SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No.___)
Filed by the Registrant X
---
Filed by a Party other than the Registrant ___
Check the appropriate box:
___ Preliminary Proxy Statement
X Definitive Proxy Statement
- - - ---
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MOSINEE PAPER CORPORATION
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
___ 14a-6(j)(2).
___ $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
___ 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:
(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[1]:
(4) Proposed maximum aggregate value of transaction:
[1] Set forth the amount on which the filing fee is
calculated and state how it was determined.
___ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identity 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: _____________________________
<PAGE>
WAUSAU PAPER MILLS COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_____________________
The annual meeting of shareholders of Wausau Paper Mills
Company will be held at The Wausau Club, 309 McClellan Street,
Wausau, Wisconsin, on December 19, 1994, at 4:00 P.M. for the
following purposes:
1. To elect two Class I directors for terms which will
expire at the annual meeting of shareholders to be
held in 1997.
2. To approve the appointment of Wipfli Ullrich Bertelson
CPAs as independent auditors for the year ending
August 31, 1995.
3. To transact such other business as may properly come
before the meeting.
PLEASE VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
November 9, 1994.
BY ORDER OF
THE BOARD OF DIRECTORS
Steven A. Schmidt
Secretary
____________________
A PROXY CARD AND POSTAGE FREE ENVELOPE ARE ENCLOSED.
<PAGE>
NOVEMBER 9, 1994
WAUSAU PAPER MILLS COMPANY
ONE CLARK'S ISLAND
P.O. BOX 1408
WAUSAU, WISCONSIN 54402-1408
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 19, 1994
The enclosed proxy is solicited by the Board of Directors of
Wausau Paper Mills Company (the "Company") for use at the annual
meeting of shareholders to be held at 4:00 P.M., at The Wausau
Club, 309 McClellan Street, Wausau, Wisconsin on December 19,
1994, and at any adjournment thereof (the "Annual Meeting").
In addition to solicitation by mail, officers, directors and
employees of the Company and its subsidiaries may solicit proxies
by telephone, telegraph or in person. None of these persons will
receive compensation, but they will be reimbursed for actual
expenses in connection therewith. Expenses in connection with
the solicitation of proxies, including the reasonable expenses of
brokers, fiduciaries and other nominees in forwarding proxy
material, will be borne by the Company.
VOTING OF PROXIES
Each holder of the Company's common stock is entitled to one
vote in person or by proxy for each share held of record on the
record date, November 1, 1994, on all matters to be voted upon at
the Annual Meeting. Votes cast by proxy or in person at the
Annual Meeting will be tabulated by an inspector of elections
appointed by the Board of Directors.
With respect to the election of directors, shareholders may
vote in favor of the nominees specified on the proxy card or may
withhold their vote. Votes that are withheld will be excluded
entirely from the voting for directors and will have no effect.
Each of the two nominees receiving the largest number of votes
will be elected a director.
On all matters other than the election of directors,
shareholders may vote in favor of a proposal, against a proposal
or abstain from voting. Abstentions on any matter presented to
the Annual Meeting will be treated as shares that are present and
entitled to vote for purposes of determining whether a quorum is
present, but such abstentions shall be treated as unvoted for
purposes of determining whether the matter has been approved by
the shareholders. If the votes cast in favor of a proposal
(other than the election of directors) exceed the votes cast
against
the proposal, the matter will be approved by the shareholders.
Brokers who hold shares of the Company's common stock in
street name for customers may have discretionary authority to
vote
<PAGE>
on certain matters when they have not received instructions from
beneficial owners, but may not have authority to vote the shares
on other matters. As to matters for which the broker cannot vote
shares held in street name, the shares will be recorded as a
"broker non-vote". Shares reported as broker non-votes will not
be considered present and entitled to vote with respect to the
matter and will not be counted for purposes of determining
whether a quorum is present.
A shareholder who executes the enclosed proxy may revoke it
at any time before it is voted by giving written notice to the
Secretary of the Company or oral notice to the presiding officer
at the Annual Meeting.
The persons named in the accompanying form of proxy, as
members of the Proxy Committee of the Board of Directors, will
vote the shares subject to each proxy. The proxy in the
accompanying form will be voted as specified by each shareholder,
but if no specification is made, each proxy will be voted:
(1) TO ELECT Messrs. San W. Orr, Jr. and David B. Smith,
Jr.
to terms of office as Class I directors which will
expire at the annual meeting of shareholders to be held
in 1997 (see "Election of Directors").
(2) TO APPROVE the appointment of Wipfli Ullrich Bertelson
CPAs as the Company's independent auditors for the
fiscal year ending August 31, 1995.
(3) IN THE BEST JUDGMENT of those named as proxies on the
enclosed form of proxy on any other matters to properly
come before the Annual Meeting (see summary of Bylaw
requirements under "Shareholder Proposals"), the
approval of minutes and matters incident to the conduct
of the Annual Meeting or the adjournment thereof.
BENEFICIAL OWNERSHIP OF SHARES
As of the record date, November 1, 1994, the Company had
26,958,446 shares of common stock outstanding (including 222,916
shares subject to options exercisable within 60 days).
The following table sets forth, based on statements filed
with the Securities and Exchange Commission or otherwise made to
the Company, the amount of common stock of the Company which may
be deemed beneficially owned as of the record date by each person
known to the Company to be the beneficial owner of more than 5%
of the aggregate shares of the Company's outstanding common
stock.
<TABLE>
<CAPTION>
Common Shares Percent of
Name and Address Beneficially Owned Class
- - - ---------------- ------------------ ----------
<S> <C> <C>
Wilmington Trust Company 6,118,607 (1) 22.70%
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
Trustees of David B. Smith 2,387,102 (2) 8.85%
Family Trust
1206 E. Sixth Street
Merrill, WI 54452
</TABLE>
The following table sets forth, based on statements filed
with the Securities and Exchange Commission or otherwise made to
the Company, the amount of common stock of the Company
beneficially owned as of the record date by each of the
directors, each of the current executive officers of the Company
named in the summary compensation table on page 8 and all
directors
and executive officers as a group.
<PAGE>
<TABLE>
<CAPTION>
Common Shares Percent of
Name Beneficially Owned Class
- - - ---- ------------------ ----------
<S> <C> <C>
San W. Orr, Jr. 320,283 (3) 1.19%
Daniel D. King 19,721 (4) *
David B. Smith, Jr. 1,777,922 (5) 6.60%
Stanley F. Staples, Jr. 329,289 (6) 1.22%
Harry R. Baker 1,888 *
Larry A. Baker 26,036 (4) *
Melvin L. Davidson 58,162 (4) *
Thomas J. Howatt 3,916 (4) *
All directors and executive
officers as a group (9 persons) 2,537,217 (7) 9.41%
<FN>
* Less than 1%
(1) Held in a fiduciary capacity as trustee under several
trusts for the benefit of the descendants of A.P.
Woodson and family.
(2) David B. Smith, Jr., Thomas P. Smith, Margaret S. Mumma
and Sarah S. Miller are the co-trustees of the David B.
Smith Family Trust (the "Trust") which owns 1,722,453
shares of the Company's common stock. Including common
stock which is beneficially owned by the trustees on an
individual basis and common stock owned by the Trust,
each of the trustees has sole or shared investment
authority with respect to the following percentage of
the
Company's common stock: David B. Smith, Jr., 6.60%;
Thomas P. Smith, 6.71%; Margaret S. Mumma, 7.54%; and
Sarah S. Miller, 7.36%.
(3) Includes 119,101 shares as to which Mr. Orr exercises
shared voting and investment power (and as to which
beneficial ownership is disclaimed) and shares which may
be acquired through the exercise of options on or before
sixty days.
(4) Includes shares which may be acquired through the
exercise of options on or before sixty days.
(5) David B. Smith, Jr. is a co-trustee of the David B.
Smith
Family Trust which holds 1,772,452 shares of the
Company's common stock.
(6) Includes 322,097 shares of the Company's common stock
held by a charitable foundation of which Mr. Staples
serves as president and a director.
(7) Includes shares described in notes (3), (4), (5) and
(6).
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and officers and persons who own
more than 10% of the Company's common stock ("reporting persons")
to
file reports of ownership and changes in ownership with the
Securities
and Exchange Commission ("SEC"). Reporting persons are also
required by SEC regulations to furnish the Company with copies of
all section 16(a) forms filed by them with the SEC. During 1994,
Mr. King's Form 4 with respect to the purchase of 300 shares of
common stock was filed sixteen days late. Based solely on its
review of the copies of the section 16(a) forms received by it or
upon written representations from certain of these reporting
persons as to compliance with the section 16(a) regulations, the
Company is of the opinion that during the 1994 fiscal year all
other filing requirements applicable under section 16 to the
reporting persons were satisfied.
<PAGE>
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation, as
amended,
provide that the number of directors shall be determined pursuant
to the Company's bylaws and resolutions of the Board of
Directors,
but there shall be not less than three nor more than nine
directors. Directors are to be divided into three classes so
that
each class has, to the extent possible, an equal number of
directors. One class of directors is to be elected at each
annual
meeting of shareholders to serve a three-year term. Vacancies
caused by the death or resignation of a director are filled by
the
Board of Directors. The Board is now composed of three classes
consisting of two Class I and Class II Directors, respectively,
and one Class III Director. No person may be elected a director
if that person has attained age 70 as of the date of the
election.
On July 29, 1994, Arnold M. Nemirow resigned as a director
and officer of the Company and Daniel D. King was elected a Class
II director, President and Chief Operating Officer and a member
of
the Company's Executive Committee. Mr. King's term as a Class II
director will expire at the annual meeting of shareholders to be
held in 1995.
At the Annual Meeting, the nominees listed below will be
candidates for election to the Board of Directors. Each of the
nominees has consented to serve if elected, but in the event
either or both of the nominees is not a candidate at the Annual
Meeting it is the intention of the proxies named in the
accompanying form of proxy to vote for such substitute or
substitutes as shall be designated by the Board.
The following information is furnished with respect to the
nominees and all continuing directors:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
CLASS AND YEAR
AND OTHER
WHICH TERM DIRECTOR
NAME AGE DIRECTORSHIPS
WILL EXPIRE SINCE
- - - ---- --- --------------------
- - - --------------- --------
<S> <C> <C>
<C> <C>
NOMINEES
San W. Orr, Jr. 53 Chairman of the Board and, since
Class I 1970
July 1994, Chief Executive Officer
1997
of the Company; Attorney, Estates
of A.P. Woodson and Family; also
a director of Mosinee Paper
Corporation and MDU Resources Group,
Inc.
David B. Smith, 56 Consultant; previously, Vice President,
Class I 1972
Jr. Labor Relations, Weyerhaeuser Company
1997
CONTINUING DIRECTORS
Daniel D. King 47 President and Chief Operating Officer of
Class II 1994
the Company since July 1994; formerly,
1995
Senior Vice President, Printing and
Writing Division, December 1993 to July
1994, Vice President and General Manager
of Brokaw Division, September 1990 to
December 1993, Vice President, Sales,
Nekoosa Papers, Inc., February 1988 to
June 1990
Harry R. Baker 61 President and Chief Executive Officer,
Class II 1992
Marathon Electric Mfg. Corp.; formerly,
1995
Group Vice President, Emerson Electric
Company
Stanley F. 70 President, Alexander Properties, Inc.
Class III 1968
Staples, Jr. (investment management); also, a director
1996
of Mosinee Paper Corporation and MDU
Resources Group, Inc.
</TABLE>
<PAGE>
COMMITTEES AND COMPENSATION OF BOARD OF DIRECTORS
COMMITTEES AND MEETINGS
The Board of Directors appointed Audit and Executive
Committees for the 1994 fiscal year.
The Audit Committee, consisting of Messrs. Orr, Staples and
Baker, met twice during the last fiscal year. The Audit
Committee
reviews the scope of the audit engagement and the audit fees and
nature of consulting fees.
The Executive Committee consists of Messrs. Orr, Smith and,
since July 1994, King. The Executive Committee met six times
during the last fiscal year. Its principal duties include review
of the Company's overall performance, the development and
implementation of policies during intervals between Board
meetings, the establishment, with management, of long and short
term growth and performance goals and the establishment of
management compensation programs. The Board does not have a
separate compensation committee (see "Committees' Report on
Compensation Policies", page 12).
The Board does not have a standing nominating committee.
The
functions of a nominating committee are performed by the
Executive
Committee in accordance with a Board of Directors' resolution.
The Executive Committee will consider nominating for directors
individuals whose names are submitted by shareholders.
Recommendations concerning nominations with pertinent background
information should be directed to the Chairman of the Executive
Committee, in care of the Company. Pursuant to the Company's
bylaws, shareholders entitled to vote at the annual meeting of
shareholders to be held in 1995 may make nominations from the
floor only if proper notice of the proposed nomination has been
provided to the Secretary of the Company not earlier than
September 20, 1995 and not later than October 20, 1995. The
precise requirements, including the information required to be
provided in the notice and the procedures for notice in the event
the date of the annual meeting is changed, are set forth in the
Company's bylaws which may be obtained from the Secretary of the
Company.
During the last fiscal year there were six meetings of the
Board of Directors. All of the directors of the Company attended
at least 75% of the aggregate number of the meetings of the Board
of Directors and the committees on which they served during the
last fiscal year.
DIRECTOR COMPENSATION
Directors of the Company, excluding Mr. King and members of
the Executive Committee, are paid a retainer of $875 per month
and
$1,000 for each meeting of the Board of Directors attended.
Members of the Executive Committee are considered employees of
the
Company and participate in various retirement and welfare benefit
plans available to all salaried employees. Mr. King receives no
additional compensation for service on the Executive Committee;
the other members of the Committee are paid a retainer of $40,000
per year. Since July 1, 1994, Mr. Orr has been entitled to
<PAGE>
additional salary for his services as Chief Executive Officer,
but
no other director receives more than the standard arrangements
described above.
The Company's Directors' Deferred Compensation Plan provides
that directors may elect each year to defer fees otherwise
payable
in cash during the year. Amounts deferred become payable in a
lump sum after the director's termination of service as a
director
or, if the participant elects with the approval of the Company,
in
quarterly installments over a period not in excess of 10 years.
In the event a director's service terminates because of a change
of control of the Company, as defined by the plan, payment of all
deferred amounts will be made in a lump sum. During the period
of
deferral, a director may elect that the deferred fees be credited
with interest at the prime rate in effect as of each calendar
quarter at The Chase Manhattan Bank of New York or be converted
into stock equivalent units. If stock equivalent units are
elected, the director's account is also credited with common
stock
equivalent units representing the shares of common stock which
could have hypothetically been purchased with the hypothetical
cash dividends which would have been paid on the accumulated
stock
equivalent units had they been actual shares of common stock.
Upon distribution, stock units are converted to cash based upon
the fair market value of the Company's common stock at the time
of
distribution. During 1994, Messrs. Staples and Baker
participated
in the plan and deferred the director or meeting fees otherwise
payable to them.
The Company's retirement policy for directors provides for
the payment of specified retirement benefits for directors who
have served on the Board for at least five years prior to their
termination of service. A retired director's benefit is equal to
the monthly retainer or meeting fee (based on the amount of such
retainer or meeting fee in effect at his termination of service)
and is paid for a period of time equal to the retired director's
period of service on the Board. Retirement benefits terminate at
death and are accelerated in the event of a change of control of
the Company, as defined by the policy.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The table below sets forth compensation awarded, earned or
paid by the Company and its subsidiaries for services in all
capacities during the three years ended August 31, 1994, 1993 and
1992, to each person who served as the Company's Chief Executive
Officer during the 1994 fiscal year and each of the four most
highly compensated executive officers of the Company as of August
31, 1994 whose total annual salary and bonus compensation for the
most recent fiscal year exceeded $100,000.
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long
Term
Annual Compensation
Compensation
- - - -----------------------------------------------------------------
- - - -------------------------
Awards
Options/ All
Other
Name and Principal Positions Year Salary(1) Bonus
SARs(#)
Compensation(2)
- - - -----------------------------------------------------------------
- - - -------------------------
<S> <C> <C> <C>
<C> <C>
San W. Orr, Jr.; 1994 $ 56,869(3) -
- - - - $1,320
Chairman of the Board and 1993 $ 40,202 -
66,667 $1,320
CEO* 1992 $ 40,378 -
- - - - $2,153
Arnold M. Nemirow; President 1994 $352,618 $156,920
- - - - $5,082
and CEO through July 29, 1994 1993 $316,894 $157,483
- - - - $4,947
1992 $287,781 $225,000
- - - - $8,292
Daniel D. King; President and 1994 $160,747 $ 92,785
- - - - $5,310
COO and Senior Vice 1993 $149,734 $ 88,102
- - - - $4,693
President/General Manager, 1992 $135,903 $135,834
26,667(4) $7,187
Printing and Writing Division*
Melvin L. Davidson; Vice 1994 $142,500 $128,076
- - - - $4,505
President/General Manager, 1993 $140,117 $127,056
- - - - $4,307
Rhinelander Division 1992 $134,926 $128,000
26,667(4) $6,857
Larry A. Baker; Senior Vice 1994 $157,354 $105,563
- - - - $4,950
President, Administration 1993 $151,491 $ 87,244
- - - - $4,466
1992 $143,405 $133,500
26,667(4) $7,106
Thomas J. Howatt; Vice 1994 $137,750 $ 82,195
- - - - $4,340
President/General Manager, 1993 $138,039 $ 66,945
20,000(5) $3,941
Groveton 1992 $113,304 $ 66,670
8,000(6) $5,814
<FN>
*Mr. Orr was elected Chief Executive Officer and Mr. King
was
elected President and Chief Operating Officer on July 29, 1994.
(1) Includes compensation deferred by participants under the
Savings and Investment Plan. See note (2).
(2) Contributions by the Company under the Savings and
Investment
Plan, a 401(k) plan under which matching contributions are
made by the Company according to a fixed formula and, in
part, based on the Company's profits in excess of certain
stated minimum amounts. Contributions made by the Company
vest over a three-year period.
(3) Includes $16,667 deferred under an agreement which provides
that the deferred amount will earn annual interest at a rate
equal to one percent below the prime rate in effect on the
first day of each calendar year and will be distributed in
five annual installments following the date Mr. Orr ceases
to
be a director of the Company. The agreement provides for a
lump sum payment in the event of a change of control of the
Company, as defined in the agreement.
(4) Options with respect to 8,889 and 10,667 shares lapsed in
fiscal 1993 and 1994, respectively (see table on page 10).
(5) Options with respect to 6,222 and 7,111 shares lapsed in
fiscal 1993 and 1994, respectively (see table on page 10).
(6) Options with respect to 2,667 and 3,556 shares lapsed in
fiscal 1993 and 1994, respectively (see table on page 10).
</TABLE>
<PAGE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The Company maintains a stock appreciation rights plan and a
stock option plan pursuant to which grants may be made to key
employees. No stock appreciation rights ("SARs") or stock
options were granted to executive officers named in the summary
compensation table in fiscal 1994.
The following table sets forth information regarding the
exercise of stock options or SARs in fiscal 1994 by each of the
executive officers named in the Summary Compensation Table and
the
August 31, 1994 value of unexercised stock options or SARs held
by
such person.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR
VALUES
<CAPTION>
Shares Number of Unexercised
Value of Unexercised In-
Acquired Options/SARs at
FY-End(#) the-Money Options/SARs
on Value
at FY-End ($)(2)(3)
Exercise Realized
Name (#)(1) ($)(2) Exercisable
Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
<C> <C>
Mr. Orr - - 66,667* -
$ 123,103* -
Mr. King - - 22,222 dagger -
$ 415,762 dagger -
7,111* -
$ 55,976* -
Mr. Nemirow 74,074* $958,278(4)* 148,149* -
$1,722,528* -
Mr. Davidson 10,000 dagger $271,580 dagger 11,511 dagger -
$ 244,597 dagger -
10,805* $302,684* 36,690* -
$ 670,273* -
Mr. Baker - - 10,756 dagger -
$ 228,539 dagger -
7,111* -
$ 55,976* -
Mr. Howatt - - 16,133 dagger -
$ 342,835 dagger -
1,777* 6,667*
$ 13,991* $12,267*
<FN>
* Options
Dagger SARs exercisable only for cash
(1) Number of shares as to which options or SARs were
exercised.
(2) In cases of SAR exercise or valuation, includes the value
of hypothetical shares credited to grantee under
provision
in SAR grant which assumes cash dividends are paid on
underlying shares and invested in Company common stock.
(3) Includes the value of hypothetical shares credited to
grantee under provision in grant under Dividend
Equivalent
Plan which assumes cash dividends are paid on underlying
shares and invested in Company common stock.
(4) Includes the value of 6,382 hypothetical shares granted
under Dividend Equivalent Plan.
</TABLE>
<PAGE>
PENSION PLAN BENEFITS
WAUSAU PAPER RETIREMENT PLAN
Under the Wausau Paper Retirement Plan, a participant with
at
least 5 years of service is entitled to receive a monthly benefit
payable for life in an amount equal to one-half of his final
average monthly earnings, exclusive of bonuses, less a factor for
Social Security benefits and years of credited service less than
30. All of the persons named in the Summary Compensation Table
participate in the Retirement Plan. The following table presents
information with respect to the Retirement Plan:
<TABLE>
<CAPTION>
Final Average Years of Service
Earnings ----------------
(base salary) 10 20 30
------------- ------ ------ ------
<S> <C> <C> <C>
$110,000 $16,500 $33,000 $ 49,600
$140,000 $21,500 $43,000 $ 64,600
$170,000 $26,500 $53,000 $ 79,600
$200,000 $31,500 $63,000 $ 94,600
$230,000 $36,500 $73,000 $109,600
$260,000 $41,500 $83,000 $124,600
</TABLE>
The table reflects illustrative estimated single life
retirement benefits payable by the Retirement Plan on an annual
basis to participants in selected remuneration and years of
service classifications. The benefit amounts listed above are
not
subject to any deductions for social security benefits or other
offset amounts. In estimating the annual benefit, it is assumed
that average covered compensation for years after 1994 will be at
the same level as 1994.
At August 31, 1994, the credited years of service and the
average covered compensation for the persons named in the table
of
cash compensation were: Messrs. Orr, 24 years, $42,000; King, 4
years, $154,000; Nemirow, 4 years, $235,840; Davidson, 11 years,
$124,000; Baker, 16 years, $132,000; and Howatt, 14 years,
$109,000.
EXECUTIVE OFFICERS' DEFERRED COMPENSATION RETIREMENT PLAN
Executive officers (defined as the President and all
corporate Vice Presidents) of the Company are covered by the
Company's Executive Officers' Deferred Compensation Retirement
Plan. The plan provides that each employee of the Company who
attains age 55 and completes 10 years of service as an executive
officer will be entitled to a benefit determined under a formula
similar to that used by the Wausau Paper Retirement Plan
described
above. However, the formula used in the Deferred Compensation
Retirement Plan assumes that each retiree had completed 30 years
of service with the Company, that the limitations on benefits
imposed by the Internal Revenue Code are not applicable, and that
100% of bonuses are included in the calculation of retirement
benefits. The benefit payable under the plan is reduced by the
<PAGE>
participant's actual benefit from the Retirement Plan. Based on
average compensation levels as of August 31, 1994, the following
annual benefits would be payable from the Deferred Compensation
Retirement Plan upon retirement at age 65: Messrs. King, $77,790;
Davidson, $78,621; Baker, $54,427; and Howatt, $46,910. As of
August 31, 1994, no current executive officer other than Mr.
Baker
had acquired a vested right to a benefit.
OTHER PLANS AND TRANSACTIONS
Under a 1990 agreement with Mr. Orr, payment of $143,750 in
salary was deferred and will be distributed to Mr. Orr or his
beneficiary in five annual installments following the date on
which Mr. Orr ceases to be a director of the Company or a change
in control of the Company (as defined in the agreement) occurs.
Simple interest, at a rate equal to one percentage point below
the
prime rate as published in The Wall Street Journal and adjusted
quarterly will accrue on all unpaid amounts under the agreement.
During fiscal 1994, the Company purchased 100,000 shares of
common stock from David B. Smith, Jr. in a private transaction at
$27.625 per share, the average market price on the day of the
transaction.
COMMITTEES' REPORT ON COMPENSATION POLICIES
The Executive Committee of the Board of Directors (the
"Executive Committee") establishes and reviews base salaries of
executive officers and is also responsible for the establishment
and implementation of executive bonus and incentive programs and
general compensation policies. Executive officers who serve on
the Executive Committee do not participate in the Executive
Committee's determination of their own compensation. The
salaries
of Mr. Orr, for services as Chairman of the Board, and Mr. Smith,
a member of the Committee, are paid in lieu of meeting or other
director fees and are approved by the Board as a whole. The
salary of Mr. Orr, for services as Chief Executive Officer, is
also approved by the Board as a whole.
The Company's compensation program for executive officers
may
include various grants under the Company's stock option, stock
appreciation rights ("SARs") and dividend equivalent plans. The
Company's plans are administered by separate committees appointed
by the Board of Directors. The plan committees generally
consider
recommendations of the Executive Committee with respect to
grants,
but each committee has full discretion and control over whether a
grant will be made and the amount and terms of any such grant.
Insofar as this report includes a description of the compensation
policies relating to the stock option, SAR and dividend
equivalent
plans, this report is a joint report of the Executive Committee
and of each of the plan committees.
This report describes the policies of the committees and the
Company as in effect for the 1994 fiscal year. As circumstances
change and one or more of the committees deem it appropriate,
policies in effect from time to time for years after 1994 may
change.
<PAGE>
GENERAL
The Company's executive compensation policies are designed
to
attract and retain individuals who have experience in the paper
industry or who otherwise have particular training or skills
which
will satisfy particular requirements of the Company. These
policies are also intended to reward job performance which
results
in superior Company performance. The total compensation paid to
executive officers and the retirement and other fringe benefits
provided by the Company are designed to offer a level of
compensation which is competitive with other companies in the
paper industry. Some, but not all, of the companies used for
purposes of compensation comparisons are included in the thirty-
nine companies which comprise the Media General MG Industry Group
381 index of paper company stock performance under the heading
"Stock Price Performance Graph." The Committee makes
compensation
comparisons only with those companies whose operations are
similar
to the Company or which have operating units which are similar to
the Company. Given the disparity in size between companies which
operate in the paper industry and the difficulty in determining
the precise duties of executive officers of other companies, it
is
difficult to draw exact comparisons with the compensation
policies
of other companies. The determination of executive compensation
is, therefore, subjective.
The Company's overall compensation policy is designed so
that
a significant portion of each executive officer's compensation
package is directly related to the performance of the Company.
Executive officers participate in incentive bonus plans which are
based primarily on the Company's financial performance during the
fiscal year, but also include incentives for individual
performance. Executive officers also participate in stock based
incentive programs under which awards are related to a specified
number of shares of common stock. The value of the stock based
awards to officers increases as the performance of the Company's
common stock in the Nasdaq National Market System increases
shareholder value as a whole.
BASE COMPENSATION
The Executive Committee does not rely on specific salary and
benefit comparisons, but does consider and review a general
survey
of paper industry compensation prepared by an independent
compensation and benefit consultant in order to gauge the
relationship of the Company's base salary and benefits levels to
the levels of comparable operating units of larger paper
companies. Annual increases in the base salary of each of the
Company's executive officers are determined by the Committee's
policy of maintaining competitive salary levels with other paper
industry companies (as discussed above), more general factors
such
as the rate of inflation, and individual job performance.
Individual job performance in the prior fiscal year is the most
important factor considered by the Executive Committee in annual
reviews and in determining appropriate increases in base salary.
Mr. King's base salary was adjusted during fiscal year 1994 to
reflect his appointment as President and Chief Operating Officer
("COO").
<PAGE>
In 1994, the base salary of Mr. Nemirow, as Chief Executive
Officer ("CEO"), was determined by the Executive Committee on the
same basis and using the same general criteria as that of the
Company's other executive officers. The Executive Committee also
established individual performance goals for the CEO and reviewed
his attainment of those goals. The salary of Mr. Orr, as CEO, is
based on these criteria, but is less than the compensation paid
to
the Company's CEO in prior years because the Company has also
appointed a COO.
INCENTIVE COMPENSATION BASED ON FINANCIAL PERFORMANCE OF THE
COMPANY AND INDIVIDUAL PERFORMANCE
The Company maintains incentive reward plans for executive
officers which provide for the payment of annual cash bonuses to
participants if annual Company financial and/or individual
performance objectives are met. The criteria by which incentive
awards are determined are based on the Executive Committee's
assessment of the total cash compensation available to executive
officers as base salary and under the incentive plans and are
designed to provide total annual cash compensation which is
comparable to other executive officers in the paper industry.
Generally, executive officers who have Company-wide
responsibilities participate in an incentive plan based on
Company
performance while an officer who has divisional operating
responsibilities generally participates in an incentive plan
which
is based on the performance of the officer's division. Maximum
incentive bonuses based on Company performance for executive
officers other than the CEO are generally 100% of an individual's
base salary, with prorated amounts payable based on the degree to
which operating goals were satisfied. The Executive Committee
can
modify performance objectives during a fiscal year under any of
the plans if an unusual or nonrecurring event occurs which would
have a significant effect on the stated performance goals.
Executive officers with Company-wide responsibilities
participate in the Corporate Management Incentive Plan under
which
participants are eligible to receive incentive awards based on
the Company's actual return on average equity as compared to a
targeted return on average equity established by the Executive
Committee. The Company's actual return on equity is determined
by
net earnings before giving effect to bonus expense, adjustments
for stock appreciation rights and certain other adjustments to
income. Mr. King became a participant in this plan in July 1994
and received 1/12 of the amount he would have earned under the
plan had he been a participant for the entire fiscal year.
Messrs. King and Baker will participate in the plan in fiscal
1995. In addition, the CEO and COO establish individual
performance objectives for each participant (other than the COO)
which provide a maximum aggregate bonus of $15,000.
Executive officers with direct management responsibilities
for the Company's Printing and Writing and Rhinelander Divisions
participate in plans which provide incentive compensation based
upon the respective division's achieved operating income as a
percentage of the average amount of total controllable assets (as
defined by the plans) employed in production. Operating income
of
each division is determined prior to taxes, bonus expense,
<PAGE>
interest expense and other specified or extraordinary items. Mr.
King participated in the incentive compensation plan maintained
for the Printing and Writing Division through July 1994 and
received a bonus based on 11/12 of the amount which he would have
earned if he had participated in the plan for the entire fiscal
year. In addition, in 1994 the CEO established individual
performance objectives for each participant which provide a
maximum aggregate bonus of $15,000. In 1995, the CEO and COO
will
establish such objectives. Messrs. Davidson and Howatt will
participate in their respective divisional incentive plans in
1995.
Mr. Nemirow, as CEO, participated in an incentive
compensation plan for the 1994 fiscal year which provided for a
maximum bonus of 80% of his base salary as determined by the
Company's achievement of certain levels of pre-tax income. The
Company's pre-tax income, for purposes of this plan, is
determined
prior to giving effect to bonus expense, adjustments for stock
appreciation rights and certain other adjustments to income.
It is not anticipated that Mr. Orr will participate in an
incentive compensation plan in fiscal 1995.
STOCK BASED COMPENSATION
Executive officers of the Company participate in stock
option, SAR and dividend equivalent plans at various levels. The
plans are administered by specific plan committees, each of which
may impose restrictions as to exercise or vesting of grants under
its respective plan. For example, certain of the options, SARs
and dividend equivalents granted to executive officers can be
exercised only if the Company meets specified operating profit
targets and/or are subject to the satisfaction of certain service
requirements for vesting. None of the committees has established
formal criteria by which the size of plan grants are determined,
but each committee considers the amount and terms of each grant
already held by an executive officer in determining the size and
amount of any new grant.
The value of these grants are principally related to the
long-term performance of the Company's common stock and therefore
provide an identity of interests between the Company's executive
officers and its shareholders. Stock options can be granted for
less than the then current market value of the Company's common
stock. In addition, grantees of SARs and dividend equivalents
benefit from the increase in value of the underlying common stock
and from the value of the hypothetical cash dividends which would
be paid with respect to a share of stock. The value of such
hypothetical dividends is determined as if underlying shares
subject to the SAR or dividend equivalent paid dividends in the
same amount as actual common stock and that such hypothetical
cash
dividends are reinvested in shares of hypothetical stock on each
dividend payment date (and further assume that dividends are paid
and reinvested on the hypothetical stock in the same manner).
Therefore, executive officers who receive grants of options with
an exercise price of less than current fair market value at the
time of grant or who exercise SARs or who receive dividend
equivalents will benefit from such grants even if there is no
increase in the price of the Company's common stock, but such
value will be enhanced by increases in the price of the Company's
<PAGE>
<PAGE>
common stock and will be of maximum value to the executive
officer
only if such increase occurs. It is the intention of the Company
that the hypothetical dividend features of the SARs and the
dividend equivalents will place the executive officers in the
same
position as shareholders of the Company, thereby enhancing the
officer's long-term incentive and increasing his identity with
the
shareholders.
Options, SARs and dividend equivalents can be, but are not
necessarily, granted on an annual basis. See table on page 8.
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Orr, King and Smith are members of the Executive
Committee and are considered employees of the Company. Mr. Orr
is
Chairman of the Board and CEO of the Company and participates in
stock based incentive plans. See "Committees and Compensation of
Board of Directors". Mr. Orr is Chairman of the Board of
Marathon
Electric Mfg. Corp. and Mr. Baker, who is President and CEO of
Marathon Electric, serves on the committees listed below. None
of
the members of the committees which administer the stock option,
SAR and dividend equivalent plans are officers of the Company.
1991 Employee Stock Option Plan Committee
1990 SAR Plan Committee
1991 Dividend Equivalent Plan Committee
- - - ---------------------------------------
Harry R. Baker
Stanley F. Staples, Jr.
David B. Smith, Jr.
Executive Committee
- - - -------------------
San W. Orr, Jr.
Daniel D. King
David B. Smith, Jr.
STOCK PRICE PERFORMANCE GRAPH
The following graph and table compare the yearly percentage
change in the cumulative total shareholder return on the
Company's
common stock for the five year period beginning August 31, 1989
with two indices published by Media General Financial Services.
The Media General Nasdaq Market Index indicates the performance
of
all stocks which have been traded on the Nasdaq market during the
entire five year period. The Media General MG Industry Group
381-
Paper Products Index indicates the performance of thirty-nine
companies in the paper products industry. The graph and table
assume that the value of the investment in the Company's common
stock and each index on August 31, 1989 was $100 and that all
dividends were reinvested.
[PERFORMANCE GRAPH FILED UNDER COVER OF FORM SE]
<PAGE>
<TABLE>
<CAPTION>
- - - -----------------------------------------------------------------
- - - -----------------
1989 1990 1991 1992
1993 1994
- - - -----------------------------------------------------------------
- - - -------------
- - - ----
<S> <C> <C> <C> <C>
<C> <C>
Wausau Paper Mills Company $100 $88.82 $210.15 $231.07
$344.20 $311.91
MG Paper Industry Group 381 $100 $82.48 $107.85 $110.83
$112.75 $139.86
MG Nasdaq Market Index $100 $87.46 $ 99.42 $101.10
$131.61 $143.81
</TABLE>
APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors will present to the Annual Meeting a
resolution that the shareholders approve the appointment of the
firm of Wipfli Ullrich Bertelson CPAs as independent auditors to
audit the books, records and accounts of the Company for the
fiscal year ending August 31, 1995.
Representatives of Wipfli Ullrich Bertelson CPAs will be
present at the Annual Meeting and will have an opportunity to
make
a statement or respond to appropriate questions.
SHAREHOLDER PROPOSALS
If any shareholder desires to submit a proposal to be
included in the proxy statement relating to the annual meeting of
shareholders to be held in 1995, the proposal must be in proper
form and received by the Company no later than July 19, 1995.
See
"Voting of Proxies" and "Committees and Compensation of Board of
Directors" regarding bylaw requirements relating to nominations
and business to be brought from the floor at the annual meeting
of
shareholders to be held in 1995.
Pursuant to the Company's bylaws, shareholders entitled to
vote at the annual meeting of shareholders to be held in 1995 may
bring business before the annual meeting for consideration only
if
proper notice of the proposed business has been provided to the
Secretary of the Company not earlier than September 20, 1995 and
not later than October 20, 1995. The precise requirements,
including the information required to be provided in the
shareholder notice and the procedures for notice in the event the
date of the annual meeting is changed, are set forth in the
Company's bylaws which may be obtained from the Secretary of the
Company.
<PAGE>
OTHER MATTERS
At this date, there are no other matters management intends
to present or has reason to believe others will present to the
Annual Meeting. If other matters now unknown to management come
before the meeting, the members of the Proxy Committee of the
Board of Directors will vote in accordance with their judgment.
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
November 9, 1994.
BY ORDER OF THE BOARD OF DIRECTORS
Steven A. Schmidt
Steven A. Schmidt
Secretary
<PAGE>
WAUSAU PAPER MILLS COMPANY
PROXY SOLICITED BY DIRECTORS FOR ANNUAL MEETING
TO BE HELD DECEMBER 19, 1994
The undersigned, having received the Notice of Annual Meeting,
Proxy Statement, and Annual Report for the year ended August 31,
1994, hereby appoint(s) San W. Orr, Jr., Daniel D. King and
Steven
A. Schmidt and each of them, with full power of substitution,
proxies of the undersigned to vote all shares of the undersigned
in Wausau Paper Mills Company at the Annual Meeting of
Shareholders to be held on December 19, 1994 and at any
adjournments thereof.
THE DIRECTORS RECOMMEND A VOTE FOR THE ELECTION OF MESSRS. ORR
AND
SMITH AND THE APPOINTMENT OF WIPFLI ULLRICH BERTELSON CPAS.
UNLESS AUTHORITY IS WITHHELD OR UNLESS OTHERWISE SPECIFIED, THE
PROXIES SHALL VOTE FOR THE ELECTION OF EACH NOMINEE LISTED ABOVE
AND THE APPOINTMENT OF WIPFLI ULLRICH BERTELSON CPAs.
(Continued and to be signed on reverse side.)
WAUSAU PAPER MILLS COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK
ONLY
For All
Except the
following
nominee(s) listed
1. Election of Directors: For Withheld below
SAN W. ORR, JR. and
DAVID B. SMITH, JR. ___ ___ ___
2. Appointment of Wipfli For __ Against __ Abstain __
Ullrich Bertelson CPAs
independent auditors for
the year ending August 31,
1995.
3. In their discretion, the proxies are authorized to vote upon
matters not known to the Board of Directors as of the
statement, approval of minutes of the prior annual meeting,
matters incident to the conduct of the meeting and to vote
for
any nominee of the Board whose nomination results from the
inability of the above named nominee to serve.
Please sign exactly as name appears below.
Dated ______________________________,
1994
__________________________________________
Signature
__________________________________________
Signature if held jointly
When shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee
or guardian, please give full title. If
a
corporation, please sign in full
corporate
name by president or other authorized
officer.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
