<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Rock-Tenn Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Rock-Tenn Company
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
(LOGO) ROCK-TENN COMPANY
January 16, 1997
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Rock-Tenn Company (the "Company") to be held on February 20, 1997, at the
Northeast Atlanta Hilton at Peachtree Corners, 5993 Peachtree Industrial
Boulevard, Norcross, Georgia 30092. The meeting will begin promptly at 9:00
a.m., local time, and we hope it will be possible for you to attend.
The following Notice of Annual Meeting of Shareholders outlines the
business to be conducted at the meeting, which includes the election of
directors.
Please complete, sign and return your proxy card in the enclosed envelope
at your earliest convenience to ensure that your shares will be represented and
voted at the Annual Meeting of Shareholders. If you attend the Annual Meeting,
you may vote your shares in person even though you have previously signed and
returned your proxy.
Sincerely,
/s/ BRADLEY CURREY, JR.
Bradley Currey, Jr.
Chairman and
Chief Executive Officer
<PAGE> 3
(LOGO) ROCK-TENN COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 20, 1997
To the Shareholders of Rock-Tenn Company:
The Annual Meeting of Shareholders of Rock-Tenn Company (the "Company")
will be held on Thursday, February 20, 1997, at 9:00 a.m., local time, at the
Northeast Atlanta Hilton at Peachtree Corners, 5993 Peachtree Industrial
Boulevard, Norcross, Georgia 30092, for the following purposes:
(i) to elect four directors;
(ii) to ratify the appointment of Ernst & Young LLP as independent
auditors of the Company to serve for the 1997 fiscal year; and
(iii) to transact such other business as may properly come before the
Annual Meeting of Shareholders or any adjournment thereof.
Only holders of record of Class A Common Stock and Class B Common Stock at
the close of business on January 10, 1997 are entitled to receive notice of, and
to vote at, the Annual Meeting of Shareholders and any adjournment thereof. A
list of shareholders as of the close of business on January 10, 1997 will be
open for examination during the Annual Meeting of Shareholders.
Your attention is directed to the Proxy Statement submitted with this
Notice. This Notice is being given at the direction of the Board of Directors.
By Order of the Board of Directors
/s/ DAVID C. NICHOLSON
David C. Nicholson
Secretary
Atlanta, Georgia
January 16, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR
SHARES IN PERSON.
<PAGE> 4
ROCK-TENN COMPANY
504 THRASHER STREET
NORCROSS, GEORGIA 30071
---------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 20, 1997
---------------------
INTRODUCTION
GENERAL
This Proxy Statement is being furnished to the shareholders of Rock-Tenn
Company (the "Company") in connection with the solicitation of proxies by the
Board of Directors of the Company for use at the annual meeting of shareholders
of the Company scheduled to be held on February 20, 1997 at the Northeast
Atlanta Hilton at Peachtree Corners, 5993 Peachtree Industrial Boulevard,
Norcross, Georgia 30092, 9:00 a.m., local time, and at any adjournment thereof
(the "Annual Meeting").
RECORD DATE
The Board of Directors of the Company has fixed the close of business on
January 10, 1997 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting. Only holders of Class A
Common Stock, par value $.01 per share, of the Company ("Class A Common Stock")
and Class B Common Stock, par value $.01 per share, of the Company ("Class B
Common Stock," together with the Class A Common Stock, the "Common Stock") as of
the record date are entitled to vote at the Annual Meeting or any adjournment
thereof. On the record date, 21,252,712 shares of Class A Common Stock and
11,943,435 shares of Class B Common Stock were issued and outstanding. No
cumulative voting rights are authorized and appraisal rights for dissenting
shareholders are not applicable to the matters being proposed. It is anticipated
that this Proxy Statement will be first mailed to shareholders of the Company on
or about January 16, 1997.
VOTING AND PROXIES
When the enclosed form of proxy is properly executed and returned, the
shares it represents will be voted as directed at the Annual Meeting and any
adjournment thereof or, if no direction is indicated, such shares will be voted
in favor of the proposals set forth in the notice attached hereto. Any
shareholder giving a proxy has the power to revoke it at any time before it is
voted. All proxies delivered pursuant to the solicitation are revocable at any
time at the option of the persons executing them by giving written notice to the
Secretary of the Company, by delivering a later-dated proxy or by voting in
person at the Annual Meeting. If Common Stock owned by a shareholder is
registered in the name of more than one person, each such person should sign the
enclosed proxy. If the proxy is signed by an attorney, executor, administrator,
trustee, guardian or by any other person in a representative capacity, the full
title of the person signing the proxy should be given and a certificate should
be furnished showing evidence of appointment.
In accordance with the Company's Restated and Amended Articles of
Incorporation (the "Articles of Incorporation") and Georgia law, each share of
Class A Common Stock is entitled to one vote at the Annual Meeting and each
share of Class B Common Stock is entitled to ten votes at the Annual Meeting.
With respect to all matters to be voted upon at the Annual Meeting, holders of
shares of Class A Common Stock and Class B Common Stock will vote together as a
single voting group (the "Voting Group").
The presence, either in person or by proxy, of the holders of a majority of
the votes of the shares of Common Stock comprising the Voting Group outstanding
on the record date is necessary to constitute a quorum at the Annual Meeting or
any adjournment thereof. Under Georgia law and the Bylaws of the
<PAGE> 5
Company, (i) with respect to the election of directors, the affirmative vote of
a plurality of the votes of the shares of Common Stock comprising the Voting
Group is required to elect the nominees to the Board of Directors and (ii) with
respect to the proposal to ratify the appointment of Ernst & Young LLP as
independent auditors, the votes cast in favor of such proposal by shares of
Common Stock comprising the Voting Group must exceed the votes cast against such
proposal to ratify such appointment. With respect to any other matter that may
properly come before the Annual Meeting, the votes cast in favor of such matter
by shares of Common Stock comprising the Voting Group must exceed the votes cast
against approval of such matter for such matter to be approved. At the Annual
Meeting, votes cast for or against any matter may be cast in person or by proxy.
Abstentions and broker non-votes will be treated as shares of Common Stock that
are present and entitled to vote for purposes of determining the presence of a
quorum but will not count as either a vote for or against any matter presented
for shareholder approval at the Annual Meeting.
ELECTION OF DIRECTORS
(ITEM 1)
BOARD OF DIRECTORS
Pursuant to the Bylaws of the Company, the Board of Directors consists of
thirteen members. The Company's Articles of Incorporation divide the Board of
Directors into three classes with the directors in each class serving a term of
three years. Directors for each class are elected at the annual meeting of
shareholders held in the year in which the term for such class expires. At the
Annual Meeting on February 20, 1997, four nominees for director are to be
elected to serve until the Annual Meeting of Shareholders in 2000, or until
their successors are elected and qualified. In accordance with the Bylaws of the
Company, the mandatory retirement age for directors is 72.
The Board of Directors has no reason to believe that any of the nominees
for the office of director will be unavailable for election as a director.
However, if at the time of the Annual Meeting any of the nominees should be
unable or decline to serve, the persons named in the proxy will vote as
recommended by the Board of Directors either (i) to elect substitute nominees
recommended by the Board, (ii) to allow the vacancy created thereby to remain
open until filled by the Board or (iii) to reduce the number of directors for
the ensuing year. In no event, however, can a proxy be voted to elect more than
four directors.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR BRADLEY CURREY, JR., MARY
LOUISE MORRIS BROWN, JOHN D. HOPKINS AND JAMES W. JOHNSON TO HOLD OFFICE UNTIL
THE ANNUAL MEETING OF SHAREHOLDERS IN 2000, OR UNTIL THEIR SUCCESSORS ARE
ELECTED AND QUALIFIED. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
NOMINEES FOR ELECTION -- TERM EXPIRING 2000
BRADLEY CURREY, JR., 66, has served as Chairman of the Board of the Company
since July 1993 and as Chief Executive Officer of the Company since 1989. Mr.
Currey served as President from 1978 until October 1995. He has been a director
of the Company since 1967. Mr. Currey joined the Company in 1976 and prior to
that time was Executive Vice President and a director of Trust Company of
Georgia (currently SunTrust Bank, Atlanta). Mr. Currey is also a director of
Genuine Parts Co., an auto parts wholesaler, and Poe & Brown, Inc., an insurance
agency. Mr. Currey is the father of Russell M. Currey and brother of Robert B.
Currey.
MARY LOUISE MORRIS BROWN, 65, has served as a director of the Company since
January 1994 and has been a homemaker for more than five years. Mrs. Brown is
the sister-in-law of J. Hyatt Brown.
JOHN D. HOPKINS, 58, has served as a director of the Company since 1989.
Mr. Hopkins has served as Senior Vice President and General Counsel of
Jefferson-Pilot Corporation, a holding company with insurance
2
<PAGE> 6
and broadcasting subsidiaries, since April 1993. Prior to joining
Jefferson-Pilot Corporation, Mr. Hopkins was a partner in the law firm of King &
Spalding since January 1971.
JAMES W. JOHNSON, 55, has served as a director of the Company since 1984.
Mr. Johnson has served as President of McCranie Tractor Company, a John Deere
tractor dealership, for more than five years.
INCUMBENT DIRECTORS -- TERM EXPIRING 1999
J. HYATT BROWN, 59, has served as a director of the Company since 1971. Mr.
Brown has served as Chairman, President and Chief Executive Officer of Poe &
Brown, Inc., an insurance agency headquartered in Daytona Beach and Tampa,
Florida, for more than five years. Mr. Brown is also a director of SunTrust
Banks, Inc., a bank holding company, BellSouth Corporation, a telephone
communications company, FPL Group, Inc., an electric utility company, and
International Speedway Corp., a motor sports company. Mr. Brown is the
brother-in-law of Mrs. Mary Louise Morris Brown.
C. RANDOLPH SEXTON, 67, has served as a director of the Company since 1967.
Mr. Sexton owns and manages citrus groves and a citrus packing plant in Vero
Beach, Florida, which he has done for more than five years.
JAY SHUSTER, 42, has served as President of the Company since October 1995
and Chief Operating Officer of the Company since June 1991. Mr. Shuster served
as an Executive Vice President of the Company from June 1991 to October 1995.
Mr. Shuster was elected a director of the Company in January 1992. From January
1989 until June 1991, Mr. Shuster was Executive Vice President and General
Manager of the Company's Consumer Packaging Group. Mr. Shuster served as
Executive Vice President and General Manager of the Company's Folding Carton
Division from December 1986 until January 1989. Mr. Shuster joined the Company
in May 1979.
INCUMBENT DIRECTORS -- TERM EXPIRING 1998
STEPHEN G. ANDERSON, 58, has served as a director of the Company since
1977. Dr. Anderson has been a physician for more than five years in private
practice in Winston-Salem, North Carolina.
ROBERT B. CURREY, 56, has served as a director of the Company since 1989.
Mr. Currey founded Currey & Company, Inc., an outdoor furniture business, and
has served as Chairman, President and Chief Executive Officer thereof for more
than five years. Mr. Currey is the brother of Bradley Currey, Jr. and the uncle
of Russell M. Currey, Senior Vice President of Marketing and Planning.
LAWRENCE L. GELLERSTEDT, JR., 71, has served as a director of the Company
since 1981. Prior to his retirement in 1996, Mr. Gellerstedt served as Chairman
of the Board of Directors of Beers Construction Co., a construction company, for
more than five years. Mr. Gellerstedt is also a director of NationsBank Corp., a
bank holding company, Atlanta Gas Light Co., a natural gas distribution company,
and John H. Harland Co., a check printing company.
JOHN W. SPIEGEL, 54, has served as a director of the Company since 1989.
Mr. Spiegel has served as Executive Vice President and Chief Financial Officer
of SunTrust Banks, Inc. for more than five years.
RETIRING DIRECTORS
Charles C. Crumley and James M. Sibley served as directors of the Company
during the Company's fiscal year ended September 30, 1996 ("fiscal 1996"). Mr.
Sibley also served as Chairman of the Company's Compensation and Options
Committee. After many years of dedicated service to the Board of Directors of
the Company, Messrs. Crumley and Sibley have resigned or will resign, as the
case may be, from the Board. Mr. Crumley's resignation was effective December
31, 1996, and Mr. Sibley's resignation will be effective on the date of the
Annual Meeting.
3
<PAGE> 7
MEETINGS OF THE BOARD OF DIRECTORS
During fiscal 1996, the Board of Directors of the Company held four regular
meetings. All members of the Board attended at least 75% of all meetings of the
Board and the committees on which such director served in fiscal 1996.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established an Executive Committee, an Audit
Committee, a Compensation and Options Committee and a Nominating Committee.
EXECUTIVE COMMITTEE. Messrs. J. Hyatt Brown, Bradley Currey, Jr., Lawrence
L. Gellerstedt, Jr., John D. Hopkins and Jay Shuster are members of the
Executive Committee, and Mr. J. Hyatt Brown is Chairman of the Committee. The
Executive Committee is authorized to exercise all the power and authority of the
Board of Directors in the management of the business and affairs of the Company,
provided that the Executive Committee does not have the power to (i) approve or
propose to shareholders action that the Georgia Business Corporation Code
requires to be approved by shareholders, (ii) fill vacancies on the Board of
Directors or any of its committees, (iii) amend the Company's Articles of
Incorporation pursuant to 14-2-1002 of the Georgia Business Corporation Code,
(iv) adopt, amend or repeal the Company's Bylaws or (v) approve a plan of merger
not requiring shareholder approval. The Committee does not hold regularly
scheduled meetings but meets when necessary. This Committee held five meetings
in fiscal 1996.
AUDIT COMMITTEE. Dr. Stephen G. Anderson and Mr. John W. Spiegel are
members of the Audit Committee, and Mr. John W. Spiegel is Chairman of the
Committee. Mr. Charles C. Crumley also was a member of the Audit Committee
during fiscal 1996. None of the members of the Audit Committee are employees of
the Company. The Audit Committee is responsible for recommending independent
auditors, reviewing with the independent auditors the scope and results of the
audit engagement, monitoring the Company's financial policies and control
procedures, and reviewing and monitoring the provision of non-audit services by
the Company's auditors. The Audit Committee may exercise such additional
authority as may be prescribed from time to time by resolution of the Board of
Directors. This Committee held three meetings in fiscal 1996.
COMPENSATION AND OPTIONS COMMITTEE. Mrs. Mary Louise Morris Brown and
Messrs. James W. Johnson and James M. Sibley are members of the Compensation and
Options Committee, and Mr. James M. Sibley is Chairman of the Committee.
Following the Annual Meeting, Mr. Sibley will have resigned from the Board of
Directors and will no longer be a member of the Compensation and Options
Committee. The Compensation and Options Committee is responsible for
establishing salaries, bonuses and other compensation for the Company's Chief
Executive Officer and for administering the Company's stock option plans,
employee stock purchase plan, key-employee incentive bonus plan and supplemental
executive retirement plan. This Committee held two meetings in fiscal 1996.
NOMINATING COMMITTEE. Messrs. Bradley Currey, Jr., J. Hyatt Brown, and C.
Randolph Sexton are members of the Nominating Committee, and Mr. Bradley Currey,
Jr. is Chairman of the Committee. The Nominating Committee reviews all persons
recommended to serve on the Board of Directors and is responsible for
recommending nominees for election as directors to the Board of Directors. The
Nominating Committee will consider nominees recommended by shareholders of the
Company provided that such nominations are made in accordance with the
procedures set forth in the Bylaws of the Company. The procedure shareholders
must follow in order to nominate an individual for election to the Board of
Directors is set forth herein under "Other Matters -- Shareholder Nominations
for Election of Directors." This Committee held no meetings in fiscal 1996.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive an annual retainer
fee of $12,500 and an attendance fee of $1,250 for each Board and committee
meeting attended (excluding telephonic meetings), as well as reimbursement of
all out-of-pocket expenses incurred in attending all such meetings. In addition,
the
4
<PAGE> 8
Company pays the chairman of each committee of the Board an annual retainer fee
of $2,500 provided such chairman is not an employee of the Company.
COMMON STOCK OWNERSHIP BY MANAGEMENT
AND PRINCIPAL SHAREHOLDERS
The table below sets forth certain information regarding the beneficial
ownership of each class of Common Stock as of January 14, 1997 by (i) each
person who is known to the Company to be the beneficial owner of more than 5% of
the outstanding Class A Common Stock or Class B Common Stock, (ii) each of the
Named Executive Officers (as hereinafter defined), (iii) each of the directors
and nominees for director of the Company and (iv) all directors and executive
officers of the Company as a group. Under the rules of the Securities and
Exchange Commission, a person is deemed to "beneficially own" securities if that
person has or shares the power to vote or dispose, or to direct the vote or
disposition, of such securities. The person is also deemed to beneficially own
any securities of which that person has the right to acquire beneficial
ownership within 60 days. Under these rules, more than one person may be deemed
to beneficially own the same securities and a person may be deemed to
beneficially own securities as to which he or she has no pecuniary interest.
Except as set forth below, the shareholders named below have sole voting and
investment power with respect to all shares of Common Stock shown as being
beneficially owned by them.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF BENEFICIAL OWNERSHIP OF
CLASS A CLASS B
COMMON STOCK(1) COMMON STOCK PERCENTAGE OF
-------------------------- ------------------------- COMBINED
NUMBER PERCENT NUMBER PERCENT VOTING
OF SHARES OF CLASS(2) OF SHARES OF CLASS(3) POWER
---------- ----------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Bradley Currey, Jr.(4)............. 3,462,719(5) 14.4% 2,766,182(6) 23.2% 20.2%
Jay Shuster........................ 703,886(7) 3.2 599,732(8) 5.0 4.3
Edward E. Bowns.................... 294,015(9) 1.4 230,369(10) 1.9 1.7
David E. Dreibelbis................ 267,294(11) 1.2 192,046(12) 1.6 1.4
David C. Nicholson................. 275,165(13) 1.3 185,295(14) 1.6 1.4
Stephen G. Anderson................ 716,293(15) 3.3 307,150(16) 2.6 2.5
J. Hyatt Brown(17)................. 3,505,411(18) 15.1 1,994,840(19) 16.7 15.3
Mary Louise Morris Brown(20)....... 2,580,758(21) 11.3 1,554,379(22) 13.0 11.8
Robert B. Currey................... 142,164(23) * 71,082(24) * *
Russell M. Currey.................. 2,069,150(25) 8.9 2,040,825(26) 17.1 14.5
Lawrence L. Gellerstedt, Jr........ 112,153(27) * 56,076(28) * *
John D. Hopkins.................... 894,830(29) 4.1 440,388(30) 3.7 3.5
James W. Johnson................... 150,532(31) * 71,966(32) * *
C. Randolph Sexton................. 712,345(33) 3.3 435,688(34) 3.7 3.3
John W. Spiegel.................... 95,288(35) * 47,094(36) * *
All directors and executive
officers as a group (24
persons)......................... 13,753,659(37) 44.0 9,377,610(38) 76.5 68.0
</TABLE>
- ---------------
* Less than 1%.
(1) Under the Company's Restated Articles, shares of Class B Common Stock are
convertible into shares of Class A Common Stock on a share-for-share basis
at any time subject to compliance with certain first offer rights. As a
result, in accordance with rules of the Securities and Exchange Commission,
shares of Class A Common Stock shown as beneficially owned include shares
of Class A Common stock issuable upon conversion of Class B Common Stock
beneficially owned by the persons listed in the table.
(2) Based on an aggregate of 21,252,712 shares of Class A Common Stock issued
and outstanding as of January 14, 1997 plus, for each individual, (i) the
number of shares of Class A Common Stock issuable upon conversion of shares
of Class B Common Stock beneficially owned by such individual, (ii) the
number of shares of Class A Common Stock issuable upon exercise of
outstanding stock options which are or will become exercisable prior to
March 17, 1997 and (iii) the number of shares of Class A
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<PAGE> 9
Common Stock issuable upon conversion of shares of Class B Common Stock
issuable upon exercise of outstanding stock options which are or will
become exercisable prior to March 17, 1997.
(3) Based on an aggregate of 11,943,435 shares of Class B Common Stock issued
and outstanding as of January 14, 1997 plus, for each individual, the
number of shares of Class B Common Stock issuable upon exercise of
outstanding stock options which are or will become exercisable prior to
March 17, 1997.
(4) Mr. Currey's address is P. O. Box 4098, Norcross, Georgia 30091.
(5) Represents (i) 115,500 shares held by Mr. Currey as trustee for the benefit
of Mrs. Mary Louise Morris Brown, (ii) 192,060 shares deemed beneficially
owned by Mr. Currey as co-trustee with Mrs. Mary Louise Morris Brown and
Mr. J. Hyatt Brown of two separate trusts for the benefit of Nancy Louise
Brown Markham and Elizabeth Irene Brown Dixon, respectively (which shares
are also shown as being beneficially owned by Mrs. Mary Louise Morris Brown
and Mr. J. Hyatt Brown), (iii) 388,977 shares deemed beneficially owned by
Mr. Currey as co-trustee with Messrs. J. Hyatt Brown and John D. Hopkins of
a trust for the benefit of Mrs. Mary Louise Morris Brown (which shares are
also shown as being beneficially owned by Messrs J. Hyatt Brown and John D.
Hopkins) and (iv) 2,766,182 shares issuable upon conversion of shares of
Class B Common Stock beneficially owned by Mr. Currey.
(6) Includes (i) 115,500 shares held by Mr. Currey as trustee for the benefit
of Mary Louise Morris Brown, (ii) 107,343 shares beneficially owned by Mr.
Currey's spouse, (iii) 1,254,000 shares beneficially owned by Currey Family
Investments, L.P., for which Mr. Currey serves as general partner, (iv)
192,060 shares deemed beneficially owned by Mr. Currey as co-trustee with
Mrs. Mary Louise Morris Brown and Mr. J. Hyatt Brown of two separate trusts
for the benefit of Nancy Louise Brown Markham and Elizabeth Irene Brown
Dixon, respectively (which shares are also shown as beneficially owned by
Mrs. Mary Louise Morris Brown and Mr. J. Hyatt Brown) and (v) 380,424
shares deemed beneficially owned by Mr. Currey as cotrustee with Messrs. J.
Hyatt Brown and John D. Hopkins of a trust for the benefit of Mrs. Mary
Louise Morris Brown (which shares are also shown as being beneficially
owned by Messrs J. Hyatt Brown and John D. Hopkins).
(7) Includes (i) 87,395 shares issuable upon exercise of stock options
beneficially owned by Mr. Shuster, (ii) 566,072 shares issuable upon
conversion of shares of Class B Common Stock beneficially owned by Mr.
Shuster and (iii) 33,660 shares issuable upon conversion of shares of Class
B Common Stock issuable upon exercise of stock options beneficially owned
by Mr. Shuster.
(8) Includes 17,780 shares held by Mr. Shuster's spouse as custodian for their
children and 33,660 shares issuable upon exercise of stock options
beneficially owned by Mr. Shuster.
(9) Includes (i) 4,521 shares held in joint tenancy with Mr. Bowns' former
spouse and Mr. Bowns' son, (ii) 59,125 shares issuable upon exercise of
stock options beneficially owned by Mr. Bowns, (iii) 184,169 shares
issuable upon conversion of shares of Class B Common Stock beneficially
owned by Mr. Bowns and (iv) 46,200 shares issuable upon conversion of
shares of Class B Common Stock issuable upon exercise of stock options
beneficially owned by Mr. Bowns.
(10) Includes 4,521 shares held in joint tenancy with Mr. Bowns' former spouse
and Mr. Bowns' son and 46,200 shares issuable upon exercise of stock
options beneficially owned by Mr. Bowns.
(11) Includes (i) 74,140 shares issuable upon exercise of stock options
beneficially owned by Mr. Dreibelbis, (ii) 146,506 shares issuable upon
conversion of shares of Class B Common Stock beneficially owned by Mr.
Dreibelbis and (iii) 45,540 shares issuable upon conversion of shares of
Class B Common Stock issuable upon exercise of stock options beneficially
owned by Mr. Dreibelbis.
(12) Includes 45,540 shares issuable upon exercise of stock options beneficially
owned by Mr. Dreibelbis.
(13) Includes (i) 61,545 shares issuable upon exercise of stock options
beneficially owned by Mr. Nicholson, (ii) 144,375 shares issuable upon
conversion of shares of Class B Common Stock beneficially owned by Mr.
Nicholson and (iii) 40,920 shares issuable upon conversion of shares of
Class B Common Stock issuable upon exercise of stock options beneficially
owned by Mr. Nicholson.
(14) Includes 40,920 shares issuable upon exercise of stock options beneficially
owned by Mr. Nicholson.
(15) Includes 262,944 shares held by Dr. Anderson's spouse, and 143,998 and
163,152 shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by Dr. Anderson and Dr. Anderson's spouse, respectively.
(16) Includes 163,152 shares held by Dr. Anderson's spouse.
6
<PAGE> 10
(17) Mr. Brown's address is P. O. Drawer 2412, Daytona Beach, Florida 32115. Mr.
Brown serves as Chairman and Chief Executive Officer of Poe & Brown, Inc.,
which together with its predecessor has provided certain insurance services
to the Company. See "Certain Transactions -- Transactions Involving
Directors."
(18) Represents (i) 716,100 shares held in joint tenancy with Mr. Brown's
spouse, (ii) 192,060 shares deemed beneficially owned by Mr. Brown as
co-trustee with Mr. Bradley Currey, Jr. and Mrs. Mary Louise Morris Brown
of two separate trusts for the benefit of Nancy Louise Brown Markham and
Elizabeth Irene Dixon Brown, respectively (which shares are also shown as
being beneficially owned by Mr. Bradley Currey, Jr. and Mrs. Mary Louise
Morris Brown), (iii) 388,977 shares deemed beneficially owned by Mr. Brown
as co-trustee with Messrs. Bradley Currey, Jr. and John D. Hopkins of a
trust for the benefit of Mrs. Mary Louise Morris Brown (which shares are
also shown as being beneficially owned by Messrs Bradley Currey, Jr. and
John D. Hopkins), (iv) 197,485 shares held indirectly by Poe & Brown, Inc.,
of which Mr. Brown serves as Chairman and Chief Executive Officer, (v)
15,948 shares held by members of Mr. Brown's immediate family and (vi)
1,994,840 shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by Mr. Brown.
(19) Represents (i) 1,046,100 shares held in joint tenancy with Mr. Brown's
spouse, (ii) 192,060 shares deemed beneficially owned by Mr. Brown as
co-trustee with Mr. Bradley Currey, Jr. and Mrs. Mary Louise Morris Brown
of two separate trusts for the benefit of Nancy Louise Brown Markham and
Elizabeth Irene Brown Dixon, respectively (which shares are also shown as
being beneficially owned by Mr. Bradley Currey, Jr. and Mrs. Mary Louise
Morris Brown), (iii) 380,424 shares deemed beneficially owned by Mr. Brown
as co-trustee with Messrs. Bradley Currey, Jr. and John D. Hopkins of a
trust for the benefit of Mrs. Mary Louise Morris Brown (which shares are
also shown as being beneficially owned by Messrs Bradley Currey, Jr. and
John D. Hopkins), (iv) 362,485 shares held indirectly by Poe & Brown, Inc.,
of which Mr. Brown serves as Chairman and Chief Executive Officer and (v)
13,770 shares held by members of Mr. Brown's immediate family.
(20) Mrs. Brown's address is P. O. Box 4098, Norcross, Georgia 30091.
(21) Represents (i) 834,319 shares held by Mrs. Brown's spouse, for whom she
holds power of attorney, (ii) 192,060 shares deemed beneficially owned by
Mrs. Brown as co-trustee with Messrs. Bradley Currey, Jr. and J. Hyatt
Brown of two separate trusts for the benefit of Nancy Louise Brown Markham
and Elizabeth Irene Brown Dixon, respectively (which shares are also shown
as being beneficially owned by Messrs. Bradley Currey, Jr. and J. Hyatt
Brown) (iii) 1,554,379 shares issuable upon conversion of shares of Class B
Common Stock beneficially owned by Mrs. Brown.
(22) Includes (i) 1,039,727 shares held by Mrs. Brown's spouse, for whom she
holds power-of-attorney and (ii) 192,060 shares deemed beneficially owned
by Mrs. Brown as co-trustee with Messrs. Bradley Currey, Jr. and J. Hyatt
Brown of two separate trusts for the benefit of Nancy Louise Brown Markham
and Elizabeth Irene Brown Dixon, respectively (which shares are also shown
as being beneficially owned by Messrs. Bradley Currey, Jr. and J. Hyatt
Brown).
(23) Represents (i) 69,841 shares held in joint tenancy with Mr. Currey's
spouse, (ii) 1,240 shares held by Mr. Currey's children and (iii) 71,082
shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by Mr. Currey.
(24) Represents shares held in joint tenancy with Mr. Currey's spouse.
(25) Represents (i) 28,325 shares issuable upon exercise of stock options
beneficially owned by Mr. Currey, (ii) 2,034,225 shares issuable upon
conversion of shares of Class B Common Stock beneficially owned by Mr.
Currey and (iii) 28,325 shares issuable upon conversion of shares of Class
B Common Stock issuable upon exercise of stock options beneficially owned
by Mr. Currey.
(26) Includes (i) 658,759 shares deemed beneficially owned by Mr. Currey as
trustee of two trusts for the benefit of Mr. Bradley Currey, Jr. and his
spouse, (ii) 2,468 shares held by Mr. Currey's spouse, (iii) 6,600 shares
issuable upon exercise of stock options beneficially owned by Mr. Currey
and (iv) 1,254,000 shares beneficially owned by Currey Family Investments,
L.P., with respect to which Mr. Currey serves as general partner.
(27) Includes (i) 6,593 shares held by Mr. Gellerstedt's spouse and (ii) 56,076
shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by Mr. Gellerstedt.
(28) Includes 6,593 shares held by Mr. Gellerstedt's spouse.
7
<PAGE> 11
(29) Includes (i) 388,977 shares deemed beneficially owned by Mr. Hopkins as
co-trustee with Messrs. Bradley Currey, Jr. and J. Hyatt Brown of a trust
for the benefit of Mary Louise Morris Brown (which shares are also shown as
being beneficially owned by Messrs. Bradley Currey, Jr. and J. Hyatt Brown)
and (ii) 440,388 shares issuable upon conversion of shares of Class B
Common Stock beneficially owned by Mr. Hopkins.
(30) Includes 380,424 shares deemed beneficially owned by Mr. Hopkins as
co-trustee with Messrs. Bradley Currey, Jr. and J. Hyatt Brown of a trust
for the benefit of Mary Louise Morris Brown (which shares are also shown as
being beneficially owned by Messrs. Bradley Currey, Jr. and J. Hyatt
Brown).
(31) Includes (i) 16,209 shares held by Mr. Johnson's spouse, (ii) 6,600 shares
deemed beneficially owned by Mr. Johnson as trustee of a trust for the
benefit of the McCranie Companies Profit Sharing Plan and (iii) 71,966
shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by Mr. Johnson.
(32) Includes 16,209 shares held by Mr. Johnson's spouse.
(33) Includes 9,600 shares held by Mr. Sexton's spouse, 24,200 shares held by
Mr. Sexton as custodian for his grandchildren and 435,688 shares issuable
upon conversion of shares of Class B Common Stock beneficially owned by Mr.
Sexton.
(34) Includes 24,800 shares held by Mr. Sexton as custodian for his
grandchildren.
(35) Includes 47,094 shares held in joint tenancy with Mr. Spiegel's spouse and
47,094 shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by Mr. Spiegel.
(36) Represents shares held in joint tenancy with Mr. Spiegel's spouse.
(37) Represents (i) 3,772,889 shares beneficially owned by such directors and
executive officers, (ii) 603,160 shares issuable upon exercise of stock
options beneficially owned by such directors and executive officers, (iii)
9,065,831 shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by such directors and executive officers and (iv)
311,778 shares issuable upon conversion of shares of Class B Common Stock
issuable upon exercise of stock options beneficially owned by such
directors and executive officers.
(38) Represents 9,065,831 shares beneficially owned by such directors and
executive officers and 311,778 shares issuable upon exercise of stock
options beneficially owned by such directors and executive officers.
8
<PAGE> 12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth certain information relating to the compensation
earned during fiscal 1996, the fiscal year ended September 30, 1995 ("fiscal
1995") and the fiscal year ended September 30, 1994 ("fiscal 1994") by the
Company's Chief Executive Officer and its four other most highly compensated
executive officers (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION(1) SECURITIES
------------------------------ UNDERLYING ALL OTHER
FISCAL OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (#) ($)(2)
- ---------------------------------------------- ------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Bradley Currey, Jr............................ 1996 $650,000 $234,000 -- $7,543
Chairman and Chief Executive Officer 1995 $600,000 $240,000 -- $2,136
1994 $450,000 $58,500 -- $2,136
Jay Shuster................................... 1996 $375,000 $135,000 30,800 $2,708
President and Chief Operating Officer 1995 $335,000 $134,000 30,000 $2,136
1994 $295,000 $38,350 35,000 $2,136
David E. Dreibelbis........................... 1996 $240,000 $86,400 17,600 $3,226
Executive Vice President and General 1995 $210,000 $84,000 19,000 $2,126
Manager of the Mill Group 1994 $184,000 $23,920 22,000 $2,136
Edward E. Bowns............................... 1996 $235,000 $84,600 13,200 $4,974
Executive Vice President and General 1995 $223,000 $89,200 10,000 $2,136
Manager of the Industrial Products 1994 $213,000 $27,690 9,000 $2,136
Group
David C. Nicholson............................ 1996 $210,000 $75,600 9,900 $2,821
Senior Vice President, Chief Financial 1995 $200,000 $80,000 12,000 $2,136
Officer and Secretary 1994 $165,000 $21,450 17,000 $2,136
</TABLE>
- ---------------
(1) The aggregate amount of perquisites and other personal benefits, if any, did
not exceed the lesser of $50,000 or 10% of the total annual salary and
bonus reported for each Named Executive Officer and has therefore been
omitted.
(2) Amounts shown reflect life insurance premiums paid by the Company.
9
<PAGE> 13
OPTION GRANTS TABLE
The table below sets forth certain information relating to the options
granted during fiscal 1996 to each Named Executive Officer. The Company's stock
option plans do not authorize the grant of stock appreciation rights.
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------------------------- ANNUAL RATES OF
PERCENT OF OPTION TERM STOCK
NUMBER OF TOTAL --------------------------- PRICE APPRECIATION
SECURITIES UNDERLYING OPTIONS/SARS EXERCISE OR FOR
OPTIONS/SARS GRANTED TO BASE OPTION TERM
GRANTED EMPLOYEES IN PRICE PER SHARE EXPIRATION -------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- -------------------------- --------------------- ------------ --------------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Bradley Currey, Jr........ -- -- -- -- -- --
Jay Shuster............... 30,800 10.73% 18.2955 10/03/06 354,382 898,073
Edward E. Bowns........... 13,200 4.60% 18.2955 10/03/06 151,878 384,889
David E. Dreibelbis....... 17,600 6.13% 18.2955 10/03/06 202,504 513,186
David C. Nicholson........ 9,900 3.45% 18.2955 10/03/06 113,909 288,667
</TABLE>
- ---------------
(1) All information in the table has been adjusted to reflect the 10% stock
dividend paid on November 15, 1996 to shareholders of record on November 4,
1996 (the "Stock Dividend"). All options granted in respect of fiscal 1996
were granted after the end of fiscal 1996 on October 4, 1996. The option
exercise price with respect to such options is equal to the closing price
per share of Class A Common Stock on October 4, 1996 as reported on the
Nasdaq Stock Market's National Market, as adjusted to reflect the Stock
Dividend.
(2) All options granted are options to purchase Class A Common Stock and vest in
increments equal to 25% of the aggregate number of options granted to the
Named Executive Officer on each of April 4, 1997 and October 4, 1997, 1998
and 1999. The option price is payable in cash or shares of Class A Common
Stock that have been held for at least six months and have an aggregate
fair market value at least equal to the aggregate option exercise price.
AGGREGATED OPTIONS TABLE
The table below sets forth certain information with respect to options
exercised during fiscal 1996 and options held at the end of fiscal 1996 by each
Named Executive Officer.
AGGREGATED OPTION/SAR
EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES TABLE(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES FISCAL YEAR-END(#) FISCAL YEAR-END(3)
ACQUIRED ON VALUE ----------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE(2) EXERCISABLE UNEXERCISABLE
- ------------------------------- ----------- ----------- ----------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bradley Currey, Jr............. -- -- -- -- -- --
Jay Shuster.................... 11,000 129,000 132,055(4) 56,925 1,284,364 79,375
Edward E. Bowns................ 29,040 280,320 105,325(5) 21,175 1,444,673 24,125
David E. Dreibelbis............ -- -- 119,680(6) 34,100 1,358,604 50,125
David C. Nicholson............. -- -- 102,465(7) 21,175 1,179,244 34,375
</TABLE>
- ---------------
(1) All information in the table and the notes thereto has been adjusted to
reflect the Stock Dividend.
(2) All unexercisable options are options to purchase Class A Common Stock.
(3) Represents, with respect to all options other than the options granted on
October 4, 1996 in respect of fiscal 1996, the difference between (i) the
fair market value of the shares of Common Stock underlying the options held
by each officer based on the last reported closing price per share of Class
A Common Stock of $18.4091 on September 30, 1996 as reported on the Nasdaq
Stock Market's National Market
10
<PAGE> 14
and (ii) the aggregate exercise price of such options. The options granted
on October 4, 1996 in respect of fiscal 1996 were granted at an exercise
price equal to the closing price per share of Class A Common Stock on
October 4, 1996 as reported on the Nasdaq Stock Market's National Market
and therefore were not in-the-money at the end of fiscal 1996 and are not
reflected in the table.
(4) Represents options to purchase 94,215 shares of Class A Common Stock and
37,840 shares of Class B Common Stock.
(5) Represents options to purchase 59,125 shares of Class A Common Stock and
46,200 shares of Class B Common Stock.
(6) Represents options to purchase 74,140 shares of Class A Common Stock and
45,540 shares of Class B Common Stock.
(7) Represents options to purchase 61,545 shares of Class A Common Stock and
40,920 shares of Class B Common Stock.
PENSION PLAN TABLE
The table below sets forth certain information with respect to pension
benefits payable upon retirement to certain eligible employees of the Company.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
BASED UPON INDICATED YEARS OF SERVICE
------------------------------------------------------------
REMUNERATION 10 15 20 25 30 35
- -------------------------------------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$125,000.............................. $12,500 $25,000 $37,500 $ 50,000 $ 50,000 $ 50,000
150,000.............................. 15,000 30,000 45,000 60,000 60,000 60,000
175,000.............................. 17,500 35,000 52,500 70,000 70,000 70,000
200,000.............................. 20,000 40,000 60,000 80,000 80,000 80,000
225,000.............................. 22,500 45,000 67,500 90,000 90,000 90,000
250,000.............................. 25,000 50,000 75,000 100,000 100,000 100,000
275,000.............................. 27,500 55,000 82,500 110,000 110,000 110,000
300,000.............................. 30,000 60,000 90,000 120,000 120,000 120,000
</TABLE>
This table sets forth the annual retirement benefits payable under the
Rock-Tenn Company Pension Plan (the "Pension Plan," as described below) and the
Supplemental Executive Retirement Plan (the "SERP," as described below) upon
retirement at normal retirement age.
Only covered employees are eligible to participate in the Pension Plan. A
"covered employee" is an employee of the Company or one of its participating
subsidiaries who is not (i) a leased employee, (ii) eligible to participate in
any other pension plan by reason of his status as a truck driver or weekly,
hourly or piecework employee, or (iii) a member of a collective bargaining unit
that has not reached an agreement with the Company to participate in the Plan. A
covered employee is eligible to begin to participate in the Pension Plan upon
completion of 12 months of service that begins on such employee's date of
employment (as defined in the Plan) and includes 1,000 "hours of service" (as
defined in the Plan) and upon reaching age 21.
The Pension Plan provides benefits based upon a participant's benefit
service, the participant's "average compensation" for any five years during the
last ten years and the participant's Social Security benefit. These benefits
ordinarily are payable at a participant's normal retirement age (as defined in
the Pension Plan) as a single life annuity and are determined under a four part
formula set forth in the Pension Plan. The participant's benefit is the greatest
of the benefits determined under Part A, B, C or D of the four part formula.
Part A equals the product of (i) 50% of the participant's average compensation
minus 50% of his Social Security benefit and (ii) a fraction, the numerator of
which is the participant's total number of years and fractional years of benefit
service and the denominator of which is 25. Part B equals three-fourths of one
percent of the participant's average compensation multiplied by his total years
and fractional years of benefit service. Part C equals $12 multiplied by the
participant's total number of years and fractional years of benefit service.
Part D equals the participant's accrued benefit as of September 30, 1985 under
one of the predecessor plans.
11
<PAGE> 15
Under the Pension Plan, "compensation" includes all compensation paid to
participants and shown as wages on Form W-2, except that for salaried employees,
compensation includes only base pay and does not include any bonuses, overtime,
commissions, reimbursed expenses of any kind, severance pay, payments in lieu of
vacation, payments for group insurance, payments under the Pension Plan or any
other employee benefit plan or any payments made upon the surrender of a stock
option. No employee's compensation for purposes of the Pension Plan has included
amounts in excess of the limit imposed by the Internal Revenue Code of 1986, as
amended (the "Code Limit") and as adjusted for inflation by the Secretary of the
Treasury. For fiscal 1994, 1995 and 1996, the Code Limit was $150,000.
"Average compensation" means the participant's highest average monthly
compensation for any full five calendar years (or, if less than five, the number
of calendar years actually worked) during the last ten years prior to
retirement. "Benefit service" is the full years and completed calendar months of
employment which the participant actually completes as a covered employee
receiving compensation from the Company or a participating subsidiary in the
period which generally begins on the participant's date of employment.
An employee's right to benefits under the Pension Plan is vested after five
years of service (as defined in the Pension Plan) or at normal retirement age,
whichever is earlier. The Plan is a defined benefit plan qualified under the
Code and, as such, is subject to certain limits on the amount of benefits which
may be paid under it.
For fiscal 1996, $250,000, $250,000, $235,000, $240,000 and $210,000 of the
compensation paid to Messrs. Currey, Shuster, Bowns, Dreibelbis and Nicholson,
respectively, was compensation for purposes of the Pension Plan and the SERP. As
of September 30, 1996, Messrs. Currey, Shuster, Bowns, Dreibelbis and Nicholson
had approximately 20, 17, 16, 22, and 13 years of benefit service as defined
under the Pension Plan, respectively. The table set forth above displays the
approximate annual retirement benefits payable under the Plan as a life annuity,
based on various levels of average compensation and years of service (using a
"normal retirement date" (as defined in the Plan) of the later of (i) the date
he reaches age 65 or (ii) the earlier of (a) the fifth anniversary of the date
he commences participation in this Plan or (b) the first day of the calendar
month which follows the date on which he reaches age 70). These amounts are
calculated using the current formula under the Plan. In addition, the amounts
shown in the table have been calculated without regard to current limitations on
compensation and benefits.
Plan benefits shown in the table set forth above are offset by 2% of
primary Social Security benefits for each year of plan participation up to 25
years. Benefits under the plan formula are subject to all the limitations under
the Code.
The SERP is designed to supplement a participant's benefit under the
Pension Plan and is paid in the same form and at the same time as a
participant's benefit is paid under the Pension Plan. The supplement is designed
to make up for the loss in benefits the participant will receive under the
Pension Plan due to the reduction in the Code Limit from $235,840 to $150,000.
The Compensation Committee of the Board of Directors determines who will
participate in the SERP. Currently, there are 13 participants in the SERP.
CERTAIN TRANSACTIONS
John W. Spiegel, a director of the Company, is an officer of SunTrust
Banks, Inc. J. Hyatt Brown, a director of the Company, is also a director of
SunTrust Banks, Inc. During fiscal 1996, the Company maintained credit
facilities with SunTrust Bank, Atlanta, a wholly owned subsidiary of SunTrust
Banks, Inc., having an aggregate borrowing availability of $75 million pursuant
to a loan agreement dated January 17, 1995. During fiscal 1996, the Company did
not owe any amounts under such loan agreement and did not pay any interest under
such loan agreement. The Company paid $61,979 in facility fees relating to this
facility. In addition, the Company and SunTrust Banks, Inc. are parties to a
master letter of credit agreement relating to industrial revenue bonds issued in
connection with certain of the Company's manufacturing facilities. SunTrust
Banks, Inc. has performed other banking services for the Company over the past
fiscal year. Aggregate payments by the Company to SunTrust Banks, Inc. for such
services did not exceed 5% of the Company's net sales or SunTrust Banks' gross
revenues in fiscal 1996.
12
<PAGE> 16
J. Hyatt Brown, a director of the Company, is President and a shareholder
of Poe & Brown, Inc. During fiscal 1996, Poe & Brown, Inc. performed insurance
services for the Company, and the Company paid Poe & Brown, Inc. an aggregate of
$3,239,353 in respect of such services.
Robert B. Currey, a director of the Company, is Chief Executive Officer of
Currey & Company, Inc., which purchased corrugated boxes from the Company in
fiscal 1996 for an aggregate of $123,343.
David C. Nicholson is Senior Vice President, Chief Financial Officer and
Secretary of the Company. Mr. Nicholson's father-in-law is President, and his
brother-in-law is Vice President of Administration, of
Carithers-Wallace-Courtenay, a furniture company from which the Company has
purchased furniture. During fiscal 1996, the Company purchased furniture
aggregating $187,860 from Carithers-Wallace-Courtenay.
REPORT ON EXECUTIVE COMPENSATION
The Compensation and Options Committee of the Board of Directors (the
"Compensation Committee") during fiscal 1996 consisted of Mrs. Mary Louise
Morris Brown and Messrs. James W. Johnson and James M. Sibley. None of the
members of the Compensation Committee is an employee of the Company or any firm
which does business with the Company. During fiscal 1996, the Compensation
Committee was responsible for (i) establishing the compensation of the Company's
Chief Executive Officer and (ii) administering the Company's stock option plans,
employee stock purchase plan, key employee incentive bonus plan and supplemental
executive retirement plan. Mr. Currey, the Company's Chief Executive Officer,
was responsible for establishing the compensation for all of the other executive
officers of the Company. The Compensation Committee has reviewed the
applicability of Section 162(m) of the Internal Revenue Code of 1986, as amended
by the Omnibus Budget Reconciliation Act of 1993. Section 162(m) may in certain
circumstances deny a federal income tax deduction for compensation to an
executive officer in excess of $1 million per year. It is not currently
anticipated that compensation to any executive officer of the Company during the
fiscal year ending September 30, 1997 ("fiscal 1997") will exceed the $1 million
threshold.
COMPENSATION POLICY. The Company's executive compensation policy is
designed to attract, retain and motivate executive officers to maximize the
Company's performance and shareholder value by:
- providing base salaries that are market-competitive;
- rewarding the achievement of the Company's business plan goals and
earnings objectives; and
- creating stock ownership opportunities to align the interests of
executive officers with those of shareholders.
In light of the Company's compensation policy, the components of its
executive compensation program for fiscal 1996 included base salaries, cash
bonuses and stock options. The Company retained an independent compensation
consulting firm to assist it in analyzing its executive compensation program for
fiscal 1996. The consulting firm recommended that the Company continue its
policy, initiated in fiscal 1995, of providing a significant percentage of
certain executive officers' total compensation based on the Company's
performance. In addition, the consultant provided the Compensation Committee an
analysis of senior executive compensation for a peer group of the Company. This
peer group was determined by searching for comparable companies using
Rock-Tenn's primary SIC code (2631-Paperboard Mills). The Compensation Committee
considered these recommendations and the peer group analysis in establishing the
base salary and cash bonus for the Chief Executive Officer, and Mr. Currey
considered them in establishing the base salary and cash bonuses for the other
executive officers.
BASE SALARY. Each executive officer's base salary, including the Chief
Executive Officer's base salary, is determined based upon a number of factors
including the executive officer's responsibilities, contribution to the
achievement of the Company's business plan goals, demonstrated leadership skills
and overall effectiveness, and length of service. Base salaries are also
designed to be competitive with those offered in the various markets in which
the Company competes for executive talent and are analyzed with a view towards
desired base salary levels over a three-year to five-year time period. Each
executive officer's salary is reviewed annually and although these and other
factors are considered in setting base salaries, no specific weight is given
13
<PAGE> 17
to any one factor. During fiscal 1996, the base salary of each Named Executive
Officer other than the Chief Executive Officer was increased by approximately 5%
to 14% over each such executive officer's fiscal 1995 base salary. Mr. Currey's
base salary was increased by approximately 8% during fiscal 1996 over his fiscal
1995 base salary.
CASH BONUSES. Each executive officer, including the Chief Executive
Officer, is eligible to receive an annual cash bonus. The Company's cash bonus
program is designed to motivate key managers and sales people as well as
executive officers and reward the achievement of specific business plan goals.
Under the Company's bonus plan, in fiscal 1996, certain executive officers were
eligible to earn a cash bonus in an amount up to 40% of their respective base
salaries to the extent the Company achieved certain financial objectives
established by the Compensation Committee. During fiscal 1996, under this plan,
the Named Executive Officers, including the Chief Executive Officer, earned
bonuses equal to 36% of their respective base salaries.
STOCK OPTIONS. The grant of stock options is designed to align the
interests of executive officers with those of shareholders in the Company's
long-term performance. Stock options granted have exercise prices equal to the
fair market value of the underlying shares on the date of grant so that
compensation is earned only through long-term appreciation in the fair market
value of the underlying shares. Stock options are generally granted on an annual
basis if warranted by the Company's growth and profitability and individual
grants are based on, among other things, the executive officer's
responsibilities and individual performance. To encourage an executive officer's
long-term performance, commencing with grants in fiscal 1994, stock options
generally vest over three years and terminate ten years after the date of grant.
The creation of opportunities to own stock is considered the most significant
component in an executive officer's compensation package. On October 4, 1996,
the Named Executive Officers other than the Chief Executive Officer received
stock option grants in respect of fiscal 1996 ranging from options to purchase
9,900 to 30,800 shares. The Chief Executive Officer was not granted stock
options because he already has a significant stake in the Company.
Mary Louise Morris Brown
Bradley Currey, Jr.
James W. Johnson
James M. Sibley
THE FOREGOING REPORT SHOULD NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934 (TOGETHER, THE "ACTS"), EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT
OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
14
<PAGE> 18
STOCK PRICE PERFORMANCE GRAPH
The graph below reflects cumulative shareholder return (assuming the
reinvestment of dividends) on the Company's Class A Common Stock compared to the
return on the S&P 500 Index and the S&P Paper & Forest Products Index. Trading
in the Company's Class A Common Stock commenced on March 2, 1994 in connection
with the Company's initial public offering. The graph reflects the investment of
$100 on March 2, 1994 in the Company's Class A Common Stock, the S&P 500 Index
and the S&P Paper & Forest Products Index and the reinvestment of dividends.
[GRAPH]
<TABLE>
<CAPTION>
S&P PAPER AND
Measurement Period ROCK- TENN FOREST PROD-
(Fiscal Year Covered) COMPANY UCTS S&P 500
<S> <C> <C> <C>
Mar. 2, 1994 100.00 100.00 100.00
Sept. 30, 1994 105.25 103.58 99.54
Sept. 30, 1995 108.67 113.78 125.73
Sept. 30, 1996 127.90 114.57 147.87
</TABLE>
THE STOCK PRICE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE ACTS EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACTS.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 2)
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has appointed the firm of Ernst & Young LLP to serve as independent
auditors of the Company for fiscal 1997, subject to ratification of this
appointment by the shareholders of the Company. Ernst & Young LLP has served as
independent auditors of the Company for many years and is considered by
management of the Company to be well qualified. The Company has been advised by
Ernst & Young LLP that neither it nor any member thereof has any direct or
material indirect financial interest in the Company or any of its subsidiaries
in any capacity. One or more representatives of Ernst & Young LLP will be
present at the Annual Meeting, will have an opportunity to make a statement if
he or she desires to do so and will be available to respond to appropriate
questions.
15
<PAGE> 19
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE PROPOSAL TO
RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR FISCAL 1997. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
OTHER MATTERS
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires officers and
directors of the Company and persons who beneficially own more than ten percent
of the Company's Class A Common Stock to file with the Securities and Exchange
Commission certain reports, and to furnish copies thereof to the Company, with
respect to each such person's beneficial ownership of the Company's equity
securities. Based solely upon a review of the copies of such reports furnished
to the Company and certain representations of such persons, all such persons
complied with the applicable reporting requirements except that the statement of
changes in beneficial ownership on Form 4 required to be filed by Richard E.
Steed, an executive officer of the Company, to report the sale of shares of
Class A Common Stock was inadvertently filed approximately 63 days late.
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge, at the written request of any
shareholder of record as of January 10, 1997, a copy of the Company's Annual
Report on Form 10-K, including the financial statements and financial statement
schedules, as filed with the Securities and Exchange Commission, except exhibits
thereto. The Company will provide copies of the exhibits, should they be
requested by eligible shareholders, and the Company may impose a reasonable fee
for providing such exhibits. Requests for copies of the Company's Annual Report
on Form 10-K should be mailed to:
Rock-Tenn Company
504 Thrasher Street
Norcross, Georgia 30071
Attention: Chief Financial Officer
SHAREHOLDER NOMINATIONS FOR ELECTION OF DIRECTORS
Under the Company's Bylaws, only persons nominated in accordance with the
procedures set forth therein will be eligible for election as directors.
Shareholders are entitled to nominate persons for election to the Board of
Directors of the Company only if the shareholder is otherwise entitled to vote
generally in the election of directors and only if timely notice in writing is
sent to the Secretary of the Company. To be timely, a shareholder's notice must
be received at the principal executive offices of the Company not less than 130
days prior to the meeting. Notwithstanding the foregoing, in the event that less
than 60 days' notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholder must be received no
later than the close of business on the 10th day following the day on which such
notice of the date the meeting was mailed or such public disclosure was made,
whichever occurs first. Such shareholder's notice must set forth (i) with
respect to each person whom the shareholder proposes to nominate for election as
a director, (a) the name, age, business address and residence address of such
person, (b) the principal occupation or employment of such person, (c) the
number of shares of each class of Common Stock beneficially owned by such person
and (d) other information that would be required to be disclosed in connection
with the solicitation of proxies for the election of directors pursuant to
Regulation 14(a) under the Exchange Act and (ii) with respect to such
shareholder giving such notice, (a) the name and address of such shareholder and
(b) the number of shares of each class of Common Stock beneficially owned by
such shareholder. The Company may require any proposed nominee to furnish such
other information as may reasonably be required by the Company to determine the
eligibility of such proposed nominee to serve as a director of the Company.
16
<PAGE> 20
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the Company's 1998
Annual Meeting of Shareholders must be received no later than September 18, 1997
in order to be considered for inclusion in the Proxy Statement and form of proxy
to be distributed by the Board of Directors in connection with such meeting.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies by the Board of Directors in connection
with the Annual Meeting will be borne by the Company. The Company has engaged
Morgen Walke to provide certain investor relation services, which will include
assistance in the solicitation of proxies. For these investor relation services,
the Company paid Corporate Communications and Morgen Walke $48,992 and $61,543,
respectively, during fiscal 1996. No specific fee has been allocated to services
provided in connection with the solicitation of proxies. The Company will
reimburse brokers, fiduciaries and custodians for reasonable expenses incurred
by them in forwarding proxy materials to beneficial owners of Common Stock held
in their names.
By Order of the Board of Directors
/s/ David C. Nicholson
David C. Nicholson
Secretary
---------------------
THE ANNUAL REPORT TO SHAREHOLDERS OF THE COMPANY FOR FISCAL 1996, WHICH
INCLUDES AUDITED FINANCIAL STATEMENTS, TOGETHER WITH AN ADDENDUM THERETO,
ACCOMPANIES THIS PROXY STATEMENT. THE ANNUAL REPORT AND THE ADDENDUM THERETO
DOES NOT FORM ANY PART OF THE MATERIAL FOR THE SOLICITATION OF PROXIES.
---------------------
17
<PAGE> 21
APPENDIX A
ROCK-TENN COMPANY
PROXY FOR CLASS A COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON FEBRUARY 20, 1997
The undersigned hereby appoints Bradley Currey, Jr. and Jay Shuster and
each of them, proxies, with full power of substitution and resubstitution, for
and in the name of the undersigned, to vote all shares of Class A Common Stock
of Rock-Tenn Company which the undersigned would be entitled to vote if
personally present at the annual meeting of shareholders to be held on
Thursday, February 20, 1997, at 9:00 a.m., local time, at the Northeast Atlanta
Hilton at Peachtree Corners, 5993 Peachtree Industrial Boulevard, Norcross,
Georgia, or at any adjournment thereof, upon the matters described in the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement,
receipt of which is hereby acknowledged, and upon any other business that may
properly come before the annual meeting or any adjournment thereof. Said
proxies are directed to vote on the matters described in the Notice of
Annual Meeting of Shareholders and Proxy Statement as follows, and otherwise in
their discretion upon such other business as may properly come before the
meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
Please sign exactly as your name or names appear hereon. For more than one
owner as shown above, each should sign. When signing in a fiduciary capacity,
please give full title. If this proxy is submitted by a corporation, it should
be executed in the full corporate name by a duly authorized officer, if a
partnership, please sign in partnership name by authorized person.
- --------------------------------------------------------------------------------
<PAGE> 22
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE FOR WITHHOLD AUTHORITY
all nominees listed to vote for all
(except as marked below to nominees listed
the contrary)
/ / / /
1. To elect four (4) directors.
Bradley Currey, Jr.
Mary Louise Morris Brown
John D. Hopkins
James W. Johnson
(Instructions: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list above.)
2. Proposal to ratify the appointment of Ernst & Young LLP as independent
auditors.
FOR AGAINST ABSTAIN
/ / / / / /
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING ON
FEBRUARY 20, 1997. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF
YOU WISH, EVEN IF YOU PREVIOUSLY RETURNED YOUR PROXY.
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date
------------------
Shareholder sign here Co-owner sign here
- --------------------------------------------------------------------------------
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<PAGE> 23
APPENDIX B
ROCK-TENN COMPANY
PROXY FOR CLASS B COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON FEBRUARY 20, 1997
The undersigned hereby appoints Bradley Currey, Jr. and Jay Shuster and
each of them, proxies, with full power of substitution and resubstitution, for
and in the name of the undersigned, to vote all shares of Class B Common Stock
of Rock-Tenn Company which the undersigned would be entitled to vote if
personally present at the annual meeting of shareholders to be held on
Thursday, February 20, 1997, at 9:00 a.m., local time, at the Northeast Atlanta
Hilton at Peachtree Corners, 5993 Peachtree Industrial Boulevard, Norcross,
Georgia 30092, or at any adjournment thereof, upon the matters described in the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement,
receipt of which is hereby acknowledged, and upon any other business that may
properly come before the annual meeting or any adjournment thereof. Said
proxies are directed to vote on the matters described in the Notice of
Annual Meeting of Shareholders and Proxy Statement as follows, and otherwise in
their discretion upon such other business as may properly come before the
meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
Please sign exactly as your name or names appear hereon. For more than one
owner as shown above, each should sign. When signing in a fiduciary or
representative capacity, please give full title. If this proxy is submitted by
a corporation, it should be executed in the full corporate name by a duly
authorized officer, if a partnership, please sign in partnership name by
authorized person.
- --------------------------------------------------------------------------------
<PAGE> 24
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
1. To elect four (4) directors FOR
all nominees listed WITHHOLD AUTHORITY
(except as marked below to to vote for all
the contrary) nominees listed
/ / / /
Bradley Currey, Jr.
Mary Louise Morris Brown
John D. Hopkins
James W. Johnson
(Instructions: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list above.)
2. Proposal to ratify the appointment of Ernst & Young LLP as independent
auditors.
FOR AGAINST ABSTAIN
/ / / / / /
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING ON
FEBRUARY 20, 1997. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF
YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
RECORD DATE SHARES:
Please be sure to sign and date this Proxy Date
------------------------
Shareholder sign here Co-owner sign here
- --------------------------------------------------------------------------------
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