<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
POPE & TALBOT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------------
<PAGE> 2
POPE & TALBOT, INC.
1500 S.W. FIRST AVENUE
PORTLAND, OREGON 97201
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 10, 1995
The Annual Meeting of Shareholders of Pope & Talbot, Inc. (the "Company"),
a Delaware corporation, will be held at the Riverplace Alexis Hotel, 1510
Southwest Harbor Way, Portland, Oregon on Wednesday, May 10, 1995, at 2:30 p.m.,
for the following purposes:
1. To elect two 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
1995; 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 March 13, 1995, 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 15, 1995
<PAGE> 3
PROXY STATEMENT
GENERAL
The accompanying proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting to be held May 10, 1995 and at 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 March 13, 1995 are
entitled to vote at the Annual Meeting. On that date, the Company had
outstanding 13,362,729 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 or her proxy. The Company intends to mail this proxy statement and proxy
card, together with the 1994 Annual Report, to its shareholders on March 16,
1995.
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., LLP as the Company's independent public accountants for
1995 and at the discretion of the proxy holders on such other matters as may
come before the Annual Meeting.
A majority of the shares of the Company's common stock, present in person
or represented by proxy, shall constitute a quorum for purposes of the Annual
Meeting. In all matters other than the election of directors, the affirmative
vote of a majority of the shares present in person or represented by proxy at
the Annual Meeting and entitled to vote on the subject matter shall be required.
Directors shall be elected by a plurality of the votes present in person or
represented by proxy at the Annual Meeting and entitled to vote on the election
of directors. 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
The Board of Directors presently consists of eight directors divided into
three classes serving staggered three-year terms. Two directors are to be
elected at the Annual Meeting, each to hold office until the 1998 Annual Meeting
of Shareholders and until a successor has been elected and qualified. Both
nominees are presently directors. Six directors will continue to serve in
accordance with their prior elections. 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 two nominees or their substitutes
so as to elect the maximum number of such persons. The Board of Directors
expects that both of these nominees will be available for election, but in the
event that either of these nominees is not so available at the time of the
Annual Meeting, proxies received will be voted
<PAGE> 4
for a substitute nominee to be designated by the Board of Directors. The Board
of Directors unanimously recommends a vote for election of both of the
above-mentioned nominees as Directors.
CERTAIN INFORMATION REGARDING DIRECTORS AND OFFICERS
The names of the nominees and the directors continuing in office, their
ages, the year each first became a director, their principal occupations during
at least the last five years and other directorships held by each are set forth
below:
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE-YEAR TERM EXPIRING IN 1998
Hamilton W. Budge, age 66, has been a director of the Company since 1967.
Mr. Budge is also a member of the Board's Human Resources Committee. Prior to
his retirement in 1990, Mr. Budge was a partner in the law firm of Brobeck,
Phleger and Harrison, and has been of counsel to that firm since his retirement.
Brobeck, Phleger and Harrison is outside general counsel to the Company. Mr.
Budge is also a director of Technology for Communications, International.
Charles Crocker, age 56, has been a director of the Company since 1986. Mr.
Crocker is also a member of the Board's Audit Committee. Since 1974, Mr. Crocker
has been Chairman of the Board of BEI Electronics, a diversified technology firm
specializing in military and medical applications. He has been President of
Crocker Capital, a private venture capital firm, since 1985 and was General
Partner of Crocker Associates, a private venture investment partnership from
1970 to 1991. Mr. Crocker is also a director of BEI Electronics, Inc., Fiduciary
Trust Company International and Superconductor Technologies, Inc.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 1996
Warren E. McCain, age 69, has been a director of the Company since 1989.
Mr. McCain is also a member of the Board's Human Resources Committee. Since
1991, Mr. McCain has been Chairman of the Executive Committee of Albertson's,
Inc., a grocery store chain, and from 1976 to 1991 was Chairman of the Board and
Chief Executive Officer of Albertson's. Mr. McCain is also a director of
Albertson's, Inc., Portland General Corporation and West One Bancorp.
Robert Stevens Miller, Jr., age 53, has been a director of the Company
since 1993. Mr. Miller is also a member of the Board's Audit and Human Resources
Committees. Since 1993, Mr. Miller has been retired. From 1992 to February 1993,
he was a senior partner with the investment banking firm of James D. Wolfensohn,
Inc. Prior to that time, he was with Chrysler Corporation, an automobile
manufacturer, as the Vice Chairman of the Board from 1990 to 1992 and as the
Chief Financial Officer from 1981 to 1990. Mr. Miller is also a director of
Coleman Company, Federal-Mogul Corporation, Fluke Corporation, Symantec, Inc.
and U.S. Bancorp.
Hugo G. L. Powell, age 50, has been a director of the Company since 1985.
Mr. Powell is also a member of the Board's Audit Committee. Since May 1994, Mr.
Powell has been President of Labatt Brewing Company, Inc., beverage
manufacturers and distributors. Prior to that time, he was President of Labatt
Breweries of Canada from 1992 to May 1994 and President of Labatt's Ontario
Breweries from 1990 to 1992. He was also President and Chief Executive Officer
of Everfresh, Inc., food processors, from 1989 to 1990. Mr. Powell is also a
director of John Labatt, Ltd.
2
<PAGE> 5
TERM EXPIRING IN 1997
Gordon P. Andrews, age 38, was elected as a director of the Company at the
1994 Annual Meeting. Mr. Andrews is also a member of the Board's Audit
Committee. Since 1982, Mr. Andrews has been associated with Andrews Associates,
Inc., a management consulting firm, as a director and in various management
positions. He has been the President of Andrews Associates, Inc. since 1993. Mr.
Andrews was Vice President of Institutional Sales for Shearson Lehman Brothers
from 1990 to 1992.
Peter T. Pope, age 60, has been a director of the Company since 1962. Since
1971, Mr. Pope has been Chairman of the Board and Chief Executive Officer of the
Company. Since 1990, he has also been President of the Company. Mr. Pope is also
a director of the Newhall Land and Farming Company and Pope MGP, Inc. and Pope
EGP, Inc., General Partners of Pope Resources.
Brooks Walker, Jr., age 66, has been a director of the Company since 1981.
Mr. Walker is also a member of the Board's Audit and Human Resources Committees.
Since 1988, Mr. Walker has been General Partner of Walker Investors, a venture
capital investment partnership. Mr. Walker is also a director of AT&T Capital
Corporation and The Gap, Inc.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of January 30, 1995,
regarding the number of shares of the common stock of the Company beneficially
owned by each director, by each of the executive officers named in "Executive
Compensation" below, and by all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
------------------------------------------
OPTIONS
EXERCISABLE
WITHIN 60 DAYS PERCENT OF
NAME OF INDIVIDUAL CURRENTLY OF OUTSTANDING
OR IDENTITY OF GROUP OWNED(1) JANUARY 30, 1995 TOTAL COMMON STOCK
- ------------------------------------------ --------- ---------------- ------- ------------
<S> <C> <C> <C> <C>
Gordon P. Andrews......................... 226,861(3) -- 226,861 1.7%
Hamilton W. Budge......................... 20,000(4) -- 20,000 (2)
Charles Crocker........................... 1,000 -- 1,000 (2)
Michael Flannery.......................... 16,235(4) 24,450 40,685 (2)
William G. Frohnmayer..................... 5,456 16,265 21,721 (2)
Carlos M. Lamadrid........................ 12,837(4) 20,810 33,647 (2)
Warren E. McCain.......................... 1,000 -- 1,000 (2)
Robert Stevens Miller, Jr................. 1,000(4) -- 1,000 (2)
Peter T. Pope............................. 416,155(5) 152,944 569,099 4.3%
Hugo G. L. Powell......................... -- -- -- (2)
Robert L. Vanderselt...................... 3,000 27,790 30,790 (2)
Brooks Walker, Jr......................... 1,600 -- 1,600 (2)
All directors and executive officers as a
group (13 persons including persons
listed above)........................... 705,144 245,161 950,305 7.1%
</TABLE>
- ---------------
(1) Except as otherwise noted, the directors and named executive officers and
all directors and officers as a group have sole voting and investment power
with respect to the shares listed.
(2) Less than one percent of the outstanding common stock.
(3) Includes 47,385 shares for which he is co-trustee for his children and his
sister's children, and 2,600 shares for which his wife is trustee for his
children.
3
<PAGE> 6
(4) Investment and voting power shared with his wife.
(5) Includes 40,000 shares for which he shares investment and voting power and
30,361 shares owned by his wife, as to which he disclaims beneficial
ownership.
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. These committees are composed
entirely of non-employee directors. The Board does not have a nominating
committee, but the Board as a whole considers and makes nominations for
directors.
The Audit Committee is currently comprised of Brooks Walker, Jr., Chairman,
Gordon P. Andrews, Charles Crocker, Robert Stevens Miller, Jr. and Hugo G. L.
Powell. 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 is currently comprised of Hamilton W. Budge,
Chairman, Warren E. McCain, Robert Stevens Miller, Jr. and Brooks Walker, Jr.
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 1994. The Audit Committee
held two meetings, and the Human Resources Committee held three meetings. Each
director attended at least 75 percent of the aggregate of (i) the total number
of meetings of the Board, and (ii) the total number of meetings held by all
committees of the Board on which he served.
Each director of the Company, except Mr. Pope, is paid $18,000 per year. In
addition, each director, except Mr. Pope, is paid $1,000 for every board meeting
attended 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 $1,000
otherwise.
BENEFICIAL OWNERSHIP OF OVER 5% OF POPE & TALBOT COMMON STOCK
The following table lists beneficial owners of more than 5% of Pope &
Talbot, Inc. common stock as of December 31, 1994.
<TABLE>
<CAPTION>
VOTING POWER INVESTMENT POWER
---------------- ---------------- PERCENT
SOLE SHARED SOLE SHARED TOTAL OF CLASS
------- ------ ------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
Emily T. Andrews..................... 832,315 -- 832,315 -- 832,315 6.2%
600 Montgomery Street
San Francisco, CA 94111
</TABLE>
4
<PAGE> 7
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the Company's four other highest-paid executive
officers for services rendered in all capacities to the Company and its
subsidiaries for the fiscal years ended December 31, 1994, December 31, 1993 and
December 31, 1992, respectively. No executive officer who would have otherwise
been includable in such table on the basis of salary and bonus earned for the
1994 fiscal year has resigned or terminated employment during 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------- ---------------------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS SAR'S COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) ($)(1) ($) ($)(2) (#) ($)(3)
- ---------------------------- ---- ------- ------- ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Peter T. Pope............... 1994 407,872 141,047 -- -- 24,000 4,500
Chairman of the Board, 1993 394,078 201,336 -- -- 60,000 4,497
President, and Chief 1992 380,750 -- -- -- 38,990 4,364
Executive Officer
Robert L. Vanderselt........ 1994 198,458 34,889 -- -- 6,000 4,491
Group Vice President 1993 191,740 39,614 53,022(4) -- 22,000 4,497
Consumer Products Div. 1992 182,250 -- 1,656(4) -- 9,650 2,795
Michael Flannery............ 1994 196,060 93,027 -- -- 5,500 4,500
Group Vice President 1993 189,426 102,572 -- -- 20,000 4,497
Wood Products Division 1992 183,018 -- -- -- 9,650 4,364
Carlos M. Lamadrid.......... 1994 191,848 68,442 -- -- 5,500 4,500
Senior Vice President, 1993 185,356 77,816 -- -- 20,000 4,497
Secretary, Treasurer and 1992 179,080 -- -- -- 9,650 4,364
Chief Financial Officer
William G. Frohnmayer....... 1994 177,994 32,902 -- -- 5,500 4,500
Group Vice President 1993 171,968 41,755 -- -- 20,000 4,497
Fiber Division 1992 166,146 -- -- -- 9,650 4,364
</TABLE>
- ---------------
(1) Includes salary and bonus deferred under the Company's Tax Deferred Savings
Plan.
(2) Mr. Flannery was the only named executive officer to hold restricted stock
at the end of the 1994 fiscal year. At that date he held 1,000 shares of
restricted common stock with a fair market value of $15,875. These shares
will vest in April 1995.
(3) Consists of contributions made by the Company to the Tax Deferred Savings
Plan on behalf of each named executive officer.
(4) Consists of relocation costs reimbursed to Mr. Vanderselt (including the
loss incurred on the sale of his former residence) in connection with his
relocation to Portland, Oregon.
5
<PAGE> 8
STOCK OPTION AND STOCK APPRECIATION RIGHTS
The following table contains information concerning the grant of stock
options and stock appreciation rights (SARs) made under the Company's Stock
Option and Appreciation Plan for the 1994 fiscal year to the named executive
officers:
OPTION/SAR GRANTS IN 1994
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL
NUMBER OF OPTIONS/SARS RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OR OPTION TERM(1)
OPTIONS/SARS IN FISCAL BASE PRICE EXPIRATION --------------------
GRANTED(2)(3) YEAR ($/SHARE)(4) DATE 5% ($) 10% ($)
------------- ------------ ------------ ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Peter T. Pope........... 24,000 24.2 30.375 1/23/04 458,464 1,161,838
Carlos M. Lamadrid...... 5,500 5.5 30.375 1/23/04 105,065 266,255
Michael Flannery........ 5,500 5.5 30.375 1/23/04 105,065 266,255
William G. Frohnmayer... 5,500 5.5 30.375 1/23/04 105,065 266,255
Robert L. Vanderselt.... 6,000 6.0 30.375 1/23/04 114,616 290,460
</TABLE>
- ---------------
(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 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 1994
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 23, 1995. 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
6
<PAGE> 9
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.
OPTION/SAR EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executive officers concerning exercise of options during the 1994 fiscal year
and unexercised options held as of the end of that fiscal year. No SAR's were
exercised during the 1994 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
SHARES (MARKET PRICE AT UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED EXERCISE LESS OPTIONS AT FY-END (#) OPTIONS AT FY-END($) (1)
ON EXERCISE EXERCISE PRICE) --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter T. Pope............ -- -- 116,806 114,334 19,425 12,950
Carlos M. Lamadrid....... 23,000 275,315 11,700 32,550 1,820 3,640
Michael Flannery......... -- -- 14,240 32,550 1,820 3,640
William G. Frohnmayer.... 20,150 258,869 11,500 32,550 -- 3,640
Robert L. Vanderselt..... -- -- 17,260 35,390 16,875 11,250
</TABLE>
- ---------------
(1) Based upon the market price of $15.875 per share, which was the closing
selling price of the Company's common stock on the last day of the 1994
fiscal year, less the exercise price payable per share.
7
<PAGE> 10
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 period of his or her employment with the Company. Covered
compensation estimated for named executive officers as of the end of the last
calendar year is: Mr. Pope, $410,184; Mr. Lamadrid, $192,936; Mr. Flannery,
$197,172; Mr. Frohnmayer, $179,004; and Mr. Vanderselt, $199,584. The estimated
years of service for each named executive officer is as follows: Mr. Pope, 29
years; Mr. Lamadrid, 21 years; Mr. Flannery, 8 years; Mr. Frohnmayer, 17 years;
and Mr. Vanderselt 3 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
8
<PAGE> 11
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,
1995 under the severance agreements currently in effect for the executive
officers listed in the Summary Compensation Table, the maximum amounts payable
would be as follows: Mr. Pope, $1,521,655; Mr. Lamadrid, $825,273; Mr. Flannery,
$821,935; Mr. Frohnmayer, $772,172; and Mr. Vanderselt, $451,886.
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.
9
<PAGE> 12
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. The principal factors considered by the Human Resources Committee
in establishing the components of each executive officer's compensation package
for the 1994 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. Within the forest products industry the peer
group consists of 29 companies of which 20 are included in the Value Line Paper
and Forest Products Index which appears in the performance graph on page 13. 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, 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 1994 fiscal year, bonuses were
earned under this program on the basis of the following factors: (i) the extent
to which the company-wide performance objective was obtained, (ii) earnings
achieved at the division level, for those executives who are division leaders
rather than corporate officers, and (iii) personal performance. The intent is to
target total cash compensation at the level determined for such individuals on
the basis of surveyed salary data. 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 1994 fiscal year were approximately 77% of the Company-wide target, 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 1994, 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/SAR Grants in 1994" on page 6). These grants are
designed
10
<PAGE> 13
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 1994 fiscal year
was based on maintaining the total number of option grants made to each
executive officer over the past five years 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, contingent 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.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code disallows a tax deduction to
publicly held companies for compensation exceeding $1 million paid to certain of
their executive officers. It is not expected that the compensation to be paid to
the Company's executive officers for fiscal 1995 will exceed the $1 million
limit per covered officer. Under the phase-in period in effect for this
limitation, any compensation deemed paid in fiscal 1995 upon the exercise of
outstanding options under the Company's Stock Option and Appreciation Plan will
qualify as performance-based compensation that will not be subject to the $1
million limitation. Until final Treasury regulations are issued with respect to
the new $1 million limitation, the Committee will defer any decision on whether
or not to limit the dollar amount of all other compensation payable to the
Company's executive officers to the $1 million limitation, should the individual
compensation of any executive officer ever approach that level.
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. These same companies form the peer group for comparative compensation
purposes for all other executive officers of the Company. 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 1994 fiscal year, Mr. Pope's base salary was set at
the median level in effect for chief executive officers at the surveyed
companies. In January 1995, the Human Resources Committee conducted its annual
review of Mr. Pope's base salary level and increased his base salary by 3%,
effective March 1, 1995. The increase was designed to maintain Mr. Pope's base
salary at approximately the mid-point of the base salary projections for the
1995 calendar year.
11
<PAGE> 14
On the basis of (i) meeting 77% of the Company-wide target in 1994, 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 $141,047.
The stock option grant for 24,000 shares made to Mr. Pope for the 1994
fiscal year was, as with all other executive officers, designed to maintain the
total level of option grants made to him over the last five years to a
competitive median level based upon recommendations of the independent
compensation consulting firm retained by the Company for comparative
compensation purposes. On the basis of those recommendations, the Human
Resources Committee also granted Mr. Pope an option for an additional 43,700
shares in January 1995.
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 Robert Stevens Miller, Jr.
Warren E. McCain 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 1994 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.
12
<PAGE> 15
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total shareholder return on the Company's common stock during the five
fiscal-year period ended December 31, 1994, 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, 1989 in
the Company's common stock and in each of the foregoing indices and assumes
reinvestment of dividends.
COMPARATIVE FIVE-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
MEASUREMENT PERIOD STANDARD & PAPER/FOREST
(FISCAL YEAR COVERED) POPE & TALBOT POORS 500 PRODUCTS
--------------------- ------------- ---------- ------------
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 59.32 96.83 83.93
1991 64.95 126.41 108.98
1992 70.77 136.25 119.91
1993 136.75 150.00 131.48
1994 75.24 151.73 142.93
</TABLE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Exchange Act of 1934
that might incorporate future filings, including this Proxy Statement, in whole
or in part, the preceding Executive Compensation Report and the preceding Stock
Performance Graph shall not be incorporated by reference into any such filings;
nor shall such Report or Graph be incorporated by reference into any future
filings.
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 5.6% 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
$3,874,127 for 1994. 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.
13
<PAGE> 16
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 (the "SEC") 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, 1994 with all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than tenpercent beneficial owners.
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., LLP as the Company's independent
public accountants for the fiscal year ending December 31, 1995, subject to
ratification by the shareholders at the Annual Meeting. A representative of
Arthur Andersen & Co., LLP 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 such selection.
SHAREHOLDER PROPOSALS
A shareholder who intends to present a proposal at the 1996 Annual Meeting
of Shareholders must submit such proposal by November 16, 1995, for inclusion in
the Company's 1996 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 and 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.
14
<PAGE> 17
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 1994, including financial statements is enclosed herewith.
By order of the Board of Directors.
C. Lamadrid
Senior Vice President, Secretary,
Treasurer and Chief Financial Officer
15
<PAGE> 18
PROXY POPE & TALBOT, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 10, 1995
The undersigned hereby appoints Warren E. McCain, Peter T. Pope and Brooks
Walker, Jr., 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 May 10, 1995 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):
HAMILTON W. BUDGE, CHARLES CROCKER
- --------------------------------------------------------------------------------
(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., LLP to continue as independent certified public
accountants for the year 1995 (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: ------------, 1995
Please sign here exactly
as name(s) appear(s)
hereon.
-------------------------
(When signing as attorney,
administrator, trustee,
guardian or corporate
officer, please so
indicate.)
