SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No.___)
Filed by the Registrant X
---
Filed by a Party other than the Registrant ___
Check the appropriate box:
Preliminary Proxy Statement
___
___ Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(3)(2))
X Definitive Proxy Statement
___
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
WAUSAU PAPER MILLS COMPANY
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement if other than
the Registrant)
Payment of Filing Fee (Check the appropriate box):
___ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
___ $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 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
X Fee paid previously with preliminary materials.
___
___ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ___________________________
(2) Form, Schedule or Registration Statement No: __________
(3) Filing Party: ___________________________
(4) Date Filed: _____________________________
<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 Grand Theatre, 415 Fourth Street, Wausau, Wisconsin, on
December 18, 1995, at 2:00 P.M. for the following purposes:
1. To elect two Class II directors for terms which will expire at
the annual meeting of shareholders to be held in 1998.
2. To consider and adopt a resolution which will amend the Company's
restated articles of incorporation to increase the authorized
common stock of the Company to 100,000,000 shares from 36,000,000
shares.
3. To approve the appointment of Wipfli Ullrich Bertelson CPAs as
independent auditors for the year ending August 31, 1996.
4. To transact such other business as may properly come before the
meeting.
PLEASE PROMPTLY VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE.
November 9, 1995.
BY ORDER OF
THE BOARD OF DIRECTORS
Steven A. Schmidt
Secretary
____________________
A PROXY CARD AND POSTAGE FREE ENVELOPE ARE ENCLOSED.
PLEASE NOTE NEW LOCATION AND TIME FOR ANNUAL MEETING:
GRAND THEATRE, 415 FOURTH STREET, WAUSAU;
2:00 P.M., DECEMBER 18, 1995
<PAGE>
NOVEMBER 9, 1995
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 18, 1995
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 2:00 P.M., at the Grand Theatre, 415 Fourth
Street, Wausau, Wisconsin on December 18, 1995, 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,
facsimile 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, 1995, 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 accompanying form of proxy or may
withhold their vote. Votes that are withheld will be excluded entirely
from the voting for directors and will have no effect. The two nominees
who receive the largest number of votes will each 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. Except with respect to the
proposed amendment to the Company's restated articles of incorporation,
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 or
amendments to the restated articles of incorporation) exceed the votes
cast against the proposal, the matter will be approved by the
shareholders. See "Amendment of Restated Articles of Incorporation"
regarding voting requirements for approval of the amendment.
Brokers who hold shares of the Company's common stock in street name
for customers may have discretionary authority to vote on certain matters
<PAGE>
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 a 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. Daniel D. King and Harry R. Baker to terms of
office as Class II directors which will expire at the annual
meeting of shareholders to be held in 1998 (see "Election of
Directors").
(2) TO ADOPT a resolution which will amend the Company's restated
articles of incorporation to increase the authorized common stock
of the Company to 100,000,000 shares from 36,000,000 shares.
(3) TO APPROVE the appointment of Wipfli Ullrich Bertelson CPAs as
the Company's independent auditors for the fiscal year ending
August 31, 1996.
(4) IN THE BEST JUDGMENT of those named as proxies on the
accompanying 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 September 30, 1995, the Company had 29,688,553 shares of common
stock outstanding (including 222,711 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 September 30, 1995 by each person known to the Company to be
the beneficial owner of more than 5% of the Company's outstanding common
stock.
<PAGE>
<TABLE>
<CAPTION>
Common Shares Percent of
NAME AND ADDRESS BENEFICIALLY OWNED CLASS
<S> <C> <C>
Wilmington Trust Company 6,730,465 (1) 22.67%
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
Trustees of David B. Smith 2,555,149 (2) 8.61%
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 September
30, 1995 by each of the directors, each of the current executive officers
of the Company named in the summary compensation table on page 9 and all
directors and executive officers as a group.
<TABLE>
<CAPTION>
Common Stock Percent of
NAME BENEFICIALLY OWNED CLASS
<S> <C> <C>
San W. Orr, Jr. 352,310 (3) 1.19%
Daniel D. King 87,693 (4) *
David B. Smith, Jr. 1,956,112 (5) 6.59%
Stanley F. Staples, Jr. 362,218 (6) 1.22%
Harry R. Baker 2,076 *
Larry A. Baker 28,639 (4) *
Melvin L. Davidson 63,978 (4) *
Thomas J. Howatt 4,316 (4) *
All directors and executive
officers as a group (9 persons) 2,864,676 (7) 9.65%
<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 1,894,696 shares of 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 common stock: David B.
Smith, Jr., 6.59%; Thomas P. Smith, 6.64%; Margaret S. Mumma,
7.35%; and Sarah S. Miller, 7.17%.
(3) Includes 131,011 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 1,894,696 shares of common stock.
(6) Includes 354,307 shares of 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>
<PAGE> 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. 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 1995 fiscal
year all filing requirements applicable under section 16(a) to the
reporting persons were satisfied.
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 for the remainder of the unexpired term. 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.
At the Annual Meeting, the nominees listed below will be candidates
for the 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.
<PAGE><TABLE>
The following information is furnished with respect to the nominees
and all continuing directors:
<CAPTION>
PRINCIPAL OCCUPATION CLASS AND YEAR
AND OTHER WHICH TERM DIRECTOR
NAME AGE DIRECTORSHIPS WILL EXPIRE SINCE
<S> <C> <C> <C> <C>
NOMINEES
Daniel D. King 48 President and Chief Operating Officer of Class II 1994
the Company since July 1994; formerly, 1998
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
Harry R. Baker 62 President and Chief Executive Officer, Class II 1992
Marathon Electric Mfg. Corp.; also a 1998
director of Mosinee Paper Corporation
CONTINUING DIRECTORS
San W. Orr, Jr. 54 Chairman of the Board and, since July Class I 1970
1994, Chief Executive Officer of the 1997
Company; Attorney, Estates of
A.P. Woodson and Family; also a
director of Mosinee Paper Corporation,
MDU Resources Group, Inc. and Marshall
& Ilsley Corporation
David B. Smith, 57 Consultant; previously, Vice President, Class I 1972
Jr. Labor Relations, Weyerhaeuser Company 1997
Stanley F. 71 Chairman, Alexander Properties, Inc. Class III 1968
Staples, Jr. (investment management); also, a 1996
director of MDU Resources Group, Inc.
</TABLE>
COMMITTEES AND COMPENSATION OF BOARD OF DIRECTORS
COMMITTEES AND MEETINGS
The Board of Directors appointed Audit and Executive Committees for
the 1995 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 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
<PAGE> compensation programs. The Board does not have a separate compensation
committee (see "Committees' Report on Compensation Policies", page 13).
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 1996 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 19, 1996 and
not later than October 19, 1996. 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 the Board of Directors met six times.
Each of the directors 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. Mr. Orr is also entitled to compensation
for his services as Chief Executive Officer, but no other director
receives more than the standard arrangements described above.
The 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, hypothetically, have 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 1995, Messrs. Staples and Baker participated in
the plan and deferred the director or meeting fees otherwise payable to
them.
<PAGE>
The 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 and meeting fees (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.
<PAGE>
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, 1995, 1994 and 1993, to the Company's Chief
Executive Officer and each of the four most highly compensated executive
officers of the Company as of August 31, 1995 whose total annual salary
and bonus compensation for the 1995 fiscal year exceeded $100,000.
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Annual Compensation Compensation
Awards
<S> <C> <C> <C> <C> <C> <C>
Other Annual Options/ All Other
Name and Principal Year Salary(1) Bonus Compensation($) SARs(#) Compensation(2)
San W. Orr, Jr.; 1995 $140,411(3) - - - $ 600
Chairman of the 1994 $ 56,869(3) - - - $ 1,320
Board and CEO 1993 $ 40,202 - - 73,334 $ 1,320
Daniel D. King; 1995 $216,566 $106,970 - 71,500(4) $ 3,230
President and COO 1994 $160,747 $ 92,785 - - $ 5,310
1993 $149,734 $ 88,102 - - $ 4,693
Melvin L. Davidson; 1995 $152,250 $ 5,000 - 3,300(4) $ 2,361
Vice President/ 1994 $142,500 $128,076 - - $ 4,505
General Manager 1993 $140,117 $127,056 - - $ 4,307
Rhinelander
Division
Larry A. Baker; 1995 $164,283 $ 51,945 - 3,300(4) $ 2,835
Senior Vice 1994 $157,354 $105,563 - - $ 4,950
President, 1993 $151,491 $ 87,244 - - $ 4,466
Administration
Thomas J. Howatt; 1995 $154,187 $158,500 $17,214(5) 3,300(4) $ 127,317(5)
Vice president/ 1994 $137,750 $ 82,195 - - $ 4,340
General Manager, 1993 $138,039 $ 66,945 - 22,000(6) $ 3,941
Printing and
Writing Division
<FN>
(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 and $100,000 deferred in 1994 and 1995,
respectively, under an agreement which provides that the
deferred amount will earn annual interest at a rate equal
to one percent below the prime rate in effect on the first
day of each calendar year and will be distributed in five
annual installments following the date Mr. Orr ceases to be
a director of the Company. The agreement provides for a lump
sum payment in the event of a change of control of the Company,
as defined in the agreement.
(4) Options lapsed in fiscal 1995 with respect to Mr. King (5,500
shares) and each other named executive officer (3,300 shares)
other than the CEO due to nonsatisfaction of Company
performance criteria; see table on page 10.
(5) Includes amounts paid under Company's relocation policy,
including reimbursement for taxes under "Other Annual
Compensation".
(6) Options with respect to 6,844 and 7,822 shares lapsed in fiscal
1993 and fiscal 1994, respectively.
</TABLE>
<PAGE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The Company maintains a stock appreciation rights plan and a stock
option plan pursuant to which grants may be made to key employees. No
stock appreciation rights ("SARs") were granted in fiscal 1995. The
following table sets forth information with respect to the grant of stock
options to executive officers named in the summary compensation table in
fiscal 1995.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Alternative
Individual Grant Date
Grants Value
% of total Market
Options/SARs Price of
Granted to Exercise or Stock on Grant Date
Options/SARs Employees in Base Price Date of Expiration Present
Name Granted(#) Fiscal Year ($/Sh) Grant Date Value $ (2)
<S> <C> <C> <C> <C> <C> <C>
Mr. King 22,000 20.73% $ 21.14 $ 21.14 9/26/14 $178,640
22,000 20.73% $ 25.46 $ 21.14 9/26/14 $150,260
22,000 20.73% $ 30.00 $ 21.14 9/26/14 $127,820
5,500(1) 5.18% $ 21.36 $ 21.36 9/30/14 $ 45,815
Mr. Davidson 3,300(1) 3.11% $ 21.36 $ 21.36 9/30/14 $ 27,489
Mr. Baker 3,300(1) 3.11% $ 21.36 $ 21.36 9/30/14 $ 27,489
Mr. Howatt 3,300(1) 3.11% $ 21.36 $ 21.36 9/30/14 $ 27,489
<FN>
(1) Options lapsed; Company performance criteria were not satisfied in
fiscal 1995.
(2) Determined pursuant to Black-Scholes option pricing model. Does
not include value of hypothetical shares credited to grantee under
the Company's Dividend Equivalent Plan which assumes cash dividends
are paid on a corresponding number of underlying shares and invested
in Company common stock. The material assumptions and adjustments
incorporated into the Black-Scholes model in estimating the value
of the options reflected in the above table include, with respect
to Mr. King, that the exercise prices of $25.46 and $30.00 for the
options granted to Mr. King were greater than the market value
($21.14) of the underlying stock on the September 27, 1994 grant
date and, with respect to each of the options described, (a) an
option term of 20 years, (b) interest rates of 7.46% and 7.74%,
respectively, that represent the interest rate on long-term
U.S. Treasury securities with maturity dates corresponding to
the option terms on the September 27 and October 1, 1994 grant
dates, (c) volatility of 32.9% calculated using daily stock
prices for the one-year period prior to the grant dates,
(d) dividends at the rate of $0.25 per share representing
the annualized dividends paid with respect to a share of
common stock at each grant date, and (e) reductions of
approximately 40% to 50% to reflect the probability of a
shortened option term due to termination of employment prior
to the option expiration date (those options having an exercise
price greater than the grant date fair market value of the
underlying stock have a higher discount due to the reduced
likelihood of the fair market value exceeding the option price
at exercise; discounts do not take into consideration Company
<PAGE> performance criteria which must be satisfied prior to vesting
and which make vesting still more uncertain). The actual
value, if any, an optionee will realize upon exercise of an
option will depend on the excess of the market value of the
Company's common stock over the exercise price on the date
the option is exercised. There is no assurance that the
market price of the common stock will increase as assumed
for purposes of this pricing model and no projections as
to the actual future value of the Company's common stock
are intended or made. See subcaption "Stock Based
Compensation" on page 15.
</TABLE>
The following table sets forth information regarding the exercise of
stock options or SARs in fiscal 1995 by each of the executive officers
named in the summary compensation table and the August 31, 1995 value of
unexercised stock options or SARs held by each such person.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
<CAPTION>
Shares Number of Unexercised Value of Unexercised
Acquired Options/SARs at FY-End(#) In-the-Money Options/SARs
on Exercise Value at FY-End($)(2)(3)
(#)(1) Realized
Name ($)(2) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Mr. Orr - - 73,334* - $146,301* -
Mr. King - - 24,445<dagger> - $423,837<dagger> -
73,822* - $102,225* -
Mr. Davidson - - 12,662<dagger> - $248,891<dagger> -
40,359* $674,620*
Mr. Baker - - 11,831<dagger> - $232,551<dagger> -
7,822* - $ 58,467* -
Mr. Howatt - - 17,747<dagger> - $348,849<dagger> -
1,955* 7,334* $ 14,617* $12,688*
<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 hypothetical 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 hypothetical Company common stock.
</TABLE>
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
<PAGE> 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>
$ 50,000 $ 6,000 $12,000 $ 18,000
$ 80,000 $11,000 $22,000 $ 33,000
$110,000 $16,000 $32,000 $ 48,000
$140,000 $21,000 $42,000 $ 63,000
$170,000 $26,000 $52,000 $ 78,000
$200,000 $31,000 $62,000 $ 93,000
$230,000 $36,000 $72,000 $108,000
</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 and the factor
for Social Security benefits for years after 1995 will be at the same
level as 1995.
At August 31, 1995, the credited years of service and the average
covered compensation for the persons named in the table of cash
compensation were: Messrs. Orr, 25 years, $40,000; King, 5 years,
$166,000; Davidson, 12 years, $132,000; Baker, 17 years, $140,000; and
Howatt, 15 years, $122,000.
SUPPLEMENTAL PLANS
Executive officers (defined as the President and all corporate Vice
Presidents) of the Company are covered by the 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 on qualified plans under
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 participant's actual benefit from the
Retirement Plan. Assuming average compensation levels as of August 31,
1995 remained unchanged, the following annual benefits would be payable
from the Deferred Compensation Retirement Plan upon retirement at age 65:
Messrs. King, $78,924; Davidson, $75,423; Baker, $59,081; and Howatt,
$57,607 As of August 31, 1995, no current executive officer other than
Mr. Baker had acquired a vested right to a benefit.
Mr. Orr participates in a plan which will provide, beginning at age 60
(or upon Mr. Orr's later termination of employment), an annual retirement
benefit of 50% of covered compensation. Mr. Orr's covered compensation
<PAGE> under this plan at August 31, 1995 was $40,000. The plan provides for
payment of the present value of the benefit in a lump sum in the event of
a change of control of the Company, as defined in the agreement.
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
("SAR") 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 foregoing committees and the
Company as in effect for the 1995 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 1995 may change.
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 forty-six companies
(representing forty-seven stock issues) 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
<PAGE> 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 on The Nasdaq Stock Market increases shareholder
value as a whole.
The Company may not deduct as a business expense compensation paid to
the CEO and each of the four most highly paid executive officers named in
the summary compensation table who are officers on the last day of the
year to the extent the compensation paid to the individual officer exceeds
$1 million annually. This limitation is subject to certain exceptions for
compensation paid pursuant to performance based plans and amounts received
through the exercise of stock options and SARs provided certain
requirements are met. Amounts receivable by Company officers under stock
options or SARs granted before February 18, 1993 are not subject to this
limit. The Company does not expect any compensation paid in 1996 will
exceed the deductible limit. The Committee will continue to review this
limit and determine what changes, if any, should be made in the Company's
compensation policies.
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 its executive officers'
base salary and benefit 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.
The salary of Mr. Orr as Chief Executive Officer ("CEO") is determined
by the Board of Directors on the same basis and using the same general
criteria as that of the Company's other executive officers, but is less
than the compensation paid to the CEO in prior years because the Company
has also appointed Mr. King to the office of Chief Operating Officer
("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. The Executive Committee
can modify performance objectives during a fiscal year under any of the
<PAGE> plans if an unusual or nonrecurring event occurs which would have a
significant effect on the stated performance goals.
Mr. Orr does not participate in an incentive compensation plan. All
other executive officers with Company-wide responsibilities participate in
the Corporate Management Incentive Plan under which participants are
eligible to receive incentive awards of up to 100% of base salary 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. Messrs. King and Baker
participate in the plan. 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 participated
in 1995 in plans which provided 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, interest expense and other
specified or extraordinary items. In addition, the CEO and COO
established individual performance objectives for each participant
which provide a maximum aggregate bonus of $15,000. Messrs. Davidson
and Howatt participate in their respective divisional incentive plans.
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 in 1995 or in prior years 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. 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 reinvested cash dividends which would be
paid with respect to a share of stock to which the SAR or dividend
equivalent relates. 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 common stock and will be of maximum value to
the executive officer only if such an 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
<PAGE> 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 10.
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 and Mr. King is President and COO of the Company. See "Committees
and Compensation of Board of Directors". Mr. Orr is also 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, 1990 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 Stock Market during the entire five-year period. The Media
General MG Industry Group 381-Paper Products Index indicates the
performance of forty-seven paper products industry stocks. The graph and
table assume that the value of the investment in the Company's common
stock and each index on August 31, 1990 was $100 and that all dividends
were reinvested.
[Performance Graph Filed with Branch Chief, Branch 8,
pursuant to Rule 304(d), Regulation S-T]
<PAGE>
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Wausau Paper Mills Company $100.00 $236.61 $260.16 $387.54 $351.18 $349.21
MG Paper Industry Group 381 $100.00 $130.77 $134.37 $136.70 $169.56 $197.78
MG Nasdaq Market Index $100.00 $113.67 $115.60 $150.49 $164.43 $195.65
</TABLE>
AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
PROPOSED AMENDMENT
The Board of Directors has recommended that the shareholders adopt a
resolution which will amend the Company's restated articles of
incorporation to increase the authorized common stock of the Company to
100,000,000 shares from 36,000,000 shares. The text of the resolution
recommended by the Board of Directors for adoption by the shareholders is
set forth as Exhibit A to this proxy statement.
REASONS FOR AMENDMENT
The Board of Directors believes that an increase in the number of
authorized shares of common stock is necessary to provide a sufficient
number of shares for future stock splits or stock dividends, the issuance
of stock in connection with employee stock option and other employee
benefit plans that may be adopted in the future, possible acquisitions and
for other general corporate purposes. The Board has no present intention
to issue any additional common stock pursuant to any plan which is not now
in effect, the Company has no present intention to acquire any other
business or entity and there are no other commitments for the issuance of
additional common stock at this time other than pursuant to the exercise
of existing stock options.
VOTE REQUIRED FOR APPROVAL OF AMENDMENTS
All shareholders are requested to specify their votes on the enclosed
form of proxy. If no specification is made, the proxy will be voted for
adoption of the resolution set forth as Exhibit A. Adoption of the
resolution requires the approval of two-thirds of the shares of common
stock of the Company issued and outstanding as of the record date for the
Annual Meeting. As of the record date for the Annual Meeting, there were
29,465,842 shares of common stock issued and outstanding.
If the resolution set forth as Exhibit A is adopted at the Annual
Meeting, it is the Company's intention to file the appropriate amendment
to the Company's restated articles of incorporation with the Secretary of
State of Wisconsin as promptly as practicable in order to make the
amendment to the restated articles of incorporation effective. Upon the
filing of the amendment, all shareholders of the Company will be bound by
the amendment whether or not they have voted to adopt the resolutions.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS
THAT THE SHAREHOLDERS VOTE TO ADOPT THE RESOLUTION SET FORTH AS EXHIBIT A
IN ORDER TO INCREASE THE AUTHORIZED COMMON STOCK OF THE COMPANY TO
100,000,000 SHARES.
<PAGE> 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, 1996.
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 1996, the proposal must be in proper form and received by the Company
no later than July 7, 1996. 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 1996.
Pursuant to the Company's bylaws, shareholders entitled to vote at the
annual meeting of shareholders to be held in 1996 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 19, 1996 and not later than October 19, 1996. 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.
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, 1995.
BY ORDER OF THE BOARD OF DIRECTORS
Steven A. Schmidt
Secretary
<PAGE> EXHIBIT A
WAUSAU PAPER MILLS COMPANY
PROXY STATEMENT
NOVEMBER 9, 1995
RESOLVED, that the first paragraph of Article IV of the restated
articles of incorporation of Wausau Paper Mills Company be amended to read
as follows:
The total number of shares of all classes of stock which
the Company shall have authority to issue is 100,500,000. Of these
(1) 100,000,000 shares shall be common stock without par value
(hereinafter sometimes referred to as "Common Stock"); and (2) 500,000
shares shall be shares of preferred stock without par value
(hereinafter sometimes referred to as "Preferred Stock").
and, that the President, any Vice President and the Secretary of the
Company, and each of them, shall be and hereby are authorized and directed
to take all actions they deem necessary and appropriate to effect such
amendment.
<PAGE>
WAUSAU PAPER MILLS COMPANY
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING
TO BE HELD DECEMBER 18, 1995
The undersigned, having received the Notice of Annual Meeting, Proxy
Statement, and Annual Report for the year ended August 31, 1995, 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 18, 1995 and at any adjournments
thereof.
THE DIRECTORS RECOMMEND A VOTE FOR THE ELECTION OF MESSRS. KING AND BAKER,
ADOPTION OF THE AMENDMENT TO INCREASE THE AUTHORIZED COMMON STOCK TO
100,000,000 SHARES 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 ON THE REVERSE SIDE, ADOPTION OF
THE AMENDMENT TO INCREASE THE AUTHORIZED COMMON STOCK AND THE APPOINTMENT OF
WIPFLI ULLRICH BERTELSON CPAs.
(Continued and to be signed on reverse side.)
<PAGE>
WAUSAU PAPER MILLS COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER
USING DARK INK ONLY
For All Except
the following nominees
1. Election of Directors: For Withheld listed below:
DANIEL D. KING and
HARRY R. BAKER --- --- ----------------------
2. Adoption of the For Against Abstain
resolution set forth
as Exhibit A to the --- --- ---
accompanying proxy
statement to increase
the authorized common
stock to 100,000,000
shares
3. Approval of appoint-
ment of Wipfli Ullrich For Against Abstain
Ullrich Bertelson CPAs
as independent auditors --- --- ---
for the year ending
August 31, 1996.
4. In their discretion, the proxies are authorized to vote upon
matters not known to the Board of Directors as of the date of
the accompanying proxy 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 an above named
nominee to serve.
Please sign exactly as name appears below.
Dated ______________________________, 1995
__________________________________________
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 IN
THE ENCLOSED ENVELOPE.
