<PAGE>
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_]Preliminary Proxy Statement
[_]Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
FORT HOWARD CORPORATION
---------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X]$125 per Exchange Act Rules 0-1(c)(1)(ii), 14a-6(i)(1), 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 transactions 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:
--------------------------------------------------------------------------
[_]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 the 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: _____________________________________________________________
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<PAGE>
[LOGO OF FORT HOWARD APPEARS HERE]
DONALD H. DeMEUSE
Chairman of the Board
and
Chief Executive Officer
March 21, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders that
will be held on Tuesday, May 14, 1996, at 9:00 a.m., local time, in Chicago,
Illinois.
The enclosed notice and proxy statement contain details concerning the
business to be acted upon at the meeting. You will note that the Board of
Directors of the Company recommends a vote "FOR" the election of three
directors to serve until the 1999 Annual Meeting of Stockholders. Please sign
and return your proxy card in the enclosed postage-paid envelope at your
earliest convenience to assure that your shares will be represented and voted
at the meeting even if you cannot attend.
To help us plan for the meeting, please mark the appropriate box on the
accompanying proxy card telling us if you will be attending.
Sincerely,
/s/ Donald H. DeMeuse
Donald H. DeMeuse
<PAGE>
[LOGO OF FORT HOWARD APPEARS HERE]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS
OF FORT HOWARD CORPORATION
The Annual Meeting of Stockholders of Fort Howard Corporation will be held
at the Metropolitan Club, 66th Floor, Sears Tower, 233 South Wacker Drive,
Chicago, Illinois, on Tuesday, May 14, 1996, at 9:00 a.m., local time, for the
following purposes:
1. To elect three directors to serve until the 1999 Annual Meeting of
Stockholders; and
2. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Stockholders of record at the close of business on March 15, 1996 are
entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
By Order of the Board of Directors
/s/ James W. Nellen II
James W. Nellen II
Vice President and
Secretary
Green Bay, Wisconsin
March 21, 1996
EACH STOCKHOLDER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD
PROMPTLY. IN THE EVENT A STOCKHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE
MAY, IF SO DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
<PAGE>
FORT HOWARD CORPORATION
1919 SOUTH BROADWAY
GREEN BAY, WISCONSIN 54304
----------------
PROXY STATEMENT
----------------
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1996
----------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Fort Howard Corporation, a Delaware
corporation (the "Company"), to be voted at the Annual Meeting of Stockholders
of the Company (the "Annual Meeting") to be held at the Metropolitan Club,
66th Floor, Sears Tower, 233 South Wacker Drive, Chicago, Illinois, on May 14,
1996, at 9:00 a.m., local time, and at any adjournments thereof. The
approximate date on which this Proxy Statement and form of proxy are first
being sent to stockholders is March 21, 1996.
Only holders of record of shares of Common Stock of the Company at the close
of business on March 15, 1996, are entitled to vote at the Annual Meeting or
any adjournments thereof. Each owner of record on the record date is entitled
to one vote for each share of Common Stock of the Company so held. The
presence, either in person or by properly executed proxy, of the owners of a
majority of the outstanding shares of Common Stock of the Company is necessary
to constitute a quorum at the Annual Meeting and to permit action to be taken
by the stockholders at such meeting. On March 1, 1996, there were 63,372,025
shares of Common Stock of the Company outstanding.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. Stockholders voting by proxy for the election of directors
nominated to serve until the 1999 Annual Meeting may vote in favor of all
nominees or withhold their votes as to all nominees or withhold their votes as
to specific nominees. Stockholders should specify their choices on the
enclosed form of proxy. If no specific instructions are given with respect to
the matters to be acted upon, the shares represented by a signed proxy will be
voted FOR the election of all nominees for director. Directors will be elected
by a plurality of the votes cast by the holders of the shares of Common Stock
voting in person or by proxy at the Annual Meeting. Abstentions and broker
non-votes will not affect the outcome of the vote.
The Board of Directors of the Company knows of no business that will be
presented for consideration at the Annual Meeting other than the matters
described in this Proxy Statement. If any other matters are presented at the
Annual Meeting, the persons named in the proxy card will vote in accordance
with their judgment.
All proxies delivered pursuant to this solicitation are revocable at any
time at the option of the persons executing them by giving written notice of
revocation to the Secretary of the Company at the address set forth above
before the Annual Meeting, by delivering another proxy bearing a later date or
by attending the Annual Meeting and voting in person.
ELECTION OF DIRECTORS
BOARD OF DIRECTORS
The Board of Directors of the Company is divided into three classes, each
class serving for a period of three years. The Board of Directors of the
Company has set the number of directors of the Company at nine.
One-third of the members of the Board of Directors are elected by the
stockholders annually. The directors whose terms will expire at the Annual
Meeting are James L. Burke, Kathleen J. Hempel and David I. Margolis,
<PAGE>
all of whom have been nominated by the Board of Directors to stand for
reelection as directors to hold office until the 1999 Annual Meeting of
Stockholders and until their successors are elected and qualified.
Should any one or more of these nominees become unable to serve, or for good
cause will not serve, the Board of Directors may, unless the Board of
Directors by resolution provides for a lesser number of directors, designate a
substitute nominee or nominees, in which event the shares represented by all
valid proxies received may be voted for such substitute nominee or nominees.
The Board of Directors knows of no reason why any nominee may be unable to
serve as a director.
RECOMMENDATION OF THE BOARD OF DIRECTORS CONCERNING THE ELECTION OF DIRECTORS
The Board of Directors of the Company recommends a vote FOR James L. Burke,
Kathleen J. Hempel and David I. Margolis as directors to hold office until the
1999 Annual Meeting of Stockholders and until their successors are elected and
qualified. Proxies received by the Board of Directors will be so voted unless
stockholders specify a contrary choice in their proxy.
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
FOR TERMS EXPIRING AT THE 1999 ANNUAL MEETING
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Dr. James L. Burke Director since 1995
Dublin, Georgia Age 57
Dr. Burke is President, Chief Executive
Officer and a member of the Management
Board of Southeast Paper Manufacturing
Company and has held such positions
since 1993. Prior to that time, he was
President and Chief Operating Officer of
Garden State Paper Company.
- -------------------------------------------------------------------------------
Kathleen J. Hempel Director since 1979
Green Bay, Wisconsin Age 45
Ms. Hempel is Vice Chairman and Chief Fi-
nancial Officer of the Company and has
held such positions since March 1992.
Prior to that time, she was Senior Execu-
tive Vice President and Chief Financial
Officer of the Company. Ms. Hempel is also
a Director of Whirlpool Corporation.
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David I. Margolis Director since 1995
New York, New York Age 66
Until his retirement in February 1995,
Mr. Margolis was Chairman of the Board
and Chief Executive Officer of Coltec
Industries Inc., a manufacturer of di-
versified industrial equipment. Mr. Mar-
golis is also a Director of Burlington
Industries Inc. and Coltec Industries
Inc.
DIRECTORS WHOSE TERMS EXPIRE
AT THE 1998 ANNUAL MEETING
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Donald Patrick Brennan Director since 1988
New York, New York Age 55
Mr. Brennan has been an Advisory Director of
Morgan Stanley & Co. Incorporated ("MS&Co")
since January 1996. Prior to that time, he
was head of MS&Co's Merchant Banking
Division and Chairman of Morgan Stanley
Capital Partners III, Inc. ("MSCP III"),
Morgan Stanley Leveraged Equity Fund II,
Inc. ("MSLEF II, Inc.") and Morgan Stanley
Venture Capital II, Inc. Mr. Brennan is also
a Director of Jefferson Smurfit Corporation,
SITA Telecommunications Holdings N.V.,
Collings Farm, Inc. and PSF Finance Holdings
Inc.
2
<PAGE>
Donald H. DeMeuse Director since 1978
Green Bay, Wisconsin Age 60
Mr. DeMeuse is Chairman of the Board and
Chief Executive Officer of the Company and
has held such positions since March 1992.
Prior to that time, he was President and
Chief Executive Officer of the Company.
Mr. DeMeuse is also a Director of
Associated Bank Green Bay.
- --------------------------------------------------------------------------------
Robert H. Niehaus Director since 1988
New York, New York Age 40
Mr. Niehaus has been a Managing
Director of MS&Co since 1990. He is a
Vice Chairman and a Director of MSLEF
II, Inc. and MSCP III. Mr. Niehaus is
also a Director of American Italian
Pasta Company, Collings Farm, Inc.,
PSF Finance Holdings Inc., Randall's
Food Markets, Inc., Silgan
Corporation, Silgan Holdings Inc.,
Waterford Wedgwood UK, plc (Chairman)
and Waterford Crystal Ltd.
DIRECTORS WHOSE TERMS EXPIRE
AT THE 1997 ANNUAL MEETING
- --------------------------------------------------------------------------------
Dudley J. Godfrey, Jr. Director since 1995
Milwaukee, Wisconsin Age 69
Mr. Godfrey is an attorney and a principal
in the law firm of Godfrey & Kahn S.C.,
which he founded in 1956. Mr. Godfrey is
also a Director of ARM Financial Group,
Inc., CLARCOR Inc. and Manpower, Inc.
- --------------------------------------------------------------------------------
Michael T. Riordan Director since 1992
Green Bay, Wisconsin Age 45
Mr. Riordan is President and Chief
Operating Officer of the Company and has
held these positions since March 1992.
Prior to that time, he was a Vice
President of the Company.
- --------------------------------------------------------------------------------
Frank V. Sica Director since 1988
New York, New York Age 45
Mr. Sica has been a Managing Director of
MS&Co since 1988. He is a Director and a
Vice Chairman of MSCP III and MSLEF II,
Inc. Mr. Sica is also a Director of ARM
Financial Group, Inc., The Compucare
Company, Consolidated Hydro, Inc., CSG
Systems International, Inc., Highlands
Gas Corporation, Ionica L3 Limited,
Kohl's Corporation, PageMart Wireless,
Inc., SITA Telecommunications Holdings
N.V., Southern Pacific Rail Corporation
and Sullivan Communications, Inc.
3
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS;
MEETINGS AND COMPENSATION OF DIRECTORS
The Board of Directors held four meetings during 1995. All of the directors
attended at least 75% of the aggregate number of meetings of the Board of
Directors and of all committees of the Board of Directors on which they
served, except for Mr. Sica, who attended two Board meetings.
The Board of Directors has, among other committees, an Audit Committee and a
Compensation and Nominating Committee.
The Audit Committee. The Audit Committee, among other things, recommends to
the Board of Directors the selection of the independent auditors of the
Company, reviews with the independent auditors the scope and results of the
Company's audits, approves the audit fees and reviews the adequacy and
effectiveness of the Company's internal auditing, accounting and financial
controls with the independent auditors and the Company's financial and
accounting staff. The Audit Committee is composed entirely of directors who
are not officers of the Company. The members of the Audit Committee are Dr.
Burke (Chairman), Mr. Godfrey and Mr. Niehaus. The Audit Committee met twice
in 1995.
The Compensation and Nominating Committee. The Compensation and Nominating
Committee reviews and approves all salary arrangements and other remuneration
for senior officers of the Company. It is also responsible for the
administration of the Fort Howard Corporation 1995 Stock Incentive Plan (the
"Stock Incentive Plan"), the Fort Howard Corporation Management Incentive Plan
(the "MIP") and the Fort Howard Corporation Supplemental Retirement Plan. The
Compensation and Nominating Committee also recommends to the Board of
Directors candidates for election to the Board of Directors. The Compensation
and Nominating Committee will consider recommendations for nominees for
director submitted by stockholders. The Compensation and Nominating Committee
is composed entirely of directors who are not officers of the Company. The
members of the Compensation and Nominating Committee are Mr. Brennan
(Chairman), Mr. Margolis and Mr. Niehaus. The Compensation and Nominating
Committee met three times in 1995. Until July 17, 1995, the Executive
Committee, the members of which are Mr. DeMeuse, the Company's Chairman and
Chief Executive Officer, and Mr. Brennan, an Advisory Director of MS&Co acted
as a compensation committee for determining certain aspects of the
compensation of the executive officers of the Company, including the
administration of the MIP. The Executive Committee did not meet in 1995.
Compensation of Directors. Officers of the Company who are also directors do
not receive any fee or remuneration for services as members of the Board of
Directors or of any committee of the Board of Directors. Nonmanagement
directors other than Mr. Brennan, Mr. Niehaus and Mr. Sica, each of whom has
waived compensation for his services as a director, receive a $30,000 annual
fee, $2,000 for each Board meeting attended and $1,000 for each committee
meeting attended. The Company pays 50% of the annual fee in the form of cash
and 50% of the annual fee in the form of shares of Common Stock pursuant to
the Company's 1995 Stock Plan for Non-Employee Directors. The payment of the
cash portion of the annual fee may be deferred by any director at such
director's election pursuant to the Company's Deferred Compensation Plan for
Non-Employee Directors until the earlier of (i) the date of termination of
such director's service as a non-employee director, (ii) the date specified by
such director in his deferred election form, and (iii) the date of such
director's death. In addition, the Company reimburses all of its directors for
their travel expenses in connection with their attendance at Board and
committee meetings.
4
<PAGE>
OWNERSHIP OF COMMON STOCK BY MANAGEMENT
The following table sets forth information as of March 1, 1996, with respect
to beneficial ownership of the Company's outstanding shares of Common Stock by
each director, each of the executive officers named in the Summary
Compensation Table below, and the directors and executive officers of the
Company as a group. Except as otherwise noted below, each of the directors and
executive officers has sole voting and investment power with respect to the
shares he or she owns.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME BENEFICIALLY OWNED OF CLASS
---- ------------------ --------
<S> <C> <C>
Donald Patrick Brennan............................. 0 --
James L. Burke..................................... 1,377 *
Donald H. DeMeuse.................................. 710,449(a) 1.1%
Andrew W. Donnelly................................. 177,477(a) *
Dudley J. Godfrey, Jr.............................. 4,377(b) *
Kathleen J. Hempel................................. 607,691(a) 1.0%
David I. Margolis.................................. 5,477 *
Robert H. Niehaus.................................. 0 --
Michael T. Riordan................................. 190,020(a) *
John F. Rowley..................................... 128,973(a) *
Frank V. Sica...................................... 0 --
All directors and executive officers as a group (23
persons).......................................... 2,572,643(a) 3.9%
</TABLE>
- --------
* Less than 1%.
(a) Includes the following numbers of shares which the designated director or
officer has the right to acquire within 60 days upon the exercise of stock
options: Mr. DeMeuse, 543,237 shares; Mr. Donnelly, 158,827 shares; Ms.
Hempel, 575,347 shares; Mr. Riordan, 173,608 shares; Mr. Rowley, 117,923
shares; and all directors and executive officers as a group, 2,151,600
shares.
(b) Includes 2,000 shares held in a trust over which Mr. Godfrey exercises
shared voting and investment power.
5
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of December 31, 1995, with
respect to persons known to the Company to be the beneficial owners of more
than five percent of the Company's outstanding shares of Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OWNED(a) OF CLASS
- ---------------- --------------------- --------
<S> <C> <C>
Morgan Stanley Group Inc........................ 23,926,174(b) 37.8%
1585 Broadway
New York, New York 10036
Mellon Bank, N.A., as Trustee for First Plaza 6,715,507 10.6
Group Trust(c).................................
1 Mellon Bank Center
Pittsburgh, Pennsylvania 15258
State of Wisconsin Investment Board............. 6,000,000(d) 9.5
P.O. Box 7842
Madison, Wisconsin 53707
AT&T Master Pension Trust....................... 3,423,250(e) 5.4
1 Enterprise Drive
North Quincy, Massachusetts 02171
</TABLE>
- --------
(a) Stock ownership information is based upon information set forth in the
beneficial owner's Schedule 13G report, filed with the Securities and
Exchange Commission with respect to beneficial ownership of the Company's
Common Stock as of December 31, 1995.
(b) Includes 2,776,884 shares held directly by Morgan Stanley Group Inc.
("Morgan Stanley Group") and 18,525,000 shares held directly by The Morgan
Stanley Leveraged Equity Fund II, L.P. ("MSLEF II"). Morgan Stanley
Leveraged Equity Fund II, Inc. is the sole general partner of MSLEF II and
is a wholly owned subsidiary of Morgan Stanley Group. Also includes
1,701,290 shares held directly by Fort Howard Equity Investors II, L.P.
and 663,000 shares held directly by Fort Howard Equity Investors, L.P.
Morgan Stanley Equity Investors Inc. is the sole general partner of both
of these partnerships and is a wholly owned subsidiary of Morgan Stanley
Group. Also includes 260,000 shares for which Morgan Stanley Group
exercises exclusive voting rights but as to which it disclaims beneficial
ownership.
(c) Mellon Bank, N.A. acts as the trustee (the "Trustee") for First Plaza
Group Trust ("First Plaza"), a trust under and for the benefit of certain
employee benefit plans of General Motors Corporation ("GM") and its
subsidiaries. These shares may be deemed to be owned beneficially by
General Motors Investment Management Corporation ("GMIMCo"), a wholly
owned subsidiary of GM. GMIMCo's principal business is providing
investment advice and investment management services with respect to the
assets of certain employee benefit plans of GM and its subsidiaries and
with respect to the assets of certain direct and indirect subsidiaries of
GM and associated entities. GMIMCo is serving as First Plaza's investment
manager with respect to these shares and in that capacity it has the sole
power to direct the Trustee as to the voting and disposition of these
shares. Because of the Trustee's limited role, beneficial ownership of the
shares by the Trustee is disclaimed.
(d) State of Wisconsin Investment Board has sole voting and investment power
with respect to shares beneficially owned.
(e) Includes 65,500 shares of Common Stock held for the AT&T Master Pension
Trust, with respect to a portion of whose assets State Street Global
Advisors acts as investment advisor. State Street Bank and Trust Company
acts as Trustee of the AT&T Master Pension Trust, a qualified employee
benefit plan of AT&T Corp. and its subsidiaries.
6
<PAGE>
CERTAIN TRANSACTIONS
Stockholders Agreement
The Company, Morgan Stanley Group, MSLEF II, certain other investors and
certain management investors (each, a "Holder") have entered into a
stockholders agreement dated as of March 1, 1995 (the "Stockholders
Agreement"), which contains certain restrictions with respect to the
transferability of Common Stock by certain parties thereunder and certain
registration rights granted by the Company with respect to such shares.
Pursuant to the terms of the Stockholders Agreement, MSLEF II and Fort
Howard Equity Investors II, L.P. each have the right to have a designee
nominated for election to the Company's Board of Directors at any annual
meeting of the Company's stockholders, so long as MSLEF II or Fort Howard
Equity Investors II, L.P., as the case may be, does not already have a
designee as a member of the Board of Directors at the time of such annual
meeting. In addition, in the event of a vacancy on the Board of Directors
created by the resignation, removal or death of a director nominated by MSLEF
II or Fort Howard Equity Investors II, L.P., such shareholders have the right
to have a designee nominated for election to fill such vacancy.
Pursuant to the terms of the Stockholders Agreement, in the event that one
or more Holders (other than the management investors) (each, a "Controlling
Stockholder") sell a majority of the shares of Common Stock subject to the
Stockholders Agreement to a third party, certain other Holders have the right
to elect to sell on the same terms the same percentage of such other Holder's
shares to the third party as the Controlling Shareholder is selling of its
shares of Common Stock. In addition, if a Controlling Shareholder sells all of
its shares of Common Stock to a third party, the Controlling Shareholder has
the right to require that certain remaining Holders sell all of their shares
to the third party on the same terms.
Pursuant to the terms of the Stockholders Agreement, Holders of specified
percentages of Common Stock are entitled to certain demand registration rights
("Demand Rights") with respect to shares of Common Stock held by them;
provided, however, that the Company (or purchasers designated by the Company)
shall have the right to purchase at fair market value the shares which are the
subject of Demand Rights in lieu of registering such shares of Common Stock.
In addition to the Demand Rights, Holders are, subject to certain limitations,
entitled to register shares of Common Stock in connection with a registration
statement prepared by the Company to register its equity securities. The
Stockholders Agreement contains customary terms and provisions with respect
to, among other things, registration procedures and certain rights to
indemnification granted by parties thereunder in connection with the
registration of Common Stock subject to such agreement.
Other transactions
MS&Co served as lead underwriter of the initial public offering of the
Company's Common Stock in March 1995 for which it received underwriting fees
of $7 million.
Mr. Godfrey is a principal in the law firm of Godfrey & Kahn S.C., which
provided legal services to the Company during 1995 and received fees from the
Company in an immaterial amount.
COMPENSATION AND NOMINATING COMMITTEE REPORT ON EXECUTIVE OFFICER COMPENSATION
The Compensation and Nominating Committee is responsible for oversight and
administration of executive compensation. The Company's compensation and
benefit programs are designed to:
.Tie executive pay to shareholder value creation through the use of equity-
based incentives;
.Link pay to performance by placing a significant portion of compensation
at risk;
.Align the Company's compensation plans to its business objectives and to
the business environment;
.Measure executives' success in attaining those business objectives; and
.Attract, retain, and motivate key executives of the Company.
7
<PAGE>
As a newly public Company, the Compensation and Nominating Committee
recognizes that a transition period is necessary to fully achieve the
objectives it has established. The Compensation and Nominating Committee is in
the process of evaluating the current executive compensation program in
relation to its philosophy and objectives. The Compensation and Nominating
Committee believes that the actions taken in 1995 with respect to the
executive compensation program are consistent with its objectives.
COMPONENTS OF COMPENSATION
The Compensation and Nominating Committee relates total compensation levels
for the Company's senior executive officers to the total compensation paid to
similarly situated executives of a peer group of companies (the "Peer Group")
with which the Company competes for executive talent. For other executive
officers, the Compensation and Nominating Committee relates cash compensation
levels (base salary plus annual incentive) to the cash compensation paid to
similarly situated executives of the Peer Group; long-term incentives are
related to the Peer Group based on salary ranges, and are not based on
specific positions. The companies comprising the Peer Group consist of
similarly sized diversified paper, consumer packaged goods and manufacturing
companies, and companies with similar capital structures. Some of these
companies are also included in the industry indices set forth in the
Performance Graph on page 10.
Base salaries and benefits are targeted to approximate the median of the
Peer Group of companies. Annual incentive targets are established to
approximate the median of the Peer Group if plan goals are achieved. Long-term
incentive awards are targeted at the median. The compensation package is
designed so that annual and long-term incentives constitute a majority of the
total compensation package.
Based on a competitive analysis completed in November 1995 comparing 1994
compensation levels, overall total compensation for the senior executive
officers ranked at the median, base salaries plus annual incentives ranked
slightly above the median, and long-term incentive award opportunities ranked
below the median. For other executive officers, cash compensation ranked at
the median.
BASE SALARIES
At a minimum, executive officer base salaries will be reviewed on an 18-
month cycle. Base salary increases will be based on a qualitative evaluation
of the following factors: level of responsibility, time in position, prior
experience, individual performance, internal equity, and a comparison of
salaries paid within the Peer Group.
ANNUAL INCENTIVES
Key employees, including all executive officers, participate in the MIP.
Awards under the MIP are based primarily on overall corporate performance;
however an award may be adjusted plus or minus 20% based on a subjective
assessment of individual performance.
In 1995, each individual was assigned an annual incentive award target based
on the achievement of an established corporate earnings before depreciation,
interest, and taxes ("EBDIT") goal. The target corporate performance goal
established was ambitious and represented a significant increase in EBDIT over
the prior year. Although ambitious, the Compensation and Nominating Committee
determined that it was critical to achieve the target corporate performance
goal. Accordingly, performance below the target corporate performance goal
would not result in any MIP award. The Compensation and Nominating Committee
also determined that participants would earn an additional 50% of the amount
that would otherwise be payable based on corporate performance (and excluding
the discretionary adjustment for individual performance), if 102% of the
target corporate performance goal was exceeded. Amounts awarded were based
upon the Company exceeding 102% of the target corporate performance goal.
Although the MIP permits the awards to be adjusted plus or minus 20% based on
a subjective assessment of individual performance, no such adjustments to the
executive officer awards were made for 1995.
8
<PAGE>
LONG-TERM INCENTIVES
The Stock Incentive Plan provides that stock options, stock appreciation
rights, restricted stock, performance shares, stock equivalents, and dividend
equivalents may be granted to key individuals who are in a position to
contribute to the future success of the Company. Long-term incentives are
intended to align pay to shareholder interests and to provide executives with
an incentive to increase shareholder value.
The Compensation and Nominating Committee evaluated its long-term incentive
program and determined that it was necessary for competitive and retention
purposes to make a stock option grant to key employees in 1995. This was the
first significant stock option grant since 1991 (awards were made to a limited
number of executive officers in 1992 and 1993).
Other than the award to the Company's Chief Executive Officer (discussed
below), stock options granted to executive officers vest on a pro rata basis
over a five-year period from the date of grant and have an exercise price
equal to the fair market value of the stock on the date of grant. The size of
the option awards for all executive officers was determined primarily based on
a comparison to award sizes in the Peer Group. In addition, the Chief
Executive Officer recommended, and the Compensation and Nominating Committee
approved, individual adjustments to the number of stock options granted to
certain executive officers based on the Chief Executive Officer's evaluation
of internal equity and retention issues, and his subjective assessment of
individual performance and potential.
COMPENSATION OF THE CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Mr. DeMeuse's compensation is determined pursuant to the terms of his
employment agreement which took effect in 1993 and which expires on December
31, 1997. Mr. DeMeuse's employment agreement provides for a base annual salary
(which may be adjusted periodically) and annual incentive bonuses.
Based on a comparison to the Peer Group, the Compensation and Nominating
Committee did not adjust Mr. DeMeuse's base salary in 1995. Relative to the
Peer Group, his base salary is in the upper quartile. In addition to base
salary, Mr. DeMeuse earned a bonus for 1995 under the MIP based on the Company
exceeding its EBDIT goal. Mr. DeMeuse's award was increased by 50% of the
amount that would otherwise be payable based on the Company exceeding 102% of
the targeted performance goal. No additional discretionary adjustment was made
to Mr. DeMeuse's MIP award.
Based on a comparison to the awards within the Peer Group, in 1995 the
Compensation and Nominating Committee granted Mr. DeMeuse options to purchase
100,000 shares of stock. The options vest one year from the date of grant and
have an exercise price equal to the fair market value on the date of grant.
Based on the results of the November 1995 analysis of competitive practice
within the Peer Group, Mr. DeMeuse's total compensation approximates the
median of other Chairmen of the Board and Chief Executive Officers of the Peer
Group.
POLICY WITH RESPECT TO QUALIFYING COMPENSATION FOR DEDUCTIBILITY
Section 162(m) of the Internal Revenue Code generally limits to $1,000,000
the tax deductible compensation paid for a particular year to the Chief
Executive Officer and to each of the four highest-paid executive officers who
are employed as executive officers on the last day of such year (the "Covered
Executive Officers"). Presently, because of the application of certain
transition rules and grandfather provisions, the Company does not expect any
of the Covered Executive Officers' compensation to be subject to the
deductibility limit. While it is the Compensation and Nominating Committee's
intention to maximize the deductibility of compensation paid to executive
officers, the Compensation and Nominating Committee may, from time to time,
reevaluate its policy with respect to Section 162(m).
COMPENSATION AND NOMINATING COMMITTEE
Donald Patrick Brennan, Chairman
David I. Margolis
Robert H. Niehaus
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return for the
period from March 9, 1995 (the date the Company became a public company)
through December 31, 1995 to the cumulative total returns for the S&P 500
Composite Index ("S&P 500 Index") and the S&P Household Products and the S&P
Paper and Forest Products Group Indices combined and weighted equally
("Household Products/Paper and Forest Products Combined Indices"). The graph
assumes an investment of $100 in the Common Stock of the Company and in each
index as of March 9, 1995, and the reinvestment of all dividends. The line
graph is not intended to be indicative of future stock performance.
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN
FROM MARCH 9, 1995 THROUGH DECEMBER 31, 1995 AMONG
FORT HOWARD CORPORATION, S&P 500 INDEX AND HOUSEHOLD
PRODUCTS/PAPER AND FOREST PRODUCTS COMBINED INDICES
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
HOUSEHOLD PRODUCTS/
PAPER AND FOREST
PRODUCTS COMBINED
DATE FORT HOWARD S&P 500 INDEX INDICES
---- ----------- ------------- -------------------
<S> <C> <C> <C>
March 9, 1995.................... $100.00 $100.00 $100.00
June 30, 1995.................... 117.71 113.49 114.67
September 30, 1995............... 128.13 122.48 118.24
December 31, 1995................ 187.50 129.83 119.05
</TABLE>
10
<PAGE>
EXECUTIVE COMPENSATION
The following table presents information concerning compensation paid for
services to the Company during 1995 and the two prior fiscal years to the
Chief Executive Officer and the four other most highly compensated executive
officers (the "Named Executive Officers") of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
AWARDS
------------
NUMBER OF
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(a) OPTIONS/SARS COMPENSATION(b)
------------------ ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Donald H. DeMeuse....... 1995 $750,000 $973,125 $2,648 100,000 $70,687
Chairman and Chief 1994 750,000 307,500 7,802 0 69,366
Executive Officer 1993 653,846 55,250 4,840 0 62,742
Kathleen J. Hempel...... 1995 $480,000 $622,800 $ 289 50,000 $27,891
Vice Chairman and 1994 480,000 196,800 1,036 0 27,311
Chief Financial Officer 1993 453,077 38,381 0 0 27,388
Michael T. Riordan...... 1995 $378,846 $486,563 $1,641 100,000 $22,088
President and 1994 375,000 153,750 4,671 0 21,400
Chief Operating Officer 1993 302,885 25,500 0 48,750 18,437
Andrew W. Donnelly...... 1995 $330,000 $428,175 $ 880 20,000 $19,026
Executive Vice Presi-
dent 1994 330,000 135,300 162 0 18,603
1993 350,000 29,750 0 0 20,859
John F. Rowley.......... 1995 $250,000 $324,375 $ 103 20,000 $14,688
Executive Vice Presi-
dent 1994 237,885 96,350 338 0 13,676
1993 255,000 21,675 0 0 15,111
</TABLE>
- --------
(a) Consists of amounts reimbursed for the payment of taxes.
(b) Consists of Company contributions to the Company's profit sharing plan and
supplemental retirement plan.
11
<PAGE>
The following table presents information concerning grants of stock options
pursuant to the Stock Incentive Plan made during the 1995 fiscal year to each
of the Named Executive Officers. No stock appreciation rights were granted
under the Stock Incentive Plan during 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE OR BASE GRANT DATE
NAME GRANTED(a) 1995 PRICE ($/Sh) EXPIRATION DATE PRESENT VALUE(b)
---- ------------ ---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Donald H. DeMeuse....... 100,000 13.5% $19.75 12/06/05 $656,000
Kathleen J. Hempel...... 50,000 6.7 19.75 12/06/05 328,000
Michael T. Riordan...... 100,000 13.5 19.75 12/06/05 656,000
Andrew W. Donnelly...... 20,000 2.7 19.75 12/06/05 131,200
John F. Rowley.......... 20,000 2.7 19.75 12/06/05 131,200
</TABLE>
- --------
(a) All grants consisted of nonqualified stock options with a term of 10 years
granted pursuant to the Stock Incentive Plan. Subject to certain
conditions, Mr. DeMeuse's options vest and become exercisable on the first
anniversary of the date of grant. Options granted to the other Named
Executive Officers vest and become exercisable as to 20% of such options
on each of the first five anniversaries of the date of grant.
Exercisability of the options is accelerated in the event of a Named
Executive Officer's death, disability, termination by the Company without
"cause" (as defined for purposes of the Stock Incentive Plan) or, unless
otherwise determined by the Compensation and Nominating Committee, upon a
"change in control" (as defined below under "1995 Stock Incentive Plan").
Notwithstanding the foregoing, no option may be exercised within the first
six months following the date of grant. The Compensation and Nominating
Committee has the discretion to accelerate the exercisability of any
options granted under the Stock Incentive Plan.
(b) The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the
value of the options reflected in the above table include the following:
(i) an option exercise price of $19.75, equal to the fair market value of
the underlying stock on the date of grant; (ii) an expected weighted
average option life equal to five years; (iii) an interest rate of 5.51%
that represents the interest rate on a U.S. Treasury security on the date
of grant with a maturity date corresponding to that of the expected
weighted average option life; and (iv) volatility of 24.32% calculated
using daily stock prices of the companies comprising the Household
Products/Paper and Forest Products Combined Indices in the five year
period preceding 1996. The ultimate values of the options will depend on
the future market price of the Company's stock, which cannot be forecasted
with reasonable accuracy. The actual value, if any, an optionee will
realize upon exercise of an option will depend on the excess of the market
value of the Company's Common Stock over the exercise price on the date
the option is exercised. There is no assurance that the value realized by
an optionee will be at or near the value estimated by the Black-Scholes
model or any other model applied to value the options.
12
<PAGE>
The following table presents information concerning unexercised stock
options for the Named Executive Officers. No stock options were exercised by
the Named Executive Officers during 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
HELD AT DECEMBER 31, 1995 OPTIONS HELD AT DECEMBER 31, 1995(a)
-------------------------------- ----------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------- --------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Donald H. DeMeuse....... 543,237 100,000 $ 3,527,507 $ 275,000
Kathleen J. Hempel...... 575,347 50,000 3,996,371 137,500
Michael T. Riordan...... 173,608 100,000 945,799 275,000
Andrew W. Donnelly...... 158,827 20,000 970,688 55,000
John F. Rowley.......... 117,923 20,000 699,472 55,000
</TABLE>
- --------
(a) The value of unexercised in-the-money options represents the positive
spread between the December 31, 1995 closing price of the Common Stock of
$22.50 per share as reported on the Nasdaq National Market System
("NASDAQ") and the exercise price of unexercised options. The actual
amount, if any, realized upon exercise of options will depend upon the
market price of the Common Stock relative to the per share exercise price
at the time the option is exercised. There is no assurance that the values
of unexercised in-the-money options reflected in this table will be
realized.
EMPLOYMENT AGREEMENTS
The Named Executive Officers have entered into employment agreements with
the Company (the "Employment Agreements") which took effect in 1993. The
Employment Agreements contain customary employment terms, have an initial term
that expires on December 31, 1997, provide for automatic one-year extensions
(unless notice not to extend is given by either party at least six months
prior to the end of the effective term) and provide for base annual salaries
and annual incentive bonuses. The Employment Agreements for Mr. DeMeuse, Ms.
Hempel and Mr. Riordan provide for participation in additional bonus
arrangements which may be agreed upon in good faith from time to time with the
Company. In the event of the termination of the employment of a Named
Executive Officer by the Company without "cause" (other than by reason of
death or disability) or by such Named Executive Officer for "good reason" (as
such terms are defined in the Employment Agreements), the Employment
Agreements provide that such Named Executive Officer would receive his or her
full base salary for a period (in each case, the "Severance Period") ranging
from one to three years. In addition, during the Severance Period, such Named
Executive Officer would receive a payment in each January following the date
of termination in respect of the previous calendar year, the amount of which
is based on the average of the three prior year bonuses under the MIP. During
the Severance Period, such Named Executive Officer would also continue to
participate in all other compensation and benefit plans of the Company and
would be entitled to outplacement assistance. Such Named Executive Officer is,
however, required to mitigate the amount of the severance payments provided
for in the Employment Agreements by seeking other employment. The Employment
Agreements for Mr. DeMeuse, Ms. Hempel and Mr. Riordan also include
noncompetition and confidentiality provisions.
MANAGEMENT INCENTIVE PLAN
Participation in the MIP is based upon individual selection by the
Compensation and Nominating Committee from among the full-time salaried
employees who, in the judgment of the Chief Executive Officer, serve in key
executive, administrative, professional or technical capacities. Awards are
based upon the extent to which the Company's financial performance during the
year has met or exceeded certain performance goals specified by the
Compensation and Nominating Committee. The Compensation and Nominating
Committee may alternatively grant a discretionary bonus. A participant must be
employed by the Company on the last day of the year in order to receive a
bonus for such year, except in the case of death, disability or retirement
after age 55, in which case such participant would receive a pro rata bonus.
In the event of termination of a participant's employment without "cause" (as
defined in the MIP) within two years following a "change in control" (as
defined below under "1995 Stock Incentive Plan"), participants would receive a
pro rata bonus for such year calculated as if the applicable performance
targets have been attained.
13
<PAGE>
1995 STOCK INCENTIVE PLAN
The Stock Incentive Plan provides for the granting of incentive and
nonqualified stock options, stock appreciation rights, restricted stock,
performance shares, stock equivalents and dividend equivalents (individually,
an "Award" or collectively, "Awards"). Employees who are eligible to receive
Awards are those officers or other key employees with potential to contribute
to the future success of the Company or its subsidiaries. A total of 3,359,662
shares of Common Stock may be subject to Awards under the Stock Incentive
Plan, subject to adjustment in accordance with the terms of the Stock
Incentive Plan.
The only Awards that have been granted to date under the Stock Incentive
Plan are nonqualified stock options. In the event of a change in control and
except as the Compensation and Nominating Committee (as constituted prior to
such change in control) may expressly provide otherwise, all stock options
then outstanding (except for any stock options granted within six months of
the Change in Control) will become fully exercisable. For purposes of the
Stock Incentive Plan, a "change in control" shall have occurred when (A) any
person (other than (x) the Company, any subsidiary of the Company, any
employee benefit plan of the Company or of any subsidiary of the Company, or
any person or entity organized, appointed or established by the Company or any
subsidiary of the Company for or pursuant to the terms of any such plans, (y)
Morgan Stanley Group, MSLEF II, Fort Howard Equity Investors, L.P., Fort
Howard Equity Investors II, L.P., or any of their respective affiliates or (z)
any general or limited partner of MSLEF II, Fort Howard Equity Investors, L.P.
or Fort Howard Equity Investors II, L.P.), alone or together with its
affiliates and associates (collectively, an "Acquiring Person"), shall become
the beneficial owner of 20% or more of the then outstanding shares of Common
Stock or the combined voting power of the Company's then outstanding voting
securities (except pursuant to an offer for all outstanding shares of Common
Stock at a price and upon such terms and conditions as a majority of the
Continuing Directors (as defined below) determine to be in the best interests
of the Company and its stockholders (other than an Acquiring Person on whose
behalf the offer is being made)), or (B) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors and any new director (other than a director who is a representative
or nominee of an Acquiring Person) whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote
of at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved (collectively, the "Continuing
Directors"), no longer constitute a majority of the Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Nominating Committee are Donald Patrick
Brennan, Robert H. Niehaus and David I. Margolis. Mr. Brennan and Mr. Niehaus
are employed by MS&Co as an Advisory Director and a Managing Director,
respectively. Until July 17, 1995, the Executive Committee of the Company's
Board of Directors acted as a compensation committee. See "Committees of the
Board of Directors--The Compensation and Nominating Committee."
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who own more than
10% of the Company's Common Stock to report their ownership and changes in
their ownership of the Company's Common Stock to the Securities and Exchange
Commission. Directors, officers and greater than 10% stockholders also are
required to furnish the Company with copies of all Section 16(a) forms they
file. Specific due dates for these reports have been established by the
Securities and Exchange Commission and the Company is required to report in
this proxy statement any failure of its directors, executive officers and
greater than 10% stockholders to file by these dates.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no other reports
were required, the Company believes that all such filing requirements were
satisfied by its officers, directors and greater than 10% stockholders, except
that two reports were filed late by Morgan Stanley Group.
14
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP was the Company's independent public accountant for
1995. Arthur Andersen LLP is expected to have a representative at the Annual
Meeting. This representative will be available to respond to appropriate
questions at that time and will have an opportunity to make a statement, if he
or she so desires. The Board of Directors has selected Arthur Andersen LLP to
audit the Company's accounts for 1996.
EXPENSES OF SOLICITATION
All expenses incurred in connection with the solicitation of proxies will be
borne by the Company. The Company has engaged Chemical Mellon Shareholder
Services to assist with the solicitation of proxies for an estimated fee of
$4,250, plus expenses. The Company will request brokerage houses, custodians,
fiduciaries and nominees to forward proxy materials to their principals and
will reimburse them for their reasonable expenses in doing so. Solicitation
may also be undertaken by mail, telephone and personal contact by directors,
officers and employees of the Company without additional compensation.
Chemical Mellon Shareholder Services, the Company's transfer agent and
registrar, will receive and tabulate proxies and will provide representatives
to act as inspectors of election at the Annual Meeting.
STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company on or before November
20, 1996, to be eligible for inclusion in the Company's proxy statement and
proxy relating to that meeting. Proposals should be addressed to James W.
Nellen II, Secretary, Fort Howard Corporation, 1919 South Broadway, Green Bay,
Wisconsin 54304.
Under the Company's Certificate of Incorporation and By-Laws, stockholders
desiring to nominate persons for election as directors or bring other business
before the annual meeting must deliver or mail a notice to the Secretary that
must be received at the principal executive offices of the Company not less
than 60 days nor more than 90 days prior to the anniversary date of the
immediately preceding annual meeting of stockholders; provided, however, that
in the event that the annual meeting is called for a date that is not within
30 days before or after such anniversary date, notice by the stockholder in
order to be timely must be so received not later than the close of business on
the tenth day following the day on which such notice of the date of the annual
meeting is mailed or such public disclosure of the date of the annual meeting
is made, whichever first occurs. Stockholders' notices must contain the
specific information set forth in the Certificate of Incorporation and the By-
Laws. Stockholders will be furnished a copy of the Company's Certificate of
Incorporation and By-Laws without charge upon written request to the Secretary
of the Company.
OTHER INFORMATION
As to any other matter or proposal that may properly come before the
meeting, including voting for the election of any person as a director in
place of a nominee named herein who becomes unable to serve or for good cause
will not serve, and voting on proposals omitted from the proxy statement
pursuant to the rules of the Securities and Exchange Commission, it is
intended that proxies received will be voted in accordance with the discretion
of the proxy holders.
The Annual Report to Stockholders of the Company for the fiscal year ended
December 31, 1995, which includes financial statements, is enclosed. The
Annual Report does not form any part of the material for the solicitation of
proxies.
15
<PAGE>
ANY STOCKHOLDER WHO DESIRES A COPY OF THE COMPANY'S 1995 ANNUAL REPORT ON
FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY OBTAIN A COPY
(EXCLUDING EXHIBITS) WITHOUT CHARGE BY ADDRESSING A WRITTEN REQUEST TO THE
PUBLIC AFFAIRS DEPARTMENT, FORT HOWARD CORPORATION, P.O. BOX 19130, GREEN BAY,
WISCONSIN 54307-9130.
By Order of the Board of Directors
/s/ James W. Nellen II
James W. Nellen II
Vice President and
Secretary
Green Bay, Wisconsin
March 21, 1996
16
<PAGE>
EXHIBIT 99.1
FORT HOWARD CORPORATION
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 14, 1996
R
The undersigned hereby appoints Kathleen J. Hempel and James W. Nellen II,
O or either of them, proxies of the undersigned, with full power of substi-
tution, to vote all shares of Common Stock of Fort Howard Corporation that
X the undersigned is entitled to vote at the Annual Meeting of Stockholders
to be held on Tuesday, May 14, 1996, at 9:00a.m., local time, at the Metro-
Y politan Club, Sears Tower, 66th Floor, 233 South Wacker Drive, Chicago,
Illinois, and at any adjournments thereof. The proxies have the authority to
vote such stock as directed on the reverse side hereof with respect to the
proposal set forth in the Proxy Statement with the same effect as though the
undersigned were present in person and voting such shares. The proxies are
further authorized in their discretion to vote upon such other business as
may properly come before the Annual Meeting of Stockholders, and any
adjournments thereof. The undersigned hereby revokes all proxies heretofore
given to vote at the Annual Meeting of Stockholders and any adjournment
thereof.
PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW YOUR STOCK IS TO BE
VOTED. UNLESS YOU OTHERWISE INDICATE, THIS PROXY WILL BE VOTED "FOR" ALL
NOMINEES IN THE PROPOSAL SET FORTH ON THE REVERSE SIDE OF THIS CARD. YOUR
SHARES CANNOT BE VOTED UNLESS YOU SIGN THIS CARD.
(CONTINUED, AND TO BE SIGNED ON THE REVERSE SIDE)
- --------------------------------------------------------------------------------
*FOLD AND DETACH HERE*
<PAGE>
This proxy, when properly executed, will be voted as Please mark
directed. IF NO DIRECTION IS GIVEN, SHARES OF COMMON your votes as
STOCK WILL BE VOTED "FOR" ALL NOMINEES IN THE PROPOSAL indicated in
SET FORTH BELOW. the example
[X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE SELECTION OF ALL NOMINEES FOR
THE BOARD OF DIRECTORS.
Election of Directors. The nominees are: James L. Burke, Kathleen J. Hempel and
David I. Margolis.
FOR all nominees FOR, except WITHHOLD authority to vote for the
following nominee(s):
[ ]
------------------------------------------------------
WITHHOLD authority to
vote for all nominees Please indicate whether you will
be attending the Annual Meeting
[ ] in person:
Will Attend Will Not Attend
[ ] [ ]
SIGNATURE(S)__________________________
______________________________________
DATED:_________________________, 1996
IMPORTANT: PLEASE SIGN EXACTLY AS NAME(S)
APPEAR HEREON. JOINT OWNERS
SHOULD EACH SIGN. WHEN SIGNING
AS EXECUTOR, ADMINISTRATOR,
TRUSTEE, GUARDIAN, ATTORNEY OR
CORPORATE OFFICER, PLEASE GIVE
FULL TITLE.
- --------------------------------------------------------------------------------
*FOLD AND DETACH HERE*
