<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
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. )
------------------------
POPE & TALBOT, INC.
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] PRELIMINARY PROXY STATEMENT
[X] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO RULE 14A-11(C) OR RULE 14A-12
POPE & TALBOT, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DENNIS BUNDAY
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] $125 per Exchange Act Rule 0-11(c)(l)(ii), 14a-6(i)(l), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Shares, Par Value $1.00
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
[ ] 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:
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
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<PAGE> 2
POPE & TALBOT, INC.
1500 S.W. FIRST AVENUE
PORTLAND, OREGON 97201
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1994
The Annual Meeting of Shareholders of Pope & Talbot, Inc. (the "Company"),
a Delaware corporation, will be held at the Mandarin Oriental Hotel, 222 Sansome
Street, San Francisco, California on Monday, April 25, 1994 at 3:00 p.m., for
the following purposes:
1. To elect three persons to the Board of Directors of the Company to serve
for a term of three years;
2. To ratify the selection of independent public accountants for the year
1994; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on February 28, 1994
are entitled to receive notice of and to vote at the Annual Meeting.
It is important that your shares be represented and voted at the Annual
Meeting. Whether or not you currently intend to be present personally at the
Annual Meeting, you are urged to complete, date, sign and return the
accompanying proxy in the enclosed, self-addressed envelope requiring no postage
if mailed in the United States. You may still vote in person if you do attend
the Annual Meeting.
By order of the Board of Directors
C. Lamadrid
Senior Vice President,
Secretary, Treasurer and
Chief Financial Officer
Portland, Oregon
March 7, 1994
<PAGE> 3
POPE & TALBOT, INC.
1500 S.W. FIRST AVENUE
PORTLAND, OREGON 97201
PROXY STATEMENT
MAILED MARCH 7, 1994, FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1994
GENERAL
Your proxy in the form enclosed is solicited by the Board of Directors of
the Company for the Annual Meeting or any adjournment thereof. You may revoke it
at any time prior to its use by a written communication to C. Lamadrid,
Secretary of the Company, or by a duly executed proxy bearing a later date.
Shareholders attending the Annual Meeting may vote their shares in person even
though they have already given a proxy. Properly executed proxies not revoked
will be voted in accordance with the specifications thereon at the Annual
Meeting and at any adjournment thereof.
Only shareholders of record at the close of business on February 28, 1994
are entitled to vote at the Annual Meeting. On that date, the Company had
outstanding 13,344,068 shares of common stock entitled to vote. Each share is
entitled to one vote except that the election of directors will be conducted
pursuant to cumulative voting. Under cumulative voting, each share of common
stock is entitled to one vote multiplied by the number of directors to be
elected, and that number of votes may be cast for one director or may be
distributed among any number of directors as designated by the shareholder or
his proxy.
Shares of common stock represented by proxies in the accompanying form
which are properly executed and returned to the Company will be voted at the
Annual Meeting of Shareholders in accordance with the shareholders' instructions
contained in such proxies. Where no such instructions are given, the shares will
be voted for the election of directors as described herein, for ratification of
Arthur Andersen & Co. as the Company's independent public accountants for 1994
and at the discretion of the proxy holders on such other matters as may come
before the Annual Meeting.
Approval of each of Proposal No. 1 and Proposal No. 2 described below in
this Proxy Statement requires the affirmative vote of holders of a majority of
the shares of common stock represented at the Annual Meeting, in person or by
proxy, who are entitled to vote on such Proposals. Abstentions and broker
non-votes are each included in the number of shares present for quorum purposes.
Abstentions, which may be specified on all proposals other than the election of
directors, are counted in tabulations of the votes cast on proposals presented
to stockholders; whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, Peter T. Pope and Brooks Walker, Jr. will be
nominated for re-election as directors for three-year terms. Mr. Adolphus
Andrews, Jr.'s term of office expires as of the date of the Annual
<PAGE> 4
Meeting and he will not stand for re-election and Mr. Edward Cooley will resign
as a director effective as of the date of the Annual Meeting, both in accordance
with the Company's policy that directors who attain the age of 72 retire from
active involvement with the Company. The Board of Directors has nominated Mr.
Gordon P. Andrews as a director for a three-year term, effective upon his
election at the Annual Meeting. Concurrently with Mr. Cooley's resignation and
effective as of the date of the Annual Meeting, the authorized number of
directors on the Board will be reduced from nine to eight. Unless otherwise
instructed, the proxy holders named on the enclosed proxy card intend to utilize
the cumulative voting right described above to distribute the votes represented
by proxies in such proportion as they shall determine between the three nominees
or their substitutes so as to elect the maximum number of such persons. The
Board of Directors expects that all of these nominees will be available for
election, but in the event that any of these nominees is not so available at the
time of the Annual Meeting, proxies received will be voted for a substitute
nominee to be designated by the Board of Directors. The Board of Directors
unanimously recommends a vote for election of each of the above-mentioned
nominees as Directors.
CERTAIN INFORMATION REGARDING DIRECTORS AND OFFICERS
Set forth below, as of January 24, 1994, for each nominee and each director
of the Company whose term continues after the Annual Meeting is certain
information regarding such person. Also set forth below, as of January 24, 1994,
is the number of shares of the Company's common stock beneficially owned by (i)
each of the executive officers named in the Summary Compensation Table below and
(ii) all directors and executive officers as a group. All officers hold office
at the pleasure of the Board of Directors.
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<TABLE>
<S> <C>
Gordon P. Andrews Age: 37
Nominee for election with term to expire in 1997
Business experience:
President, Andrews Associates, Inc. -- 1993 to present.
Associated with Andrews Associates, Inc. (management
consulting) as a Director and various management
positions -- 1982 to present.
Vice President, Institutional Sales, Shearson Lehman
Brothers, Inc. -- 1990 to 1992.
Securities beneficially owned: 226,861 (1.9% of class).
Includes 176,876 shares as to which he has sole investment
and voting power, and 47,385 shares held as co-trustee for
his children and his sister's children. Also includes 2,600
shares for which his wife is trustee for his children.
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Hamilton W. Budge Age: 65
Committee memberships: Human Resources
Director since: 1967
Term of office expires: 1995
Business experience:
Of Counsel, Brobeck, Phleger & Harrison (Attorneys) --
July 1990 to present.
Partner, Brobeck, Phleger & Harrison -- May 1988 to July
1990.
Directorships:
Technology for Communications International
Securities beneficially owned: 20,000 (less than 1% of
class). Investment and voting power shared with his wife.
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</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C>
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Charles Crocker Age: 55
Committee memberships: Audit
Director since: 1986
Term of office expires: 1995
Business experience:
Chairman of the Board, BEI Electronics (diversified
technology for military and medical applications) -- 1974
to present.
President, Crocker Capital (private venture capital
firm) -- September 1985 to present.
General Partner, Crocker Associates (private venture
investment partnership) -- 1970 to 1991.
Directorships:
BEI Electronics, Inc.
Fiduciary Trust Company International
Superconductor Technologies, Inc.
Securities beneficially owned: 1,000 (less than 1% of
class) (1)
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Warren E. McCain Age: 68
Committee memberships: Human Resources
Director since: 1989
Term of office expires: 1996
Business experience:
Chairman of the Executive Committee, Albertson's Inc.
(grocery store chain) -- 1991 to present.
Chairman of the Board and Chief Executive Officer of
Albertson's, Inc. -- 1976 to 1991.
Directorships:
Albertson's, Inc.
Portland General Corporation
West One Bancorp
Securities beneficially owned: 1,000 shares (less than 1% of class)(1)
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Robert Stevens Miller, Jr. Age: 52
Committee memberships: Audit, Human Resources
Director since: 1993
Term of office expires: 1996
Business experience:
Retired -- January 1993 to present.
Senior Partner, James D. Wofens (investment
banking) -- 1992 to January 1993.
Vice Chairman of the Board, Chrysler Corporation
(automobile manufacturing) -- 1990 to 1992.
Chief Financial Officer, Chrysler Corporation -- 1981 to
1990.
Directorships:
Federal-Mogul Corporation
Flecke Corporation
Syntex, Inc.
U.S. Bancorp
Securities beneficially owned: 1,000 (less than 1% of
class). Investment and voting power shared with his wife.
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</TABLE>
3
<PAGE> 6
<TABLE>
<S> <C>
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Peter T. Pope Age: 59
Position: Chairman of the Board, President and Chief
Executive Officer
Director since: 1962
Term of office expires: 1994 (nominee for re-election)
Business experience:
Chairman of the Board, President and Chief Executive
Officer of the Company -- March 1990 to present.
Chairman of the Board and Chief Executive Officer of the
Company -- 1971 to March 1990.
Directorships:
Pope MGP, Inc. and Pope EGP, Inc., general partners of Pope
Resources, a Delaware limited partnership
The Newhall Land & Farming Company, a California limited
partnership
Securities beneficially owned: 544,158 (4.6% of class)
Includes 355,969 shares as to which he has sole investment
and voting power, 40,000 shares as to which he shares
investment and voting power and 116,806 shares subject to
options exercisable within 60 days after January 24, 1994
under the Company's Stock Option and Appreciation Plan.
Also includes 31,383 shares owned by his wife as to which
he disclaims beneficial ownership.
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Hugo G. L. Powell Age: 49
Committee memberships: Audit
Director since: 1985
Term of office expires: 1996
Business experience:
President of Labatt Breweries of Canada (beverage
manufacturing and distribution) -- May 1992 to present.
President of Labatt's Ontario Breweries -- October 1990 to
May 1992.
President and Chief Executive Officer of Everfresh, Inc.
(food processing) -- January 1989 to October 1990.
Securities beneficially owned: None
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Brooks Walker, Jr. Age: 65
Committee memberships: Audit, Human Resources
Director since: 1981
Term of office expires: 1994 (nominee for re-election)
Business experience:
General Partner, Walker Investors (venture capital
investment partnership) -- 1988 to present.
Directorships:
AT&T Capital Corporation
The Gap, Inc.
Securities beneficially owned: 1,600 (less than 1% of
class) (1)
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Carlos M. Lamadrid Securities beneficially owned: 47,537 (2)
Michael Flannery Securities beneficially owned: 30,475 (2)
William G. Frohnmayer Securities beneficially owned: 37,106 (2)
Robert L. Vanderselt Securities beneficially owned: 17,260 (2)
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</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
All Directors and Executive Securities beneficially owned: 931,689 (8.0% of class).
Officers As a Group (13 Includes 138,057 shares in which voting and investment
individuals) powers are shared, 546,901 shares to which such directors
or officers have sole voting and investment powers and
31,383 shares to which certain directors and officers
disclaim beneficial ownership. Also includes 215,348 shares
subject to options exercisable within 60 days after Janu-
ary 24, 1994 under the Company's Stock Option and
Appreciation Plan.
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</TABLE>
(1) Sole voting and investment power is held on all of the shares.
(2) Includes shares purchasable under options which are currently exercisable or
will become exercisable within 60 days after January 24, 1994 under the
Company's Stock Option and Appreciation Plan.
INFORMATION ON THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors has as its two standing committees the Audit
Committee and the Human Resources Committee. The membership of each committee is
listed above on pages 2 through 4. These committees are composed entirely of
nonemployee directors. The Board does not have a nominating committee, but the
Board as a whole considers and makes nominations for directors.
The Audit Committee monitors, on a periodic basis, the performance of the
independent public accountants and recommends their engagement or dismissal to
the Board of Directors. It also reviews with the independent public accountants
the scope and results of their audits and their independence with respect
thereto and the adequacy of the Company's accounting and financial controls. The
Human Resources Committee generally performs the functions of a compensation
committee and recommends salary, incentive compensation and bonus arrangements
for the Company's senior management. Its recommendations are acted upon by the
Board of Directors. The Human Resources Committee also has sole authority to
administer the Company's stock option and stock bonus plans and make grants or
awards thereunder.
The Board of Directors held six meetings during 1993. The Audit Committee
held two meetings, and the Human Resources Committee held two meetings.
Each director of the Company is paid $1,000 for every Board meeting
attended. In addition, directors who are not also officers of the Company are
paid $18,000 per year plus $700 for each meeting of a standing committee of the
Board attended if that meeting is held on the same day as a Board meeting and
$1,000 otherwise.
5
<PAGE> 8
BENEFICIAL OWNERSHIP OF OVER 5% OF POPE & TALBOT COMMON STOCK
The following table lists beneficial owners of more than 5% of Pope &
Talbot, Inc. common stock as of December 31, 1993.
<TABLE>
<CAPTION>
VOTING POWER INVESTMENT POWER
----------------- ----------------- PERCENT
SOLE SHARED SOLE SHARED TOTAL OF CLASS
------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Fidelity Management &
Research Corp.
82 Devonshire Street
Boston, MA 02109.................... 119,111 -- 971,411 -- 971,411 8.3%
Mr. and Mrs. Adolphus Andrews, Jr.(1)
600 Montgomery Street
San Francisco, CA 94111............. 834,499 -- 834,499 -- 834,499 7.1%
Michell Hutchins
Institutional Investors, Inc.
1285 Avenue of Americas
New York, NY 10019.................. -- 665,800 -- 665,800 665,800 5.7%
</TABLE>
- ---------------
(1) Mr. Adolphus Andrews, Jr. will retire as a director of the Corporation
effective as of the date of the 1994 Annual Meeting.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the Company's four other highest-paid executive
officers for services rendered in all capacities to the Company and its
subsidiaries for the fiscal years ended December 31, 1993, December 31, 1992 and
December 31, 1991, respectively. No executive officer who would have otherwise
been includable in such table on the basis of salary and bonus earned for the
1993 fiscal year has resigned or terminated employment during 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------ ---------------------------------------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS SAR'S COMPENSATION
PRINCIPAL POSITION YEAR ($)(2) ($) ($) ($)(3) (#) ($)(4)
- ------------------------------------- ---- -------- -------- ------------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Peter T. Pope 1993 $394,078 $201,336 -- -- 60,000 $ 4,497
Chairman of the Board, 1992 380,750 -- -- -- 38,990 4,364
President, and Chief Executive
Officer 1991 362,336 -- -- -- 37,000 4,238
Robert L. Vanderselt(1) 1993 191,740 39,614 $ 53,022(5) -- 22,000 4,497
Group Vice President 1992 182,250 -- 1,656(5) -- 9,650 2,795
Consumer Products Division 1991 48,448 -- 10,227(5) $ 28,000 15,000 --
Michael Flannery 1993 189,426 102,572 -- -- 20,000 4,497
Group Vice President 1992 183,018 -- -- -- 9,650 4,364
Wood Products Division 1991 176,552 -- -- -- 10,400 4,238
Carlos M. Lamadrid 1993 185,356 77,816 -- -- 20,000 4,497
Senior Vice President, 1992 179,080 -- -- -- 9,650 4,364
Secretary, Treasurer and 1991 172,748 -- -- -- 10,400 4,238
Chief Financial Officer
William G. Frohnmayer 1993 171,968 41,755 -- -- 20,000 4,497
Group Vice President 1992 166,146 -- -- -- 9,650 4,364
Fiber Division 1991 157,798 -- -- -- 10,400 4,238
</TABLE>
6
<PAGE> 9
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(1) Mr. Vanderselt was hired as the Group Vice President -- Consumer Products
Division in October 1991.
(2) Includes salary deferred under the Company's Tax Deferred Savings Plan.
(3) Mr. Flannery was the only named executive officer to hold restricted stock
at the end of the 1993 fiscal year. At that date he held 2,000 shares of
restricted common stock with a fair market value of $57,500. These shares
will vest incrementally over his period of continued service with the
Company as follows: April, 1994, 1,000 shares and April, 1995, 1,000 shares.
(4) Consists of contributions made by the Company to the Tax Deferred Savings
Plan on behalf of each named executive officer.
(5) Consists of reimbursement of relocation costs incurred by Mr. Vanderselt
(including the loss incurred on the sale of his former residence) in
connection with his relocation to Portland, Oregon.
STOCK OPTION AND STOCK APPRECIATION RIGHTS
The following table contains information concerning the grant of stock
options and stock appreciation rights (SARs) made under the Company's Stock
Option and Appreciation Plan for the 1993 fiscal year to the named executive
officers:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
- ------------------------------------------------------------------------------------------ AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
OPTIONS/SARS PRICE
GRANTED TO APPRECIATION FOR
EMPLOYEES EXERCISE OR OPTION TERM(1)
IN FISCAL BASE PRICE EXPIRATION -------------------
YEAR ($/SHARE)(4) DATE 5% ($) 10% ($)
------------ ------------ ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Peter T. Pope..................... 60,000 20.5% $ 19.125 1/23/03 721,657 1,828,819
Carlos M. Lamadrid................ 20,000 6.8% $ 19.125 1/23/03 240,552 609,606
Michael Flannery.................. 20,000 6.8% $ 19.125 1/23/03 240,552 609,606
William G. Frohnmayer............. 20,000 6.8% $ 19.125 1/23/03 240,552 609,606
Robert L. Vanderselt.............. 22,000 7.5% $ 19.125 1/23/03 264,607 670,567
</TABLE>
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(1) The potential realizable value illustrates the value that might be realized
upon exercise of the options immediately prior to the expiration of their
maximum 10-year term, assuming the specified compounded rates of
appreciation on the Company's common stock over the option term. However,
there is no assurance provided to any executive officer or any other holder
of the Company's securities that the actual stock price appreciation over
the 10-year option term will be at the assumed 5% and 10% levels or at any
other defined level. Unless the market price of the common stock does in
fact appreciate over the option term, no value will be realized from the
option grants made to the executive officers. In addition, these assumed
values do not take into account option provisions which trigger the
termination of the option following cessation of employment, the
nontransferability of the options and the exercise schedule in
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<PAGE> 10
effect for each option which is contingent upon continuous service with the
Company for periods of up to five years.
(2) The Stock Option Plan permits the granting of two types of stock
appreciation rights: Tandem Stock Appreciation Rights and Independent Stock
Appreciation Rights. Tandem Stock Appreciation Rights allow the holder to
elect between the exercise of the underlying option for shares of common
stock or the surrender of such option for an appreciation distribution from
the Company, payable in cash or in shares of common stock. Independent Stock
Appreciation Rights may be exercised for an appreciation distribution
concurrently with (or within a period not to exceed 12 months following) the
exercise of the underlying option for shares of common stock and do not
require that option to be surrendered. None of the options granted in 1993
included stock appreciation rights.
(3) Options will become exercisable for the option shares in a series of 5 equal
and successive annual installments, beginning January 24, 1994. Each option
will become immediately exercisable for all of the option shares in the
event the Company is acquired by merger or sale of substantially all of the
Company's assets or outstanding common stock, unless the option is assumed
or otherwise replaced by the acquiring entity. Upon the termination of the
optionee's employment within 18 months after (i) an acquisition of the
Company which does not otherwise result in the immediate acceleration of the
option or (ii) any hostile change in control of the Company effected by
tender offer for 25% or more of the outstanding common stock or proxy
contest for Board membership, the option will become immediately exercisable
for all of the option shares. Option acceleration will, however, in all
instances be limited so as to avoid excess parachute payments under the
federal tax laws. For further information concerning these option
acceleration provisions, please see the section below entitled Employment
Contracts and Change in Control Arrangements. Each option has a maximum term
of 10 years, subject to earlier termination in the event of the optionee's
cessation of service with the Company.
(4) The exercise price of each option may be paid in cash, in shares of common
stock valued at fair market value on the exercise date or through a cashless
exercise procedure involving a same-day sale of the purchased shares. The
Company may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise price for the purchased shares and the
federal and state tax liability incurred in connection with such exercise.
The optionee may be permitted, subject to the approval of the Plan
Administrator, to apply a portion of the shares purchased under the option
(or to deliver existing shares of common stock) in satisfaction of such tax
liability. The Plan Administrator also has the authority to reprice
outstanding options through the cancellation of those options and the grant
of replacement options with a exercise price equal to the lower fair market
value of the option shares on the regrant date.
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<PAGE> 11
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executive officers concerning exercise of options during the 1993 fiscal year
and unexercised options held as of the end of that fiscal year. No SAR's were
exercised during the 1993 fiscal year by the named executive officers, nor were
any SAR's outstanding at the end of such fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE REALIZED NUMBER OF SECURITIES VALUE OF UNEXERCISED
(MARKET PRICE UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES AT EXERCISE OPTIONS AT FY-END OPTIONS AT FY-END($)(1)
ACQUIRED LESS EXERCISE --------------------------- ---------------------------
NAME ON EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter T. Pope................... 7,518 $ 13,626 78,178 128,962 $ 788,726 $ 1,323,043
Carlos M. Lamadrid.............. 3,618 7,010 23,550 38,200 240,209 390,310
Michael Flannery................ 18,666 128,873 3,300 37,990 13,613 388,158
William G. Frohnmayer........... 2,410 4,368 20,710 37,990 209,849 388,158
Robert L. Vanderselt............ -- -- 7,930 38,720 103,006 417,525
</TABLE>
- ---------------
(1) Based upon the market price of $28.75 per share, which was the closing
selling price of the Company's common stock on the last day of the 1993
fiscal year, less the exercise price payable per share.
PENSION PLANS
The following table shows the estimated annual pension benefits payable in
the aggregate to a covered participant as a single life annuity beginning at
normal retirement age (age 65) under the Company's qualified defined benefit
pension plan and the nonqualified supplemental pension plan which provides
benefits that would otherwise be denied participants by reason of certain
Internal Revenue Code limitations on qualified plan benefits, based upon the
remuneration that is covered under the plans and years of service with the
Company and its subsidiaries:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE ------------------------------------------------------------
SALARY 15 20 25 30 35
---------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000................... $ 25,871 $ 34,494 $ 43,118 $ 45,618 $ 48,118
125,000................... 33,371 44,494 55,618 58,743 61,868
150,000................... 40,871 54,494 68,118 71,868 75,618
175,000................... 48,371 64,494 80,618 84,993 89,368
200,000................... 55,871 74,494 93,118 98,118 103,118
225,000................... 63,371 84,494 105,618 111,243 116,868
250,000................... 70,871 94,494 118,118 124,368 130,618
300,000................... 85,871 114,494 143,118 150,618 158,118
350,000................... 100,871 134,494 168,118 176,868 185,618
400,000................... 115,871 154,494 193,118 203,118 213,118
450,000................... 130,871 174,494 218,118 229,368 240,618
500,000................... 145,871 194,494 243,118 255,618 268,118
</TABLE>
A participant's compensation covered by the Company's pension plan is his
or her average salary for the five consecutive calendar plan years within the
last ten years of the participant's career for which such average is the highest
or, in the case of a participant who has been employed for less than five full
calendar years, the
9
<PAGE> 12
period of his or her employment with the Company. Covered compensation for named
executives as of the end of the last calendar year is: Mr. Pope, $396,312; Mr.
Lamadrid, $186,408; Mr. Flannery, $190,500; Mr. Frohnmayer, $172,944; and Mr.
Vanderselt, $192,828. The estimated years of service for each named executive is
as follows: Mr. Pope, 28 years; Mr. Lamadrid, 20 years; Mr. Flannery, 7 years;
Mr. Frohnmayer, 16 years; and Mr. Vanderselt 2 years.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTRACT ARRANGEMENT
The Company does not have any employment agreements with any of the
executive officers named in the Summary Compensation Table. However, the Company
has entered into special severance agreements with several of its executive
officers, including each of the named executive officers. Under these
agreements, the executive officers will be entitled to certain benefits in the
event their employment is involuntarily terminated (other than for cause) within
18 months following a change in control of the Company. Involuntary termination
is defined in each severance agreement as the officer's involuntary discharge or
dismissal (other than for cause) by the Company or his/her voluntary termination
of employment following a material reduction in compensation or level of
responsibilities.
The benefits to be provided upon such officer's involuntary termination
include (i) the acceleration of all unvested options and stock appreciation
rights held by the officer under the Company's Stock Option and Appreciation
Plan and (ii) the vesting of all restricted shares of the Company's common stock
held in escrow for the officer under the Company's Restricted Stock Bonus Plan.
In addition, to the extent the spread on the accelerated options and stock
appreciation rights which exists at the time of the officer's involuntary
termination (i.e., the excess of the then current market price of the Company's
common stock subject to such options and stock appreciation rights over the
exercise price) and the then current market price of the shares which vest under
the Restricted Stock Bonus Plan do not in the aggregate exceed two times the
officer's base salary and bonuses for the fiscal year preceding the fiscal year
of involuntary termination, the officer will receive a lump sum cash severance
payment in an amount sufficient to bring the total benefit package up to the two
times salary-and-bonus amount. However, the value of the total benefit package
(option acceleration, share vesting and severance payment) is limited to 2.99
times the officer's average W-2 wages from the Company for the five calendar
years immediately preceding the calendar year in which the change in control
occurs. This limitation is designed to prevent the benefit package from becoming
an excess parachute payment under the federal tax laws.
Each severance agreement contains a detailed procedure for valuing the
officer's total benefit package and determining whether or not the total value
of the package exceeds the parachute payment limitation. In no event, however,
will benefits be reduced if they are found to represent reasonable compensation
for the officer's services with the Company prior to involuntary termination.
For purposes of each severance agreement, a change in control is defined as
(i) the successful acquisition of 25% or more of the Company's outstanding
voting stock pursuant to a third-party tender or exchange offer which the Board
of Directors does not recommend the Company's shareholders accept or (ii) a
change in the composition of the Company's Board of Directors which occurs
because the individuals nominated for election or re-election by majority vote
of those members of the Board elected at the last shareholder meetings at which
there were not contested elections for Board membership fail to be elected or
re-elected by the shareholders by reason of one or more contested elections for
Board membership.
In the event benefits were to become due in the year ending December 31,
1994 under the severance agreements currently in effect for the executive
officers listed in the Summary Compensation Table, the
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<PAGE> 13
maximum amounts payable would be as follows: Mr. Pope, $1,460,593; Mr. Lamadrid,
$619,795; Mr. Flannery, $769,490; Mr. Frohnmayer, $643,380; and Mr. Vanderselt,
$297,833.
HUMAN RESOURCES COMMITTEE
OF THE BOARD OF DIRECTORS
EXECUTIVE COMPENSATION REPORT
The Human Resources Committee of the Board of Directors has furnished the
following report on executive compensation.
It is the duty of the Human Resources Committee to set the base salary of
the Company's executive officers and to administer the Company's Stock Option
and Appreciation Plan under which grants may be made to such officers and other
key employees. In addition, the Human Resources Committee administers the
Company's Executive Incentive Plan under which the Company's executive officers
and other key employees may earn additional bonus amounts each year based upon
individual performance and the Company's attainment of specified performance
goals.
GENERAL COMPENSATION POLICY
The fundamental policy of the Human Resources Committee in compensation
matters is to offer the Company's executive officers competitive compensation
opportunities based upon their personal performance and their contribution to
the financial success of the Company. It is an objective of this policy to have
a substantial portion of each officer's total annual compensation contingent
upon the achievement of such financial and performance goals. Accordingly, each
executive officer's compensation package is comprised of three elements: (i)
base salary which is designed primarily to be competitive with base salary
levels in effect both at companies within the forest products industry which are
of comparable size to the Company and at companies outside of such industry with
which the Company competes for executive talent, (ii) annual variable
performance awards payable in cash and tied to the achievement of performance
goals, financial or otherwise, established by the Human Resources Committee, and
(iii) long-term stock-based incentive awards which strengthen the mutuality of
interests between the executive officers and the Company's shareholders. As an
employee's level of responsibility and accountability within the Company
increases over time, a greater portion of his or her total compensation is
intended to be dependent upon Company and personal performance and stock price
appreciation rather than upon base salary.
In order to facilitate the implementation of these policies, the Human
Resources Committee has in the past employed, and expects to continue to employ,
the services of a nationally recognized, independent compensation consulting
firm.
Factors. Several of the more important factors considered by the Human
Resources Committee in establishing the components of each executive officer's
compensation package for the 1993 fiscal year are summarized below.
* BASE SALARY. The base salary for each executive officer is determined on
the basis of internal comparability considerations and the base salary levels in
effect for comparable positions at the Company's principal competitors, both
inside and outside the industry. The base salary level for executive officers is
generally at the median level determined for such individuals on the basis of
the external salary data provided the Committee by the independent compensation
consulting firm. Salaries are reviewed on an annual basis,
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<PAGE> 14
and adjustments to each executive officer's base salary are based upon
individual performance and salary increases paid by the Company's competitors.
* ANNUAL INCENTIVE COMPENSATION. An annual bonus may be earned by each
executive officer under the terms of the Executive Incentive Plan, provided the
Company's earnings for the fiscal year exceed 4% of shareholder equity, as
measured at the start of that year. For the 1993 fiscal year, bonuses were
earned under this program on the basis of the following factors: (i) the
attainment of a company-wide performance objective tied primarily to after-tax
consolidated earnings, (ii) earnings achieved at the division level, for those
executives who are division leaders rather than corporate officers, and (iii)
personal performance. The target bonus for each executive officer was
established by the Human Resources Committee at the start of the year, with the
target bonus per executive officer set at 25% to 35% of base salary (in
accordance with his position at the Company) and the maximum bonus limited to a
range between 50% and 70% of base salary for the year. The after-tax earnings
for the 1993 fiscal year exceeded the company-wide target by approximately 40%,
and the bonuses paid for that year to each of the executive officers named in
the Summary Compensation Table are indicated in the Bonus column.
* LONG-TERM INCENTIVE COMPENSATION. In January 1993, the Human Resources
Committee approved the grants of stock options to each of the Company's
executive officers under the Company's Stock Option and Appreciation Plan (see
the table titled "Option Grants in Last Fiscal Year" on page 8). These grants
are designed to align the interests of each executive officer with those of the
Company's shareholders and provide each individual with a significant incentive
to manage the Company from the perspective of an owner with an equity stake in
the business. The option grant to each executive officer for the 1993 fiscal
year was comprised of two components. The first component was a special option
grant based upon the officer's accountability for attaining the one-time
cost-reduction targets assigned to his areas of responsibility and/or his
contribution to the successful acquisition of additional Company operations in
Canada. The second component of the 1993 option grant represented the regular
annual grant made to maintain the total number of option grants made to each
executive officer (net of the special option grant) over the past five year to a
competitive median level based upon recommendations submitted by the independent
compensation consulting firm retained by the Company.
Each option grant allows the officer to acquire shares of the Company's
common stock at a fixed price per share (the market price on the date preceding
the grant date) over a specified period of time (up to 10 years). The
exercisability of these stock options generally vests in equal installments over
a five-year period, continent upon the executive officer's continued employment
with the Company. Accordingly, the option will provide a return to the executive
officer only if the executive officer remains employed by the Company for one or
more years during which the option vests, and then only if the market price of
the underlying shares appreciates over the option term.
Tax Limitation. As a result of federal tax legislation enacted in 1993, a
publicly-held company such as Pope & Talbot will not be allowed a federal income
tax deduction for compensation paid to the executive officers named in the
Summary Compensation Table, to the extent that compensation exceeds $1 million
per officer. This limitation will become effective for the 1994 fiscal year, and
it is not expected that the compensation to be paid to the Company's executive
officers for the 1994 fiscal year will exceed the $1 million limit per officer.
In addition, the Company intends to amend the provisions of the Stock Option and
Appreciation Plan so that the compensation deemed paid under that plan when
outstanding stock options are exercised will qualify as performance-based
compensation which is not subject to the $1 million limitation. Until final
Treasury Regulations are issued with respect to the new limitation, the Human
Resources
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<PAGE> 15
Committee will defer any decision on whether or not to limit all other
compensation payable to such executive officers to the $1 million cap.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In setting the compensation payable to the Company's Chief Executive
Officer, Mr. Pope, the Human Resources Committee has sought to establish a
competitive rate of base salary, while at the same time tying a significant
percentage of his overall compensation package to individual and Company
performance and stock price appreciation.
Mr. Pope's base salary is established through an evaluation of salaries
paid to similarly situated chief executive officers both at companies in the
forest products industry which are of comparable size to the Company and at
companies in other industries with which the Company competes for executive
personnel. Salary information is provided the Human Resources Committee by the
Company's independent compensation consulting firm. In setting Mr. Pope's base
salary, it is the intent of the Human Resources Committee to provide him with a
level of stability and certainty each year and not have this particular
component of compensation affected to any significant degree by Company
performance factors. For the 1993 fiscal year, Mr. Pope's base salary was set at
the median level in effect at the surveyed companies. In January 1994, the Human
Resources Committee conducted its annual review of Mr. Pope's base salary level
and increased his base salary by 3 1/2%, effective March 1, 1994. The increase
was designed to maintain Mr. Pope's base salary at approximately the mid-point
of the base salary projections for the 1994 calendar year.
On the basis of (i) the Company's success in exceeding the after-tax
earnings target for the 1993 fiscal year by more than 40% and (ii) Mr. Pope's
individual performance during that year, the Human Resources Committee awarded
him a cash bonus under the Executive Incentive Plan in the amount of
$201,336.
In January 1993, the Human Resources Committee granted Mr. Pope options to
purchase 60,000 shares of the Company's common stock under the Stock Option and
Appreciation Plan. Options for 20,000 of those shares were granted on the basis
of Mr. Pope's accountability for attaining the one-time, corporate-wide cost-
reduction targets established during the 1993 fiscal year and Mr. Pope's
contribution to the successful acquisition of the additional operations in
Canada. The balance of the option was based upon an evaluation of competitive
median grant levels prepared and reported to the Human Resources Committee by
the independent compensation consulting firm retained by the Company.
The option grants made to Mr. Pope place a significant portion of his total
compensation for the year at risk, since the options will have no value unless
there is appreciation in the value of the Company's common stock over the option
term.
HUMAN RESOURCES COMMITTEE
<TABLE>
<S> <C>
Hamilton W. Budge Edward H. Cooley
Warren E. McCain Robert Stevens Miller, Jr.
Brooks Walker, Jr.
</TABLE>
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Human Resources Committee serves as the Company's Compensation
Committee, and its members are as named above. No member of the Human Resources
Committee was at any time during the 1993 fiscal year or at any other time an
officer or employee of the Company. No executive officer of the Company serves
as a member of the board of directors or compensation committee of any entity
which has one or more executive officers serving as a member of the Company's
Board of Directors or Human Resources Committee.
Mr. Budge is of counsel to the law firm of Brobeck, Phleger & Harrison,
outside general counsel to the Company.
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<PAGE> 16
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Company's common stock during the five
fiscal-year period ended December 31, 1993, with the cumulative total return on
the S&P 500 Index and the Value Line Paper and Forest Products Index for that
same period. The comparison assumes $100 was invested on December 31, 1988 in
the Company's common stock and in each of the foregoing indices and assumes
reinvestment of dividends.
COMPARATIVE FIVE-YEAR TOTAL RETURNS
<TABLE>
Measurement Period VALUE LINE PAPER &
(Fiscal Year Covered) POPE & TALBOT S&P 500 FOREST PRODUCTS INDEX
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 147.54 131.49 114.69
1990 87.41 127.32 96.57
1991 95.78 166.21 125.42
1992 104.35 179.30 138.02
1993 193.88 197.23 157.38
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has in prior years acquired, and in future years intends to
continue to acquire, timber from Pope Resources, a Delaware limited partnership
(the "Partnership"). Peter T. Pope holds 4.4% of the outstanding partnership
interests in the Partnership. In addition, Mr. Pope owns 50% of the shares of
the Partnership's general partners and serves on such general partners' boards
of directors. Timber purchases by the Company from the Partnership totaled
$4,641,808 for 1993. The terms and conditions under which these timber purchases
have been made have been based on competitive bids or have been comparable to
those made available by third parties, as determined by the Partnership and the
Company.
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<PAGE> 17
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of the Company's common stock and other equity securities. Officers,
directors and greater than ten-percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
Based solely upon review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that there was compliance for the fiscal year ended December
31, 1993 with all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than ten-percent beneficial owners, except that
Mr. Miller's election as a Director of the Corporation was not reported on a
Form 3 until 30 days after his election as a Director and that Mr. Vanderselt
erroneously reported the sale of 1,000 shares of common stock on a timely filed
Form 4, with the actual amount sold being 2,000 shares of common stock. When
this error was discovered, a Form 4 reflecting the previously unreported
1,000-share sale was filed.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee of
the Board, appointed Arthur Andersen & Co. as the Company's independent public
accountants for the fiscal year ending December 31, 1994, subject to
ratification by the shareholders at the Annual Meeting. A representative of
Arthur Andersen & Co. is expected to be present at the Annual Meeting with the
opportunity to make a statement if he so desires, and to respond to appropriate
questions. The Board of Directors recommends that the shareholders approve this
appointment. Although this appointment is not required to be submitted to a vote
by the shareholders, the Company continues to believe it appropriate, as a
matter of policy, to request the shareholders' ratification. If the shareholders
do not ratify this appointment, the Board of Directors will reconsider its
action.
SHAREHOLDER PROPOSALS
A shareholder who intends to present a proposal at the 1995 Annual Meeting
of Shareholders must submit such proposal by November 4, 1994, for inclusion in
the Company's 1995 proxy statement and form of proxy relating to such meeting.
The proposal must be mailed to Mr. C. Lamadrid, Senior Vice President,
Secretary, Treasurer, and Chief Financial Officer, Pope & Talbot, Inc., 1500
S.W. First Avenue, Portland, Oregon 97201. Such proposals will be included in
next year's proxy statement if they comply with certain rules and regulations
promulgated by the Securities & Exchange Commission.
SOLICITATION OF PROXIES
The cost of soliciting proxies in the enclosed form will be borne by the
Company. In addition to solicitation by mail, officers and other employees of
the Company may solicit proxies personally or by telephone. The Company may
request banks and brokers or other similar agents or fiduciaries to transmit the
proxy materials to the beneficial owners for their voting instructions and will
reimburse them for their expenses in so doing.
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OTHER MATTERS
The Board of Directors does not know of any other matters which will be
presented for action at the meeting. However, if other matters come before the
meeting, the persons named in each proxy intend to vote it in accordance with
their best judgment.
ANNUAL REPORT -- FINANCIAL MATTERS
The annual report to shareholders covering the operations of the Company
for the year 1993, including financial statements is enclosed herewith.
By order of the Board of Directors.
C. Lamadrid
Senior Vice President, Secretary,
Treasurer and Chief Financial Officer
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POPE & TALBOT, INC.
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS, APRIL 25, 1994
The undersigned hereby appoints Hamilton W. Budge, Charles Crocker and Warren
E. McCain, jointly and severally, with full power of substitution, proxies of
the undersigned, to vote the shares of Common Stock which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of Pope & Talbot, Inc. to
be held on April 25, 1994 and at any adjournments thereof:
1. / / WITH / / WITHOUT authority to vote for the following nominees to the
Board of Directors to serve three-year terms, as described in the
accompanying Proxy Statement (The Board of Directors favors a vote WITH
authority):
GORDON P. ANDREWS; PETER T. POPE; BROOKS WALKER, JR.
------------------------
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. / / FOR / / AGAINST / / ABSTAIN the proposal to ratify the selection
of Arthur Andersen & Co. to continue as independent certified public
accountants for the year 1994 (The Board of Directors recommends a vote
FOR): and
3. In their discretion, upon any such other matters as may properly come before
the meeting.
UNLESS OTHERWISE SPECIFIED, THE PROXIES ARE GRANTED THE AUTHORITY TO VOTE
FOR THE ELECTION OF ALL OR ANY OF THE NOMINEES FOR DIRECTOR AND FOR
PROPOSALS 2 AND 3.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
Dated: , 1994
Please sign here exactly as
name(s) appear(s) hereon.
-------------------------------
(When signing as attorney,
administrator, trustee,
guardian or corporate officer,
please so indicate.)
