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
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-11 (c) or Rule 14a-12
Ag Services of America, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ]No fee required.
[ ]Fee computed on table below per Exchange Act Rules 14a-6 (i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ]Fee paid previously with preliminary materials.
[ ]Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a) (2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
AG SERVICES OF AMERICA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 1, 2001
To the Stockholders of Ag Services of America, Inc.
The Annual Meeting of the Stockholders of Ag Services of America, Inc. (the
"Company"), an Iowa corporation, will be held on Wednesday, August 1, 2001,
at the Company's Corporate Headquarters, 2302 West 1st Street, Cedar Falls,
Iowa, at 9:00 a.m., Central Standard Time, for the following purposes:
1. To elect two (2) directors of the Company.
2. To ratify the appointment of McGladrey & Pullen, LLP, as the
Company's independent public accountants for the Fiscal year ending
February 28, 2002.
3. To consider and act upon any other matters that may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the 6th day of June, 2001, as the record date
for the determination of stockholders entitled to notice of and to vote at the
meeting or any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you plan to be
personally present at the meeting, please complete, date and sign the enclosed
Proxy and return it promptly in the enclosed envelope. If you later desire to
revoke your Proxy, you may do so at any time before it is exercised.
By Order of the Board of Directors
\s\Kevin D. Schipper
Kevin D. Schipper
Secretary
June 25, 2001
Approximate Date First
Sent to Stockholders
Cedar Falls, Iowa
Your vote is important. Please date, sign and return your Proxy.
Your Proxy is in the enclosed envelope.
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AG SERVICES OF AMERICA, INC.
PROXY STATEMENT
For the Annual Meeting of Stockholders
August 1, 2001
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of the
enclosed proxy by the Board of Directors of Ag Services of America, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held August 1,
2001 at 9:00 a.m., Central Standard Time, at the Company's Corporate
Headquarters and any adjournment thereof, for the purposes set forth in the
Notice of Annual Meeting of Stockholders.
Shares of common stock represented by proxies in the form solicited will be
voted in the manner directed by a stockholder. If no direction is made, the
proxy will be voted for the election of nominees for director named in this
Proxy Statement, ratification of the Board of Directors' selection
McGladrey & Pullen, LLP, as the Company's independent public accountants for
the 2002 Fiscal year and transacting such other business as may come before
the meeting or any adjournment thereof. A stockholder may revoke his or her
proxy at any time before it is voted by delivering to the Secretary a written
notice of termination of the proxy's authority, by filing with the Secretary
another proxy bearing a later date, or by appearing and voting at the meeting.
This Proxy Statement and the form of proxy enclosed are being mailed to
stockholders commencing on or about June 25, 2001. Only the holders of the
Company's common stock whose names appear of record on the Company's books at
the close of business on June 6, 2001 will be entitled to vote at the Annual
Meeting. At the close of business on June 6, 2001, a total of 5,330,614 shares
of common stock were outstanding, each share being entitled to one vote.
There is no right of cumulative voting provided in the Company's Articles
of Incorporation or Bylaws. The affirmative vote of a majority of the
outstanding shares of the Company's common stock represented at the meeting in
person or by proxy, is necessary to effectuate all matters proposed to the
stockholders at the Annual Meeting.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by the
inspectors of election appointed by the Company for the meeting, and the number
of stockholders present in person or by proxy will determine whether or not a
quorum is present. The inspectors of election will treat abstentions as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum for all matters. Shares abstaining with respect to any matter will
be treated as unvoted. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote by the
inspectors of election with respect to that matter.
Expenses in connection with the solicitation of proxies will be paid by the
Company. In addition to solicitations by mail, the Company may request banks,
brokers, and other custodians, nominees, and fiduciaries to send proxy materials
to beneficial owners and to request voting instructions. The Company may
reimburse them for their expenses in so doing. Directors, officers and regular
employees of the Company, who will not receive extra compensation for their
services, may solicit personally or by mail, telephone, or telegraph, if proxies
are not promptly received.
The Annual Report of the Company, including Financial Statements for the Fiscal
year ended February 28, 2001, accompanies this Proxy Statement.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of June 6, 2001, information about the
beneficial ownership of Common Stock of the Company by each stockholder who is
known by the Company to own beneficially more than five percent of the
outstanding Common Stock of the Company, by each director, by each executive
officer named in the Summary Compensation Table, and by all officers and
directors as a group:
Number of
Shares Percentage
Name and Address of Beneficially of Shares
Beneficial Owner Owned(1)(2) Outstanding
------------------- ------------ -----------
Gaylen D. Miller 364,884 (3) 6.78%
Henry C. Jungling, Jr. 366,934 (3) 6.81%
Kevin D. Schipper 362,134 (3) 6.72%
James D. Gerson 196,466 (4) 3.68%
Michael Lischin 12,000 (4) *
Ervin J. Mellema 11,000 (4) *
Bradley D. Schlotfeldt 28,300 (5) *
Neil Stadlman 19,200 (6) *
All Directors and Officers
as a Group (16 persons) 1,473,138 (7) 27.41%
* Less than 1%
( 1 )The persons or entities identified in the above table have sole voting
and investment power with respect to all shares shown as beneficially
owned by them unless otherwise indicated. The number of shares
beneficially owned includes shares of Common Stock issuable upon
exercise of options exercisable during the next 60 days.
( 2 )Includes shares held by spouses and minor children sharing the same home.
( 3 )Includes options to purchase 55,000 shares of Common Stock exercisable
within 60 days.
( 4 )Includes options to purchase 6,250 shares of Common Stock exercisable
within 60 days.
( 5 )Includes options to purchase 6,500 shares of Common Stock exercisable
within 60 days.
( 6 )Includes options to purchase 5,000 shares of Common Stock exercisable
within 60 days.
( 7 )Includes options to purchase 246,975 shares of Common Stock exercisable
within 60 days.
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EXECUTIVE COMPENSATION AND OTHER RELATED INFORMATION
The following table sets forth the cash and certain other compensation paid
or accrued by the Company for services rendered in all capacities during the
Fiscal years ended February 28, 2001, February 29, 2000 and February 28, 1999
to all executive officers of the Company who's total aggregate compensation
was greater than $100,000.
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------------------- -------------------------------------
Awards Payouts
------------------- -----------------
Securities
Restricted Underlying
Name and Fiscal Stock Options LTIP All
Principal Position Year Salary Bonus Other(a) Awards(b) SARs Payouts(d) Other
------------------ ------ ------- ------- -------- --------- -------- --------- -------
Gaylen D. Miller 2001 $233,534 $125,000(f) $0 $0 0 $0 $5,017(i)
President and Chief 2000 200,603 206,923(f) 0 0 0 0 4,635(i)
Executive Officer 1999 200,603 161,454(f) 0 0 15,000(c) 0 4,635(i)
Henry C. Jungling Jr. 2001 $233,534 $125,000(f) $0 $0 0 $0 $5,052(j)
Chairman of the 2000 200,603 206,923(f) 0 0 0 0 4,670(j)
Board 1999 200,603 161,454(f) 0 0 15,000(c) 0 4,670(j)
Kevin D. Schipper 2001 $233,534 $125,000(f) $0 $0 0 $0 $4,675(k)
Chief Operating 2000 200,603 206,923(f) 0 0 0 0 4,293(k)
Officer 1999 200,603 161,454(f) 0 0 15,000(c) 0 4,292(k)
Bradley D. Schlotfeldt2001 $112,295 $11,055(g) $0 $0 10,000(d) $0 $2,759(l)
Senior Executive 2000 88,240 1,747(g) 0 0 0 0 1,891(l)
Officer 1999 81,442 2,818(g) 0 0 0 0 2,487(l)
Neil Stadlman 2001 $103,322 $10,139(h) $0 $0 4,000(d) $0 $2,911(m)
VP Credit 2000 96,740 1,927(h) 0 0 0 0 2,810(m)
Administration 1999 89,942 3,115(h) 0 0 0 0 2,518(m)
(a) The table excludes noncash compensation for the use of an automobile, which
did not exceed the lesser of $50,000 or 10% of the base compensation paid
to each officer.
(b) No restricted stock awards were made in any of the periods presented.
(c) No stock appreciation rights were granted or paid in any periods presented.
Includes stock options granted on May 31, 1998, under the 1993 Stock Option
Plan of the Company, when the market value of the Company's Common Stock
was $17.375.
(d) No stock appreciation rights were granted or paid in any periods presented.
Includes stock options granted on May 31, 2000, under the 1993 Stock Option
Plan of the Company, when the market value of the Company's Common Stock
was $16.310.
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(e) The Company did not have a long-term incentive compensation plan for any
of the periods presented.
(f) Reflects incentive compensation accrued in Fiscal 2001, 2000 and 1999
to the officers of the Company of $125,000, $206,923 and $161,454, each,
respectively, accordingly to their respective employment agreements.
(g) Reflects incentive compensation accrued in Fiscal 2001, 2000 and 1999 to
the officer of the Company of $11,055, $1,747 and $2,818.
(h) Reflects incentive compensation accrued in Fiscal 2001, 2000 and 1999 to
the officer of the Company of $10,139, $1,927 and $3,115.
(i) Reflects premiums paid by the Company for $250,000 term life insurance
coverage in Fiscal 2001, 2000 and 1999 of $635, $635 and $635,
respectively, and $4,382, $4,000 and $4,000, respectively, contributed to
the Company's 401(k) plan by the Company on behalf of the officer listed
above.
(j) Reflects premiums paid by the Company for $250,000 term life insurance
coverage in Fiscal 2001, 2000 and 1999 of $670, $670, and $670,
respectively, and $4,382, $4,000 and $4,000, respectively, contributed to
the Company's 401(k) plan by the Company on behalf of the officer listed
above.
(k) Reflects premiums paid by the Company for $250,000 term life insurance
coverage in Fiscal 2001, 2000 and 1999 of $293, $293, and $292,
respectively, and $4,382, $4,000 and $4,000, respectively, contributed to
the Company's 401(k) plan by the Company on behalf of the officer listed
above.
(l) Reflects Company contributions to the Company's 401(k) plan on behalf of
the officer listed above in Fiscal 2001, 2000 and 1999 of $2,759, $1,891
and $2,487 respectively.
(m) Reflects Company contributions to the Company's 401(k) plan on behalf of
the officer listed above in Fiscal 2001, 2000 and 1999 of $2,911, $2,810
and $2,578 respectively.
Options/SAR Grants
in Fiscal 2001
Potential realizable
value at assumed
Percent of annual rates of stock
Number of total price appreciation
Securities options/SARs for option term
Underlying granted to Exercise ----------------
Options/SARs employees in Price Expiration 5% 10%
Name granted Fiscal year ($/SH)(1) Date ($)(2) ($)(2)
--------------- ----------- ----------- ------- ---------- ------- -------
Brad D. Schlotfeldt 10,000 10.1% $16.31 5/31/10 $102,573 $259,939
Neil Stadlman 4,000 4.0% $16.31 5/31/10 $41,029 $103,976
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(1) Includes stock options granted on May 31, 2000, under the 1993 Stock Option
Plan of the Company when the market price of the Company's common stock was
$16.31.
(2) Reflects the estimated market value of underlying shares of Common Stock of
the Company on May 31, 2010, assuming 5% and 10% stock price appreciation
over the 10 year life of the stock options granted, minus the exercise
price.
Aggregated Option/SAR Exercises
in Fiscal 2001 and Year-End Option/SAR Values
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARS at Options/SARS at
Shares February 28, 2001 February 28, 2001
Acquired ----------------- --------------------
On Value Exer- Unexer- Exer- Unexer-
Name Exercise(a) Realized(a) cisable cisable cisable cisable
--------------- ----------- ----------- ------- ---------- ------- -------
Gaylen D. Miller 0 $0 50,000 5,000(b) $436,250 $0
Henry C. Jungling, Jr. 0 $0 50,000 5,000(b) $436,250 $0
Kevin D. Schipper 0 $0 50,000 5,000(b) $436,250 $0
Bradley D. Schlotfeldt 0 $0 18,000 10,000(c) $181,500 $0
Neil Stadlman 0 $0 18,000 4,000(d) $181,500 $0
(a) No stock options were exercised in Fiscal 2001. There were no stock
appreciation rights outstanding or exercised in Fiscal 2001.
(b) Includes 40,000 stock options granted on May 30, 1991, under the 1991
Stock Option Plan of the Company based primarily on performance during
prior years and includes 15,000 stock options granted on May 31, 1998,
under the 1993 Stock Option Plan of the Company as part of the executive
compensation package.
(c) Includes 14,000 stock options granted on May 30, 1991, under the 1991
Stock Option Plan of the Company based primarily on performance during
prior years and includes 4,000 stock options granted on February 28, 1994
and 10,000 stock options granted on May 31, 2000, under the 1993 Stock
Option Plan of the Company as part of the executive compensation package.
(d) Includes 14,000 stock options granted on May 30, 1991, under the 1991
Stock Option Plan of the Company based primarily on performance during
prior years and includes 4,000 stock options granted on February 28, 1994
and 4,000 stock options granted on May 31, 2000, under the 1993
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Stock Option Plan of the Company as part of the executive compensation
package.
(e) Reflects market value of underlying shares of Common Stock of the Company
on February 28, 2001, minus the exercise price.
Employment Agreements
Effective July 1, 2000, Messrs. Jungling, Miller and Schipper entered into
separate three-year employment agreements with the Company, each of which
provide for (i) a base salary of $250,000, subject to adjustment upward upon
annual review by the Board of Directors on March 1 of each year the agreement
is in effect, (ii) payment of an annual bonus to each of these persons based
upon the earning per share ("EPS") growth of the Company compared to the
previous year, (iii) $250,000 in term life insurance coverage and (iv) receipt
of other Company benefits including use of an automobile. If the respective
employment agreement is terminated by the Company without "cause", the
Company must continue to pay the person salary and bonus for up to two years.
"Cause" is defined to include repeated neglect in performance, breach of the
employment agreement or indictment or conviction of a felony or misdemeanor
involving moral turpitude.
Board Report on Executive Compensation
At present, the entire Board of Directors is responsible for approving the
compensation program and salaries for Messers. Jungling, Miller and Schipper.
However, Messrs. Jungling, Miller and Schipper are not present when their
own compensation is under consideration.
Compensation Philosophy. It is the philosophy of the Company to ensure that
executive compensation is directly linked to sustained improvements in
corporate performance and increases in stockholder value as measured by the
Company's stock price. The following objectives have been adopted by the Board
of Directors as guidelines for compensation decisions:
Provide a competitive total compensation package that enables the
Company to attract and retain key executive talent needed to
accomplish its corporate goals.
Integrate all pay programs with the Company's annual and long-term
business objectives and strategy, and focus executive behavior on the
fulfillment of those objectives.
Provide variable compensation opportunities that are directly linked
with performance of the Company and that align executive remuneration
with the interests of stockholders.
At present, the Company's executive compensation is comprised of (i) a base
salary, (ii) an annual cash incentive bonus, (iii) additional incentive
compensation in the form of stock options, and (iv) other benefits typically
provided to executives of comparable companies, all described further below.
For each such component of compensation, the Company's compensation levels are
compared with those of comparable companies. For purpose of establishing these
comparable compensation levels, the Company compares itself to a national
group of companies selected by management and its consultants. This group
consists primarily of public and non-public companies that have revenue levels
similar to the Company's. This group does not include the companies used by
the Company in the industry peer group index in the performance graph appearing
elsewhere herein, as several of the members of the industry peer group are
considerably larger in size with executive compensation well above that of the
Company.
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Base Salary. The salary of Messrs. Jungling, Miller and Schipper, including
the Chief Executive Officer, is based on the officer's level of responsibility
and comparisons to prevailing salary levels for similar positions at the Company
and at comparable companies. The Board seeks to provide Messrs. Jungling,
Miller and Schipper with salaries that are at least commensurate with the median
salary levels at comparable companies. Compensation is linked to individual
employment agreements as discussed above, which are consistent with the
Company's compensation philosophy.
After taking into account the Company's increase in its revenue and earnings
growth, the Board sought to establish the Fiscal 2001 salaries of Messrs.
Jungling, Miller and Schipper at the median salary levels for similarly-situated
executives of comparable companies. The Compensation Committee increased base
salary from $200,603 to $250,000 effective July 1, 2000.
Annual Bonus. Messrs. Jungling, Miller and Schipper's annual bonus is linked
to individual employment agreements as discussed above, which are consistent
with the Company's compensation philosophy. The employment agreements establish
target performance levels and the amount of bonus payable if these targets are
met. The Board evaluates the annual bonus through review of information
furnished by its consultants as to the bonus practices among comparable
companies. The annual bonuses paid to Messrs. Jungling, Miller and Schipper
have typically been less than the median annual bonuses paid by comparable
companies.
The bonus is based upon the earning per share ("EPS") growth of the Company.
The EPS growth shall be determined by comparing the Fiscal year end audited
results to the EPS of the previous year. The bonus payment shall be $150,000
if the EPS growth is 15%. The bonus shall be adjusted upward by $10,000 for
each full percent increase above 15% and conversely be adjusted downward by
$5,000 for each full percent that falls below 15%. In the event the Company
fails to achieve what the Board deems appropriate sustained growth, the Board
in its discretion may determine the bonus by comparing the Fiscal year end
audited results to the EPS of either of the two prior year's end results,
whichever is higher. The Board may also, at its discretion, exclude certain
items affecting the short-term profitability of the Company deemed important
to future growth of the Company, from the calculation of the bonus. In
Fiscal 2001, Messrs. Jungling, Miller and Schipper received a cash incentive
bonus of $125,000.
Compensation Committee:
James D. Gerson Michael Lischin Ervin J. Mellema
-8-
Performance Graph
The following graph compares the cumulative total stockholder return on the
Common Stock of the Company with that of the Russell 2000 Index and the
Agricultural Input Supply Index, an agricultural input supply index prepared
for the Company by RDG made up of the following NYSE companies; Agco
Corporation, CNH Global NV, Deere & Company, Dow Chemical, Du Pont, Lindsay
Manufacturing, Monsanto and Ag Services of America,Inc. The comparison for
each of the periods assumes that $100 was invested on February 29, 1996, in
each of the Common Stock of the Company, the stocks included in the Russell
2000 Index and the stocks included in the Agricultural Input Supply Index.
These indexes, which reflect formulas for dividend reinvestment and weighting
of individual stocks, do not necessarily reflect returns that could be achieved
by individual investors.
Comparison of 5 Year Cumulative Total Return
Among Ag Services of America, Inc.,
The Russell 2000 Index and a Peer Group
[ Graphic included with hard copy ]
1996 1997 1998 1999 2000 2001
Ag Services of America, Inc. 100 159 160 132 210 138
Russell 2000 Index 100 113 146 126 187 156
Agricultural Input Supply Index 100 128 151 128 137 125
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
General:
The Company's Bylaws provide that the Board of Directors shall be divided into
three classes, as nearly equal in number as reasonably possible and shall be
designated as Class I, Class II or Class III directors. The term of office of
the Class I directors elected at the 2000 Annual Meeting of Stockholders shall
expire at the 2001 Annual Meeting of Stockholders; the term of office of the
Class II directors elected at the 2000 Annual Meeting of Stockholders shall
expire at the 2002 Annual Meeting of Stockholders; and the term of office of
the Class III directors elected at the 2000 Annual Meeting of Stockholders
shall expire at the 2003 Annual Meeting of Stockholders. At each Annual
Meeting of Stockholders following such initial classification and election,
each director elected to succeed a director whose term is expiring shall be
elected for a three (3) year term.
Messrs. Jungling, Miller and Schipper served as officers of the Company
pursuant to their respective employment agreements with the Company (See
"Executive Compensation and other Related Information"). The Board of
Directors intends to alternate the officer positions of Messrs. Jungling
and Miller every two years so that commencing after the adjournment of the
2001 Annual Meeting of Stockholders, Mr. Jungling will serve as President
and Chief Executive Officer and Mr. Miller will serve as Chairman of the
Board.
The Board is currently composed of six members:
Class I Directors: Mr. Gaylen D. Miller and Mr. James Gerson
Class II Directors: Mr. Henry C. Jungling, Jr. and Mr. Michael Lischin
Class III Direcors: Mr. Kevin D. Schipper and Mr. Ervin J. Mellema
The persons named in the accompanying proxy will vote for the election of
the nominees described herein, unless authority to vote is withheld. The
Board of Directors has been informed that each of the nominees is willing to
serve as a director; however, if any of the nominees should decline or become
unable to serve as a director for any reason, the proxy may be voted for such
other person as the proxies shall, in their discretion, determine.
The following table sets forth certain information as of June 6, 2001,
concerning the nominees for election as directors of the Company:
Name Age Position with the Company
---------------------- ----- ----------------------------
Gaylen D. Miller 52 President, Chief Executive
Officer and Director
James D. Gerson 57 Director
Class I Directors (term expiring in 2001)
Gaylen D. Miller is a founder of the Company and has served as a director since
its formation in October 1985 and as President and Chief Executive Officer
since August 1999 and from August 1995 until August 1997 and from May 1991
until August 1993. Mr. Miller served as Chairman from August 1997 until August
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1999 and from August 1993 until August 1995 and as Chairman and Chief Operating
Officer from August 1993 until July 1994, as Co-President of the Company from
July 1988 until May 1991 and as Vice President, Secretary, and Treasurer from
November 1985 until July 1988. Mr. Miller was raised on a farm in Iowa and
before joining the Company he held administrative and accounting positions with
Land-O-Lakes, Inc., an agricultural cooperative, and DEKALB Genetics
Corporation, an international seed company. Messrs. Miller and Jungling are
First cousins and Mr. Jungling is Mr. Schipper's uncle.
James D. Gerson has served as a director of the Company since August 1991. For
more than five years, Mr. Gerson has been Vice President of Fahnestock & Co.
Inc., a securities firm. Mr. Gerson also serves as a director of American Power
Conversion Corp., Evercell, Inc. and Fuel Cell Energy, Inc.
Class II Directors (term expiring in 2002)
Henry C. Jungling, Jr. is a founder of the Company and has served as a
director since its formation in October 1985 and as Chairman since August 1999
and from August 1995 until August 1997 and as Chairman and Chief Operating
Officer from May 1991 until August 1993. Mr. Jungling served as President and
Chief Executive Officer from August 1997 until August 1999 and from August
1993 until August 1995, as Co-President of the Company from July 1988 until
May 1991 and as President from November 1985 until July 1988. Mr. Jungling
was raised on a farm in Iowa and managed his own farming operation for 18
years.
Michael Lischin has served as a director of the Company since April 1990. Mr.
Lischin is an attorney admitted to the bar in New York and Kentucky. His area
of concentration is livestock asset based financing. He has served as a
director and officer of a variety of companies that provide financing in the
agricultural industry.
Class III Directors (term expiring in 2003)
Kevin D. Schipper is a founder of the Company and has served as a director since
its formation in October 1985 and as Chief Operating Officer since July 1994 and
as Chief Operating Officer and Secretary since August 1999. Mr. Schipper served
as Vice President since its formation in October 1985 until July 1994 and as
Treasurer and Secretary since July 1988 until July 1994. Before joining the
Company, Mr. Schipper was employed by Scoular Grain Company, where he worked in
product sales.
Ervin J. Mellema has served as a director of the Company since May 1991. Since
1976, Mr. Mellema has been an operating principal of Campbell Mellema Insurance
Inc., a property and casualty insurance agency, and Campbell Mellema Realty,
LLC, a real estate brokerage firm.
Committees and Meetings of the Board of Directors
The Board of Directors met eight times in Fiscal year 2001. All incumbent
directors attended at least 75% of the respective meetings of the Board and
Audit Committee, if they were directors or committee members.
Audit Committee
The Board of Directors of the Company has an Audit Committee consisting of
Messrs. Gerson, Lischin and Mellema. The Audit Committee's primary
responsibilities are set forth in the Audit Committee charter. The
Audit Committee met four times during Fiscal 2001 and has the responsibility
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for consulting with the Company's officers regarding the appointment of
independent public accountants as auditors, discussing the scope of the
auditor's examination and reviewing annual financial statements. The
Audit Committee has discussed and reviewed the audited financial statements
with management. The Audit Committee has also received the written
disclosures and letter from McGladrey & Pullen, LLP required by Independence
Standards Board Standard No. 1 and has discussed with McGladrey & Pullen, LLP
their independence. Based on the above reviews and discussions, the Audit
Committee recommended to the Company's Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form
10-K. Such members of the Audit Committee are all "independent" within the
meaning set forth in sections 303.01(B)(2)(a) and (B)(3) of the New York Stock
Exchange Listing Manual.
Audit Committee:
James D. Gerson Michael Lischin Ervin J. Mellema
Directors' Fees
The Company currently pays director's fees to its non-employee directors in
the amount of $1,500 per board meeting and $250 per committee meeting plus
reimbursement for expenses incurred in connection with the performance of
their duties.
Compensation Committee Interlocks and Insider Participation
At present, the entire Board of Directors is responsible for approving the
compensation program and salaries for the executive officers. Gaylen D.
Miller, Henry C. Jungling, Jr. and Kevin D. Schipper who are members of the
Board of Directors were also executive officers of the Company during Fiscal
2001. However, the executive officers that are also members of the board
are not present when any of their own compensation is under consideration.
There were no director interlocks with other companies or related party
transactions in Fiscal 2001.
Required Vote; Board Recommendation
Pursuant to Iowa law, the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock is required to approve the election
of the directors nominated below.
Mr. Gaylen D. Miller Mr. James Gerson
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL NO. 1
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PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
General:
The Stockholders are being requested to approve the resolution ratifying the
action of the Board of Directors in appointing McGladrey & Pullen, LLP as the
Company's independent public accountants for the Fiscal year ending
February 28, 2002.
It is not expected that a member of McGladrey & Pullen, LLP will be present at
the Annual Meeting. However, we will forward any questions that arise to
McGladrey & Pullen, LLP, who will have the opportunity to respond.
McGladrey & Pullen, LLP acted as independent certified public accountants for
the Company for Fiscal 2001, and has been selected by the Board to serve again
in that capacity for Fiscal 2002. The following table lists the aggregate fees
and costs billed by McGladrey & Pullen, LLP and their affiliate, RSM McGladrey,
Inc., to the Company for (i) services rendered in connection with auditing the
Company's annual consolidated financial statements for Fiscal 2001, reviewing
the Company's quarterly financial statements for Fiscal 2001 and tax return
preparation, (ii) services rendered during Fiscal 2001 in connection with
implementation of financial reporting software, (iii) website enhancements
and (iv) miscellaneous technology consulting.
Audit Fees and Tax Preparation ........................$73,050
Financial Information Systems Software Implementation...37,993
Website Enhancements....................................12,000
Miscellaneous Technology Consulting......................2,668
Required Vote; Board Recommendation:
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is required to ratify the action of the Board of Directors
in appointing McGladrey & Pullen, LLP, as the Company's independent public
accountants for the Fiscal year ending February 28, 2002. Option Plan.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL NO. 2.
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OTHER MATTERS
The Board of Directors of the Company knows of no other matters which may come
before the meeting. However, if any matters other than those referred to above
should properly come before the meeting calling for a vote of the stockholders,
it is the intention of the persons named in the enclosed proxy to vote such
proxy in accordance with their best judgment.
DEADLINE FOR SUBMISSION OF STOCKHOLDER
PROPOSALS FOR 2002 ANNUAL MEETING
Proposals of Stockholders to be presented at the Company's 2002 Annual
Stockholders' Meeting must be received at the Company's corporate headquarters
no later than February 28, 2002, for inclusion in the agenda for the 2002
Annual Meeting.
By Order of the Board of Directors
/s/ Kevin D. Schipper
Kevin D. Schipper
Secretary
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