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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Deltic Timber Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
RR DONNELLEY FINANCIAL
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO OF DELTIC TIMBER CORPORATION APPEARS HERE]
DELTIC TIMBER CORPORATION
NOTICE OF ANNUAL MEETING
_________________
To the Stockholders of
Deltic Timber Corporation:
The Annual Meeting of Stockholders of Deltic Timber Corporation ("Deltic"
or "the Company") will be held at the South Arkansas Arts Center, 110 East 5th
Street, El Dorado, Arkansas, on Tuesday, April 28, 1998 at 10:00 a.m., Central
Daylight Time, for the following purposes:
Item 1: To elect three Class II directors to hold office for a three-
year term;
Item 2: To express approval or disapproval of the action of the Board
of Directors in appointing KPMG Peat Marwick LLP as the Company's
independent auditors for 1998.
To transact such other business as may properly come before the
meeting and any adjournment thereof.
Holders of record of Deltic common stock at the close of business on March
11, 1998 will be entitled to vote with respect to this solicitation.
Stockholders are reminded that your shares of Deltic common stock cannot be
voted unless you properly execute and return the enclosed proxy card or make
other arrangements to have your shares represented at the meeting.
By order of the Board of Directors,
W. Bayless Rowe
Secretary
El Dorado, Arkansas
March 18, 1998
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE COMPLETE AND RETURN THE PROXY CARD IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
DELTIC TIMBER CORPORATION
P.O. BOX 7200
EL DORADO, ARKANSAS 71731-7200
____________________
PROXY STATEMENT
____________________
GENERAL
This proxy statement and the accompanying proxy card are being furnished in
connection with the solicitation of proxies on behalf of the Board of Directors
of Deltic Timber Corporation ("Deltic" or "the Company") for the Annual Meeting
of Stockholders to be held on April 28, 1998, in El Dorado, Arkansas. Only
stockholders of record at the close of business on March 11, 1998 (the "Record
Date") are entitled to notice of, and to vote at, the meeting. There were
12,813,879 shares of Deltic common stock outstanding and entitled to vote on
February 28, 1998. Each share of Deltic common stock is entitled to one vote on
each matter properly brought before the meeting.
Commencing approximately on March 18, 1998, the Company is mailing its
annual report for the year ended December 31, 1997, together with this proxy
statement and the enclosed proxy card to holders of Deltic common stock on the
Record Date. A copy of the Company's Form 10-K for 1997 as filed with the
Securities and Exchange Commission ("SEC") may be obtained by writing the
Controller of the Company at the address provided above.
VOTING OF PROXIES
Your vote is important. Shares can be voted at the annual meeting only if
you are present in person or represented by proxy. Even if you plan to attend
the meeting, you are urged to sign, date and return the accompanying proxy card.
When the enclosed proxy card is properly signed, dated, and returned, stock
represented by the proxy will be voted in accordance with your directions. You
can specify your voting instructions by marking the appropriate spaces on the
proxy card. If your proxy card is signed and returned without specific voting
instructions, your shares of Deltic common stock will be voted as recommended by
the Board of Directors: "FOR" the election of the three nominees for director
named in the proxy card, and "FOR" the ratification of the selection of KPMG
Peat Marwick LLP as the Company's independent auditors for 1998. Abstentions
marked on the proxy card are voted "against" the proposals but are counted in
determination of a quorum.
You may revoke your proxy at any time before it is voted at the meeting by
(a) executing a later-dated proxy, (b) voting by ballot at the meeting, or (c)
filing a notice of revocation with the inspectors of election in care of the
Secretary of the Company at the above address.
(1)
<PAGE>
VOTING SHARES HELD IN EMPLOYEE THRIFT PLAN
If you are a participant in the Deltic Stock Fund of the Deltic Timber
Corporation Thrift Plan or Fund C-1 of the Murphy Oil Corporation Thrift Plan,
the trustees of such plans will vote the number of shares allocated to your
account pursuant to the instructions you provide, so please sign and return your
card promptly.
VOTES REQUIRED
The presence, in person or by proxy, of the holders of at least a majority
of the shares of Deltic common stock outstanding on the Record Date is necessary
to have a quorum for the annual meeting. Abstentions and broker "no-votes" are
counted as present for purposes of determining a quorum. A broker "no-vote"
occurs when a nominee holding shares of Deltic common stock for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner.
The affirmative vote of a majority of the shares present in person or by
proxy at the meeting is required for the passage of the Board of Directors'
proposals (Items 1 and 2). Any shares not voted by abstention have the same
effect as a vote against the proposals and broker "no-votes" have no effect on
the outcome of the vote.
SOLICITATION OF PROXIES
Solicitation of proxies may be made by directors, officers or employees of
the Company through the mail, in person and by telecommunications. The cost of
soliciting proxies will be borne by the Company. In accordance with the
regulations of the SEC and the New York Stock Exchange ("NYSE"), the Company
will also reimburse brokerage houses and other custodians, nominees and
fiduciaries for their expenses incurred in sending proxies and proxy materials
to the beneficial owners of Deltic common stock.
PROCEDURES FOR STOCKHOLDER PROPOSALS AND NOMINATIONS
Under the Company's Amended and Restated Bylaws, nominations for director
may be made only by the Board of Directors (or a committee of the Board), or by
a stockholder entitled to vote who has delivered notice to the Company not less
than ninety (90) days before the anniversary of the preceding year's annual
meeting.
The Bylaws also provide that no business may be brought before an annual or
special stockholders' meeting except as specified in the notice of meeting
(which includes stockholders' proposals that the Company is required to set
forth in its proxy statement under applicable SEC rules) or as otherwise brought
before the meeting by or at the direction of the Board or by a stockholder
entitled to vote who has delivered notice to the Company (containing certain
information specified in the Bylaws) within the time limits described above for
a nomination for the election of director. These requirements are separate and
apart from, and in addition to the SEC's requirements that a stockholder
must comply with in order to have a stockholder proposal included in the
Company's proxy statement under SEC rules.
(2)
<PAGE>
A copy of the full text of Company's Amended and Restated Bylaws may be
obtained upon written request to the Secretary at the address provided above.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholder proposals intended to be presented at Deltic's 1999 Annual
Meeting of Stockholders must be received by Deltic's Secretary no later than
January 29, 1999. Such proposals must meet the requirements set forth in the
rules and regulations of the SEC in order to be eligible for inclusion in the
Company's 1999 proxy materials.
ELECTION OF CLASS II DIRECTORS
(ITEM 1 ON PROXY CARD)
The Board of Directors currently consists of three classes of directors,
equal in number. Directors hold office for staggered terms of three years (or
less if they are filling a vacancy) and until their successors are elected and
qualified. One of the three classes, comprising one third of the directors, is
elected each year to succeed the directors whose terms are expiring. The
directors in Class I were elected at the 1997 annual meeting to serve for a term
expiring at the Company's annual meeting in the year 2000. The directors in
Class II are serving terms expiring at the Company's annual meeting of
stockholders in 1998 and Class II directors will stand for election at such
meeting. The directors in Class III are serving terms expiring at the
Company's annual meeting of stockholders in 1999.
The Company was incorporated in Delaware on September 4, 1996 in
anticipation of the spin off by Murphy Oil Corporation ("Murphy") of its farm,
timber and real estate business, then conducted by Deltic Farm & Timber Co.
Inc., an Arkansas corporation ("Deltic Farm & Timber"). Effective December 17,
1996, Deltic Farm & Timber was merged with and into the Company. From the date
of its incorporation until December 17, 1996, the Board of Directors of the
Company consisted of three employees of Murphy, Messrs. Walter K. Compton,
Clefton D. Vaughan and W. Bayless Rowe. (The latter two individuals became
employees of Deltic effective January 1, 1997.) Effective on December 17, 1996,
Murphy, acting as Deltic's sole stockholder, elected nine new directors to
Deltic's board. Three of these nine, including Chairman Robert C. Nolan, were
elected for new three year terms at the 1997 annual meeting. These nine
directors have served continuously on the Board since December 17, 1996.
Deltic's Board of Directors has proposed the following nominees for
election as directors at the 1998 annual meeting:
NOMINEES FOR CLASS II DIRECTORS
WITH TERMS EXPIRING AT THE ANNUAL MEETING IN THE YEAR 2001:
Eric M. Heiner
William L. Rosoff
John C. Shealy
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE ABOVE-
NAMED NOMINEES AS DIRECTORS FOR A TERM OF THREE YEARS.
(3)
<PAGE>
Proxies solicited by the Board of Directors will be voted "FOR" the election of
the nominees, unless otherwise instructed on the proxy card.
Information is provided below with respect to each nominee for election and
for each director whose term expires in subsequent years. Should one or more of
these nominees be unavailable to accept nomination or election as a director,
the individuals named as proxies on the enclosed proxy card will vote the shares
that they represent for the election of such other persons as the Board may
recommend unless the Board reduces the number of directors. The Board of
Directors knows of no reason why any of the nominees will be unavailable or
unable to serve if elected.
NOMINEES FOR ELECTION AS DIRECTORS
CLASS II -- TERMS EXPIRE IN 2001
ERIC M. HEINER, 53, has been a Director since December 17, 1996. Since
1975, Mr. Heiner has been engaged in real estate development and investments.
Mr. Heiner serves as a member of the Board's Audit Committee and Executive
Compensation Committee.
WILLIAM L. ROSOFF, 51, has been a Director since December 17, 1996.
Effective January 15, 1998, Mr. Rosoff was named Senior Vice President and
General Counsel of RJR Nabisco Holdings Corp ("RJR Nabisco"). Prior to his
position at RJR Nabisco, Mr. Rosoff had been a partner of the Davis Polk &
Wardwell law firm. Davis Polk & Wardwell has represented the Company in various
corporate matters, and the Company expects to retain the services of Davis Polk
& Wardwell in the future. Mr. Rosoff serves as a member of the Board's Audit
Committee and Executive Compensation Committee (except as to certain matters).
JOHN C. SHEALY, 69, has been a Director since December 17, 1996. Mr.
Shealy was Vice President and General Manager, Southern Region of Willamette
Industries, Inc. from 1981 until his retirement in 1994. Mr. Shealy is also
Chairman of American Bank of Ruston, Louisiana. Mr. Shealy serves as Chairman
of the Board's Audit Committee.
DIRECTORS WHOSE TERM OF OFFICE CONTINUE
CLASS III -- TERMS EXPIRE IN 1999
O.H. DARLING, JR., 69, has been a Director since December 17, 1996. Mr.
Darling was Division Manager, Crossett Division, Georgia Pacific Corporation
from 1978 until his retirement in 1994. Mr. Darling serves as a member of the
Board's Audit Committee.
REV. CHRISTOPH KELLER, III, 43, has been a Director since December 17,
1996. Rev. Keller has been a clergyman since 1982 and the Vicar of St.
Margaret's Episcopal Church in Little Rock, Arkansas since June 1990. Rev.
Keller is also a member of the Board of Directors of Inglewood Land and
Development Company of Alexandria, Louisiana and effective early in 1998 became
one of the managers of Keller Enterprises, L.L.C. Rev. Keller serves as a
member of the Board's Audit Committee and Executive Compensation Committee.
(4)
<PAGE>
R. MADISON MURPHY, 40, has been a Director since December 17, 1996. Since
October 1994, Mr. Murphy has been Chairman of the Board of Murphy. Prior to
such time, Mr. Murphy served as Executive Vice President and Chief Financial and
Administrative Officer of Murphy (from March 1992 to October 1994, with the
Chief Administrative position added in February 1993), Vice President of
Planning of Murphy (February 1988 to March 1992) and Treasurer of Murphy (July
1990 to August 1991). Mr. Murphy is also a director of First United Bancshares,
Inc. Mr. Murphy serves as Chairman of the Board's Executive Compensation
Committee and as a member of its Executive and Nominating Committee.
CLASS I -- NOMINEES FOR TERMS EXPIRING IN 2000
ROBERT C. NOLAN, 56, has been the Company's nonemployee Chairman of the
Board since December 17, 1996. For the past 26 years, Mr. Nolan has been
Managing Partner of Munoco Company, an Arkansas partnership engaged in the
exploration for and production of oil and gas. In addition, Mr. Nolan has over
25 years experience in timberland management. Mr. Nolan is a director of First
United Bancshares, Inc. and First National Bank of El Dorado. Mr. Nolan is
Chairman of the Board's Executive and Nominating Committee, and by virtue of his
office serves as an "ex officio" member of all other Committees of the Board,
except the Audit Committee.
RON L. PEARCE, 56, has been President and Chief Executive Officer and a
Director of the Company since December 17, 1996. From June 1993, Mr. Pearce was
President of Deltic Farm & Timber, which was merged with and into the Company on
December 17, 1996. Prior to such time, Mr. Pearce was Manager of Operations and
Planning for Deltic Farm & Timber, a position he held beginning in February
1991. Mr. Pearce is a member of the Board's Executive and Nominating Committee.
ALEX R. LIEBLONG, 47, has been a Director since December 17, 1996.
Effective June 19, 1997 Mr. Lieblong formed his own full service securities
firm, Lieblong & Associates, Inc., where he is President and owner. Prior to
formation of Lieblong & Associates, Inc., Mr. Lieblong was Branch Manager,
Corporate Vice President of PaineWebber, Inc. Mr. Lieblong serves as a member
of the Board's Executive and Nominating Committee and Executive Compensation
Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Messrs. Keller, Murphy and Nolan are first cousins and Mr. Heiner is the
spouse of a first cousin of Messrs. Keller, Murphy and Nolan. These four
nominees, their spouses, and members of their immediate families directly or
indirectly own in the aggregate approximately 25% of the outstanding stock of
the Company and may be considered the controlling persons of the Company. See
also "Certain Stock Ownerships" on Page 7 of this Proxy Statement.
The Company owns undivided interests in numerous tracts of timberland and
several tracts of farmland that it operates and manages on behalf of itself and
co-owners. In addition, the Company manages under contract timberland and
farmland in which it does not own an interest for third parties. Messrs. Nolan,
Murphy, Keller and Heiner and members of their respective families (the
"families") own certain undivided interests in timberland and farmland managed
by the Company. In addition, the families are parties to management contracts
with the Company for timberland and farmland which they or entities for which
they are officers, directors, stockholders, trustees and/or partners own. The
Company's standard
(5)
<PAGE>
terms and conditions are utilized in all arrangements with the families, as well
as with other third parties. For timberland, these terms and conditions include
an annual per acre fee, cost plus 15% for special silvicultural projects and a
5% commission from the proceeds of timber sales. For farmland, the principal
term and condition is a fee of 25% of operating income realized from crop sales.
The families own farmland, commonly referred to as the Buckmeadow Plantation,
which is managed and operated for the families' account by the Company. During
1997, Buckmeadow Plantation paid to the Company $115,074.57 for management fees,
overhead reimbursement and cotton ginning fees. Also during 1997, Munoco
Company, an Arkansas partnership, for whom Mr. Nolan is managing general
partner, received a distribution of proceeds totaling $81,250.00 from a farming
venture operated and owned 61.875% by the Company. The families own
approximately 96% of the outstanding shares of Loutre Land and Timber Company,
an Arkansas corporation. Loutre Land and Timber Company owns approximately
32,000 acres of timberland, a majority of which is managed by the Company. In
1997, Loutre Land and Timber Company paid to Deltic $236,111.14 for management
fees, special silvicultural services and timber sales commissions. The families
also own approximately 16% of the outstanding stock of First Land and Timber
Corporation, an Arkansas corporation. The Company manages approximately 9,700
acres of timberland owned by First Land and Timber Corporation and in 1997
received management fees, special silvicultural project expense and timber sale
commissions totaling $86,264.68.
THE BOARD OF DIRECTORS
The responsibility and authority for managing the business of the Company
rests with its Board of Directors, who are elected by its stockholders. The
Board of Directors sets strategic policy, approves business plans and delegates
authority to execute its policies and plans to the President and Chief Executive
Officer. During 1997, Deltic's Board of Directors held six meetings. Also
during the year, the Board's Audit Committee, Executive Compensation Committee
and Executive and Nominating Committee held one, two and nine meetings,
respectively. All of the Company's Directors attended at least 75% percent of
their Board and Committee meetings.
COMMITTEES
At the first meeting of Deltic's Board of Directors held on January 22,
1997, the Board established three committees: the Audit Committee, the
Executive Compensation Committee, and the Executive and Nominating Committee.
These committees are briefly described below:
The Audit Committee meets regularly with the Company's independent auditors
and internal auditors to review the adequacy of the Company's internal controls
as well as the scope and reports of audits performed by them. In addition, the
committee is the principal agent of the Board of Directors in assuring the
adequacy of the Company's financial and accounting reporting control processes.
The Audit Committee is also responsible for recommending to the Board of
Directors the appointment of the Company's independent auditors. The committee
consists of five independent directors and during its first year met once. It is
expected to meet as necessary in 1998.
The Executive Compensation Committee reviews and approves the Company's
total compensation philosophy and programs covering executive officers and key
management employees as well as the competitiveness of Deltic's total
compensation practices. The committee also reviews the performance levels of
Deltic's executive officers and determines base salaries and incentive awards
for such executive
(6)
<PAGE>
officers and also the compensation of Deltic's nonemployee Chairman. The
committee, which consists of five independent (including four "nonemployee")
directors, met twice in 1997 and is expected to meet as necessary in 1998.
The Executive and Nominating Committee acts as surrogate for the Board by
maintaining surveillance over operations and exercising the general powers of
the Board when the Board is not in session, except that the Committee does not
have the power, among other things to: declare dividends, issue stock, amend
the Bylaws, or approve any merger or share exchange. This committee also
constitutes the Board's Nominating Committee and in such capacity it proposes
and considers suggestions as to candidates for membership on the Board,
including a slate of directors for submission to the stockholders at the annual
meeting. The Committee met nine times in 1997 and is expected to meet at least
each month during which the Board does not meet in 1998.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company will be paid an annual
retainer of $16,000, a $1,000 fee for each meeting attended of the Board and a
$500 fee for each meeting attended of any committee thereof. Retainer and
meeting fees are paid quarterly in arrears. Directors are also reimbursed their
travel, meal and lodging expenses for attending meetings. In addition to the
regular retainer and meeting fees, the Company's nonemployee Chairman, Mr.
Nolan, was paid $50,000 during 1997. For 1998, the Chairman's retainer has been
increased by $10,000.
CERTAIN STOCK OWNERSHIP
The following table and related text sets forth information, by the
categories listed, concerning ownership of Common Stock of the Company at
February 28, 1998 with respect to each director (including those nominated for
re-election), each of the named executives listed in the "Summary Compensation
Table" on Page 12 of this Proxy Statement, directors and officers as a group,
and each person or entity who has filed reports with the Company pursuant to
applicable SEC rules disclosing ownership of as much as 5% of the Company's
Common Stock.
<TABLE>
<CAPTION>
TYPE OF OWNERSHIP
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VOTING AND
INVESTMENT
PERSONAL, POWER ONLY, SUBJECT TO
WITH FULL SPOUSE AND NOT OPTIONS PERCENT OF
VOTING AND PERSONAL, AS AND OTHER INCLUDED IN EXERCISABLE OUTSTANDING
INVESTING BENEFICIARY HOUSEHOLD OTHER WITHIN (IF GREATER
NAME POWER OF TRUST(S) MEMBERS (1) COLUMNS (2) 60 DAYS TOTAL THAN .9%)
-------- ------------- ------------ ------------ ------------ ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
O.H. Darling................. 1,000 --- --- --- --- 1,000 ---
Eric Heiner.................. 6,057 --- 126,947 21,733 --- 154,737 1.2%
Rev. Christoph Keller, III... 26,240 65,080 2,652 197,003 (3) --- 290,975 2.3%
Alex Lieblong................ 5,000 --- --- --- --- 5,000 ---
R. Madison Murphy............ 30,102 177,779 23,291 174,390 --- 405,562 3.2%
Robert C. Nolan.............. 48,214 7,670 1,000 216,337 --- 273,221 2.1%
Ron Pearce................... 14,700 (4) 212 --- --- 8750 23,662 ---
William Rosoff............... 750 --- --- --- --- 750 ---
John Shealy.................. 1,500 --- --- --- --- 1500 ---
Clefton D. Vaughan........... 6,343 (4) 1,250 --- --- --- 7,593 ---
</TABLE>
(7)
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
W. Bayless Rowe.............. 2,500 (4) 1434 300 --- 4,750 8,984 ---
Jack R. McCray............... 1,018 (4) 1,307 --- --- 1,000 3,325 ---
Richard H. Humphreys......... 1,036 (4) 1,555 --- --- 3,375 5,966 ---
All directors together with
five named executives and
another officer
as a group 145,314 (5) 257,296 154,190 609,463 17,875 1,184,138 9.2%
</TABLE>
_________________________
/1/ Includes shares directly owned and shares owned as beneficiary of
trust(s).
/2/ Includes shares held as a trustee for others and shares owned by a
corporation or other organization of which the named person is an officer as
well as sole or shared investment power.
/3/ One of the trusts for which Reverend Keller shares investment power
owns an additional 38,375 shares of stock which were omitted from this column
since such shares were included in the column disclosing "Personal, as
beneficiary of trust(s)".
/4/ Included are shares of "restricted stock" awarded on February 18, 1998
pursuant to the Company's 1996 Stock Incentive Plan. Such shares are subject to
vesting requirements, but the recipients are entitled to vote such shares upon
their issuance. The amount of restrictive stock for each individual is: Pearce
4,000 shares; Vaughan 2,500 shares; Rowe 2,500 shares; McCray 1,000 shares; and
Humphreys 1,000 shares.
/5/ This total includes 11,500 shares of restricted stock as discussed
in note 4 above.
Persons or entities who have filed reports with the Company through
February 28, 1998 pursuant to applicable SEC rules disclosing ownership of as
much as 5% of the Company's common stock are as follows:
(1) On January 10, 1997, C.H. Murphy, Jr., Suite 400, Union Bldg., El
Dorado, Arkansas, filed a Schedule 13(d) report which disclosed that as of
December 31, 1996 and as a result of the spin off: Mr. Murphy has sole voting
and dispositive power as to 339,531 shares of the Company's common stock;
household members of Mr. Murphy own 876 shares of the Company's common stock;
and Mr. Murphy has shared voting and dispositive power as to 856,374 shares of
the Company's common stock. Combined, these categories of shares represent 9.3%
of the outstanding common stock of the Company. Mr. Murphy is the father of
Director R. Madison Murphy and the uncle of: Director Robert C. Nolan, Director
Christoph Keller, III, and Director Eric M. Heiner's spouse.
(2) On February 10, 1998, First United Bancshares, Inc. filed Amendment
No. 1 to its Schedule 13(G) report which disclosed that as of December 31, 1997
its wholly owned subsidiaries, First United Trust Company, N.A., Main and
Washington Streets, El Dorado, Arkansas and FirstBank, 3000 New Boston Road,
Texarkana, Texas have sole or shared voting and dispositive power as to 729,505
shares of the Company's common stock, representing 5.7% of the outstanding
common stock of the Company.
(3) On February 10, 1998, The Capital Group Companies, Inc. filed
Amendment No. 1 to its Schedule 13(G) report which disclosed that as of December
31, 1997 its wholly owned subsidiary, Capital
(8)
<PAGE>
Research and Management Company, 333 South Hope Street, Los Angeles, California,
holds investment power, as a result of acting as investment adviser to various
investment companies registered under Section 8 of the Investment Company Act of
1940, as to 959,490 shares of the Company's common stock, representing 7.5% of
the outstanding common stock of the Company.
(4) Subsequent to its initial filing made on April 4, 1997 of a Schedule
13(G) report which disclosed beneficial ownership of 13.2% of the Company's
common stock, Southeastern Asset Management, Inc., 6410 Poplar Avenue, Suite
900, Memphis, TN filed on February 4, 1998 Amendment No. 1 to its Schedule 13(G)
report. Such report disclosed that Southeastern Asset Management, Inc. holds
investment power, as a result of acting as investment adviser to various
investment companies registered under Section 8 of the Investment Company Act of
1940, as to 1,917,300 shares of the Company's common stock, representing 14.9%
of the outstanding common stock of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the securities laws and regulations promulgated thereunder, the
Company's directors and executive officers are required to report their
beneficial ownership (as defined in such laws and regulations) of the Company's
common stock and any changes in that ownership to the SEC and NYSE. Specific
due dates for the reports have been established and the Company is required to
report in this Proxy Statement any failure to file by said due dates. With two
exceptions noted below, each of the Company's directors and executive officers
satisfied their filing requirements for fiscal 1997.
Director Reverend Christoph Keller, III requested the assistance of Company
staff in the filing of a Form 4 for the month of July 1997 to reflect that
Reverend Keller had been named as a co-trustee of a family trust under which he
is also one of the beneficiaries. Such report was prepared and timely filed,
but only listed the number of shares held by the trust for which Reverend Keller
is the beneficiary (38,375) instead of all shares held by the trust (191,875).
An amended Form 4 which corrected this error and reconciled other insignificant
stock amounts in various accounts arising from the spin off was filed in March,
1998.
Director Robert C. Nolan made a stock purchase order in late December, 1997
and his office was verbally informed that the shares had been bought in early
January, 1998. However, when written documentation was received, it revealed
that 2,000 shares had been acquired on December 31, 1997, and accordingly should
have been reported on Form 4 on or before January 10, 1998. Such Form 4 report
was filed on February 3, 1998.
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee ("the Committee") reviews and approves
the Company's total compensation philosophy and programs covering executive
officers and key management employees as well as the competitiveness of Deltic's
total compensation practices. The Committee also reviews the performance levels
of Deltic's officers and determines base salaries and incentive awards for such
executive officers, and also the compensation of Deltic's nonemployee Chairman.
The Committee is comprised of five independent (including four "nonemployee")
directors elected by the Board of Directors. During 1997, the Committee met
twice and acted on one matter by written consent in lieu of meeting. This
report is provided by the Committee to assist stockholders in understanding the
philosophy and objectives of the Committee and its actions during 1997.
(9)
<PAGE>
A major objective of the Committee is to design compensation programs to
attract and retain individuals of outstanding ability for the Company, and to
provide incentives for such individuals to strive to enhance stockholder value.
Philosophically, the Committee believes its objectives can be met when the
compensation of the Company's executives is closely linked to the Company's
business performance and attainment of strategic objectives as established by
the Board. The Committee's compensation programs seek to: encourage stock
ownership by executives in order to directly align their interests with those of
all stockholders; maintain an appropriate balance between base salary and annual
and long-term incentive opportunities; and recognize and reward exceptional
individual contributions to the Company's success.
The three main elements of Deltic's compensation program are base salary,
annual bonus and long-term incentives. Base salary and bonus are keyed to
recognition of individual performance and achievement of business objectives
each year. The value of long-term incentives are directly linked to the
performance of Deltic's common stock and, therefore to total stockholder return.
In evaluating the compensation programs, the Committee solicits the services of
independent compensation consultants and information on industry pay practices
gathered by Deltic's human resource department.
Generally for base salaries, Deltic maintains an administrative framework
of job levels into which positions are assigned based on internal comparability
and external market data. Base salaries are reviewed annually and adjusted as
appropriate to reward performance and maintain a competitive position. Annual
bonuses are awarded if the Company meets or exceeds certain performance measures
which are established each year by the Committee. Participation in the annual
bonus program is based on job level and is intended to reward individuals who
are capable of having a significant impact on the Company's performance.
Communication of the applicable performance measure is promptly made to each
participant after it has been determined by the Committee.
The Company's 1996 Stock Incentive Plan ("1996 SIP") vests with the
Committee the authority to award incentive or nonqualified stock options, stock
appreciation rights and restricted stock. Such awards are intended under the
1996 SIP to foster and promote the long-term financial success of the Company
and materially increase stockholder value by motivating superior performance and
encouraging and providing for the acquisition of an ownership interest in the
Company by those employees upon whose judgement, interest and special effort the
successful conduct of its operations is largely dependent. The 1996 SIP
establishes an aggregate and annual number of shares which may be issued, sets a
limit on the percentage of restricted stock which may be issued in total and to
any individual, and provides for other terms and conditions applicable to the
different types of awards.
1997 Committee Actions
The Committee acted on several matters during 1997. An Annual Incentive
Compensation Plan which had been drafted by staff of the Company with assistance
from an independent compensation consultant was reviewed and adopted. The 1997
performance measure for earning a bonus under the Annual Incentive Compensation
Plan was established at a 8.6% company-wide return on capital employed ("ROCE")
for all plan participants.
Awards of stock options under the 1996 SIP were considered and made. Each
stock option under this category was priced at the fair market value on the date
of grant and will become exercisable
(10)
<PAGE>
as to one-half of its shares two years from the date of grant and exercisable as
to the remaining one-half, three years after the date of grant. Each option has
a term of ten years from the date of grant and will expire after such time. To
the extent allowed under applicable internal revenue code provisions, each of
these stock options were designated as incentive stock options with any not
qualifying for incentive stock option treatment designated as nonqualified stock
options.
The Committee also acted in regard to those employees which due to the spin
off had forfeited Murphy stock options and restricted stock. For the holders of
forfeited Murphy stock options, the Committee determined the individuals should
retain the essential elements and economic value, if any, existing in the Murphy
options, but that the goals of the Company's compensation program would be
better achieved if such essential elements and value were transferred to options
for Deltic Common Stock. Accordingly, the Committee granted Company
nonqualified stock options to such individuals in the same amount and with the
same exercise and termination date as the forfeited Murphy stock options. To
the extent such forfeited Murphy stock options were "in-the-money", the exercise
price of the Company stock options was reduced by a like amount from the fair
market value of Company stock on the date of grant. As to individuals which
forfeited Murphy restricted stock, the Committee decided to issue Company stock
options with a deemed value equivalent to the projected value of the Murphy
restricted stock. The independent compensation consultants retained by the
Company were instructed to calculate such values. After receipt of the
consultant's report, the Committee acted by written consent in lieu of meeting
to grant additional nonqualified stock options to the individuals. The exercise
price of such stock options was at fair market value of the Company's stock on
the date of grant and other typical terms and conditions were made applicable.
The Committee also addressed 1997 base salary compensation for the
Company's executive officers as well as compensation for the Company's
nonemployee Chairman. As to Ron L. Pearce, the Company's President and Chief
Executive Officer, the Committee increased Mr. Pearce's base salary 27% from
$141,250 to $180,000. The Committee reviewed the Company's financial and
operating performance in 1996 which included an increase in net income over the
prior year and the status of capital projects to expand the Company's
manufacturing operations. The Committee also noted that while Mr. Pearce had
previously been President of the Company when it was a wholly owned subsidiary,
his duties were now expanded as the top executive of a publicly owned company.
Respectfully submitted,
Executive Compensation Committee
R. Madison Murphy, Chairman Alex R. Lieblong William L. Rosoff
Eric M. Heiner Reverend Christoph Keller, III
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
There were no committee interlocks. Messrs. Murphy, Heiner and Keller are
related by blood and/or marriage as described in the "Certain Relationships and
Related Transactions" section supra. Such section also describes applicable
related transactions. Mr. Rosoff who prior to January 15, 1998 was a partner of
a law firm used by the Company, did not participate in deliberation or decisions
related to grants of stock based awards or cash compensation to officers and
employees of the Company during 1997.
(11)
<PAGE>
EXECUTIVE COMPENSATION
As a wholly owned subsidiary until December 31, 1996, matters involving the
compensation of the Company's executive officers for fiscal years prior to 1997
were determined by Murphy. The following table sets forth information with
respect to compensation for the Company's President and Chief Executive Officer
and the four other most highly compensated executives of the Company at the end
of 1997:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
---------------------------------------- LONG-TERM
COMPENSATION AWARDS
OTHER ---------------------- ALL
ANNUAL RESTRICTED SECURITIES OTHER
COMPENSA- STOCK UNDERLYING COMPEN-
SALARY BONUS TION AWARDS OPTIONS SATION
NAME AND PRINCIPAL POSITION YEAR ($) (1) ($) (2) ($) (3) ($) (#) ($)(7)
- ----------------------------- ------ ------- ------- --------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ron L. Pearce 1997 180,000 83,500 --- --- 34,059(5) 6,624
President and Chief 1996 141,250 55,000 --- (4) (6) 8,965
Executive Officer 1995 126,250 --- --- --- (6) 5,384
Clefton D. Vaughan 1997 140,000 53,507 --- --- 29,171(5) 4,080
Vice President, Finance 1996 204,006 60,000 24,336 (4) (6) 14,299
and Administration and 1995 196,458 --- --- --- (6) 12,024
Treasurer [Prior to 1/1/97
Vaughan was employed by
Murphy as Vice President.]
W. Bayless Rowe 1997 140,000 44,589 --- --- 15,500(5) 7,537
General Counsel and 1996 127,834 40,000 --- --- (6) 6,976
Secretary [Prior to 1/1/97 1995 121,350 --- --- --- (6) 6,672
Rowe was employed by
Murphy as General Attorney
and Secretary]
Jack R. McCray 1997 113,418 24,082 --- --- 5,000(5) 4,865
General Manager, Real 1996 108,573 24,500 --- --- (6) 4,524
Estate & Vice President, 1995 104,466 --- --- --- --- 3,774
Chenal Properties, Inc.
Richard H. Humphreys, 1997 94,380 21,108 --- --- 7,375(5) 5,294
General Manager, Mills 1996 88,542 26,500 --- --- (6) 4,968
1995 83,225 --- --- --- (6) 4,658
- ----------------------------
</TABLE>
/1/ Includes amounts of cash compensation earned and received by
executives as well as amounts earned but deferred at their election.
/2/ Bonuses were awarded and paid by Deltic and Murphy, as applicable,
after the end of the year in which they are reported. Because these payments
related to services rendered in the
(12)
<PAGE>
year prior to payment, Deltic and Murphy report bonuses as a component of
compensation for the prior year.
/3/ Represents the amount of income tax payments made by Murphy for
restricted Murphy stock awards that vested in 1996.
/4/ Messrs. Pearce and Vaughan were awarded restricted stock awards by
Murphy in 1996 valued at $53,594 and $75,031, respectively. Under the terms of
Murphy's stock plan, each were deemed to have retired as of the date of the spin
off. As a result, 80% of the restricted stock awards were forfeited, with the
remainder subject to vesting or forfeiture in 2001 depending on achievement of
performance measures. As discussed in the Report of Executive Compensation
Committee supra, the Committee replaced the projected value of forfeited
restricted stock with Company stock options.
/5/ The stock options awarded by the Committee in 1997 included options
which were intended by the Committee to replace Murphy stock options and
restricted stock which were forfeited by the named executives as a result of the
spin off. The number of options in this unique category included in the totals
listed in the table above for each of the named executives is: Mr. Pearce -
20,390; Mr. Vaughan - 19,671; Mr. Rowe - 6,500; Mr. McCray - 2,000; and Mr.
Humphreys - 4,375.
/6/ The named executives received stock option awards from Murphy in
1996 and 1995 which under the terms of Murphy's stock plan were forfeited as a
result of the spin off. The number of Murphy stock options forfeited by each of
the named executives is: Mr. Pearce - 10,000; Mr. Vaughan - 7,000; Mr. Rowe -
6,500; Mr. McCray - 2,000; and Mr. Humphreys - 4,375.
/7/ The total amounts shown in this column for 1997 consist of the
following: Mr. Pearce: $6,000--Company contributions to defined
contribution plan; $624--Benefit attributable to Deltic-owned term life
insurance policy. Mr. Vaughan: $3456--Company contributions to defined
contribution plan; $624--Benefit attributable to Deltic-owned term life
insurance policy. Mr. Rowe: $6913--Deltic contributions to defined
contribution plan; $624--Benefit attributable to Deltic-owned term life
insurance policy. Mr. McCray: $4,241--Company contribution to defined
contribution plan; $624--Benefit attributable to Deltic-owned term life
insurance policy. Mr. Humphreys: $4,707--Company contribution to defined
contribution plan; $590--Benefit attributable to Deltic owned-term life
insurance policy.
OPTION GRANTS IN LAST FISCAL YEAR
The following table summarizes options granted during fiscal 1997 to the
named executives listed in the Summary Compensation Table, and the potential
value of the shares subject to such options if the options were exercised at
their expiration date. Included in the table, as indicated, are stock options
awarded to replace Murphy stock options and restricted stock forfeited by the
named executives as a result of the spin off.
(13)
<PAGE>
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- -------------------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED IN EXERCISE EXPIRATION
NAME OPTIONS GRANTED FISCAL YEAR PRICE ($) DATE 0%($) 5%($) 10%($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ron L. Pearce 1,250 (1) 1.2% 9.90 03/02/04 16,609 28,625 44,694
5,000 (1) 4.8% 13.90 01/31/05 46,438 102,008 179,633
5,000 (1) 4.8% 12.40 02/06/06 53,938 118,223 212,461
9,059 (1) 8.8% 25.25 04/21/07 0 143,853 364,552
13,750 13.3% 23.19 01/22/07 0 200,509 508,130
Clefton D. Vaughan 1,000 (1) 1.0% 9.90 03/02/04 13,288 22,900 35,755
3,500 (1) 3.4% 13.90 01/31/05 32,506 71,405 125,743
3,500 (1) 3.4% l2.40 02/06/06 37,756 82,756 148,723
11,671 (1) 11.3% 25.25 04/21/07 0 185,331 469,664
9,500 9.2% 23.19 01/22/07 0 138,534 351,072
W. Bayless Rowe 3,000 (1) 2.9% 13.90 01/31/05 27,863 61,205 107,780
3,500 (1) 3.4% 12.40 02/06/06 37,756 82,756 148,723
8,500 8.2% 23.19 01/22/07 0 123,951 314,117
Jack R. McCray 2,000 (1) 1.9% 12.40 02/06/06 21,575 47,289 84,984
3,000 2.9% 23.19 01/22/07 0 43,747 110,865
Richard H. Humphreys 375 (1) 0.4% 9.90 03/02/04 4,983 8,588 13,408
2,000 (1) 1.9% 13.90 01/31/05 18,575 40,803 71,853
2,000 (1) 1.9% 12.40 02/06/06 21,575 47,289 84,984
3,000 2.9% 23.19 01/22/07 0 43,747 110,865
All Stockholders (2) 483,392,585 (5%)
769,721,903 (10%)
</TABLE>
- -----------------------------------
/1/ Options in replacement of Murphy stock options or restricted stock
forfeited as a result of the spin off.
/2/ The potential realizable value for all Stockholders represents the
aggregate value at the end of 10 years of all Common Stock outstanding as of
January 22, 1997 (the date of awards of employee stock options) which then had a
value of $296,761,115, assuming the same rates of appreciation used to calculate
the potential realizable value of shares subject to stock options summarized in
the table. Such information is shown for comparison purposes only and does not
represent an estimate or prediction of future Common Stock price.
(14)
<PAGE>
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE TABLE
There were no exercises of stock options during fiscal 1997. The following
table summarizes the value at December 31, 1997, of all the shares subject to
options granted to the named executives of the Company.
<TABLE>
<CAPTION>
Shares Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Held at December 31, 1997 Held at December 31, 1997 (1)
- -------------------------------------------------------------------------------------------
Name Exercisable (2) Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ron L. Pearce 3,750 30,309 $55,550 $185,508
Clefton D. Vaughan 2,750 26,421 $41,070 $140,684
W. Bayless Rowe 1,500 13,500 $20,220 $108,265
Jack R. McCray -0- 5,000 -0- $ 42,530
Richard H. Humphreys 1,375 6,000 $20,035 $ 56,010
- ------------------------
</TABLE>
/1/ Represents the closing price for Deltic common stock on December
31, 1997 of $27.38 less the exercise price for all outstanding exercisable and
unexercisable stock options.
/2/ All options exercisable during 1997 were awarded as replacements
for Murphy stock options which were forfeited as a result of the spin off.
PERFORMANCE GRAPH
The following graph compares the cumulative total returns for Deltic's
common stock, the Standard & Poor's Small Cap 600 Index and the Standard &
Poor's Paper & Forest Products Index for the period January 2, 1997 (the first
day of regular public trading of Deltic's common stock) through December 31,
1997. The Company believes because it does not own and operate paper
manufacturing facilities and its market capitalization is significantly smaller
than most firms included within the industry index, that it may in the future be
able to determine a more appropriate industry peer group as more timber focused
companies become publicly traded. The graph assumes an investment on January 2,
1997 of $100 in each of Deltic's common stock, the stocks comprising the
Standard & Poor's Small Cap 600 Index and the stocks of the Standard & Poor's
Paper & Forest Products Index, and that all paid dividends were reinvested.
(15)
<PAGE>
[PERFORMANCE GRAPH APPEARS HERE]
1/2/97 12/31/97
Deltic $100 $127.75
S&P Small Cap 600 $100 $125.58
S&P Paper & Forest Products $100 $107.22
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code generally limits the corporate
tax deduction for compensation paid during a year to a public company's chief
executive officer and its four other most highly compensated executive officers
to $1 million, unless specified conditions are met. Certain performance-based
compensation is not subject to the deduction limitation. The Company did not
have nondeductible compensation expense during 1997 and is not expected to have
such in 1998. Nevertheless, the Executive Compensation Committee intends to
review this matter from time to time and, if appropriate and consistent with the
Company's compensation philosophy, may recommend in the future that actions be
taken to maximize the amount of compensation expense that is deductible to the
Company.
RETIREMENT PLANS
Prior to and effective upon the spin off, the Company established its
retirement plans for its employees. The following table shows the estimated
annual pension benefit payable, at age 65, under Deltic Timber Corporation's
Retirement Plan at December 31, 1997 for the salary and length of service
indicated. The amounts shown are subject to reduction for social security
benefits.
(16)
<PAGE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
--------------------------------------------------------------------
REMUNERATION (1) 15 20 25 30 35 40
- ---------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 24,000 $ 32,000 $ 40,000 $ 48,000 $ 56,000 $ 64,000
150,000 36,000 48,000 60,000 72,000 84,000 96,000
200,000 48,000 64,000 80,000 96,000 112,000 128,000(2)
250,000 60,000 80,000 100,000 120,000 140,000(2) 160,000(2)
300,000 72,000 96,000 120,000 144,000(2) 168,000(2) 192,000(2)
350,000 84,000 112,000 140,000(2) 168,000(2) 196,000(2) 224,000(2)
400,000 96,000 128,000(2) 160,000(2) 192,000(2) 224,000(2) 256,000(2)
450,000 108,000 144,000(2) 180,000(2) 216,000(2) 252,000(2) 288,000(2)
500,000 120,000 160,000(2) 200,000(2) 240,000(2) 280,000(2) 320,000(2)
</TABLE>
A portion of the benefits shown above would be paid under the Company's
Supplemental Benefit Plan to the extent such benefits exceed legislative
limitations.
The credited years of service for Messrs. Pearce, Vaughan, Rowe, McCray,
and Humphreys are six years, one year, twenty years, eight years and twenty-six
years respectively.
_________________________
/1/ During 1997, the maximum compensation limit for qualified retirement
plans, as established by the Internal Revenue Service, was $160,000,
/2/ Exceeds presently allowable maximum legislative limits for annual
pension benefits under a defined benefit pension plan. In 1997, the maximum
benefit allowable was $125,000 ($130,000 effective January 1, 1998).
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 2 ON PROXY CARD)
The Board of Directors desires to obtain from the stockholders an
indication of their approval or disapproval of its action in appointing KPMG
Peat Marwick LLP, Certified Public Accountants, as independent auditors of the
Company for the year 1998. KPMG Peat Marwick LLP has been serving as the
Company's independent auditors for the past year, and is familiar with the
Company's accounts through its many years of service as Murphy's independent
auditors. The firm has advised the Company that its members have no direct or
indirect financial interest in the Company or any of its subsidiaries. Members
of the firm are expected to be present at the Annual Meeting for the purpose of
responding to inquiries by stockholders and such representatives will have an
opportunity to make a statement if they desire to do so.
In the event a majority of the stockholders voting should indicate they
disapprove the appointment of KPMG Peat Marwick LLP the adverse vote will be
considered as a directive to the Board of Directors to select other auditors
for the following year. Because of the difficulty and expense of making any
substitution of auditors during a year, it is contemplated that the
(17)
<PAGE>
appointment for 1998 will be permitted to stand unless the Board finds other
good reason for making a change.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Directors does not know of any matters which will be brought
before the 1998 annual meeting other than those specifically set forth in the
notice of meeting. If any other matters are properly introduced at the meeting
for consideration, including, among other things, consideration of a motion to
adjourn the meeting to another time or place, the individuals named on the
enclosed proxy card will have discretion to vote in accordance with their best
judgment.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
W. Bayless Rowe
Secretary
(18)
<PAGE>
[DELTIC TIMBER CORPORATION
LOGO APPEARS HERE]
DELTIC TIMBER CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING, APRIL 28, 1998
The stockholder(s) whose name(s) appears on the reverse side hereby appoints
Robert C. Nolan and Ron L. Pearce, or each of them, as the stockholder's proxy
or proxies, with full power of substitution, to vote all shares of Common Stock
of Deltic Timber Corporation which the stockholder is entitled to vote at the
Annual Meeting of Stockholders to be held at the South Arkansas Arts Center, 110
East 5th Street, El Dorado, Arkansas, on April 28, 1998, at 10:00 a.m., local
time, and any adjournments thereof, as fully as the stockholder could if
personally present.
IMPORTANT--THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE
REVERSE SIDE, BUT IF NONE ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED ON THE REVERSE SIDE, AND FOR ITEM 2.
(continued on reverse side)
- --------------------------------------------------------------------------------
DELTIC TIMBER CORPORATION
PLEASE MARK VOTE IN OVAL, IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED ITEMS.
FOR WITHHOLD
ALL ALL FOR ALL (EXCEPT NOMINEE(S)
1. ELECTION OF DIRECTORS-- / / / / / / WRITTEN BELOW)
Nominees: Eric M. Heiner,
William L. Rosoff, John C. ------------------
Shealy.
FOR AGAINST ABSTAIN
2. RATIFY THE APPOINTMENT OF / / / / / /
KPMG PEAT MARWICK LLP AS
AUDITORS.
Dated: , 1998
---------------
--------------------------------------------------------
--------------------------------------------------------
Signature of stockholder(s)
Please sign exactly as your name or names appear hereon.
For joint accounts, each owner should sign. When signing
as executor, administrator, attorney, trustee or
guardian, etc., please give full title. Please return
promptly.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED POSTMARKED ENVELOPE.
