<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Pope & Talbot, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(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>
POPE & TALBOT, INC.
1500 S.W. FIRST AVENUE
PORTLAND, OREGON 97201
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 2000
The Annual Meeting of Shareholders of Pope & Talbot, Inc. (the
"Company"), a Delaware corporation, will be held at the RiverPlace Hotel, 1510
Southwest Harbor Way, Portland, Oregon on Thursday, April 27, 2000, at 1:30
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 2000;
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 10, 2000
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 attend the
Annual Meeting.
By order of the Board of Directors
Maria M. Pope
Vice President, Chief Financial Officer
& Secretary
Portland, Oregon
March 24, 2000
<PAGE>
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 on April 27, 2000 and at any
adjournment thereof. You may revoke it at any time before its use by a written
communication to Maria M. Pope, Vice President, Chief Financial Officer and
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 submitted 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 10, 2000
are entitled to vote at the Annual Meeting. On that date, the Company had
outstanding 14,553,448 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 1999 Annual Report, to its shareholders on March 24,
2000.
Shares of common stock represented by proxies in the accompanying form
that are properly executed and returned to the Company will be voted at the
Annual Meeting 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 LLP as the Company's independent public accountants for 2000 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 nonvotes 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 shareholders and will
have the same effect as negative votes, whereas broker nonvotes are not counted
for purposes of determining whether a proposal has been approved.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors presently consists of nine directors divided
into three classes serving staggered three-year terms. Three directors are to be
elected at the Annual Meeting, each to hold office until the 2003 Annual Meeting
of Shareholders and until a successor has been elected and qualified. All
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 use 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
if 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 all of the 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 2003
GORDON P. ANDREWS, age 43, has been a director of the Company since
1994. Mr. Andrews is also a member of the Board's Audit Committee and the
Board's Human Resources and Nominating 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 65, has been a director of the Company since 1962.
From 1971 until his retirement on July 31, 1999, Mr. Pope was Chief Executive
Officer of the Company. He continues to serve as Chairman of the Board, a
position he has held since 1971. From 1990 to September 1995, he was also
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. Mr. Pope is the father of Maria M. Pope, Vice President and Chief
Financial Officer of the Company.
BROOKS WALKER, JR., age 71, has been a director of the Company since
1981. Mr. Walker is also the Chairman of the Board's Audit Committee and a
member of the Human Resources and Nominating Committee. Since 1988, Mr. Walker
has been General Partner of Walker Investors, a venture capital investment
partnership. Mr. Walker is also a director of The Gap, Inc.
2
<PAGE>
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 2001
HAMILTON W. BUDGE, age 71, has been a director of the Company since
1967. Mr. Budge is also the Chairman of the Board's Human Resources and
Nominating Committee. Before his retirement in 1990, Mr. Budge was a partner in
the law firm of Brobeck, Phleger and Harrison LLP and has been of counsel to
that firm since his retirement.
CHARLES CROCKER, age 61, has been a director of the Company since 1986.
Mr. Crocker is also a member of the Board's Audit Committee. Since September
1997, Mr. Crocker has served as Chairman of the Board, President and Chief
Executive Officer of BEI Technologies, Inc., a diversified electronics company
specializing in electronic sensors and motion control products, and as Chairman
of the Board of BEI Medical Systems Company, a medical device company
specializing in diagnostic and therapeutic products for the women's health care
market. From 1974 until September 1997, Mr. Crocker served as Chairman of the
Board of BEI Electronics, Inc., a diversified technology firm. He has been
President of Crocker Capital, a private venture capital firm, since 1985. Mr.
Crocker is also a director of Fiduciary Trust Company International and
Keravision, Inc.
MICHAEL FLANNERY, age 56, has been a director of the Company since
September 1995, when he was also elected President of the Company. In August
1999, he became President and Chief Executive Officer of the Company. From
August 1987 to September 1995, he was Group Vice President of Wood Products for
the Company.
TERM EXPIRING IN 2002
LIONEL G. DODD, age 60, was elected as a director of the Company in
October 1999. Mr. Dodd is also a member of the Board's Audit Committee. Mr. Dodd
is an independent consultant. Mr. Dodd was the President and Chief Executive
Officer of Versacold Corporation, a temperature sensitive food logistics company
based in Vancouver, British Columbia from May 1996 until January 2000. He was
previously the Chief Operating Officer of Olympia and York Enterprises, based in
Toronto from June 1988 to April 1993. Mr. Dodd was a director of Harmac Pacific,
Inc. until the Company completed the acquisition of Harmac in November 1999.
KENNETH G. HANNA, age 63, has been a director of the Company since
1998. Mr. Hanna is also a member of the Board's Human Resources and Nominating
Committee. From September 1996 until his retirement in September 1999, Mr. Hanna
was the President and Chief Executive Officer of Aber Resources Ltd., a Canadian
diamond development company. He was previously a partner with Hanna Heppel Bell
& Visosky, corporate finance lawyers, from 1992 to 1997. Mr. Hanna is also a
director of Aber Resources Ltd. and the Canadian Venture Exchange Inc.
ROBERT STEVENS MILLER, JR., age 58, has been a director of the Company
since 1993. Mr. Miller is also a member of the Board's Audit and Human Resources
and Nominating Committees. Mr. Miller is a strategic advisor to the Chairman of
Aetna, Inc. From November 1999 to February 2000, he was President and a director
of Reliance Group Holdings, an insurance holding company. During 1997 and 1998,
he was the Chairman of the Board of Waste Management, Inc., an international
provider of waste management services. Since September 1996, Mr. Miller has been
the Vice-Chairman of the Board of Morrison Knudsen Corporation, an engineering
and construction company, and from April 1995 to September 1996 he was the
Chairman of the Board of Morrison Knudsen Corporation. During 1992, he was a
senior partner with the investment-banking firm of James D. Wolfensohn, Inc.
Before that time,
3
<PAGE>
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 Federal-Mogul
Corporation, Morrison Knudsen Corporation, Symantec, Inc. and Waste
Management, Inc.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of January 31, 2000,
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 the Summary
Compensation Table below, and by all directors and executive officers as a
group. 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.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-----------------------------------------------------------
OPTIONS EXCERCISABLE PERCENT OF
NAME OF INDIVIDUAL CURRENTLY WITHIN 60 DAYS OF OUTSTANDING
OR IDENTITY OF GROUP OWNED JANUARY 31, 2000 TOTAL COMMON STOCK
- -------------------------------- ---------------- -------------------------- ------------ --------------------
<S> <C> <C> <C> <C>
Gordon P. Andrews 217,384(1) 13,430 230,814 1.6%
Hamilton W. Budge 20,000(2) 13,430 33,430 (6)
Charles Crocker 1,000 9,215 10,215 (6)
Lionel G. Dodd 1,000 3,285 4,285 (6)
Michael Flannery 32,875(2) 97,819 130,694 (6)
Abram Friesen 1,700 31,936 33,636 (6)
Kenneth G. Hanna 10,000(3) 11,430 21,430 (6)
Ralph Leverton - 2,000 2,000 (6)
Robert Stevens Miller, Jr. 1,000(2) 13,430 14,430 (6)
Maria M. Pope 65,616(4) 5,670 71,286 (6)
Peter T. Pope 376,864(5) 250,663 627,527 4.3%
Brooks Walker, Jr. 1,600 13,430 15,030 (6)
All directors and executive
officers as a group (12
persons) 729,039 465,738 1,194,777 8.2%
</TABLE>
(1) Includes 37,908 shares for which Mr. Andrews is co-trustee for his
children and 16,320 shares for which his wife is trustee for his
children. Mr. Andrews is Emily T. Andrews' son. See Beneficial
Ownership of Over 5% of Pope & Talbot common stock below.
(2) Investment and voting power shared with his wife.
(3) Shares are held by an entity of which Mr. Hanna is the sole
shareholder.
(4) Includes shares held jointly with Ms. Pope's husband. Also includes
6,081 shares held in trust for the benefit of her children of which
she is trustee.
(5) Includes 80,000 shares for which Mr. Pope shares investment and voting
power with Emily T. Andrews and for which he disclaims beneficial
ownership. Refer to Emily T. Andrews in the table disclosing
Beneficial Ownership of Over 5% of Pope & Talbot Common Stock. Also
includes 26,945 shares owned by his wife as to which he disclaims
beneficial ownership.
(6) Less than 1% of the outstanding common stock.
4
<PAGE>
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 and Nominating Committee. These committees are
composed entirely of non-employee directors.
The Audit Committee is currently composed of Brooks Walker, Jr.,
Chairman, Gordon P. Andrews, Charles Crocker, Robert Stevens Miller, Jr. and
Lionel Dodd. 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 and Nominating Committee is currently composed of
Hamilton W. Budge, Chairman, Gordon P. Andrews, Kenneth G. Hanna, Robert Stevens
Miller, Jr. and Brooks Walker, Jr. The Human Resources and Nominating Committee
generally performs the functions of a compensation committee and recommends
salary, incentive compensation and bonus arrangements for the Company's senior
management to be implemented by the Board of Directors. The Human Resources and
Nominating Committee has sole authority to administer the Company's stock option
and stock bonus plans and make grants or awards thereunder. It also has the
responsibility to make recommendations to the Board of Directors on the Board's
compensation and on nomination of Board members. The Human Resources and
Nominating Committee will also consider director nominees suggested by
shareholders in writing to the Corporate Secretary.
The Board of Directors held seven meetings during 1999. The Audit
Committee held three meetings, and the Human Resources and Nominating Committee
held four meetings. Each current director attended at least 75 percent of the
aggregate of (i) the total number of meetings of the Board during the period in
which he was a director, and (ii) the number of meetings held by all the
committees of the Board on which he served.
DIRECTOR REMUNERATION
Each director of the Company, except Messrs. Flannery and Pope, is paid
an annual retainer fee of $18,000 per year. Mr. Pope is paid an annual retainer
of $42,000 as Chairman of the Board. In addition, each director, except Mr.
Flannery, is paid $1,000 for every Board meeting attended plus $1,000 for each
meeting of a standing committee of the Board attended. Directors who are also
chairmen of each standing committee are paid an additional $500 for each
committee meeting.
In 1999, the shareholders approved the Special Non-Employee Director
Stock Retainer Fee Plan under which non-employee Board members may apply all
or a portion of their annual retainer on a quarterly basis to the acquisition
of options to purchase shares of the Company's common stock. The number of
shares covered by such options is determined by dividing the amount of
retainer fees to be applied by the Black-Scholes formula value for the
option. Such options have an exercise price equal to the fair market value of
the common stock on the grant date. Each option has a term of 10 years and is
exercisable immediately upon grant. Messrs. Andrews, Budge, Hanna, Miller and
Walker elected to apply all of their 1999 retainer fees to the of options,
and each therefore received four stock option grants for an aggregate of
7,618 shares with an average exercise price of $8.97 per share. Mr. Crocker
elected to apply half of his 1999 retainer fees to the acquisition of
options, and he therefore received four stock option grants for an aggregate
of 3,809 shares with an average exercise price of $8.97 per share. Mr. Pope
elected to apply all of his 1999 Chairman of the Board fees to the
acquisition of
5
<PAGE>
options, and he therefore received one stock option grant for 4,605 shares
with an exercise price of $12.375 per share.
Under the automatic option grant program in effect under the Company's
1996 Non-employee Director Stock Option Plan (the "Director Plan"), an
individual who first becomes a non-employee member of the Board will receive an
automatic option grant for 2,000 shares of the Company's common stock upon
commencement of Board service, and each individual with six or more months of
Board service will receive an automatic option grant for an additional 1,000
shares at each Annual Meeting of Shareholders at which he continues to serve as
a non-employee Board member, whether or not he is standing for re-election at
that particular meeting. Each option has a term of 10 years and is exercisable
immediately upon grant. On April 29, 1999, the date of the 1999 Annual Meeting
of Shareholders, each non-employee Board member received an automatic option
grant under the Director Plan for 1,000 shares of common stock with an exercise
price of $9.5625 per share, the fair market value per share of common stock on
the grant date. On October 12, 1999, Mr. Dodd received an automatic option grant
under the Director Plan for 2,000 shares of common stock with an exercise price
of $13.1875 per share, the fair market value per share of common stock on the
date of the grant.
No other compensation is paid to the non-employee members of the Board
with respect to their service on the Board.
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, 1999.
<TABLE>
<CAPTION>
VOTING POWER INVESTMENT POWER
-------------------------- ------------------------ PERCENT
SOLE SHARED SOLE SHARED TOTAL OF CLASS
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Emily T. Andrews (1) 874,615 80,000(2) 874,615 80,000(2) 954,615 6.6%
600 Montgomery Street
San Francisco, CA 94111
National Rural Electric - 856,000 - 856,000 856,000 5.9%
Cooperative Association
4301 Wilson Boulevard
Arlington, VA 22203
Dimensional Fund Advisors Inc. (3) 999,821 - 999,821 - 999,821 6.9%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
DePrince, Race & Zollo, Inc. 1,336,300 - 1,336,300 - 1,336,300 9.2%
201 S. Orange Ave., Suite 850
Orlando, FL 32801
</TABLE>
(1) Emily T. Andrews is the mother of Gordon P. Andrews. See the table
disclosing Security Ownership of Management.
(2) Represents shares for which Ms. Andrews shares voting and investing
power with Mr. Pope and for which she disclaims beneficial ownership.
See the table disclosing Security Ownership of Management.
(3) Information provided in shareholder's Schedule 13G indicates that
shares reported are owned by advisory clients of the company, no one
of which owns more than 5% of such shares, and that the company
disclaims beneficial ownership of all such shares.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation earned by each person
who served as the Company's Chief Executive Officer during 1999, and each of the
Company's other executive officers as of December 31,1999, for services rendered
in all capacities to the Company and its subsidiaries for each of the last three
years in which such person served as an executive officer. The individuals named
in such table will be subsequently referred to as the "Named Executive
Officers." Mr. Ralph Leverton is also included in such table on the basis of the
salary he earned for the 1999 fiscal year although his employment with the
Company terminated before the end of such fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------------- -------------------------------
OTHER
ANNUAL OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(1) COMPENSATION SARS COMPENSATION(2)
- --------------------------------- -------- ------------ ------------- ----------------- ---------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Michael Flannery 1999 $ 413,444 $ 344,470 $ - 54,193 $ 5,000
President and 1998 340,768 - - - 5,000
Chief Executive Officer 1997 292,700 90,586 - 30,000 4,750
Peter T. Pope (3) 1999 288,718 201,608 81,454(4) 2,366 234,261(5)
Former Chief Executive 1998 471,268 - - - 5,000
Officer 1997 449,666 162,359 - - 4,750
Abram Friesen 1999 216,430 180,000 - 20,000 5,000
Vice President-Division Mgr. 1998 187,605(6) - 60,180(7) - 2,400
Wood Products 1997 177,711(8) 82,480 - 15,000 -
Maria M. Pope (9) 1999 177,462 125,366 - 30,732 5,000
Vice President and 1998 - - - - -
Chief Financial Officer 1997 - - - - -
Ralph Leverton 1999 134,809 - 35,221(11) - 242,632(12)
Former Vice President- 1998 167,042(13) - 106,887(14) 10,000 403,030(15)
Division Mgr. Pulp Products 1997 - - - - -
</TABLE>
(1) Includes salary and bonus deferred under the Company's Tax Deferred
Savings Plan.
(2) Except as otherwise noted, consists of contributions made by the
Company to the Tax Deferred Savings Plan on behalf of each Named
Executive Officer.
(3) Mr. Pope retired as Chief Executive Officer from the Company in July
1999.
(4) Consists of payment by the Company to Mr. Pope of earned vacation
benefits upon his retirement and a $20,000 retirement gift.
(5) Includes the full amount of the premium paid in 1999 under a
split-dollar life insurance arrangement described more fully under
"Employment Contracts, Change in Control Arrangements and Retirement
Arrangements" below.
7
<PAGE>
(6) Mr. Friesen was relocated to Portland, Oregon on August 1, 1998. Mr.
Friesen was compensated in Canadian dollars through July 31, 1998.
From August 1, 1998 to December 31, 1998, Mr. Friesen was compensated
in U.S. dollars. The 1998 compensation in Canadian dollars is
reflected above in U.S. dollars using an exchange rate of .6517.
(7) Includes payment by the Company of certain moving expenses incurred by
Mr. Friesen in relocating to Portland, Oregon.
(8) Mr. Friesen was compensated in Canadian dollars. The compensation
above reflects the conversion to U.S. dollars using the year-end 1997
Canadian to U.S. exchange rate of .6992.
(9) Ms. Pope became Vice President and Chief Financial Officer in May
1999.
(10) Mr. Leverton was President and Chief Operating Officer of Harmac
Pacific Inc. ("Harmac"), majority ownership of which was acquired by
the Company on February 2, 1998. Mr. Leverton was named Vice
President-Division Manager, Pulp Division in September 1998. Mr.
Leverton resigned from the Company in July 1999.
(11) Includes payment by the Company of certain moving expenses and earned
vacation benefits of $30,555.
(12) Includes payment of the remaining one-third of Mr. Leverton's Harmac
severance allowance under the agreement described in Note 15 below and
an additional severance payment of $45,345 representing three months
of salary under a separation agreement with the Company.
(13) Includes salary paid by Harmac from February 2 through August 31,
1998. Mr. Leverton's compensation was paid in Canadian dollars and is
reflected above in U.S. dollars using an exchange rate of .6517.
(14) Includes payment by the Company of certain moving expenses. Also
includes payment of banked vacation benefits payable upon his transfer
from Harmac of $52,333 which is reflected above in U.S. dollars using
an exchange rate of .6517.
(15) Upon the acquisition of a majority interest in Harmac by the Company,
Mr. Leverton was entitled to elect to terminate his employment and to
receive a severance allowance equal to three times the sum of his 1998
salary and the average of the bonuses paid to him in the three
preceding fiscal years. In order to induce Mr. Leverton to provide
continuity of management by remaining with Harmac after the
acquisition of control by the Company, Harmac entered into an
agreement with Mr. Leverton under which his employment contract was
amended to provide for the immediate payment to him of two-thirds of
the stipulated severance allowance, and for the further payment to him
if his employment should be terminated, voluntarily or involuntarily,
before July 31, 1999, of the remaining one-third. The amount stated
under the heading also includes financial advisory expenses totaling
$5,906 paid by Harmac on his behalf, as well as the contribution to a
share purchase plan. This amount also includes contributions of $3,680
by the Company to the Tax Deferred Savings Plan.
8
<PAGE>
STOCK OPTION GRANTS
The following table contains information concerning the grants of stock
options to the Named Executive Officers in 1999:
<TABLE>
<CAPTION>
OPTION GRANTS IN 1999
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL
------------------------------------------------------------------------------ RATES OF STOCK
NUMBER OF % OF TOTAL PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM (4)
OPTIONS EMPLOYEES BASE PRICE GRANT EXPIRATION ---------------
GRANTED (1)(3) IN FISCAL YEAR (PER SHARE) DATE DATE 5% 10%
----------------- --------------- ------------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael Flannery 40,000 0.14 $ 8.25 02/03/99 02/02/09 $207,535 $525,935
Michael Flannery 14,193(2) 0.05 5.25 02/19/99 02/18/09 46,861 118,755
Peter T. Pope 2,366(2) 0.01 5.25 02/19/99 02/18/09 7,812 19,797
Abram Friesen 20,000 0.07 8.25 02/03/99 02/02/09 103,768 262,968
Maria M. Pope 6,000 0.02 8.25 02/03/99 02/02/09 31,130 78,890
Maria M. Pope 3,549(2) 0.01 5.25 02/19/99 02/18/09 11,718 29,695
Maria M. Pope 20,000 0.07 9.56 04/29/99 04/28/09 120,276 304,803
Maria M. Pope 1,183(2) 0.01 8.13 05/14/99 05/13/09 6,049 15,328
Ralph Leverton 20,000 0.07 8.25 02/03/99 02/02/09 103,768 262,968
</TABLE>
(1) Options become exercisable for the option shares in 5 equal
installments on the first 5 anniversaries of the grant date.
(2) These options were originally granted prior to November 8, 1999 by
Harmac, the Company's majority-owned subsidiary, to purchase Harmac
stock. On November 8, 1999 the Company completed a transaction by
which it acquired all remaining outstanding stock of Harmac. In
connection with that transaction, all options to purchase Harmac stock
were converted into options to purchase Company stock ("Harmac
Replacement Options") based on the conversion rate applicable to
Harmac minority shareholders in the transaction.
(3) Each option (other than Harmac Replacement Options) becomes
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. Under the terms
of executive severance agreements, 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, each option (including
Harmac Replacement Options) will become immediately exercisable for
all of the option shares. Option acceleration under the executive
severance agreements 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 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.
9
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executive Officers concerning exercised options during 1999 and unexercised
options held as of that fiscal year-end.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
VALUE REALIZED UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES (MARKET PRICE AT OPTIONS AT FY-END OPTIONS AT FY-END (1)
ACQUIRED EXERCISE LESS ------------------------------- -------------------------------
NAME ON EXERCISE EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ------------- ------------------ ------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C>
Michael Flannery - - 74,560 91,113 $ 33,690 $ 504,170
Peter T. Pope - - 269,468 1,893 105,165 20,350
Abram Friesen - - 21,776 35,320 14,490 174,095
Maria M. Pope - - 2,780 37,352 4,640 233,949
Ralph Leverton - - 2,000 - - -
</TABLE>
(1) Based upon the market price of $16.00 per share, which was the closing
selling price of the Company's common stock on the last day of the
1999 fiscal year, less the exercise price payable per share.
LONG-TERM INCENTIVE AWARDS
The following table sets forth information with respect to a long-term
incentive award made to a Named Executive Officer in 1999.
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS
PERFORMANCES OR OTHER PERIOD --------------------------------------
NAME UNTIL MATURATION OR PAYOUT THRESHOLD MAXIMUM
------------------------------- ------------------------------------- ------------------ ----------------
<S> <C> <C> <C>
Michael Flannery (1) Each 20% increase in price
of Company common stock $260,000 $780,000
Peter T. Pope - - -
Abram Friesen - - -
Maria M. Pope - - -
Ralph Leverton - - -
</TABLE>
(1) This award was approved on September 9, 1999 when the market price of
the Company's common stock was $12.125. Stock price targets of $14.55
(120% of $12.125), $17.46 (120% of $14.55) and $20.95 (120% of $17.46)
were established under the award. If and when the Company's common
stock closes at or above each of the target price levels for 20
consecutive trading days, Mr. Flannery will be issued a number of
shares of restricted common stock determined by dividing $260,000 by
the closing price of the common stock on the 20th trading day. The
restricted shares will be subject to forfeiture upon termination of
employment and will vest for 10% of the shares on the date of issuance
and for an additional 10% on each anniversary thereof until fully
vested.
10
<PAGE>
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 Company's Supplemental Executive Retirement Income Plan
which provide benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code and other applicable limitations on qualified plan
benefits. The estimated benefits are based upon the remuneration that is covered
under the plans and years of service with the Company and its subsidiaries and
are not subject to offsets for Social Security retirement benefits:
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
FINAL AVERAGE --------------------------------------------------------------------------------------------
SALARY 15 20 25 30 35
- ----------------------- --------------- --------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 24,900 $ 33,200 $ 41,500 $ 44,000 $ 46,500
125,000 32,400 43,200 54,000 57,125 60,250
150,000 39,900 53,200 66,500 70,250 74,000
175,000 47,400 63,200 79,000 83,375 87,750
200,000 54,900 73,200 91,500 96,500 101,500
225,000 62,400 83,200 104,000 109,625 115,250
250,000 69,900 93,200 116,500 122,750 129,000
300,000 84,900 113,200 141,500 149,000 156,500
350,000 99,900 133,200 166,500 175,250 184,000
400,000 114,900 153,200 191,500 201,500 211,500
450,000 129,900 173,200 216,500 227,750 239,000
500,000 144,900 193,200 241,500 254,000 266,500
</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 10 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 fewer 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 as follows: Mr. Flannery, $490,008; Mr. Friesen, $217,656;
Mr. Leverton, $217,656; and Ms. Pope, $216,000. The estimated years of service
for each Named Executive Officer is as follows: Mr. Flannery, 13 years; Mr.
Friesen, 12 years; Mr. Leverton, 25 years; and Ms. Pope, 4 years. For Mr.
Leverton, years of service include years of service with Harmac. His benefit is
calculated under the Company's formula and then offset with the Harmac benefit.
EMPLOYMENT CONTRACTS, CHANGE IN CONTROL ARRANGEMENTS AND RETIREMENT ARRANGEMENTS
The Company does not have any employment agreements with any of the
Named Executive Officers. However, the Company has entered into severance
agreements with each of the Named Executive Officers. Under the severance
agreements, the executive officers will be entitled to certain benefits if 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 dismissal (other than
for cause) by the Company or the officer's resignation in connection with a
material reduction in the officer's duties, a reduction in the officer's
11
<PAGE>
level of compensation by more than 20% or a relocation of the officer's
principal place of employment by more than 50 miles.
Upon such an involuntary termination, the officer will be entitled to
the following severance benefits: (i) a cash severance payment equal to two
times the officer's annual rate of base salary plus one times the officer's
target bonus for the year in which such termination occurs, (ii) accelerated
vesting of all outstanding stock options and (iii) continued health care
coverage for the officer and eligible dependents for up to 18 months at the
Company's expense. However, the total benefit package (as valued under the
federal parachute tax laws and regulations) will be 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 before involuntary termination.
For purposes of each severance agreement, a change in control will be
deemed to occur upon (i) the successful acquisition of securities possessing
more than 25% of the total combined voting power of the Company's outstanding
securities pursuant to a transaction or series of related transactions that the
Board does not at any time recommend the Company's shareholders to approve, (ii)
a change in the composition of the Board over a period of 36 consecutive months
or less such that a majority of the Board ceases, by reason of one or more
contested elections for Board membership, to be composed of individuals who
either (A) have been members of the Board continuously since the beginning of
such period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or nomination was
approved by the Board, (iii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company in complete liquidation or
dissolution of the Company or (iv) any merger or consolidation in which
securities possessing more than 50% of the total combined voting power of the
Company's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately before such
transaction.
In the event benefits were to become due in the year ending December
31, 2000 under the severance agreements currently in effect for the Named
Executive Officers, the maximum amounts payable would be as follows: Mr.
Flannery, $1,130,188; Mr. Friesen, $644,335 and Ms. Pope, $362,872.
In 1999, Mr. Pope waived his vested right to receive retirement
benefits under the Company's Supplemental Executive Retirement Income Plan.
These benefits would have paid $81,264 to him per year for life and then half of
that amount to his surviving spouse for her life. Also in 1999, the Company
entered into a split-dollar life insurance agreement with Maria M. Pope as
trustee of a trust for the benefit of Mr. Pope's grandchildren (the "Trust").
Under this agreement, the Company will pay the premiums on a life insurance
policy obtained by the Trust on the lives of Mr. Pope and his wife. The premiums
equal $229,261 per year for seven years, or total premiums of $1,604,827. All
premiums paid by the Company will be reimbursed by the Trust, without interest,
in 2015 or earlier upon the death of Mr. Pope and his wife.
12
<PAGE>
HUMAN RESOURCES AND NOMINATING COMMITTEE
OF THE
BOARD OF DIRECTORS
EXECUTIVE COMPENSATION REPORT
The Human Resources and Nominating Committee of the Board of Directors
has furnished the following report on executive compensation.
It is the duty of the Human Resources and Nominating 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 and
Nominating Committee administers the Company's Executive Incentive Plan under
which the Company's executive officers and other key employees may earn bonuses
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 and Nominating 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 financial objectives and performance goals.
Accordingly, each executive officer's compensation package is composed of three
elements: (i) base salary that is designed primarily to be competitive with base
salary levels in effect both at companies within the forest products industry
that 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
and Nominating Committee and (iii) long-term stock-based incentive awards that
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.
To facilitate the implementation of these policies, the Human Resources
and Nominating 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 that were considered by the Human
Resources and Nominating Committee in establishing the components of each
officer's compensation package for 1999 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 comparable
companies, both inside and outside the industry. Within the forest
products industry the peer group consists of 34 companies of which 20
are included in the Value Line Paper and Forest Products Index, which
is included in the stock price performance graph on page 17. 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 to the Human Resources and Nominating Committee by the
independent
13
<PAGE>
compensation consulting firm. Salaries are reviewed on an annual
basis, with adjustments to each executive officer's base salary based
upon salary increases paid by the Company's competitors, changes in
duties and individual performance.
- 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. Bonuses
under this program are based on 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 target bonus for each executive officer was
established by the Human Resources and Nominating Committee at the
start of the year, with the target bonus per executive officer set at
35% to 50% of base salary (in accordance with his or her position at
the Company) and the maximum bonus limited to a range between 70% and
100% of base salary for the year. The after-tax earnings for the 1999
fiscal year exceeded the company-wide target by 12% 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 February 1999, the Human
Resources and Nominating 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 1999" on page 10). These grants are designed to
align the interest 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 1999 fiscal year was based on a competitive median
level provided 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.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code limits to $1 million per
person the amount that the Company may deduct for compensation paid to any of
its most highly compensated officers in any year. The levels of salary and bonus
generally paid by the Company do not exceed this limit. Upon the exercise of
nonstatutory stock options the excess of the current market price over the
option price (option spread) is treated as compensation and, therefore, it may
be possible for option exercises by an officer in any year to cause the
officer's total compensation to exceed $1 million. Under IRS regulations, option
spread compensation from options that meet certain requirements will not be
subject to the $1 million cap on deductibility, and it is the Company's current
policy generally to grant options that meet those requirements.
14
<PAGE>
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In setting the compensation payable to the Company's Chief Executive
Officer, Mr. Flannery, the Human Resources and Nominating 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.
The Chief Executive Officer'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 that 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 the Chief Executive Officer's base salary, it is the intent of the Human
Resources and Nominating 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 1999
fiscal year, the Chief Executive Officer's base salary was set approximately at
the median level in effect for chief executive officers at the surveyed
companies. In February 2000, the Human Resources and Nominating Committee
conducted its annual review of Mr. Flannery's base salary level and increased
his base salary by 3.5% effective March 1, 2000. The increase was designed to
maintain Mr. Flannery's base salary at approximately the median level for chief
executive officers at the surveyed companies.
On the basis of (i) exceeding the Company-wide target in 1999, and (ii)
Mr. Flannery's individual performance during that year, the Human Resources and
Nominating Committee awarded him a cash bonus under the Executive Incentive Plan
in the amount of $344,470. Mr. Pope, Chief Executive Officer through July 1999,
was also awarded a cash bonus under the Executive Incentive Plan in the amount
of $201,608.
In February 1999, the Human Resources and Nominating Committee granted
Mr. Flannery options to purchase 40,000 shares of the Company's common stock
under the Stock Option and Appreciation Plan. The option was based on an
evaluation of competitive median grant levels prepared and reported to the Human
Resources and Nominating Committee by the independent compensation consulting
firm retained by the Company.
In an effort to improve shareholder, Board and employee views of Mr.
Flannery's long-term commitment to the Company's success, the Board approved in
September 1999 an initiative to increase Mr. Flannery's stock ownership. The
goal of the initiative is for Mr. Flannery to increase his ownership of Company
stock over a period of ten years to a number of shares valued at approximately 3
times his base salary. He is encouraged to increase his ownership by doing the
following: (i) investing 50% of his after-tax annual bonus in Company common
stock; and (ii) after any stock option exercise, retaining at least 50% of the
after-tax stock option gain in Company common stock. As part of this initiative,
the Board approved the award to Mr. Flannery of restricted stock based on 20%
increases in the Company's stock price as described in the section entitled
Long-Term Incentive Awards.
HUMAN RESOURCES AND NOMINATING COMMITTEE
Gordon P. Andrews Hamilton W. Budge
Kenneth G. Hanna Robert Stevens Miller, Jr.
Brooks Walker, Jr.
15
<PAGE>
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, 1999 with the cumulative total return
on the Russell 2000 Index and the Value Line Paper and Forest Products Index for
that same period. The comparison assumes $100 was invested on December 31, 1994
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>
<S> <C> <C> <C> <C> <C> <C>
GRAPH PLOT POINTS
NAME 1994 1995 1996 1997 1998 1999
POPE & TALBOT INC 100.00 87.73 110.45 109.70 64.96 130.50
Russell 2000 Index 100.00 128.44 149.55 182.75 177.76 209.46
Paper & Forest Products 100.00 118.55 138.57 161.14 150.41 226.97
</TABLE>
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933 or the Securities
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 Chart shall not be incorporated by reference
into any such filings; nor shall such Report or Chart be incorporated by
reference into any future filings.
16
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission ("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 10% shareholders are required
by SEC regulation to furnish the Company with copies of all Section 16(a)
reports filed.
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, 1999 with all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than 10% beneficial owners, except that (1) Mr.
Hanna filed a late report with respect to an acquisition of 1,900 shares by an
entity of which Mr. Hanna is the sole shareholder, (2) Mr. Dodd's initial
statement of beneficial ownership on Form 3 was filed late, and (3) Hugo G.L.
Powell, a former director of the Company, filed one late report in which five
transactions in which he acquired beneficial ownership of Company stock were
reported late.
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 LLP as the Company's independent public
accountants for the fiscal year ending December 31, 2000, subject to
ratification by the shareholders at the Annual Meeting. A representative of
Arthur Andersen LLP is expected to be present at the Annual Meeting with the
opportunity to make a statement if he or she 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
The Company's bylaws require shareholders to give the Company advance
notice of any proposal or director nomination to be submitted at any meeting of
shareholders. The bylaws prescribe the information to be contained in any such
notice. For any shareholder proposal or nomination to be considered at the 2001
Annual Meeting of Shareholders, the shareholder's notice must be received at the
Company's principal executive office no later than January 29, 2001. In
addition, any shareholder proposal to be considered for inclusion in the
Company's proxy statement for the 2001 Annual Meeting of Shareholders must be
received at the Company's principal executive office no later than November 29,
2000.
17
<PAGE>
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.
OTHER MATTERS
The Board of Directors does not know of any other matters that will be
presented for action at the Annual 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 1999, including financial statements, is enclosed herewith.
Copies of the 1999 Annual Report and Annual Form 10-K, including financial
statements and schedules filed with the SEC, may be obtained from Ms. Maria M.
Pope, Vice President and Chief Financial Officer, Pope & Talbot, Inc., P.O. Box
8171, Portland, Oregon 97207.
By order of the Board of Directors
Maria M. Pope
Vice President, Chief Financial Officer
& Secretary
March 24, 2000
<PAGE>
POPE & TALBOT, INC.
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, APRIL 27, 2000
The undersigned hereby appoints Charles Crocker, Kenneth G. Hanna and Lionel
G. Dodd, 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 27, 2000 and at any adjournments
thereof:
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
WITH WITHOUT
/ / / / 1. 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.
FOR AGAINST ABSTAIN
2. The proposal to ratify the selection of Arthur Andersen / / / / / /
LLP to continue as independent certified public
accountants for the year 2000. (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.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
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 PROPOSAL 2.
PLEASE DATE, SIGN AND RETURN THIS PROXY
IN THE ENCLOSED ENVELOPE.
______________________________________________________ Dated: __________, 2000
Please sign here exactly as name(s) appear(s) hereon. (When signing as
attorney, administrator, trustee, guardian or corporate officer, please so
indicate.)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
