SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
Filed by a Party other than the Registrant ___
Check the appropriate box:
__ Preliminary Proxy Statement
__ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
X Definitive Proxy Statement
__ Definitive Additional Materials
__ Soliciting Material Pursuant to <section> 240.14a-11(c) or
<section> 240.14a-12
WAUSAU-MOSINEE PAPER CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required
__ Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and
0-11.
__ 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-MOSINEE PAPER CORPORATION
1244 KRONENWETTER DRIVE
MOSINEE, WISCONSIN 54455-9099
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_____________________
The annual meeting of shareholders of Wausau-Mosinee Paper
Corporation will be held at the Westwood Conference Center, 1800 West
Bridge Street, Wausau, Wisconsin, on Thursday, April 20, 2000, at 2:00
p.m., local time, for the following purposes:
1. To elect three Class I directors;
2. To approve the appointment of Wipfli Ullrich Bertelson LLP as
independent auditors of the company for the fiscal year ending
December 31, 2000; and
3. To transact such other business as may properly come before the
meeting.
The record date for determining the holders of common stock
entitled to vote at the annual meeting or any adjournment thereof is
the close of business on February 24, 2000.
PLEASE PROMPTLY VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN
THE ENCLOSED ENVELOPE.
March 17, 2000
BY ORDER OF
THE BOARD OF DIRECTORS
GARY P. PETERSON
Gary P. Peterson
Secretary
____________________
MARCH 17, 2000
WAUSAU-MOSINEE PAPER CORPORATION
1244 KRONENWETTER DRIVE
MOSINEE, WISCONSIN 54455-9099
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 2000
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors (the
"Board") of Wausau-Mosinee Paper Corporation (the "Company") for use at
<PAGE>
the annual meeting of shareholders to be held at 2:00 p.m., at the
Westwood Conference Center, 1800 West Bridge Street, Wausau, Wisconsin
on April 20, 2000, and at any adjournment thereof (the "Annual
Meeting").
In addition to solicitation by mail, officers, directors and
employees of the Company and its subsidiaries, none of whom will be
compensated for such services, may solicit proxies in person or by
telephone, facsimile, electronic mail or other forms of communication.
Expenses in connection with the solicitation of proxies, including the
reasonable expenses of brokers, fiduciaries and other nominees in
forwarding proxy material to beneficial owners of the Company's common
stock, 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,
February 24, 2000 (the "Record Date"), 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.
If a shareholder is a participant in the Company's Dividend
Reinvestment and Stock Purchase Plan (the "DRP"), the participant's
proxy will also serve to direct the administrator of the DRP with
respect to the voting of any shares of common stock held for the
participant under the DRP at the close of business on the Record Date.
Shares beneficially owned by participants in the DRP for which no proxy
or other voting directions are received will not be voted.
-1-
Brokers who are the holders of record of Company common stock for
customers generally have discretionary authority to vote on certain
routine matters. However, such brokers generally will not have
authority to vote on other matters if they have not received
instructions from their customers. In determining the vote of a
shareholder on matters for which the broker does not have the authority
to vote shares held of record by the broker, the shares will be
recorded as a "broker non-vote."
Although there is no controlling Wisconsin precedent regarding the
treatment of broker non-votes, the Company believes Wisconsin law
provides for, and the Company intends to apply, the following
principles with respect to broker non-votes and the other voting
requirements for the matters to be presented to the Annual Meeting.
The discussion of voting requirements assumes, with respect to each
matter to be presented to shareholders, that a quorum is present.
Quorum. For purposes of determining a quorum, shareholders who
are present in person or are represented by proxy, but who abstain from
voting, are considered present and count toward the determination of
the quorum. Shares reported as broker non-votes are also considered to
be shares present for purposes of determining whether a quorum is
present.
Election of Directors. Directors are elected by a plurality of the
<PAGE>
votes cast by the shares entitled to vote. For this purpose, a
"plurality" means that the individuals receiving the largest number of
votes are elected as directors, up to the maximum of three directors to
be chosen at the Annual Meeting. Shareholders may vote in favor of the
nominees specified on the accompanying form of proxy or may withhold
their vote as to one or more of such nominees. Shares withheld or not
otherwise voted in the election of directors (because of abstention,
broker non-vote, or otherwise) will have no effect on the election of
directors.
Approval of Auditors. The appointment of auditors will be approved
if more shares are voted in favor of approval than are voted against
approval. Shares not voted (because of abstention, broker non-vote, or
otherwise) will have no effect on the approval of auditors.
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 at
the Company's principal office, by filing another duly executed proxy
bearing a later date with the Secretary, or by giving oral notice to
the presiding officer at the Annual Meeting.
The persons named in the accompanying form of proxy 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 Walter Alexander, San W. Orr, Jr., and David B. Smith,
Jr. for terms of office as Class I directors which will expire
at the annual meeting of shareholders to be held in 2003 (see
"Election of Directors");
-2-
(2) TO APPROVE the appointment of Wipfli Ullrich Bertelson LLP as
the Company's independent auditors for the fiscal year ending
December 31, 2000 (see "Approval of the Appointment of
Independent Auditors"); and
(3) 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").
ELECTION OF DIRECTORS
The Board is composed of three classes consisting of three Class I
and Class II directors, respectively, and two Class III directors. One
class of directors is to be elected at each annual meeting of
shareholders to serve a three-year term. No person may be elected a
director if that person has attained age 70 as of the date of the
election.
Daniel R. Olvey resigned as a Class III director effective February
24, 2000. Pursuant to the bylaws of the Company, the election of a
director to fill the vacancy on the Board resulting from Mr. Olvey's
resignation shall be by a majority of the directors then in office.
The new director will serve a term which will end at the annual meeting
<PAGE>
to be held in 2002. As of the date of this proxy statement, the Board
has not selected a director to fill the vacancy.
The Nominating Committee of the Board will consider nominating
individuals whose names are submitted by shareholders for election as
director at the annual meeting of shareholders to be held in 2001. See
"Committees and Compensation of Board of Directors." At the Annual
Meeting, the nominees listed below will be candidates for reelection to
the classes indicated. Each of the candidates has consented to serve if
elected, but in the event one or both of the nominees is not a
candidate at the Annual Meeting, it is the intention of the proxies to
vote for such substitute or substitutes as may be designated by the
Nominating Committee.
The following information is furnished with respect to the nominees
and all continuing directors:
-3-
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION CLASS AND YEAR
AND OTHER WHICH TERM DIRECTOR
NAME AND AGE DIRECTORSHIPS WILL EXPIRE SINCE
<S> <C> <C> <C>
NOMINEES
Walter Alexander, 65 President of Alexander Lumber Class I 1997
Co.; also a director of 2003
Old Second Bancorp, Inc.; formerly
a director of Mosinee (1987 - 1997)
San W. Orr, Jr., 58 Chairman of the Board and CEO of the Class I 1970
Company and Advisor, Estates of A.P. 2003
Woodson and Family; Chief Executive Officer
of the Company (1994 - 1995); formerly
Chairman of the Board (1987 - 1997)
and a director (1972 - 1997) of Mosinee;
also a director of MDU Resources Group,
Inc. and Marshall & Ilsley Corporation
David B. Smith, Jr., 61 Consultant; formerly Vice President, Class I 1972
Labor Relations, Weyerhaeuser Company 2003
CONTINUING DIRECTORS
Harry R. Baker, 67 Former President and Chief Class II 1992
Executive Officer, Marathon Electric 2001
Manufacturing Corporation
(1989 - 1998); formerly a director of
Mosinee (1995 - 1997)
Richard G. Jacobus, 70 Chairman and CEO, Jacobus Wealth Class II 1997
Management, Inc. (multiple client family office); 2001
formerly, President and
Chief Executive Officer, Johnson
International, Inc. (1988 - 1995);
formerly a director of Mosinee (1985 - 1997)
Richard L. Radt, 68 Vice Chairman of the Board of the Class II 1997
Company; President and Chief Executive 2001
Officer and a director of the Company
(1977 - 1987); formerly Vice Chairman
(1993 - 1997) and President and Chief
Executive Officer (1988 - 1993) of Mosinee
Gary W. Freels, 51 President, Alexander Properties, Inc. Class III 1996
(investment management); formerly 2002
President, M&I First American
Bank (1992 - 1995)
</TABLE>
-4-
COMMITTEES AND COMPENSATION OF BOARD OF DIRECTORS
COMMITTEES AND MEETINGS
<PAGE>
The Board appointed audit, compensation, and nominating committees
for the last fiscal year.
The Audit Committee, consisting of Messrs. Jacobus, Alexander,
Baker and Freels, met five times during the last fiscal year. The
Audit Committee reviews the independence and performance of the
Company's independent and internal auditors and administers the
corporate compliance program.
The Executive Compensation & Bonus Committee consists of Messrs.
Orr, Baker, Jacobus, and Smith. The Committee met once during the
last fiscal year to review management compensation matters. The
Board's Option and SAR Committee reviews and grants, as it deems
appropriate, options, stock appreciation rights, and dividend
equivalents. See "Committees' Report on Compensation Policies."
The Nominating Committee consists of Messrs. Orr, Alexander, Freels
and Radt. The Nominating Committee met once in 1999 to consider and
recommend to the Board nominees for election as directors. Inquiries
concerning nominations with pertinent background information should be
directed to the Chairman of the Nominating 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 2001 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 January 21, 2001 and not later than February 20, 2001.
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 met seven times. Each of the
directors attended at least 75% of the aggregate number of the meetings
of the Board and the committees on which they served during the last
fiscal year.
DIRECTOR COMPENSATION
Directors are paid a retainer of $2,000 per month and $1,000 for
each meeting of the Board attended. Mr. Smith participates in the
Company's health insurance plan and the other directors who are
officers of the Company receive salaries and benefits related to their
duties as officers of the Company or its subsidiaries. No other
director received more than the standard arrangements described above.
-5-
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 ten years. In the event a director's
service terminates because of a change of control of the Company, as
defined in 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
<PAGE>
converted into Company common stock equivalent units. If stock
equivalent units are elected, the director's account is also credited
with stock equivalent units representing the 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 common stock. Upon distribution,
stock equivalent units are converted to cash based upon the fair market
value of the common stock at the time of distribution. During 1999,
Messrs. Olvey, Alexander, Baker, Jacobus, and Freels participated in
the plan and deferred all or a portion of the retainer 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 monthly 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 or on the Board of Directors of Mosinee Paper Corporation prior
to December 17, 1997. Retirement benefits terminate at death and are
accelerated in the event of a change of control of the Company, as
defined in the policy.
BENEFICIAL OWNERSHIP OF COMMON STOCK
As of the Record Date, there were 51,416,691 shares of common stock
outstanding. The following table sets forth, based on statements filed
with the SEC or information otherwise known to the Company, the number
of shares of common stock which may be deemed beneficially owned as of
February 24, 2000, by each person known to the Company to be the
beneficial owner of more than 5% of the outstanding common stock.
-6-
<TABLE>
<CAPTION>
Common Shares Percent of
NAME AND ADDRESS BENEFICIALLY OWNED CLASS
<S> <C> <C>
Wilmington Trust Company 10,437,785 {(1)} 20.30%
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
Trustees of David B. Smith Family Trust 3,217,608 {(2)} 6.26%
1206 E. Sixth Street
Merrill, WI 54452
</TABLE>
<PAGE>
The following table sets forth the number of shares of common stock
beneficially owned as of the Record Date, by each of the directors,
each person nominated to become a director, each of the executive
officers of the Company named in the summary compensation table and all
directors and executive officers as a group.
<TABLE>
<CAPTION>
DIRECTORS AND OFFICERS
Common Stock Percent of
NAME BENEFICIALLY OWNED CLASS
<S> <C> <C>
San W. Orr, Jr. 1,075,820 {(3)} 2.09%
Richard L. Radt 33,546 {(4)} *
Walter Alexander 16,212 *
Harry R. Baker 7,970 *
Gary W. Freels 835,072 {(5)} 1.62%
Richard G. Jacobus 15,398 *
David B. Smith, Jr. 2,452,491 {(6)} 4.77%
Gary P. Peterson 104,514 {(4)} *
Stuart R. Carlson 104,277 {(4)} *
Thomas J. Howatt 143,205 {(4)} *
David L. Canavera 167,714 {(4)} *
All directors and executive officers as a group
(14 persons) 4,954,393 {(7)} 9.49%
________________
<FN>
*Less than 1%
{(1)} Held in a fiduciary capacity as trustee, including 10,437,785
shares held 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 2,368,372 shares of
common stock. Including common stock which is beneficially
owned by the trustees on an individual basis
-7-
and common stock owned by the Trust, each of the trustees
has sole or shared investment authority with respect to the
following percentages of common stock: David B. Smith, Jr.,
4.77%; Thomas P. Smith, 4.79%; Margaret S. Mumma, 5.32%; and
Sarah S. Miller, 5.19%.
{(3)} Includes 681,011 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 60 days.
{(4)} Includes shares which may be acquired through the exercise of
options on or before 60 days.
{(5)} Includes 830,052 shares of common stock held by a charitable
foundation of which Mr. Freels serves as president and a
director.
{(6)} David B. Smith, Jr. is a co-trustee of the David B. Smith
Family Trust which holds 2,368,372 shares of common stock.
See note (2).
{(7)} Includes shares described in notes (3), (4), (5) and (6).
</TABLE>
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and officers and persons who own
more than 10% of the common stock outstanding ("Reporting Persons") to
file reports of ownership and changes in ownership with the 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 most recent
fiscal year all other filing requirements applicable under Section
16(a) to Reporting Persons were satisfied.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The table below sets forth compensation earned by, or awarded or
paid by the Company to, the Company's CEO as of December 31, 1999, and
to each of the four most highly compensated executive officers of the
Company as of December 31, 1999, whose salary and bonus exceeded
$100,000 for the last fiscal year. On December 17, 1997, the Company
changed its fiscal year-end to December 31 from August 31. The
compensation disclosed with respect to Mr. Howatt includes amounts
earned by, or awarded or paid, during the four months ended December
31, 1997 and the fiscal year of the Company ended August 31, 1997.
-8-
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
Long Term
Compensation
Awards
Other Annual Options/ All Other
Name and Principal Position Year Salary (1) Bonus Compensation($) SARs(#) Compensation
<S> <C> <C> <C> <C> <C> <C>
Daniel R. Olvey; President+ 1999 $ 462,507 $ 0 - 58,000<dagger> $ 34,360(2)
and CEO of the Company 1998 $ 402,277 $113,346 - 58,000* $ 39,816
1997 $ 311,361 $304,361 - - $ 42,020
Gary P. Peterson, Senior Vice 1999 $ 228,303 $ 57,083 - 29,600<dagger> $ 3,360(3)
President, Finance, Secretary 1998 $ 215,496 $ 99,413 - 29,600* $ 6,816
and Treasurer 1997 $ 176,590 $173,635 - - $ 20,020
Thomas J. Howatt; Senior Vice 1999 $ 247,841 $ 61,631 - 86,205<dagger> $ 3,360(3)
President, Printing and Writing 1998 $ 231,377 $104,506 - 86,205* $ 6,816
Group 1997(4) $ 58,869 $ 27,085 - - $ 707
1997(5) $ 176,889 $162,196 $117,567 7,500<dagger> $ 8,397
Stuart R. Carlson, Senior Vice 1999 $ 247,126 $ 36,963 - 29,600<dagger> $ 3,360(3)
President, Specialty Papers 1998 $ 230,607 $121,073 - 29,600* $ 6,816
Group 1997 $ 186,437 $123,210 - - $ 20,020
David L. Canavera, Senior Vice 1999 $ 204,643 $ 83,011 - 31,840<dagger> $ 3,360(3)
President, Towel and Tissue 1998 $ 195,000 $ - - 31,840* $ 6,816
Group 1997 $ 170,226 $105,090 - - $ 20,020
<FN>
+Mr. Olvey resigned as President and CEO effective February 24,
2000.
*Stock appreciation rights (expired on January 22, 1999).
<dagger>Options to acquire common stock.
(1)Includes compensation deferred by participants under 401(k) plans.
(2)Includes 401(k) contribution of $3,360 and directors' fees of
$31,000. Mr. Olvey's fees were deferred under the Deferred Compensation Plan
for Directors described under the caption "Committees and Compensation of the
Board of Directors."
(3)Contributions under 401(k) plans.
(4)Amounts indicated with respect to the four months ended December 31,
1997.
(5)Amounts indicated with respect to the fiscal year ended August 31,
1997.
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
GRANTS. The Company maintains stock appreciation rights ("SAR")
and stock option plans pursuant to which grants may be made to key
employees. The following options were granted in 1999 to executive
officers named in the summary compensation table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Alternative
Individual Grants Grant Date
Value
% of total Market Price
Options/SARs of Stock on
Granted to Exercise or Date of Grant Grant Date
Options/SARs Employees in Base Price Expiration Present Value
Name Granted(#) Fiscal Year ($/Sh) Date $ (2)
<S> <C> <C> <C> <C> <C> <C>
Mr. Olvey 58,000(1) 13.1% $15.88 $15.88 1/22/19 $352,060
Mr. Peterson 29,600(1) 6.7% $15.88 $15.88 1/22/19 $179,672
Mr. Howatt 86,205(1) 19.5% $15.88 $15.88 1/22/19 $523,264
Mr. Carlson 29,600(1) 6.7% $15.88 $15.88 1/22/19 $179,672
Mr. Canavera 31,840(1) 7.2% $15.88 $15.88 1/22/19 $193,269
(1)Stock option.
(2)Determined pursuant to Black-Scholes option pricing model. The
material assumptions and adjustments incorporated into the
Black-Scholes model in estimating the value of the options
reflected in the above table include (a) an option term of 20 years;
(b) an interest rate of 4.72% that represents the interest rate on long-term
U.S. Treasury securities with maturity date corresponding to the term on the
grant date; (c) volatility of 43.9% calculated using daily stock prices of the
underlying common stock for the one-year period prior to the grant dates; (d)
dividends at the rate of $0.28 per share, representing the annualized dividend
paid with respect to the underlying common stock and a corresponding dividend yield
of 1.86%; and (e) reductions of approximately 3% to reflect the probability of
a shortened term due to termination of employment prior to the option expiration
date. The actual value, if any, a grantee will realize upon exercise of an option will
depend on the excess of the market value of the common stock over the exercise price on
the date the option is exercised. See "Committees' Report on Compensation--Stock Based
Compensation."
</TABLE>
<PAGE>
EXERCISE AND YEAR-END VALUE. The following table sets forth
information regarding the exercise of stock options or SARs in 1999 by
each of the executive officers named in the summary compensation table
and the December 31, 1999 value of unexercised, in-the-money stock
options or SARs held by each such person.
-10-
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
Shares Number of Unexercised Value of Unexercised In-the-
Acquired Value Options/SARs at FY-End (#) Money Options/SARs at FY-End
on Exercise Realized ($)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Mr. Olvey - - 296,000* - $340,438* -
154,000<dagger> - $799,126<dagger> -
Mr. Peterson - - 103,800* - $115,404* -
46,200<dagger> - $167,155<dagger> -
Mr. Howatt - - 127,817* - $ 23,721* -
22,183<dagger> - $200,881<dagger> -
Mr. Carlson - - 103,800* - $115,404* -
46,200<dagger> - $170,739<dagger> -
Mr. Canavera - - 119,200* - $ 57,036* -
30,800<dagger> - $111,122<dagger> -
<FN>
*Options. Value of options include the value of hypothetical shares credited
to certain grantees under the Dividend Equivalent Plan which assumes cash
dividends are paid on underlying shares and invested in hypothetical common
stock.
<dagger>SARs exercisable only for cash. In cases of SAR valuations,
includes, in cases where the grant so provides, 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 common
stock.
</TABLE>
PENSION PLAN AND OTHER BENEFITS
RETIREMENT PLANS
Effective January 1, 1999, the Company's retirement plan for
non-union employees was converted to a "cash balance" plan. The plan
bases a participant's pension on the value of a hypothetical account
balance in the plan. Participants in the plan as of December 31, 1998,
received a starting cash balance account in an amount equal to the
present value of their benefit under the former retirement plan formula
which was based on years of credited service and final average
compensation, with an offset to reflect the Company's contribution to
Social Security. In addition, non-union participants as of December
31, 1998 received a special one-time transition credit in an amount
equal to a specified percentage varying with age, multiplied by
credited service and 1998 covered compensation. For 1999 and
<PAGE>
thereafter, a participant will receive an annual credit to his account
equal to 4.25% of covered compensation up to the Social Security
taxable wage base and 8.5% of the covered compensation in excess of the
taxable wage base, plus an interest credit on all prior accruals equal
to the discount rate on 12-month Treasury Bills as in effect in
November of the year preceding the plan year. For the 1999 plan year,
the Board declared an additional interest credit of 9%. The benefit
payable under the plan is determined by converting the hypothetical
account balance credits into annuity form. Individuals who were
participants in the plan on December 31, 1998 and who retire on or
before December 31, 2003 will receive a minimum benefit equal to the
-11-
benefit they would have received under the plan formula as in effect
on December 31, 1998.
Executive officers also participate in a nonqualified supplemental
retirement plan (the "supplemental plan") under which benefits are
determined by compensation without regard to limitations contained in
the cash balance plan. The supplemental and cash balance plan will
provide an executive officer with a retirement benefit equal to 50% of
his average salary and bonus upon retirement at age 62 after 10 years
of service as an executive officer. The supplemental plan provides for
an offset of certain benefits payable under the cash balance plan.
Accrued benefits under the supplemental plan will be paid in a lump sum
in the event of a change of control of the Company, as defined in the
supplemental plan. As of December 31, 1999, no current executive
officer of the Company had acquired a vested right to a benefit in the
supplemental plan.
Based on average covered compensation as of December 31, 1999, the
following estimated single life annual benefits would be payable from
the cash balance and supplemental retirement plans upon retirement at
age 65 to the following executive officers:
<TABLE>
<CAPTION>
Additional Total Average
Years of Cash Balance Supplemental Retirement Covered
EXECUTIVE OFFICER SERVICE{(1)} PLAN BENEFIT PLAN BENEFIT BENEFIT REMUNERATION
<S> <C> <C> <C> <C> <C>
Daniel R. Olvey 10 $32,290 $ 231,710 $264,000 $529,000
Gary P. Peterson 8 $22,245 $ 133,755 $156,000 $313,000
Thomas J. Howatt 7 $57,220 $ 106,780 $164,000 $328,000
Stuart R. Carlson 8 $21,682 $ 133,318 $155,000 $311,000
David L. Canavera 8 $22,605 $ 103,395 $126,000 $252,000
<FN>
{(1)}Years of service as an executive officer under the supplemental plan.
Vesting under the supplemental plan requires attainment of age 62 and 10 years
of service as an executive officer. All officers are vested in their accrued
benefit under the cash balance plan.
</TABLE>
COMMITTEES' REPORT ON COMPENSATION POLICIES
The Executive Compensation & Bonus Committee (the "Compensation
Committee") establishes and reviews base salaries of executive officers
<PAGE>
and is responsible for the establishment and implementation of
executive bonus and incentive programs and general compensation
policies. The Company's compensation program for executive officers
may include various grants under the Company's stock option, SAR and
dividend equivalent plans. The Company's plans are administered by the
Board's Option and SAR Committee which generally considers
recommendations of the Compensation Committee with respect to grants,
but 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 Compensation Committee and the Option and SAR Committee.
Executive officers who served on the Compensation Committee do not
participate in the Committee's determination of their own compensation.
-12-
This report describes the policies of the foregoing committees and
the Company as in effect for the 1999 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 1999 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 the Compensation
Committee believes to be at or above the level expected of the
Company's executive officers. 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-eight companies which, in addition to the
Company, comprise the Media General index of paper companies' stock
performance under the heading "Stock Price Performance Graph." The
Compensation 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 annual performance of the Company and the
performance of the Company's common stock. 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, the value of which
increases as the performance of the Company's common stock increases
shareholder value as a whole.
The Company may not deduct as a business expense compensation paid
<PAGE>
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. No compensation paid in
1999 exceeded the deductible limit. The Compensation Committee will
continue to review this limit and its application to the Company's
compensation policies.
-13-
BASE COMPENSATION
The Compensation Committee does not rely on specific salary and
benefit comparisons, but does consider and periodically 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 in accordance with the
Compensation 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 Compensation Committee in
annual reviews and in determining appropriate increases in base salary.
The CEO annually assesses the job performance of executive officers who
report to him. The CEO's base salary is determined by the Compensation
Committee on the same basis as that of the Company's other executive
officers, except that the Compensation Committee annually establishes
performance criteria for the CEO and reviews his performance.
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
the Company's annual financial and/or individual performance objectives
are met. The criteria by which incentive awards are determined are
based on the Compensation 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 amounts paid to officers in
comparable positions in the paper industry. The Compensation 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.
During 1999, Mr. Olvey participated in an incentive compensation
plan which provided for a bonus opportunity based on the earnings per
share of the Company. Mr. Olvey's bonus opportunity ranged from 20% of
base salary if 1999 earnings per share were at $0.94 to 100% if 1999
earnings per share were at least $1.40. Mr. Peterson participated in a
similar plan which provided for a bonus equal to 20% of base salary if
1999 earnings per share were at $0.94 to 75% of base salary if 1999
<PAGE>
earnings per share were at least $1.40. Mr. Peterson also participated
in a plan which provided for a maximum bonus of 25% of base salary upon
satisfaction of individual performance objectives established at the
beginning of the year by the CEO. Each of Messrs. Carlson, Howatt, and
Canavera participated in plans which provided for incentive
compensation ranging from 20% of base salary to 75% of base salary,
depending upon achievement of his operating group's targeted operating
profit. Each of these three officers also had the opportunity to earn
incentive compensation equal to 25% of base salary upon satisfaction of
individual performance objectives established by the CEO. In all
cases, earnings per share were
-14-
adjusted for accruals on SARs, bonus expense, the effect of purchases
of Company stock under the stock repurchase program and extraordinary
items.
STOCK BASED COMPENSATION
Executive officers of the Company participate in stock option, SAR
and dividend equivalent plans at various levels. The Option and SAR
Committee may impose restrictions as to exercise or vesting of grants.
The Option and SAR Committee has not established formal criteria by
which the size of plan grants are determined, but the Committee
considers the amount and terms of each grant already held by an
executive officer in determining the size and terms 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.
Grantees of certain SARs and dividend equivalents may 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. The value of any such grant 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 Option and SAR Committee
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 the officer's identity with the shareholders.
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Orr is Chairman of the Board and CEO and served on the
Compensation Committee in 1999. None of the members of the Option and
SAR Committee is an officer of the Company.
<PAGE>
<TABLE>
<CAPTION>
Executive Compensation
OPTION AND SAR COMMITTEE & BONUS COMMITTEE
<S> <C>
Walter Alexander San W. Orr, Jr.
Harry R. Baker Harry R. Baker
Gary W. Freels Richard G. Jacobus
David B. Smith, Jr. David B. Smith, Jr.
</TABLE>
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 period beginning December 31, 1994 and ending December
-15-
31, 1999 with the Media General Financial Services' Russell 2000, and
Paper and Paper Products Indices for the same periods.
The graph and table assume that the value of the investment in the
Company's common stock and each index on December 31, 1994 was $100 and
that all dividends were reinvested.
[Stock Price Performance Graph deleted pursuant to Rule 304(d) of
Regulation S-T. Data reported in the graph is also reported in the
following tabular form in the proxy statement delivered to
shareholders.]
<TABLE>
<CAPTION>
December 31
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Wausau-Mosinee
Paper Corporation $100.00 $133.18 $114.28 $125.84 $112.24 $ 75.86
MG Paper & Paper
Products $100.00 $124.27 $142.75 $151.61 $151.78 $188.41
Russell 2000 Index $100.00 $128.44 $149.77 $183.23 $178.09 $212.98
</TABLE>
APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board will present to the Annual Meeting a resolution that the
shareholders approve the appointment of the firm of Wipfli Ullrich
Bertelson LLP as independent auditors to audit the books, records and
-16-
accounts of the Company for the fiscal year ending December 31, 2000.
Representatives of Wipfli Ullrich Bertelson LLP 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 for inclusion in
<PAGE>
the proxy statement to be used in connection with the annual meeting of
shareholders to be held in 2001, the proposal must be in proper form
and be received by the Company no later than November 18, 2000.
Pursuant to the Company's bylaws, shareholders entitled to vote at
the annual meeting of shareholders to be held in 2001 may bring
business before the 2001 annual meeting for consideration only if
proper notice of the proposed business has been provided to the
Secretary of the Company not earlier than January 21, 2001 and not
later than February 20, 2001. 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. See "Committees and Compensation of
Board of Directors" regarding bylaw requirements relating to
nominations from the floor at the annual meeting of shareholders to be
held in 2001.
OTHER MATTERS
At this date, there are no other matters the Board of Directors
intends to present or has reason to believe others will present to the
Annual Meeting. If other matters now unknown to the Board of Directors
are properly presented at the Annual Meeting, those named as proxies
will vote in accordance with their judgment.
DATED: March 17, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
GARY P. PETERSON
GARY P. PETERSON
Secretary
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
-17-
<PAGE>
PROXY
WAUSAU-MOSINEE PAPER CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING
TO BE HELD APRIL 20, 2000
The undersigned hereby appoint(s) San W. Orr, Jr. and Richard L. Radt,
and each of them, proxies of the undersigned, with full power of
substitution, to vote all shares of common stock of Wausau-Mosinee
Paper Corporation that the undersigned is entitled to vote at the
annual meeting of shareholders to be held on April 20, 2000 and at any
adjournment thereof (the "Annual Meeting"). The proxies have the
authority to vote such stock as directed on the reverse side hereof
with respect to the proposals set forth in the Proxy Statement with the
same effect as though the undersigned were present in person and voting
such shares. For participants in the Dividend Reinvestment and Stock
Purchase Plan, the proxy also serves as voting instructions to the plan
administrator of such plan to vote the shares of common stock
beneficially owned by the participant in the plan. The undersigned
hereby revokes all proxies heretofore given to vote at the Annual
Meeting and any adjournment thereof.
PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW YOUR STOCK IS TO
BE VOTED. UNLESS AUTHORITY IS WITHHELD OR UNLESS OTHERWISE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR
AND FOR THE APPOINTMENT OF INDEPENDENT AUDITORS AT THE ANNUAL MEETING
OF SHAREHOLDERS AND AT ANY ADJOURNMENT THEREOF.
(Continued and to be signed on reverse side.)
WAUSAU-MOSINEE PAPER CORPORATION
PLEASE MARK YOUR VOTE IN THE FOLLOWING MANNER USING DARK INK ONLY
<square>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES AND FOR THE APPROVAL OF INDEPENDENT AUDITORS.
<TABLE>
<CAPTION>
1. Election of Directors: For all except the
For All Withhold All nominess written below
<S> <C> <C> <C> <C>
WALTER ALEXANDER, SAN W. ORR, JR., <square> <square> ______________________________
AND DAVID B. SMITH, JR.
For Against Abstain
2. Approval of appointment of <square> <square> <square>
independent auditors.
</TABLE>
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
Please sign exactly as name
appears at left.
Dated ________________________, 2000
____________________________________
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.
