper officer levels. These findings and the Company's
experience in recent years led the Committee to conclude that the compensation
budget could be deployed to more effectively achieve the goals of attracting,
retaining, and motivating executives. The gap between the Company's base
salaries and the industry median was making the compensation package
uncompetitive in many cases.
12
In December 2000, the Committee resolved this problem by shifting a portion
of the annual bonus opportunity into the officers' base salaries. This was
achieved by amending the terms for the annual incentive compensation calculation
to lower the bonus opportunity as a percentage of salary commencing with the
2001 plan year, and raising salaries effective January 1, 2001 to bring them
more closely in line with competitive medians. Under the existing terms of the
annual incentive compensation plan, target bonus opportunity was calculated
under the following formula:
.04 X grade level X salary = target bonus opportunity
Beginning with the 2001 plan year, the .04 factor is lowered to .02 and the
factor for maximum bonus opportunity is reduced from .06 to .03.
At a meeting in January 2001, the Committee adjusted the Company's stock
option award guidelines to more closely align long-term incentive compensation
opportunity with the median levels indicated by the Towers Perrin survey data.
The effect of these changes is to generally bring each of the three main
components of the Company's executive compensation plan, and the total of the
three components, closer to the median compensation levels at other companies of
similar size.
RELATIONSHIP OF PERFORMANCE TO COMPENSATION
The Company currently ties executive pay to corporate performance primarily
through the 1995 Executive Incentive Compensation Plan awards that are based
upon achievement of objectives adopted by the Compensation Committee, and stock
option grants which only provide realizable compensation through increases in
the stock price.
Annual Incentive Compensation Plan
The opportunity for the six executive officers and one other corporate
officer to earn compensation under the terms of the 1995 Executive Incentive
Compensation Plan in effect for 2001 was dependent upon meeting the three
equally weighted financial objectives for the Company established by the
Compensation Committee prior to the beginning of the plan year. In addition to
awards under the Plan, the Committee made special cash bonus awards for 2001 to
four executive officers and one corporate officer for the successful integration
of the SGB Group business into the Company following the acquisition of that
business in 2000. For divisional officers, the award was based on achievement of
the business unit's three financial objectives established by the Compensation
Committee prior to the beginning of the year. The goals for 2001 were based upon
return on capital, earnings per share, and cash flow provided by operations.
No award will be made for achievement of only the minimum performance
level, but awards will begin to be earned as performance in each of the
designated objective categories rises above the minimum. For 2001, achieving
target levels of performance in all objectives results in an award that is 67%
of the award for achieving the maximum level of performance against all
objectives, and the award will continue to rise correspondingly as the achieved
results approach the maximum objective performance levels set by the
Compensation Committee.
The Compensation Committee establishes minimum, target and maximum
financial objectives for the corporate office and each division for that year,
which will constitute 100% of the annual bonus criteria for the officers. The
corporate officer financial objectives for minimum, target and maximum
achievement are established based upon a consolidation of the financial
13
goals for the operating divisions. Thus, the incentive compensation awards of
the corporate officers are closely related to the overall performance of the
divisions against their financial goals.
The executive officers attained 28% of maximum achievement for the 2001
goals resulting in each of the executive officers earning 28% of the maximum
annual incentive compensation for 2001 under the Plan. The amounts of the awards
under the Plan and the special cash bonuses are summarized in the Summary
Compensation Table.
Stock Options
As shown in the table that follows, the Compensation Committee granted
stock options to the executive officers on January 22, 2001 under the 1995
Executive Incentive Compensation Plan with an exercise price of $25.63 per
share, which was the market price on the date of grant. This Plan was approved
by the stockholders in 1995 and is used to make grants to other corporate
officers and key employees, division officers as well as the executive officers.
The number of options granted to each officer is determined by grade level and
the Committee's evaluation of the strategic performance of the individual and
the individual's unit. Thus, the Chairman, President and Chief Executive
Officer, Mr. Hathaway, who has the highest grade level, received the largest
award. The absolute maximum stock option award as provided in the 1995 Plan is
150,000 shares for any single participant in a calendar year.
The guidelines for the maximum annual number of options granted for each
grade level were established in January 2001 based upon a recommendation from
Towers Perrin, a compensation consulting firm, and that firm's 2000 survey of
the long-term incentive compensation and total compensation practices of major
United States companies. Towers Perrin used a Black-Scholes valuation of the
Company's options to make comparisons of compensation value. In determining the
January 22, 2001 grants, the Committee considered the number of options
previously granted to participants under the 1986 Stock Option Plan and the 1995
Plan, and the increase in the aggregate number that would be outstanding upon
approval of the 2001 grants.
Salaries
The Compensation Committee completed its annual review of salaries of all
corporate and division officers, including the Named Executives, at its December
14, 2000 Committee meeting. As discussed above, the Committee considered an
analysis of compensation survey data that the compensation consultant, Towers
Perrin had prepared, and determined that a combination of increases in salary
and reductions in bonus opportunity should be made. This change was implemented
effective January 1, 2001, making the salaries competitive with industry medians
and lowering the bonus opportunity to more closely reflect industry norms.
Each year, the Compensation Committee adjusts the salary of each executive
officer based upon the available salary budget, the performance of each officer,
comparison survey data provided by one or more major consulting firms,
comparison to other internal salaries and the Company's salary range structure
for various grade levels. The salary range structure for various grade levels is
also revised from time to time based upon industry survey data provided by
Towers Perrin. Based on this information, the Committee, at its December 2000
meeting, approved an increase in the salary range structure for all officer
grade levels. The Towers Perrin industry compensation survey considered by the
Committee is a broad based survey of companies selected by the consulting firm
which are not limited to the companies within the
14
Dow Jones Industrial-Diversified Index referenced elsewhere in the Proxy
Statement, though some of those companies may have been included in the survey.
The compensation study that Towers Perrin prepared for the Company in 2000
analyzed competitive compensation levels and total direct compensation (defined
as base salary, annual incentives and long-term incentives in the form of cash
and stock option awards) for the Company's key executive positions. The analysis
was based on competitive data from Towers Perrin's 2000 Executive Compensation
Data Base Survey for general industry companies with annual revenues between $1
and $3 billion. The salary increases effective January 1, 2001 were based upon
that analysis, and a review of the performance of each officer. The salary for
the Chief Executive Officer in 2000 was below the median in the Towers Perrin
analysis, but was less than 1% above the 75th percentile in 2001 following the
reduction in bonus opportunity and corresponding increase in salary. The total
of salary plus target bonus opportunity for the Chief Executive Officer in 2001
was between the 50th and 75th percentile. The 2001 salaries for the other
executive officers ranged between 7% above and 9% below the Towers Perrin
medians for those positions.
In preparation for future compensation adjustments, the Committee intends
to periodically review similar detailed survey data. In general, the Committee
strives to maintain total compensation packages which range from moderately
below to moderately above the industry medians.
Other Compensation
The Company has certain other broad based employee benefit plans in which
the executive officers participate on the same terms as non-executive employees,
including health insurance, the Savings Plan and the term life insurance benefit
equal to two times the individual's salary. In addition, the executive officers
participate in the Supplemental Retirement Benefit Plan as described elsewhere
in this Proxy Statement, which supplements both the qualified pension plan and
the Company's 401(k) Savings Plan.
THE CHIEF EXECUTIVE OFFICER'S 2001 COMPENSATION
The incentive plan cash, stock options, and salary awarded or paid to Mr.
Hathaway with respect to 2001 are discussed in the Summary Compensation Table on
page 17 in this Proxy Statement with respect to amounts, and in this Report with
respect to the factors considered by the Compensation Committee. Of the total
$1,236,125 in cash compensation paid to Mr. Hathaway for 2001 as reflected in
the Summary Compensation Table, 17.4% was dependent upon achieving performance
objectives under the 1995 Executive Incentive Compensation Plan. This is
consistent with the Compensation Committee's view that those executives most
able to affect the performance of the Company should have a significant portion
of their potential total compensation opportunity at risk based upon Company
performance. Those Company performance objectives are composed of financial
objectives. The Compensation Committee believes that attainment of specific,
measurable financial goals is an important determinant of total return to
stockholders over the long-term and has the advantage of not being subject to
period vagaries of the common stock price. However, the Compensation Committee
also believes that the Chief Executive Officer and other officers should share
in the gains or losses of common stock value experienced by the stockholders in
order to reinforce the alignment of their respective interests. Therefore, the
Compensation Committee utilizes stock option grants as an important component of
compensation. The Compensation Committee believes that the combined effect of
these compensation elements is to establish strong
15
incentives to achieve results which will provide stockholders with the
investment returns that they seek.
ECONOMIC VALUE-ADDED BASED ANNUAL INCENTIVE PLAN EFFECTIVE FOR 2002
At the 2001 Annual Meeting of Stockholders, the stockholders approved an
amendment to the 1995 Executive Incentive Compensation Plan that enables the
Company to implement economic value-added measures as performance criteria for
determining annual incentive compensation awards. The Committee, with assistance
from Stern Stewart & Co., has adopted an economic value-added ("EVA(R)") based
annual incentive compensation plan for the corporate and division officers for
the 2002 plan year. The annual incentive compensation awards for 2002 will be
based upon minimum, target and maximum EVA improvement goals that the Committee
has established in consultation with Stern Stewart for each business unit.
Economic value-added is a measurement of the amount by which the Company's
after tax profits, after certain adjustments, exceed the cost of capital
employed by the Company. The use of economic value-added as a performance
measurement for incentive compensation is designed to help managers in making
decisions that lead to overall improvement in shareholder value, taking into
account not only profits generated, but the economic cost of capital to generate
the profits.
In summary, the Committee believes that the Company's total compensation
program achieves the objective of providing meaningful and appropriate rewards,
recognizing both current performance contributions and the attainment of
long-term strategic business goals of critical importance to the future growth
of Harsco Corporation.
SUBMITTED BY THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS:
R. C. Wilburn, Chairman
C. F. Scanlan
J. I. Scheiner
A. J. Sordoni, III
16
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information concerning the compensation
awarded to, earned by or paid to the Named Executives for services rendered to
the Company in all capacities during each of the last three fiscal years.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
NAME AND ------------------------ UNDERLYING COMPEN-
PRINCIPAL SALARY BONUS OPTIONS SATION
POSITION YEAR ($) ($) (#)(1) ($)(2)
--------- ---- ------- ------- ------------ ---------
D. C. Hathaway.............................. 2001 852,500 215,290 125,000 220,806
Chairman, President & 2000 620,000 896,520 100,000 39,209
Chief Executive Officer 1999 560,000 686,952 50,000 98,275
G. D. H. Butler(3).......................... 2001 375,200 258,888 40,000 -0-
Senior Vice President -- Operations 2000 223,808 303,193 10,000 -0-
1999 214,000 227,696 10,000 79,249
P. C. Coppock............................... 2001 309,000 59,827 40,000 63,864
Senior Vice President, 2000 235,000 260,521 20,000 13,675
Chief Administrative Officer, 1999 227,000 220,848 20,000 35,130
General Counsel & Secretary
S. D. Fazzolari............................. 2001 309,000 59,827 40,000 63,864
Senior Vice President, Chief 2000 235,000 260,521 20,000 13,033
Financial Officer & Treasurer 1999 205,000 199,445 20,000 24,232
R. W. Kaplan(4)............................. 2001 325,000 62,925 40,000 66,766
Senior Vice President -- Operations 2000 235,000 260,521 20,000 13,033
1999 205,000 199,445 20,000 26,259
---------------
(1) Represents stock options granted in the respective years. The Company
granted these options, relating to shares of its common stock, to certain
employees, including executive officers, of the Company under its 1995
Executive Incentive Compensation Plan. Options granted during a particular
year are not exercisable for twelve months following the date of grant,
unless a change in control of the Company occurs, nor are they exercisable
ten years after the date of grant. The exercise price per share of options
granted under the Plan was one hundred percent (100%) of the fair market
value of common stock at the date of grant.
(2) For 2001, represents Company Savings Plan contributions and certain
Supplemental Retirement Benefit Plan contributions made on behalf of the
Named Executives. The Company maintains the Harsco Corporation Savings Plan
which includes the "Salary Reduction" feature afforded by Section 401(k) of
the Internal Revenue Code. Eligible employees may authorize the Company to
contribute from 1% to 16% of their pre-tax compensation to the Savings Plan.
The Company makes matching contributions for the purchase of common stock of
the Company for the account of each participating employee equal to 50% of
the first 1% to 6% of such employee's "Salary Reduction" contribution. Under
the Supplemental Savings Benefit portion of the Supplemental Retirement
Benefit
17
Plan, if the IRS-imposed limitations on Section 401(k) Savings Plan
contributions are reached by a Named Executive for a given year, so that he
is unable to make the maximum 6% of pre-tax compensation "Salary Reduction"
contribution that would be subject to the Company's matching contributions
under the Savings Plan, the Company will make contributions on behalf of
such Named Executive to the Supplemental Savings Benefit portion of the
Supplemental Retirement Benefit Plan in an amount equal to the amount of the
matching contributions that it would have made under the Savings Plan if the
Executive could have contributed the full 6% of his pre-tax compensation,
less the amount of matching contributions that the Company actually made for
his benefit under the Savings Plan. Such Company contributions to the
Supplemental Retirement Benefit portion of the Supplemental Retirement
Benefit Plan are credited in the form of phantom shares based upon the value
of common stock on the date of the Company's contributions. Dividends that
would have been paid on common stock are credited as additional phantom
shares, and all phantom shares will ultimately be paid out in cash based
upon the value of shares of common stock at the time of payment. For 2001,
includes a special cash bonus for successful integration of the SGB Group
business after acquiring it in 2000.
(3) Mr. Butler was elected Senior Vice President -- Operations effective
September 26, 2000. He serves concurrently as President of the Heckett
MultiServ -- East Division. Effective September 26, 2000, Mr. Butler was
appointed to the additional position of President of the SGB Division. Mr.
Butler's salary and bonus are designated in U.S. dollars, but he is paid in
British pounds at a conversion rates that were in effect during the
respective periods.
(4) Mr. Kaplan was elected Senior Vice President -- Operations effective July 1,
1998 and is concurrently President of the Harsco Gas & Fluid Control Group.
18
STOCK OPTIONS
The following table contains information concerning the number of stock
options granted to each Named Executive under the Company's 1995 Executive
Incentive Compensation Plan during the last fiscal year:
OPTION GRANTS IN 2001
INDIVIDUAL GRANTS
----------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE GRANT DATE
GRANTED IN FISCAL PRICE EXPIRATION PRESENT
NAME (#)(1) YEAR ($/SH) DATE VALUE($)(2)
---- ---------- ---------- -------- ---------- -----------
D. C. Hathaway --....................... 125,000 17.6 25.63 01/21/11 851,250
Chairman, President & Chief Executive
Officer
G. D. H. Butler --...................... 40,000 5.6 25.63 01/21/11 272,400
Senior Vice President -- Operations
P. C. Coppock --........................ 40,000 5.6 25.63 01/21/11 272,400
Senior Vice President, Chief
Administrative Officer, General
Counsel & Secretary
S. D. Fazzolari --...................... 40,000 5.6 25.63 01/21/11 272,400
Senior Vice President, Chief Financial
Officer & Treasurer
R. W. Kaplan --......................... 40,000 5.6 25.63 01/21/11 272,400
Senior Vice President -- Operations
---------------
(1) The Company granted these options, for shares of its common stock, to
certain employees, including executive officers, of the Company under its
1995 Executive Incentive Compensation Plan. The Company's 1995 Executive
Incentive Compensation Plan authorizes the Compensation Committee to grant
stock options to purchase common stock, as well as stock appreciation rights
to certain officers and employees who in the discretion of the Compensation
Committee significantly impact the profitability of the Company. Options
granted during a particular year are not exercisable for twelve months
following the date of grant, unless a change in control of the Company
occurs, nor are they exercisable more than ten years after the grant. The
exercise price per share of options granted under the 1995 Executive
Incentive Compensation Plan was one hundred percent (100%) of the fair
market value of common stock at the date of grant. There were no stock
appreciation rights granted in 2001.
(2) The fair value of the options granted during 2001 is estimated on the date
of grant using the binomial option pricing model. This estimate has been
developed for purposes of comparative disclosure and does not necessarily
reflect the Company's view of the value of the option. The estimated value
has been determined based upon the terms of the option grant, the common
stock price performance history, the Company's experience that its options,
on average, are exercised within four years of grant, a $0.96 dividend and a
5% rate of dividend increase. Options expiring in January 2011 are assumed
to have stock volatility of 37% and a 4.96% risk-free interest rate.
19
OPTION EXERCISES AND HOLDINGS
The following table sets forth information, with respect to the Named
Executives, concerning the exercise of options during fiscal year 2001 and
unexercised options at December 31, 2001:
AGGREGATED OPTION EXERCISES IN 2001
AND OPTION VALUES AT 12/31/01
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT OPTIONS AT
ON VALUE 12/31/01(#)(2) 12/31/01($)(3)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ---------- ----------- ------------- ----------- -------------
D. C. Hathaway --........... -0- -0- 270,000 125,000 1,460,900 1,083,750
Chairman, President &
Chief Executive Officer
G. D. H. Butler --.......... -0- -0- 28,000 40,000 129,400 346,800
Senior Vice President --
Operations
Paul C. Coppock --.......... -0- -0- 115,000 40,000 608,050 346,800
Senior Vice President,
Chief Administrative
Officer, General Counsel &
Secretary
S. D. Fazzolari --.......... -0- -0- 84,000 40,000 398,500 346,800
Senior Vice President,
Chief Financial Officer &
Treasurer
R. W. Kaplan --............. 9,022 123,098.60 87,200 40,000 537,360 346,800
Senior Vice President --
Operations
---------------
(1) Represents the difference between the exercise price and the market price of
common stock on the date of exercise.
(2) Options granted during a particular year are not exercisable for twelve
months following the date of grant unless a change in control of the Company
occurs.
(3) Represents the difference between the exercise price and the market price of
common stock on December 31, 2001, multiplied by the number of in-the-money
unexercised options contained in the respective category. Average market
price at December 31, 2001 was $34.48 per share. Options are in-the-money
when the market price of the underlying securities exceeds the exercise
price.
20
STOCK PERFORMANCE GRAPH
The following performance graph compares the yearly percentage change in
the cumulative total stockholder return (assuming the reinvestment of dividends)
on the Company's common stock against the cumulative total return of the
Standard & Poor's MidCap 400 Index and the Dow Jones Industrial-Diversified
Index for the past five years. The graph assumes an initial investment of $100
on December 31, 1996 in the Company's common stock or in the underlying
securities which comprise each of those market indices. The information
contained in the graph is not necessarily indicative of future Company
performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG HARSCO CORPORATION, S&P MIDCAP 400 INDEX AND DOW JONES
INDUSTRIAL-DIVERSIFIED INDEX(1)(2)
FISCAL YEAR ENDING DECEMBER 31
LOGO
--------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
--------------------------------------------------------------------------------
Harsco Corporation 100 129 93 100 80 114
S&P MidCap 400
Index 100 132 158 181 212 196
Dow Jones
Industrial-Diversified 100 142 182 247 249 224
---------------
(1) Peer companies included in the Dow Jones Industrial-Diversified Index are:
Albany International Corp., Briggs & Stratton Corp., Capstone Turbine Corp.,
Carlisle Companies Inc., Crane Company Inc., Dover Corporation, Eaton Corp.,
Emerson Electric Co., Flowserve Corp., FMC Corporation, General Electric
Co., Honeywell International Inc., Illinois Tool Works, Inc., Ingersoll-Rand
Company, ITT Industries Inc., Kaydon Corp., Kennametal Inc., Minnesota
Mining & Manufacturing Co., Mueller Industries Inc., Parker Hannifin
Corporation, Pentair Inc., Rockwell International Corp., Roper Industries
Inc., The
21
Shaw Group Inc., Teleflex Inc., Textron Inc., The Timken Company and Tyco
International Ltd.
(2) In December 2001, Dow Jones restructured its industry classification system.
The net result of this change is that all US indexes will show differences
when compared to the prior index series.
RETIREMENT PLANS
The Company provides retirement benefits for each officer under the
Supplemental Retirement Benefit Plan ("Supplemental Plan"). All executive
officers are covered by the Supplemental Plan excepting G.D.H. Butler who is
covered by the U.K. pension plan described below. The Supplemental Plan replaces
the 401(k) Company match lost due to government limitations on such
contributions. The replacement is in the form of phantom shares as more fully
described in footnote 2 on page 17. All U.S. executive officers are also covered
by the qualified pension plan. Each plan is a defined benefit plan providing for
normal retirement at age 65. Early retirement may be taken commencing with the
first day of any month following the attainment of age 55, provided at least 15
years of service have been completed. Early retirement benefits commencing prior
to age 65 are reduced. The Supplemental Plan also provides for unreduced pension
benefits if retirement occurs after age 62, provided at least 30 years of
service have been completed. The Supplemental Plan provides for a preretirement
death benefit payable in a monthly benefit to a beneficiary designated by the
participant for participants who die after qualifying for benefits. The
Supplemental Plan also includes provisions which fully vest participants upon
termination of employment following a "change in control" of the Company as
defined in the Supplemental Plan.
Total pension benefits are based on final average compensation and years of
service. The normal retirement benefit under the Supplemental Plan is equal to a
total of .8% of final average compensation up to the "Social Security Covered
Compensation" as defined in the Supplemental Plan plus 1.6% of the final average
compensation in excess of the "Social Security Covered Compensation" multiplied
by up to 33 years of service, reduced by the benefits under the qualified plan.
Final average compensation is defined as the aggregate compensation (base salary
plus nondiscretionary incentive compensation) for the 60 highest consecutive out
of the last 120 months prior to date of retirement or termination of employment
for any reason prior to normal retirement date.
The following table shows estimated total annual pension benefits payable
to the U. S. executive officers of the Company under the qualified pension plan
and the Supplemental Plan, including the Named Executives upon retirement at age
65, in various remuneration and year-of-service classifications, assuming the
total pension benefit was payable as a straight life annuity guaranteed for ten
years and retirement took place on January 1, 2002.
22
PENSION PLAN TABLE -- U.S. EXECUTIVES
YEARS OF SERVICE
--------------------------------------------------------------
REMUNERATION(1) 10 15 20 25 30 35*
--------------- ------- ------- ------- ------- ------- -------
300,000................. 44,844 67,267 89,689 112,111 134,533 147,987
400,000................. 60,844 91,267 121,689 152,111 182,533 200,787
500,000................. 76,844 115,267 153,689 192,111 230,533 253,587
600,000................. 92,844 139,267 185,689 232,111 278,533 306,387
700,000................. 108,844 163,267 217,689 272,111 326,533 359,187
800,000................. 124,844 187,267 249,689 312,111 374,533 411,987
900,000................. 140,844 211,267 281,689 352,111 422,533 464,787
1,000,000................. 156,844 235,267 313,689 392,111 470,533 517,587
1,100,000................. 172,844 259,267 345,689 432,111 518,533 570,387
1,200,000................. 188,844 283,267 377,689 472,111 566,533 623,187
1,300,000................. 204,844 307,267 409,689 512,111 614,533 675,987
1,400,000................. 220,844 331,267 441,689 552,111 662,533 728,787
1,500,000................. 236,844 355,267 473,689 592,111 710,533 781,587
1,600,000................. 252,844 379,267 505,689 632,111 758,533 834,387
---------------
* The Supplemental Plan has a 33 year service maximum.
(1) Final average compensation for the U.S. Named Executives as of the end of
the last calendar year is: Mr. Hathaway: $1,300,918.40; Mr. Coppock:
$487,951.60; Mr. Fazzolari: $382,751.60; and Mr. Kaplan: $421,421.40. The
estimated credited years of service for each Named Executive are as follows:
Mr. Hathaway: 35.5 years; Mr. Coppock: 20.5 years; Mr. Fazzolari: 21.5
years; and Mr. Kaplan: 22.5 years.
The Company does not provide retiree medical benefits to its executive
officers.
The following table shows estimated total annual pension benefits payable
to the U.K. executive officer of the Company, Mr. Butler, for life, under the
Harsco Pension Scheme, a qualified pension plan in the U.K., upon retirement at
age 60, which is normal retirement age under the Scheme, in various remuneration
and year-of-service classifications, assuming the total pension benefit was
payable and retirement took place on January 1, 2002. The benefit would be paid
in British pounds and all amounts in the table below are stated in U.S. dollars
at a conversion rate of $1.4560 = L1.00. The Scheme provides that if the
participant dies within five years after starting to receive a pension, a lump
sum will be paid equal to the pension payments that would have been made during
the remainder of the five year period. The annual pension benefit is based on
the highest annual total of salary and bonus within the last five years (or the
highest average amount of annual salary plus bonus received in any three
consecutive scheme years within the last ten years, if higher) ("Final
Pensionable Salary") and the years of service, subject to various deductions for
service prior to April 6, 1989, and a statutory limitation of two thirds of the
Final Pensionable Salary.
23
PENSION PLAN TABLE -- U.K. EXECUTIVE
YEARS OF SERVICE
--------------------------------------------------------------------
REMUNERATION(1) 10 15 20 25 30 35
--------------- -------- -------- -------- -------- -------- --------
300,000............ 54,990 82,500 109,980 137,490 165,000 198,000
400,000............ 73,320 110,000 146,640 183,320 220,000 264,000
500,000............ 91,650 137,500 183,300 229,150 275,000 330,000
600,000............ 109,980 165,000 219,960 274,980 330,000 396,000
700,000............ 128,310 192,500 256,620 320,810 385,000 462,000
800,000............ 146,640 220,000 293,280 366,640 440,000 528,000
900,000............ 164,970 247,500 329,940 412,470 495,000 594,000
1,000,000............ 183,300 275,000 366,600 458,300 550,000 660,000
---------------
(1) Final Pensionable Salary for G.D.H. Butler as of the end of the last
calendar year is $593,607. The estimated credited years of service for Mr.
Butler is 32.5 years.
EMPLOYMENT AGREEMENTS WITH OFFICERS OF THE COMPANY
On September 25, 1989, the Board of Directors authorized the Company to
enter into employment agreements with certain officers, including Messrs.
Hathaway, Coppock and Kaplan, and subsequently with Messrs. Fazzolari and Butler
(the "Agreements"). Pursuant to those authorizations, the Company entered into
individual Agreements with the Named Executive Officers. The Agreements are
designed as an inducement to retain the services of the officers and provide for
continuity of management during the course of any threatened or attempted change
in control of the Company. The Agreements are also intended to ensure that, if a
possible change in control should arise and the officer should be involved in
deliberations or negotiations in connection with the possible change in control,
the officer would be in a position to consider as objectively as possible
whether the possible change in control transaction is in the best interests of
the Company and its stockholders without concern for his position or financial
well-being. Should a change in control occur, the Agreements provide for
continuity of management following the change by imposing certain obligations of
continued employment on the officers.
Under the Agreements, the Company and the officers agree that in the event
of a change in control, such officer will remain in the Company's employ for a
period of three years from the date of the change in control (or to such
officer's normal retirement date, if earlier), subject to such officer's right
to resign during a thirty-day period commencing one year from the date of the
change in control or for good reason, as defined in the Agreement. If such
officer's employment terminates within three years after a change in control for
any reason other than cause as defined in the Agreements, resignation without
good reason as defined in the Agreements, or disability or death, such officer
will be paid a lump sum amount equal to such officer's average annual gross
income reported on Form W-2 (P-60 for Mr. Butler) for the most recent five
taxable years prior to the change in control, multiplied by the lesser of 2.99
or the number of whole and fractional years left to such executive officer's
normal retirement date, plus interest. The payment may be subject to reduction
to avoid adverse tax consequences.
For purposes of the Agreements, a "change in control" would be deemed to
have occurred if (i) any person or group acquires 20% or more of the Company's
issued and outstanding shares of common stock; (ii) the members of the Board as
of the date of the Agreements (the "Incumbent Board") including any person
subsequently becoming a Director whose election, or nomination for election by
the Company's shareholders, was approved by a majority of the
24
Directors then comprising the Incumbent Board, cease to constitute a majority of
the Board of the Company as a result of the election of Board members pursuant
to a contested election; (iii) the stockholders approve of a reorganization,
merger or consolidation that results in the stockholders of the Company
immediately prior to such reorganization, merger or consolidation owning less
than 50% of the combined voting power of the Company; or (iv) the stockholders
approve the liquidation or dissolution of the Company or the sale of all or
substantially all of the Company's assets.
If such provisions under the applicable Agreements had become operative on
January 1, 2002, the Company would have been required to pay Messrs. Hathaway,
Butler, Coppock, Fazzolari and Kaplan the following termination payments based
on compensation information available at December 31, 2001: $4,070,341,
$1,297,881, $1,528,685, $1,171,965 and $1,307,628, respectively.
On September 26, 1988, the Company entered into an agreement with Mr.
Hathaway which provides that for purposes of calculating his retirement
benefits, his years of service will be deemed to have commenced June 20, 1966.
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
designated PricewaterhouseCoopers LLP as independent accountants to audit the
financial statements for the fiscal year ending December 31, 2002, subject to
stockholder approval. This firm has audited the financial statements of the
Company and its predecessors since 1929. Although neither the Restated
Certificate of Incorporation and By-laws nor the General Corporation Law of the
State of Delaware, the state of incorporation, requires the election or approval
of the selection of independent accountants, the Board of Directors desires that
the selection of independent accountants be approved by the stockholders. Such
designation of PricewaterhouseCoopers LLP will be submitted to the Annual
Meeting for confirmation or rejection, and, in the absence of contrary
direction, it is intended that Proxies in the accompanying form will be voted in
favor of confirmation. A representative of PricewaterhouseCoopers LLP will
attend the Annual Meeting, with the opportunity to make a statement and answer
questions of stockholders.
If this proposal is not approved by a majority of the shares entitled to
vote at the Annual Meeting present in person or by proxy, the appointment of the
independent accountants will be reevaluated by the Board of Directors. However,
due to the difficulty and expense of making any substitution of accountants, it
is contemplated that the appointment for the fiscal year ending December 31,
2002 will be permitted to stand. The Board will then make an independent
business judgment as to whether to seek new independent accountants for the
fiscal year ending December 31, 2003.
The Audit Committee of the Company's Board of Directors, at its meeting
held on September 25, 2001, reviewed and approved the fee estimate for the
annual audit of the Company's fiscal 2001 financial statements and, taking into
consideration the possible effect of non-audit services on the accountants'
independence, also approved the type of non-audit services to be rendered.
The Board of Directors unanimously recommends that the stockholders vote
FOR this proposal.
25
OTHER MATTERS
The cost of this solicitation of Proxies will be borne by the Company. In
addition to solicitation by use of mail, employees of the Company may solicit
Proxies personally or by telephone or facsimile but will not receive additional
compensation for these services. Arrangements may be made with brokerage houses,
custodians, nominees and fiduciaries to send Proxies and Proxy materials to
their principals and the Company may reimburse them for their expense in so
doing. The Company has retained Morrow & Co. to assist in the solicitation at a
cost that is not expected to exceed $10,000 plus reasonable out-of-pocket
expenses.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR PRESENTATION AT 2003 ANNUAL MEETING OF
STOCKHOLDERS
If a stockholder of the Company wishes to submit a proposal for
consideration at the 2003 Annual Meeting of Stockholders, such proposal must be
received at the executive offices of the Company no later than November 26,
2002, to be considered for inclusion in the Company's Proxy Statement and Proxy
Card relating to the 2003 Annual Meeting. Although a stockholder proposal
received after such date will not be entitled to inclusion in the Company's
Proxy Statement and Proxy Card, a stockholder can submit a proposal for
consideration at the 2003 Annual Meeting in accordance with the Company's
By-laws if written notice is given to the Secretary of the Company not less than
60 days nor more than 90 days prior to the Meeting. In the event that the
Company gives less than 70 days notice of the Meeting date to stockholders, the
stockholder must give notice of the proposal within ten days after the mailing
of notice or announcement of the Meeting date. The 2003 Annual Meeting is
scheduled to be held on April 29, 2003. In order to nominate a candidate for
election as a Director at the 2003 Annual Meeting, a stockholder must provide
written notice and supporting information to the Secretary of the Company by
personal delivery or mail not later than January 30, 2003.
HARSCO CORPORATION
/s/ Paul C. Coppock
Paul C. Coppock
Senior Vice President,
Chief Administrative Officer,
General Counsel and Secretary
March 26, 2002
26
APPENDIX A
HARSCO CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
I. MISSION STATEMENT
The Audit Committee will assist the Board of Directors in fulfilling its
oversight responsibilities by reviewing: the financial reports provided by the
Corporation; the Corporation's systems of internal controls regarding finance,
accounting, legal compliance and ethics that management and the Board have
established; and the Corporation's auditing, accounting and financial reporting
processes generally. The Audit Committee's primary duties and responsibilities
are:
- Overseeing that management has maintained the reliability and integrity
of the accounting policies and financial reporting and disclosure
practices of the Company.
- Overseeing that management has established and maintained processes to
assure that an adequate system of internal control is functioning within
the Company.
- Overseeing that management has established and maintained processes to
assure compliance by the Company with all applicable laws, regulations
and Company policy.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section IV. of this Charter.
II. ORGANIZATION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee.
All members of the Committee shall have a working familiarity with basic finance
and accounting practices, and at least one member of the Committee shall have
financial management expertise. Such qualifications will be determined by the
Board of Directors in its sole judgment.
The Chairman of the Board shall submit his recommendation for the
appointment of members of the Committee and the Chairman of the Committee. The
Board shall elect the members and Chairman of the Committee at the annual
organizational meeting of the Board to serve until the next annual
organizational meeting or until their successors shall be duly elected and
qualified.
II. MEETINGS
The Committee shall meet at least three times annually, or more frequently
as circumstances dictate. The Committee will fully discuss with management any
questions which it may have regarding matters within the scope of its
responsibilities. As part of its job to foster open communication, the Committee
shall be empowered to request private conversations with the director of the
internal auditing department and the independent accountants in separate
executive sessions to discuss any matters that the Committee or each of these
groups believe should be discussed. In addition, the Chairman of the Committee
or a member of the Committee designated by the Chairman, shall meet with
management and the independent accountants quarterly to review the financial and
legal matters of the Corporation.
27
IV. RESPONSIBILITIES AND DUTIES
The Audit Committee shall report Committee actions to the full Board of
Directors and may make appropriate recommendations. To fulfill its
responsibilities and duties, the Audit Committee shall:
DOCUMENTS/REPORTS REVIEW
1. Review and update this Charter annually, or as conditions dictate.
2. Review the annual financial statements with financial management and the
independent accountants prior to their filing with the Securities and
Exchange Commission.
3. Review with management the interim quarterly financial results to be
included in the Quarterly Report on Form 10-Q prior to its filing. The
Chairman of the Committee or a member of the Committee designated by the
Chairman may represent the entire Committee for purposes of this review.
4. Review the regular internal reports to management prepared by the internal
auditing department and management's response.
INDEPENDENT ACCOUNTANTS
5. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve the fees
and other compensation to be paid to the independent accountants. Review the
independent accountant's written statement delineating its relationship with
the Corporation.
6. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
7. Periodically consult with the independent accountants about internal
controls and the fullness and accuracy of the organization's financial
statements.
FINANCIAL REPORTING PROCESSES
8. In consultation with the independent accountants and the internal auditors,
review the integrity of the organization's financial reporting processes,
both internal and external.
9. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied in its
financial reporting.
PROCESS IMPROVEMENT
10. Following completion of the annual audit, review with each of management,
the independent accountants and the internal auditing department any
significant difficulties encountered during the course of the audit,
including any restrictions on the scope of work or access to required
information.
11. Review any significant disagreement among management and the independent
accountants or the internal auditing department in connection with the
preparation of the financial statements.
28
INTERNAL CONTROL FRAMEWORK, CODE OF CONDUCT, AND LEGAL COMPLIANCE
12. Evaluate whether management is setting the appropriate tone at the top by
communicating the importance of the Harsco Internal Control Framework and
ensuring that all individuals possess an understanding of their roles and
responsibilities.
13. Review periodically the Harsco Code of Conduct and ensure that management
has established a system to enforce this Code.
14. Review activities, organizational structure, and qualifications of the
internal audit department.
15. Review, with the organization's counsel, legal compliance matters including
corporate securities trading policies.
16. Review, with the organization's counsel, any legal matter that could have a
significant impact on the Corporation.
17. Perform any other activities consistent with this Charter, the Corporation's
By-laws and governing law, as the Committee or the Board deems necessary or
appropriate.
18. Provide the report of the Committee required by the rules of the Securities
and Exchange Commission to be included in the Corporation's proxy statement
for each annual meeting.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Corporation'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 accountants. Nor is it the duty
of the Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent accountants or to assure compliance with
laws and regulations and the Corporation's policies.
Nothing contained in this Charter is intended to alter or impair the
operation of the "business judgment rule" as interpreted by the courts under the
Delaware General Corporation Law. Further, nothing contained in this Charter is
intended to alter or impair the right of the members of the Committee to rely,
in discharging their oversight role, on the records of the Corporation and on
other information presented to the Committee, Board of Directors or the
Corporation by its officers or employees or by outside experts such as the
independent accountants.
29
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. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1
AND 2.
Please mark
your votes as
indicated in [X]
this example
1.ELECTION OF DIRECTORS
NOMINEES: 01 G.D.H. Butler, 02 S.D. Fazzolari, 03 C.F. Scanlan, 04 A.J. Sordoni,
III and 05 J.P. Viviano
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to the to vote for all nominees
contrary) listed to the right
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP as the independent
accountants of the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
"By checking the box to the right, I consent to future access of the Annual
Report, Proxy Statements, prospectuses and other communications electronically
via the Internet. I understand that the Company may no longer distribute printed
materials to me for any future shareholder meeting until such consent is
revoked. I understand that I may revoke my consent at any time by contacting the
Company's transfer agent, Mellon Investor Services, Ridgefield Park NJ and that
costs normally associated with electronic access, such as usage and telephone
charges, will be my responsibility Please disregard if you have previously
provided your consent decision."
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
SIGNATURE SIGNATURE DATE
-------------------- ---------------------- ----------
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 4PM EASTERN TIME
THE BUSINESS DAY PRIOR TO ANNUAL MEETING DAY.
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR
SHARES IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
INTERNET
http://www.eproxy.com/hsc
Use the Internet to vote your proxy. Have your proxy card in hand when you
access the web site. You will be prompted to enter your control number, located
in the box below, to create and submit an electronic ballot.
OR
TELEPHONE
1-800-435-6710
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in the
box below, and then follow the directions given.
OR
MAIL
Mark, sign
and date
your proxy
card
and
return it in
the
enclosed
postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
YOU CAN VIEW THE ANNUAL REPORT AND PROXY STATEMENT
ON THE INTERNET AT: http://www.harsco.com
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
HARSCO CORPORATION
The undersigned hereby appoints J.J. Jasinowski, J.I. Scheiner and R.C.
Wilburn proxies, each with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote, as designated on
the other side and otherwise in their discretion, all the shares of stock of
Harsco Corporation standing in the name of the undersigned with all powers which
the undersigned would possess if present at the Annual Meeting of Stockholders
of the Company to be held April 30, 2002 or any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED ON THE OTHER SIDE WHICH
ALSO INCLUDES INSTRUCTIONS ON HOW TO VOTE BY INTERNET OR TELEPHONE.)
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
ANNUAL
[HARSCO LOGO] MEETING OF
STOCKHOLDERS
APRIL 30, 2002 10:00 A.M.
THE RADISSON PENN HARRIS
HOTEL AND CONVENTION CENTER
ROUTES 11 AND 15 AT ERFORD ROAD
CAMP HILL, PENNSYLVANIA