<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
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 Rule 14a-11(c) or Rule 14a-12
ROCK-TENN COMPANY
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(Name of Registrant as Specified In 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)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee previously paid with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
(LOGO) ROCK-TENN COMPANY
December 18, 1998
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Rock-Tenn Company (the "Company") to be held on January 28, 1999, 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 January 28, 1999
To the Shareholders of Rock-Tenn Company:
The Annual Meeting of Shareholders of Rock-Tenn Company (the "Company")
will be held on Thursday, January 28, 1999, 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 five directors;
(ii) to approve certain amendments to the Company's 1993 Stock Option
Plan;
(iii) to ratify the appointment of Ernst & Young LLP as independent
auditors of the Company to serve for the 1999 fiscal year; and
(iv) 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 December 4, 1998 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 December 4, 1998 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
December 18, 1998
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 JANUARY 28, 1999
------------------------
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 January 28, 1999 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
December 4, 1998 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, 22,947,900 shares of Class A Common Stock and
11,740,152 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 December 18, 1998.
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 and in the
discretion of the proxy holders as to any other matter that may properly come
before the Annual Meeting. 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").
<PAGE> 5
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, the Bylaws of the Company and the
rules of the New York Stock Exchange, (i) with respect to the election of
directors, the affirmative vote of a plurality of the shares comprising the
Voting Group is required to elect the nominees to the Board of Directors and
(ii) with respect to the proposal to approve certain amendments to the Company's
1993 Stock Option Plan and to ratify the appointment of Ernst & Young LLP as
independent auditors, the votes cast in favor of such proposal by shares
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
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 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 January 28, 1999, five nominees for director are to be elected
to serve until the Annual Meeting of Shareholders in 2002, 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
five directors.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR J. HYATT BROWN, A.D. FRAZIER,
EUGENE U. FREY, C. RANDOLPH SEXTON AND JAY SHUSTER TO HOLD OFFICE UNTIL THE
ANNUAL MEETING OF SHAREHOLDERS IN 2002, 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 2002
J. Hyatt Brown, 61, 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.
A.D. Frazier, 54, has served as President and Chief Executive Officer of
Invesco, Inc., an investment management company, since November 1996. Mr.
Frazier served as Chief Operating Officer of Atlanta Committee for the Olympic
Games from March 1991 until October 1996. Mr. Frazier is also a director of
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<PAGE> 6
Apache Corp., an oil and gas exploration company, Magellan Health Services,
Inc., a managed health care provider, and Amvescap, PLC, an investment
management company.
Eugene U. Frey, 68, has served as a director of the Company since February
1997. Since January 1997, Mr. Frey has served as Chairman of Wabash Management,
Incorporated. Prior to January 1997, Mr. Frey served as Chairman and Chief
Executive Officer of Waldorf Corporation, a recycled paperboard and folding
carton manufacturer that is now a subsidiary of the Company, for more than five
years.
C. Randolph Sexton, 69, has served as a director of the Company since 1967.
Mr. Sexton owns and manages citrus groves and a citrus packaging plant in Vero
Beach, Florida, which he has done for more than five years.
Jay Shuster, 44, 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 2001
Stephen G. Anderson, 60, 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, 58, 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.
John W. Spiegel, 57, 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., a bank holding company, for more than five years. Mr.
Spiegel is also a director of Conti Financial Corporation, a consumer and
commercial finance business, and Suburban Lodges of America, a real estate
investment trust. Mr. Spiegel is also a director of SunTrust Capital Markets.
L.L. Gellerstedt, III, 42, has served as Chairman and Chief Executive
Officer of American Business Products Inc., a printing company, since May, 1998.
Mr. Gellerstedt served as the Chief Executive Officer of Beers Construction
Company, a construction company, since June 1994 until May 1998. He has served
as Chairman of Beers Construction Company since June 1994. From November 1990
until June 1994, Mr. Gellerstedt served as President and Chief Executive Officer
of Beers Construction Company. Mr. Gellerstedt is also a director of SunTrust
Bank, Atlanta, a commercial bank, and Alltel Corporation, a nationwide
telecommunications services company.
INCUMBENT DIRECTORS -- TERM EXPIRING 2000
Bradley Currey, Jr., 68, 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 Banks, Inc.). Mr. Currey is also a director of
Genuine Parts Company, an auto parts wholesaler and Poe & Brown, Inc., an
insurance agency. Mr. Currey is the father of Russell M. Currey and the brother
of Robert B. Currey.
Mary Louise Morris Brown, 67, 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. Mrs. Brown is a
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trustee of Stetson University, a member of the board of Visiting Nurse Health
System and chairman of the Mary Louise Morris Brown Charitable Trust.
John D. Hopkins, 60, has served as a director of the Company since 1989.
Mr. Hopkins has served as Executive Vice President and General Counsel of
Jefferson-Pilot Corporation, a holding company with insurance 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, 57, 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.
MEETINGS OF THE BOARD OF DIRECTORS
During fiscal 1998 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 1998.
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., John D.
Hopkins, John W. Spiegel and Jay Shuster are members of the Executive Committee,
and Mr. 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 four meetings in fiscal 1998.
Audit Committee. Dr. Stephen G. Anderson and Messrs. Eugene U. Frey, A.D.
Frazier and John W. Spiegel are members of the Audit Committee, and Mr. Spiegel
is Chairman of the Committee. None of the members of the 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 1998.
Compensation and Options Committee. Mrs. Mary Louise Morris Brown, Messrs.
James W. Johnson and L.L. Gellerstedt, III are members of the Compensation and
Options Committee (the "Compensation Committee"), and Mr. Johnson is Chairman of
the Committee. The Compensation 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 one meeting in fiscal 1998.
Nominating Committee. Messrs. Bradley Currey, Jr., J. Hyatt Brown and C.
Randolph Sexton are members of the Nominating Committee, and Mr. Currey 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
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<PAGE> 8
Matters -- Shareholder Nominations for Election of Directors." This Committee
held no meetings in fiscal 1998.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive an annual retainer
fee of $12,000 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 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.
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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 December 4, 1998 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 COMMON STOCK(1) CLASS B COMMON STOCK
-------------------------- ---------------------------- PERCENTAGE
NUMBER PERCENT NUMBER PERCENT OF COMBINED
OF SHARES OF CLASS(2) OF SHARES OF CLASS(3) VOTING POWER
---------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Bradley Currey, Jr.(4).......... 3,510,616(5) 13.64% 2,766,180(6) 23.56% 20.23%
Jay Shuster..................... 751,858(7) 3.18 599,769(8) 5.10 4.37
Edward E. Bowns................. 316,211(9) 1.36 211,364(10) 1.80 1.58
David E. Dreibelbis............. 297,929(11) 1.28 192,046(12) 1.63 1.44
David C. Nicholson.............. 282,581(13) 1.22 177,153(14) 1.50 1.33
Stephen G. Anderson............. 716,292(15) 3.09 307,150(16) 2.62 2.48
J. Hyatt Brown(17).............. 5,208,935(18) 20.06 3,020,795(19) 25.73 23.08
Mary Louise Morris Brown(20).... 2,283,874(21) 9.38 1,398,296(22) 11.91 10.59
Robert B. Currey................ 142,163(23) * 71,081(24) * *
Russell M. Currey............... 2,091,424(25) 8.37 2,040,824(26) 17.37 14.56
A.D. Frazier.................... 4,058 * 0 * *
Eugene U. Frey.................. 55,050(27) * 0 * *
L.L. Gellerstedt, III........... 52,800(28) * 0 * *
John D. Hopkins................. 887,142(29) 3.79 440,388(30) 3.75 3.46
James W. Johnson................ 152,530(31) * 71,965(32) * *
C. Randolph Sexton.............. 689,395(33) 2.96 429,038(34) 3.65 3.24
John W. Spiegel................. 95,448(35) * 47,094(36) * *
All directors and executive
officers as a group (27
persons)...................... 13,524,742(37) 38.04 9,073,492(38) 76.09 72.97
</TABLE>
- ---------------
* Less than 1%.
(1) Under the Company's Articles of Incorporation, 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 22,947,900 shares of Class A Common Stock issued
and outstanding as of December 4, 1998 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
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<PAGE> 10
which are or will become exercisable prior to February 2, 1999 and (iii)
the number of shares of Class A 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 February 2, 1999.
(3) Based on an aggregate of 11,740,152 shares of Class B Common Stock issued
and outstanding as of December 4, 1998 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
February 2, 1999.
(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) 192,059 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) 2,766,180 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 Mrs. Mary Louise Morris Brown, (ii) 118,077 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
(which shares are also shown as beneficially owned by Mr. Russell M.
Currey), (iv) 192,059 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
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).
(7) Includes (i) 126,480 shares issuable upon exercise of stock options
beneficially owned by Mr. Shuster, (ii) 577,329 shares issuable upon
conversion of shares of Class B Common Stock beneficially owned by Mr.
Shuster, (iii) 22,440 shares issuable upon conversion of shares of Class B
Common Stock issuable upon exercise of stock options beneficially owned by
Mr. Shuster and (iv) 3,669 shares held by Mr. Shuster's spouse as custodian
for their children.
(8) Includes 17,778 shares held by Mr. Shuster's spouse as custodian for their
children and 22,440 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) 57,200 shares issuable upon exercise of
stock options beneficially owned by Mr. Bowns, (iii) 184,964 shares
issuable upon conversion of shares of Class B Common Stock beneficially
owned by Mr. Bowns and (iv) 26,400 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 26,400 shares issuable upon exercise of stock
options beneficially owned by Mr. Bowns.
(11) Includes (i) 84,040 shares issuable upon exercise of stock options
beneficially owned by Mr. Dreibelbis, (ii) 166,306 shares issuable upon
conversion of shares of Class B Common Stock beneficially owned by Mr.
Dreibelbis and (iii) 25,740 shares issuable upon conversion of shares of
Class B Common Stock issuable upon exercise of stock options beneficially
owned by Mr. Dreibelbis.
(12) Includes 25,740 shares issuable upon exercise of stock options beneficially
owned by Mr. Dreibelbis.
(13) Includes (i) 65,065 shares issuable upon exercise of stock options
beneficially owned by Mr. Nicholson, (ii) 151,413 shares issuable upon
conversion of shares of Class B Common Stock beneficially owned by
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Mr. Nicholson and (iii) 25,740 shares issuable upon conversion of shares of
Class B Common Stock issuable upon exercise of stock options beneficially
owned by Mr. Nicholson.
(14) Includes 25,740 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.
(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."
(18) Represents (i) 716,100 shares held in joint tenancy with Mr. Brown's
spouse, (ii) 192,059 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) 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)
3,020,795 shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by Mr. Brown and (vi) 693,519 shares deemed beneficially
owned by Mr. Brown as executor of the estate of A. Worley Brown.
(19) Represents (i) 1,046,100 shares held in joint tenancy with Mr. Brown's
spouse, (ii) 192,059 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)
1,039,727 shares deemed beneficially owned by Mr. Brown as executor of the
estate of A. Worley Brown.
(20) Mrs. Brown's address is P. O. Box 4098, Norcross, Georgia 30091.
(21) Represents (i) 693,519 shares held by the estate of A. Worley Brown (ii)
192,059 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) 1,398,296 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 the estate of Worley Brown and (ii)
192,059 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 71,082 shares held in joint tenancy with Mr. Currey's spouse and
71,081 shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by Mr. Currey.
(24) Includes 69,841 shares held in joint tenancy with Mr. Currey's spouse and
1,240 shares held by Mr. Currey's children.
8
<PAGE> 12
(25) Represents (i) 50,600 shares issuable upon exercise of stock options
beneficially owned by Mr. Currey, (ii) 2,034,224 shares issuable upon
conversion of shares of Class B Common Stock beneficially owned by Mr.
Currey and (iii) 6,600 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) 658,758 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 (which
shares are also shown as beneficially owned by Mr. Bradley Currey, Jr.).
(27) Includes 550 shares held in joint tenancy with Mr. Frey's spouse.
(28) Includes 52,800 shares held by Beers Construction Company, of which Mr.
Gellerstedt serves as Chairman of the Board.
(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 Mrs. 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 Mrs. 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) 8,600 shares
deemed beneficially owned by Mr. Johnson as trustee of a trust for the
benefit of the McCranie Companies Profit Sharing Plan and (iii) 71,965
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 34,200 shares held by Mr. Sexton as custodian for his
grandchildren and 429,038 shares issuable upon conversion of shares of
Class B Common Stock beneficially owned by Mr. Sexton.
(34) Includes 18,150 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) 3,772,570 shares beneficially owned by such directors and
executive officers, (ii) 678,680 shares issuable upon exercise of stock
options beneficially owned by such directors and executive officers, (iii)
8,889,093 shares issuable upon conversion of shares of Class B Common Stock
beneficially owned by such directors and executive officers and (iv)
184,399 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 8,889,093 shares beneficially owned by such directors and
executive officers and 184,399 shares issuable upon exercise of stock
options beneficially owned by such directors and executive officers.
9
<PAGE> 13
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth certain information relating to the compensation
earned during fiscal 1998, the fiscal year ended September 30, 1997 ("fiscal
1997") and the fiscal year ended September 30, 1996 ("fiscal 1996") 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
ANNUAL COMPENSATION(1) COMPENSATION
---------------------------- ------------
AWARDS
------------
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......................... 1998 $700,000 $224,000 50,000 $7,357
Chairman and Chief 1997 $700,000 $ 91,000 50,000 $7,530
Executive Officer 1996 $650,000 $234,000 -- $7,543
Jay Shuster................................ 1998 $455,000 $145,600 42,000 $2,522
President 1997 $415,000 $ 53,950 39,000 $2,696
and Chief Operating Officer 1996 $375,000 $135,000 30,800 $2,708
David E. Dreibelbis........................ 1998 $290,000 $ 92,800 26,000 $3,039
Executive Vice President 1997 $270,000 $ 35,100 24,000 $3,213
and General Manager of 1996 $240,000 $ 86,400 17,600 $3,226
the Mill Group
Edward E. Bowns............................ 1998 $265,000 $ 84,800 24,000 $4,788
Executive Vice President 1997 $252,000 $ 32,760 23,000 $4,962
and General Manager of 1996 $235,000 $ 84,600 13,200 $4,974
the Industrial Products Group
David C. Nicholson......................... 1998 $236,000 $ 75,520 21,000 $2,635
Senior Vice President, Chief 1997 $222,000 $ 28,860 20,000 $2,809
Financial Officer and Secretary 1996 $210,000 $ 75,600 9,900 $2,821
</TABLE>
- ---------------
(1) The aggregate amount of perquisites and other personal benefits, if any, did
not exceed the lesser of $50,000 or 10% of the total annual salary and bonus
reported for each Named Executive Officer and has therefore been omitted.
(2) Amounts shown reflect life insurance premiums paid by the Company.
10
<PAGE> 14
OPTION GRANTS TABLE
The table below sets forth certain information relating to the options
granted during fiscal 1998 to each Named Executive Officer. The Company's stock
option plans do not authorize the grant of stock appreciation rights.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------- OPTION TERM VALUE AT ASSUMED
PERCENT OF ----------------------------- ANNUAL RATES OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR BASE OPTION TERM
OPTIONS/SARS EMPLOYEES IN PRICE PER SHARE EXPIRATION ---------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE 5% ($) 10% ($)
---- ------------- ------------ ---------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bradley Currey, Jr........ 50,000 9.6% 11.1250 9/23/08 349,823 886,519
Jay Shuster............... 42,000 8.1% 11.1250 9/23/08 293,851 744,676
David E. Dreibelbis....... 26,000 5.0% 11.1250 9/23/08 181,908 460,990
Edward E. Bowns........... 24,000 4.6% 11.1250 9/23/08 167,915 425,529
David C. Nicholson........ 21,000 4.0% 11.1250 9/23/08 146,926 372,338
</TABLE>
- ---------------
(1) All options granted are options to purchase Class A Common Stock and vest in
increments equal to 50% of the aggregate number of options granted to the
Named Executive Officer on September 24, 2000 and September 24, 2001. 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.
(2) The option exercise price with respect to such options is equal to the
closing price per share of Class A Common Stock on September 23, 1998 as
reported on the New York Stock Exchange.
AGGREGATED OPTIONS TABLE
The table below sets forth certain information with respect to options
exercised during fiscal 1998 and options held at the end of fiscal 1998 by each
Named Executive Officer.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES TABLE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES FISCAL YEAR-END(#)(1) FISCAL YEAR-END($)(2)
ACQUIRED ON VALUE ------------------------------ ---------------------------
NAME EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------ ----------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bradley Currey,
Jr................. 0 0 0 100,000 0 0
Jay Shuster.......... 21,360 254,699 141,220(3) 96,400 268,650 0
David E.
Dreibelbis......... 19,800 202,501 105,380(4) 58,800 277,379 0
Edward E. Bowns...... 39,600 638,146 80,300(5) 53,600 387,502 0
David C. Nicholson... 30,360 380,632 88,330(6) 45,950 277,379 0
</TABLE>
- ---------------
(1) All unexercisable options are options to purchase Class A Common Stock.
(2) Represents 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 $11.0625 on
September 30, 1998 as reported on the New York Stock Exchange and (ii) the
aggregate exercise price of such options.
(3) Represents options to purchase 118,780 shares of Class A Common Stock and
22,440 shares of Class B Common Stock.
11
<PAGE> 15
(4) Represents options to purchase 79,640 shares of Class A Common Stock and
25,740 shares of Class B Common Stock.
(5) Represents options to purchase 53,900 shares of Class A Common Stock and
26,400 shares of Class B Common Stock.
(6) Represents options to purchase 62,590 shares of Class A Common Stock and
25,740 shares of Class B Common Stock.
PENSION PLAN TABLE
The table below 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) to the
"grandfathered participants" (as described below) upon retirement if their old
formula benefit (as described below) is greater than their new formula benefit
(as described below).
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
RENUMERATION 10 15 20 25 30 35
- --------------------------------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$125,000......................... $21,800 $32,700 $43,600 $ 54,500 $ 54,500 $ 54,500
150,000......................... 26,800 40,200 53,600 67,000 67,000 67,000
175,000......................... 31,800 47,700 63,600 79,500 79,500 79,500
200,000......................... 36,800 55,200 73,600 92,000 92,000 92,000
225,000......................... 41,800 62,700 83,600 104,500 104,500 104,500
250,000......................... 46,800 70,200 93,600 117,000 117,000 117,000
275,000......................... 48,800 73,200 97,600 122,000 122,000 122,000
300,000......................... 48,800 73,200 97,600 122,000 122,000 122,000
</TABLE>
There were approximately 300 grandfathered participants on January 1, 1998,
one of whom was Mr. Currey. Neither Messrs. Shuster, Bowns, Dreibelbis nor
Nicholson is a "grandfathered participant."
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 defined benefit plan maintained in whole or in part by contributions
from an "Affiliate" (as defined), or (iii) a member of a collective bargaining
unit that has not reached an agreement with the Company to participate in the
Pension Plan. A covered employee is eligible to begin to participate in the
Pension Plan upon completion of 12 months of service in one, or more than one,
period of employment (as defined in the Plan) and upon reaching age 21.
The Pension Plan was amended effective as of January 1, 1998 to add a new
benefit formula (the "new formula benefit"). For each calendar year after 1997,
the new formula benefit equals 1.2% of a participant's compensation plus .5% of
a participant's compensation in excess of 50% of the social security wage base
for each such calendar year (as such base is announced by the Internal Revenue
Service). This formula produces a benefit payable at a participant's normal
retirement age as a straight life annuity. The amendment to the Pension Plan
also freezes the benefit accrued under the old four part benefit formula (the
"old benefit formula") for all participants (except the "grandfathered
participants") as of December 31, 1997 so that all participants (except the
"grandfathered participants") will receive a benefit at retirement equal to the
sum of their benefit accrued as of December 31, 1997 under the old formula
benefit and their benefit accrued after that date under the new formula benefit.
A "grandfathered participant" is a Pension Plan participant as of December 31,
1997 who has reached at least age 55 and completed at least 10 years of service
as of January 1, 1998. A grandfathered participant will receive a benefit at
retirement based either completely on the old formula benefit or on the same
combination of the old formula benefit and the new formula benefit as all other
participants, whichever results in the greater benefit for the grandfathered
participant.
Under the Pension Plan, "compensation" for hourly paid participants is
defined as total compensation paid which is reportable as taxable income on Form
W-2, plus any elective deferrals under any 401(k) plan or Code sec. 125
Cafeteria Plan. Compensation for salaried employees is defined as base pay. It
therefore does not
12
<PAGE> 16
include any bonuses, overtime, commissions, reimbursed expenses of any kind,
severance pay, income imputed from insurance coverage or the like, and payments
under the Pension Plan or any other employee benefit plan or any income from a
stock option. No employee's compensation for purposes of the Pension Plan shall
include amounts in excess of the limit (the "Code Compensation Limit") imposed
by the Internal Revenue Code of 1986, as amended (the "Code") and as adjusted
for inflation by the Secretary of the Treasury. For calendar year 1996, the Code
Compensation Limit was $150,000, and for calendar years 1997 and 1998, the Code
Compensation Limit was $160,000.
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 1998, $260,000, $260,000, $260,000, $260,000 and $236,000 of the
compensation paid to Messrs. Currey, Shuster, Dreibelbis, Bowns and Nicholson,
respectively, was compensation for purposes of the Pension Plan and the SERP. As
of September 30, 1998, Messrs. Currey, Shuster, Dreibelbis, Bowns and Nicholson
had approximately 22, 19, 24, 18 and 15 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 (using the old
benefit formula in effect prior to January 1, 1998) as a life annuity, based on
various levels of average compensation and years of service at a grandfathered
participant's retirement date. In addition, the amounts shown in the table have
been calculated without regard to current limitations on compensation and
benefits.
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 Compensation Limit from $235,840
to $150,000 in 1994, indexed thereafter. The Compensation Committee of the Board
of Directors determines who will participate in the SERP. Currently, there are
17 participants in the SERP.
The estimated benefit payable at the normal retirement age under the new
benefit formula and the SERP for Messrs. Shuster, Dreibelbis, Bowns and
Nicholson is $180,000, $178,000, $118,000 and $131,000, respectively. Mr.
Currey's estimated benefit payable under the old formula benefit currently is
greater than his estimated benefit payable under the new formula benefit.
CERTAIN TRANSACTIONS
Mr. 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 1998, the Company maintained a syndicated
credit facility pursuant to a loan agreement under which SunTrust Bank, Atlanta,
a wholly owned subsidiary of SunTrust Banks, Inc., serves as agent. Under the
loan agreement, the Company has aggregate borrowing availability of
$450,000,000. As of September 30, 1998, the Company had outstanding borrowings
of $369,000,000 under such loan agreement and during fiscal 1998 the Company
paid $18,442,000 in interest under such loan agreement. The Company also paid
$1,179,000 in facility fees relating to this facility during fiscal 1998. 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 1998.
Mr. J. Hyatt Brown, a director of the Company, is President and a
shareholder of Poe & Brown, Inc. During fiscal 1998, Poe & Brown, Inc. performed
insurance services for the Company, and the Company paid Poe & Brown, Inc. an
aggregate of $4,898,000 in respect of such services.
Mr. 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 1998 for an aggregate of $328,225.
13
<PAGE> 17
Mr. L. L. Gellerstedt, III, a director of the Company, was President and
Chief Executive Officer of Beers Construction Company until May 1998 and
currently serves as Chairman. During fiscal 1998, the Company paid Beers
Construction Company an aggregate of $2,733,000 in exchange for services
relating to the construction of a new facility for the Company at its Norcross,
Georgia office.
Mr. 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 1998, the Company purchased furniture
aggregating $1,267,000 from Carithers-Wallace-Courtenay.
On January 21, 1997, the Company acquired all of the outstanding capital
stock of the parent of Waldorf Corporation ("Waldorf"). Mr. Eugene U. Frey, a
director of the Company, together with members of his immediate family, received
in connection with the acquisition cash in exchange for shares of capital stock
of the parent of Waldorf beneficially owned by them. In addition, in connection
with the Waldorf acquisition, Mr. Frey entered into a Consulting Agreement dated
January 21, 1997 with the Company, pursuant to which the Company agreed to pay
Mr. Frey, until January 21, 2000, a consulting fee of $264,000 per year in equal
monthly installments in exchange for various consulting services. During fiscal
1998, the Company paid Mr. Frey an aggregate of $264,000 under the Consulting
Agreement.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors during fiscal 1998
consisted of Mrs. Mary Louise Morris Brown and Messrs. James W. Johnson and L.L.
Gellerstedt, III. During fiscal 1998, 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 currently anticipated that compensation subject to
this threshold to be paid to one executive officer of the Company during fiscal
year ending September 30, 1999 ("fiscal 1999") may exceed $1 million.
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 1998 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 1998. 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. The Compensation Committee considered these recommendations 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
14
<PAGE> 18
markets in which the Company competes for executive talent and are analyzed with
a view towards desired base salary levels over a three- 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 to any one factor. During fiscal 1998, the base salary of each Named
Executive Officer other than the Chief Executive Officer was increased by
approximately 5.2% to 9.6% over each such executive officer's fiscal 1997 base
salary. Mr. Currey's base salary was not increased during fiscal 1998.
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 1998, 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 1998, under this plan,
the Named Executive Officers, including the Chief Executive Officer, earned
bonuses equal to 32% 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 September 23, 1998,
the Named Executive Officers received stock option grants in respect of fiscal
1998 ranging from options to purchase 21,000 to 50,000 shares.
Mary Louise Morris Brown
Bradley Currey, Jr.
James W. Johnson
L.L. Gellerstedt, III
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.
15
<PAGE> 19
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.
(PERFORMANCE GRAPH)
<TABLE>
<CAPTION>
Measurement Period S&P Paper
(Fiscal Year Covered) RKT S&P 500 Index
<S> <C> <C> <C>
Mar. 2, 1994 100.00 100.00 100.00
Sept. 30, 1994 105.25 99.54 103.58
Sept. 30, 1995 108.67 125.73 113.78
Sept. 30, 1996 127.90 147.87 114.57
Sept. 30, 1997 140.96 203.80 148.52
Sept. 30, 1998 79.63 218.80 107.93
</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.
APPROVAL OF AMENDMENTS TO 1993 STOCK OPTION PLAN
(ITEM 2)
The Board of Directors has approved and recommends to the shareholders that
they approve a proposal to amend the Company's 1993 Stock Option Plan (the
"Existing Plan" and, as proposed to be amended, the "Amended Plan") to (i)
increase by 1,500,000 the number of shares of Class A Common Stock available for
grant under the Existing Plan such that the total number of shares of Class A
Common Stock available for grant under the Amended Plan will be approximately
3,700,000, (ii) update the Plan with respect to the changes under Rule 16-3 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and (iii)
delete the existing grant limitation in the Existing Plan (which is a number of
shares equal to the product of five times the optionee's base salary divided by
the current market price per share of Class A Common Stock) and substitute a
grant limit of 100,000 shares each calendar year for all individuals except
individuals who the Company is seeking to employ for the first time which will
be subject to a grant limit of 300,000 shares. In the event that the adoption of
the Amended Plan is approved, 1,815,400 shares of Class A Common
16
<PAGE> 20
Stock would remain available for issuance under the Amended Plan. As of December
1, 1998, the fair market value of the Class A Common Stock was $16.94.
The Board of Directors of the Company has determined that the Amended Plan
is in the best interests of the Company and its shareholders. The Amended Plan
would provide additional shares for stock option grants to employees of the
Company. The Board of Directors believes that the grant of stock options is an
effective method to attract and retain employees and that the availability of
additional shares for future grants under the Amended Plan will be important to
the Company's business prospects and operations. The Board of Directors of the
Company believes that the other proposed amendments to the Existing Plan are in
the nature of clarifying and updating changes that will not have a significant
impact upon participants in the Amended Plan or on the Company in general.
PLAN DESCRIPTION
The following description of the Amended Plan is a summary and is qualified
in its entirety by reference to the text of the Amended Plan, which is available
from the Company upon request.
The Amended Plan will allow for the grant of both options that qualify as
incentive stock options and options that do not qualify as incentive stock
options (the "non-qualified options") under the Code. Under the Amended Plan,
there will be 3,700,000 shares of Class A Common Stock (subject to adjustments
set forth in the Amended Plan) available for use. Under the Amended Plan,
options may be granted to salaried full-time employees, including executive
officers, of the Company and its subsidiaries and affiliates (approximately
1,950 persons as of December 1, 1998). The Amended Plan will be administered by
the Compensation Committee, which will consist of individuals who are both
non-employee directors within the meaning of Rule 16b-3 under the Exchange Act,
and outside directors within the meaning of Section 162(m) of the Code. The
Compensation Committee will select individuals to receive options and will
determine the terms and conditions of the options to be granted, including the
type of option to be granted, the vesting schedule and the exercise price. Under
the Amended Plan, no individual in any calendar year may be granted an option to
purchase more than 100,000 shares of Class A Common Stock unless the individual
is an individual not previously employed by the Company, an affiliate or a
subsidiary, in which event such individual may be granted an option to purchase
up to 300,000 shares of Class A Common Stock in the first calendar year he or
she is so employed to induce him or her to become an employee of the Company.
The granting of options will be in the discretion of the Compensation Committee
and will be based upon, among other things, the employee's performance and
potential impact on the Company's growth and profitability. Options granted to
employees under the Amended Plan generally must expire no later than 10 years
after the date of grant. The exercise price of the options must be equal to at
least 100% of the fair market value of the Class A Common Stock on the date of
grant. Options are not transferable by the holder other than by will or
applicable laws of descent or distribution.
The Amended Plan may be amended from time to time by the Board of
Directors, except that no such amendment shall be made absent the approval of
the shareholders to the extent the Company determines such approval is required
under Section 162(m) of the Code or such approval is required under Section 422
of the Code (a) to increase the number of shares of Class A Common Stock
reserved for issuance under the Amended Plan or (b) to change the class of
employees eligible to participate in the Amended Plan.
The Amended Plan provides that, if the Company agrees to sell all or
substantially all of its assets or agrees to any merger, consolidation,
reorganization, division or other corporate transaction in which the Class A
Common Stock is converted into another security or into a right to receive
securities or property and such agreement does not provide for the assumption or
substitution of options granted under the Amended Plan on a basis that the Board
of Directors of the Company determines is fair and equitable to holders of
options, the Board of Directors may in its discretion cancel unilaterally any
unexercised options in exchange for the right to exercise the options in full
for a reasonable period before the options are unilaterally cancelled. The
Amended Plan further provides that, upon a change in control of the Company or
the making of a tender or exchange offer for the Class A Common Stock other than
by the Company, the Board of Directors may in its discretion take such actions
with respect to unexercised options as it deems appropriate to protect the
17
<PAGE> 21
integrity of the outstanding options. The Board of Directors, upon a change in
control, may take different action with respect to different employees or groups
of employees as it deems appropriate.
ESTIMATE OF BENEFITS
The number of options that will be granted under the Amended Plan to the
Named Executive Officers and the other executive officers, directors and
employees of the Company at future dates is not currently determinable.
The following table sets forth the number of stock options granted under
the Exiting Plan to the Named Executive Officers and to the executive officers
and other employees eligible to participate in the Existing Plan as a group
during fiscal 1998.
<TABLE>
<CAPTION>
NUMBER OF DOLLAR VALUE OF
OPTIONS GRANTED BENEFITS IN
NAME AND POSITION IN FISCAL 1998 FISCAL 1998(1)
- ----------------- --------------- ---------------
<S> <C> <C>
Bradley Currey, Jr.......................................... 50,000 $ 0
Chairman of the Board and Chief Executive Officer
Jay Shuster................................................. 42,000 0
President and Chief Operating Officer
David E. Dreibelbis......................................... 26,000 0
Executive Vice President and General Manager of the Mill
Group
Edward E. Bowns............................................. 24,000 0
Executive Vice President and General Manager of the
Industrial
Products Group
David C. Nicholson.......................................... 21,000 0
Senior Vice President, Chief Financial Officer and
Secretary
Executive officers as a group............................... 287,400 0
Current directors who are not executive officers as a
group..................................................... 0 0
All employees, including all current officers who are not
executive officers, as a group............................ 231,800 0
</TABLE>
- ---------------
(1) All stock options granted during fiscal 1998 had an exercise price per share
equal to the fair market value per share of Class A Common Stock on the date
of grant. Consequently, the dollar value of the benefits was $0 as of the
grant date.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion outlines generally the federal income tax
consequences of participation under the Amended Plan. Individual circumstances
may vary these results. The federal income tax law and regulations are
frequently amended, and each participant should rely on his or her own tax
counsel for advice regarding federal income tax treatment under the Amended
Plan.
Non-qualified Stock Options. The recipient of a non-qualified stock option
under the Amended Plan will not be subject to any federal income tax upon the
grant of such option nor will the grant of the option result in an income tax
deduction for the Company. As a result of the exercise of an option, the
recipient will recognize ordinary income in an amount equal to the excess, if
any, of the fair market value of the shares transferred to the recipient upon
exercise over the exercise price. Such fair market value generally will be
determined on the date the shares of Class A Common Stock are transferred
pursuant to the exercise. However, if the recipient is subject to Section 16(b)
of the Exchange Act, the date on which the fair market value of the shares
transferred will be determined is delayed under Section 83(c) of the Code for up
to six months if the recipient cannot sell the Class A Common Stock without
being subject to liability under Section 16(b) of the Exchange Act.
Alternatively, if the recipient is subject to Section 16(b) of the Exchange Act
and makes a timely election under Section 83(b) of the Code, such fair market
value will be determined
18
<PAGE> 22
on the date the shares are transferred pursuant to the exercise without regard
to the effect of Section 16(b) of the Exchange Act. The recipient will recognize
ordinary income in the year in which the fair market value of the shares
transferred is determined under Section 83 of the Code. The Company generally
will be entitled to a federal income tax deduction equal to the amount of
ordinary income recognized by the recipient when such ordinary income is
recognized by the recipient provided the Company satisfies applicable federal
income tax reporting requirements.
Depending on the period the shares of Class A Common Stock are held after
exercise, the sale or other taxable disposition of shares acquired through the
exercise of a non-qualified stock option generally will result in a short-or
long-term capital gain or loss equal to the difference between the amount
realized on such disposition and the fair market value of such shares when the
non-qualified stock option was exercised (or if a recipient was subject to
Section 16(b) of the Exchange Act and did not timely elect under Section 83(b)
of the Code, the fair market value on the delayed determination date, if
applicable).
Special rules apply to a recipient who exercises a non-qualified stock
option by paying the exercise price, in whole or in part, by the transfer of
shares of Class A Common Stock to the Company.
Incentive Stock Options. An employee will not subject to any federal
income tax upon the grant of an incentive stock option pursuant to the Amended
Plan, nor will the grant of an incentive stock option result in an income tax
deduction for the Company. Further, an employee will not recognize income for
federal income tax purposes and the Company normally will not be entitled to any
federal income tax deduction as a result of the exercise of an incentive stock
option and the related transfer of shares of Class A Common Stock to the
employee. However, the excess of the fair market value of the shares transferred
upon the exercise of the incentive stock option over the exercise price for such
shares generally will constitute an item of alternative minimum tax adjustment
to the employee for the year in which the option is exercised. Thus, certain
employees may increase their federal income tax liability as a result of the
exercise of an incentive stock option under the alternative minimum tax rules of
the Code.
If the shares of Class A Common Stock transferred pursuant to the exercise
of an incentive stock option are disposed of within two years from the date the
option is granted or within one year from the date the option is exercised, the
employee generally will recognize ordinary income equal to the lesser of (1) the
gain recognized (i.e., the excess of the amount realized on the disposition over
the exercise price) or (2) the excess of the fair market value of the shares
transferred upon exercise over the exercise price for such shares. If the
employee is subject to Section 16(b) of the Exchange Act, special rules may
apply to determine the amount of ordinary income recognized upon the
disposition. The balance, if any, of the employee's gain over the amount treated
as ordinary income on disposition generally will be treated as long- or
short-term capital gain depending upon whether the holding period applicable to
long-term capital assets is satisfied. The Company normally would be entitled to
a federal income tax deduction equal to any ordinary income recognized by the
employee provided the Company satisfied applicable federal income tax reporting
requirements.
If the shares of Class A Common Stock transferred upon the exercise of an
incentive stock option are disposed of after the holding periods have been
satisfied, such disposition generally will result in a long-term capital gain or
loss treatment with respect to the difference between the amount realized on the
disposition and the exercise price. The Company will not be entitled to a
federal income tax deduction as a result of a disposition of such shares after
these holding periods have been satisfied.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE THE AMENDED PLAN. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
19
<PAGE> 23
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 3)
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 the fiscal 1999, subject to ratification of this
appointment by the shareholders of the Company. 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.
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 1999. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 (i) the initial
statement of beneficial ownership on Form 3 required to be filed by Vincent
D'Amelio, an executive officer of the Company, was inadvertently filed
approximately 34 days late, (ii) the initial statement of beneficial ownership
on Form 3 required to be filed by Steve Flanagan, an executive officer of the
Company, was inadvertently filed approximately 34 days late, (iii) the statement
of changes of beneficial ownership on Form 4 required to be filed by Eugene
Frey, a director of the Company, to report the sale of shares of Class A Common
Stock was inadvertently filed approximately 44 days late, (iv) the statement of
changes of beneficial ownership on Form 4 required to be filed by Mary Louise
Morris Brown, a director of the Company, to report the sale of shares of Class A
Common Stock was inadvertently filed approximately 30 days late and (v) the
statement of changes of beneficial ownership on Form 4 required to be filed by
C. Randolph Sexton, a director of the Company, to report the sale of shares of
Class A Common Stock was inadvertently filed approximately 30 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 December 4, 1998, 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. Request 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
20
<PAGE> 24
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.
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the Company's 2000
Annual Meeting of Shareholders must be received no later than August 9, 1999 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. If,
however, the Company gives less than 60 days notice of the Company's 2000 Annual
Meeting of Shareholders, any shareholder proposals intended to be presented at
such meeting must be received no later than ten days after the date of such
notice.
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. For investor relation
services, the Company paid Morgen Walke $111,000 during fiscal 1998. No specific
fee was 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 1998, WHICH
INCLUDES AUDITED FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY STATEMENT. THE
ANNUAL REPORT DOES NOT FORM ANY PART OF THE MATERIAL FOR THE SOLICITATION OF
PROXIES.
------------------------
21
<PAGE> 25
APPENDIX
ROCK-TENN COMPANY
PROXY FOR CLASS A COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON JANUARY 28, 1999
<TABLE>
<S> <C>
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 that
the undersigned would be entitled to vote if personally present at the annual meeting of shareholders to be held on January 28,
1999, 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, 2 AND 3.
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.
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE FOR WITHHOLD
all nominees listed AUTHORITY
(except as marked below to vote for all
to the contrary) nominees listed FOR AGAINST ABSTAIN
1. To elect five (5) directors: / / / / 2. To adopt and approve the / / / / / /
J. Hyatt Brown Amendments to the
A.D. Frazier Company's 1993 Stock
Eugene U. Frey Option Plan.
C. Randolph Sexton
Jay Shuster 3. To ratify the appointment FOR AGAINST ABSTAIN
of Ernst & Young LLP as / / / / / /
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL independent auditors.
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
RECORD DATE SHARES:
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 JANUARY 28, 1999. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU
WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED
YOUR PROXY.
</TABLE>
-----------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here
<PAGE> 26
APPENDIX
ROCK-TENN COMPANY
PROXY FOR CLASS B COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON JANUARY 28, 1999
<TABLE>
<S> <C> <C> <C> <C> <C>
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 that the undersigned would be entitled to vote if personally present at the annual meeting of shareholders to be
held on January 28, 1999 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, 2 AND 3.
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.
/X/ PLEASE MARK VOTES FOR
AS IN THIS EXAMPLE all nominees listed WITHHOLD AUTHORITY
(except as marked below to to vote for all
the contrary) nominees listed
/ / / / FOR AGAINST ABSTAIN
1. To elect five (5) directors: 2. To adopt and approve the Amendments to / / / / / /
J. Hyatt Brown the Company's 1993 Stock Option Plan.
A.D. Frazier
Eugene U. Frey
C. Randolph Sexton
Jay Shuster
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL 3. To ratify the appointment of Ernst & FOR AGAINST ABSTAIN
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST Young, LLP as independent auditors. / / / / / /
ABOVE.)
RECORD DATE SHARES: 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 JANUARY 28, 1999. IF YOU
ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU
WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
</TABLE>
-----------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here
