<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
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
P.H. GLATFELTER COMPANY
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 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 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:
Notes:
<PAGE>
P. H. GLATFELTER COMPANY
228 SOUTH MAIN STREET
SPRING GROVE, PENNSYLVANIA 17362
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 1995
----------------
To The Shareholders:
The annual meeting of shareholders of P. H. Glatfelter Company will be held
at the Company's principal office, 228 South Main Street, Spring Grove,
Pennsylvania, on Wednesday, April 26, 1995 at 10:00 A.M. for the following
purposes:
1. To elect four members of the Board of Directors, each to serve for
full three-year terms expiring in 1998.
2. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed March 1, 1995 as the record date for
determining the holders of Common Stock entitled to notice of and to vote at
the meeting. Consequently, only holders of Common Stock of record on the
transfer books of the Company at the close of business on March 1, 1995 will be
entitled to notice of and to vote at the meeting.
Please complete, date and sign the enclosed proxy and return it promptly. If
you attend the meeting, you may vote in person.
R. S. Wood,
Secretary
March 17, 1995
<PAGE>
P. H. GLATFELTER COMPANY
PROXY STATEMENT
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of P. H.
Glatfelter Company, 228 South Main Street, Spring Grove, Pennsylvania 17362.
Copies of this proxy statement and the accompanying proxy are being mailed to
the holders of Common Stock on or after March 17, 1995. The proxy may be
revoked by a shareholder at any time prior to its use by giving written notice
of such revocation to the Secretary of the Company, by appearing at the meeting
and voting in person or by the timely submission of a properly executed later
dated proxy. The expense of this solicitation will be paid by the Company. Some
of the officers and other employees of the Company may solicit proxies
personally and by telephone.
Holders of Common Stock of record at the close of business on March 1, 1995
will be entitled to one vote per share so held of record on all business of the
meeting, except that the holders have cumulative voting rights in elections of
directors. Therefore, each shareholder is entitled to as many votes in the
election of directors of each class as shall equal the number of his shares of
Common Stock multiplied by the number of directors of such class to be elected.
A shareholder may cast all such votes for a single nominee or may distribute
them between two or more nominees within such class as he sees fit. The Company
had 44,201,916 shares of Common Stock outstanding on the record date. The
presence at the meeting in person or by proxy of the holders of a majority of
the shares of Common Stock outstanding on the record date will constitute a
quorum at the meeting. Votes withheld and abstentions will be counted in
determining the presence of a quorum, but will not be voted. Broker non-votes
will not be counted in determining the presence of a quorum and will not be
voted. The votes will be counted by judges of election appointed by the
Company.
ELECTION OF DIRECTORS
Four directors are to be elected at the annual meeting of shareholders to
serve three-year terms expiring on the date of the 1998 annual meeting of
shareholders and until their respective successors are elected and shall
qualify. The persons named in the accompanying proxy intend to vote for the
election of P. H. Glatfelter III, R. S. Hillas, P. R. Roedel and J. M. Sanzo
for terms expiring in 1998, unless authority to vote for one or more of such
nominees is specifically withheld in the proxy. Messrs. Glatfelter, Hillas,
Roedel and Sanzo are currently directors of the Company. The persons named in
the proxy will have the right to vote cumulatively and to distribute their
votes among the nominees as they consider advisable. The four nominees for
director receiving the highest number of votes cast by shareholders entitled to
vote thereon will be elected to serve on the Board of Directors. The Board of
Directors is informed that all the nominees are willing to serve as directors,
but if any of them should decline to serve or become unavailable for election
as a director at the meeting, an event which the Board of Directors does not
anticipate, the persons named in the proxy will vote for such nominee or
nominees as may be designated by the Board of Directors unless the Board of
Directors reduces the number of directors accordingly.
<PAGE>
The following table sets forth information as to the nominees and the other
persons who are to continue as directors of the Company after the annual
meeting. The offices referred to in the table are offices of the Company unless
otherwise indicated. For information concerning the number of shares of Common
Stock of the Company owned by each director and all directors and officers as a
group as of March 1, 1995, see "Ownership of Common Stock."
<TABLE>
<CAPTION>
YEAR FIRST PRINCIPAL OCCUPATION AND
ELECTED A BUSINESSES DURING LAST FIVE
NAME AGE DIRECTOR YEARS AND CURRENT DIRECTORSHIPS
---- --- ---------- -------------------------------
Nominees to be elected for terms expiring in 1998:
<S> <C> <C> <C>
P. H. Glatfelter III(1). 79 1944 Chairman Emeritus since 1988; Chairman of the
Board prior thereto
Roger S. Hillas......... 67 1964 Retired; Chairman and Chief Executive
Officer, Meritor Savings Bank, prior to
December 11, 1992; Director of Consolidated
Rail Corporation, Toll Bros., Inc., VF
Corporation and The Bon-Ton Stores, Inc.
Paul R. Roedel.......... 67 1992 Retired; Chairman and Chief Executive
Officer, Carpenter Technology Corporation,
manufacturer of specialty metals, prior to
July 1, 1992; Director of Carpenter
Technology Corporation, Meridian Bancorp,
Inc. and General Public Utilities
Corporation
John M. Sanzo........... 45 1992 Private Financial Consultant since June 1994;
President, Edison Control Corporation,
manufacturer of circuit indicators for
electric utility industry, from November
1991 to June 1994; Managing Director, The
First Boston Corporation, an investment
bank, prior to August 1991
<CAPTION>
Directors continuing for terms expiring in 1997:
<S> <C> <C> <C>
Robert E. Chappell...... 50 1989 President, Penn Mutual Life Insurance Company
since January 10, 1994; Executive Vice
President, PNC Bank Corp., a bank holding
company, from January 1992 to December 31,
1993; Chairman, Provident National Bank, a
subsidiary of PNC Bank Corp., prior to
January 28, 1993; Vice Chairman, PNC
Financial Corp prior to December 1991;
President, Provident National Bank prior to
May 1991
George H. Glatfelter 43 1992 Vice President--General Manager, Glatfelter
II(1).................. Paper Division since May 1993; General
Manager, Glatfelter Paper Division prior to
May 1993
Thomas C. Norris........ 56 1976 Chairman, President and Chief Executive
Officer
Richard L. Smoot........ 54 1994 President and Chief Executive Officer, PNC
Bank, National Association, Philadelphia
since July 1991; President, Provident
National Bank, from May 1991 to July 1991;
Executive Vice President, Provident National
Bank, prior to May 1991
<CAPTION>
Directors continuing for terms expiring in 1996:
<S> <C> <C> <C>
Garza Baldwin, Jr....... 74 1987 Retired; former President--Ecusta Paper
Division
George H. Glatfelter(1). 68 1970 Retired; former Vice President--
Manufacturing, Spring Grove Mill
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST PRINCIPAL OCCUPATION AND
ELECTED A BUSINESSES DURING LAST FIVE
NAME AGE DIRECTOR YEARS AND CURRENT DIRECTORSHIPS
---- --- ---------- -------------------------------
<S> <C> <C> <C>
M. A. Johnson II........ 61 1970 Retired; former Executive Vice President,
Treasurer and Chief Financial Officer
John W. Kennedy......... 74 1978 Chairman, McClarin Plastics, a manufacturer
of plastic industrial products
</TABLE>
- --------
(1) P. H. Glatfelter III and George H. Glatfelter are brothers. George H.
Glatfelter II is the son of George H. Glatfelter.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
BOARD OF DIRECTORS
The Board of Directors held six meetings during 1994. Each of the incumbent
directors attended at least 75% of the aggregate of all meetings of the Board
of Directors and committees thereof on which he served in 1994, except for G.
Baldwin, Jr., who underwent open-heart surgery causing him to miss two meetings
of the Board of Directors and one meeting of the Audit Committee in December.
The standing committees of the Board are the Executive Committee, the Audit
Committee, the Compensation Committee, the Finance Committee, the Nominating
Committee, the Pension Committee and the Profit Sharing and Employee Stock
Ownership Committee. The members of all of these committees are appointed by
the Board.
COMMITTEES
Executive Committee
The Executive Committee consists of six members of the Board: G. H.
Glatfelter, P. H. Glatfelter III, R. S. Hillas, M. A. Johnson II, J. W. Kennedy
and T. C. Norris. The Executive Committee has the authority to exercise all of
the powers of the Board of Directors between meetings of the Board, except the
power to amend the Company's By-Laws and the power to rescind or modify any
prior action of the Board of Directors. The Executive Committee held no
meetings during 1994.
Audit Committee
The Audit Committee consists of six members of the Board: G. Baldwin, Jr., R.
E. Chappell, J. W. Kennedy, R. S. Hillas, P. R. Roedel and J. M. Sanzo, none of
whom are members of the Company's management. Generally, the Audit Committee
(i) recommends to the Board of Directors the independent accountants to be
appointed for the Company, (ii) meets with the independent accountants, the
chief internal auditor and other corporate officers to review matters relating
to corporate financial reporting and accounting procedures and policies,
adequacy of financial, accounting and operating controls and the scope of the
audits of the independent accountants and internal auditors, including in the
case of the independent accountants, the fees for such services and (iii)
reviews and reports on the results of such audits to the Board of Directors.
The Audit Committee held two meetings during 1994.
In accordance with the recommendations of the Audit Committee, the Board of
Directors has selected Deloitte & Touche LLP, independent certified public
accountants, to audit the consolidated financial statements of the Company and
its consolidated subsidiaries for the year ending December 31, 1995. A
representative of Deloitte & Touche is expected to attend the shareholders'
meeting and will be given the opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
Compensation Committee
The Compensation Committee consists of five members of the Board: P. H.
Glatfelter III, R. S. Hillas, J. W. Kennedy, P. R. Roedel and R. L. Smoot. The
responsibilities of the Compensation Committee are
3
<PAGE>
described below (see "Report of Compensation Committee on Executive
Compensation"). The Compensation Committee held four meetings during 1994.
Finance Committee
The Finance Committee consists of six members of the Board: R. E. Chappell,
G. H. Glatfelter II, P. H. Glatfelter III, M. A. Johnson II, T. C. Norris and
J. M. Sanzo. The Finance Committee is responsible for overseeing the Company's
financial affairs and recommending such financial actions and policies,
including those with respect to dividends, as are most appropriate to
accommodate the Company's strategic and operating strategies while maintaining
its sound financial condition. The Finance Committee held two meetings during
1994.
Nominating Committee
The Nominating Committee consists of five members of the Board: P. H.
Glatfelter III, R. S. Hillas, T. C. Norris, J. M. Sanzo and R. L. Smoot. The
responsibilities of the Nominating Committee include the identification and
recruitment of effective candidates for nomination as directors and officers of
the Company. The Nominating Committee held one meeting during 1994. The
Nominating Committee will consider nominees for election to the Board
recommended by the holders of Common Stock of the Company. Any shareholder
desiring to recommend a nominee for election at the 1996 annual meeting of
shareholders should submit such nomination in writing to the Secretary of the
Company by November 15, 1995.
Pension Committee
The Pension Committee consists of two members of the Board, G. H. Glatfelter
II and T. C. Norris, and four officers or employees of the Company, D. H.
Landis, R. P. Newcomer, R. W. Wand and R. S. Wood. The responsibilities of the
Pension Committee include the general overview of the provisions of various
pension plans of the Company and an annual review of pension fund performance.
The Pension Committee held two meetings during 1994.
Profit Sharing and Employee Stock Ownership Committee
The Profit Sharing and Employee Stock Ownership Committee consists of two
members of the Board, G. H. Glatfelter II and T. C. Norris, and three officers
of the Company, R. P. Newcomer, R. W. Wand and R. S. Wood. The responsibilities
of the Committee are to administer the Company's various profit sharing and
stock ownership plans and to conduct an annual review of profit sharing fund
performance. The Committee held two meetings during 1994.
COMPENSATION OF DIRECTORS
Board members, who are not otherwise salaried employees of the Company,
receive an annual retainer of $12,000.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
from the Company and its subsidiaries which was awarded to, earned by, or paid
to the Company's Chief Executive Officer and each of the Company's four other
most highly compensated executive officers in 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------ ----------------------- ----------
NAME AND RESTRICTED SECURITIES
PRINCIPAL FISCAL STOCK UNDERLYING LTIP ALL OTHER
POSITION YEAR SALARY($)(1) BONUS($)(2) AWARDS($)(3) OPTIONS(3) PAYOUTS($) COMPENSATION($)
--------- ------ ------------ ----------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
T. C. Norris............ 1994 320,102 4,802 0(4) 0 0 9,519(5)
Chairman, President 1993 316,337 15,184 0 45,000 0 9,405(5)
and CEO 1992 302,144 205,458 0 0 286,000 8,980(5)
R. W. Wand.............. 1994 183,492 2,752 0 0 0 5,530(5)
Vice President-- 1993 182,157 8,744 0 25,000 718,750 5,490(5)
Administration 1992 176,439 104,099 0 0 53,625 5,318(5)
J. F. Myers............. 1994 151,200 2,268 0(6) 0 0 4,536(7)
Vice President-- 1993 149,094 7,157 0 25,000 0 4,473(7)
Manufacturing Technol-
ogy 1992 141,012 83,197 0 0 35,750 4,230(7)
G. H. Glatfelter II(8).. 1994 128,619 4,244 0 0 0 0
Vice President--General
Manager, 1993 119,899 6,355 0 25,000 0 0
Glatfelter Paper Divi-
sion 1992 -- -- -- -- -- --
R. S. Lawrence(8)....... 1994 127,620 0 0 0 0 3,829(7)
Vice President-- 1993 119,112 1,634 0 25,000 0 2,808(7)
General Manager, Ecusta 1992 -- -- -- -- -- --
Paper Division
</TABLE>
- --------
(1) Salaries for 1994 exceeded 1993 because 1993 salary increases were not
implemented until the spring of 1993.
(2) Reflects distributions under broad-based profit sharing plans payable to
all salaried employees and bonuses under the Management Incentive Plans for
executive officers and other senior level employees. Incentive bonuses were
not earned in 1994 or 1993 since earnings did not meet minimum award goals.
(3) No dividends are paid on restricted stock awards which have not vested or
on options which have not been exercised.
(4) At December 31, 1994, 160,000 shares of restricted stock were held, 100,000
shares of which will vest on May 1, 1996 and 20,000 shares of which will
vest on each of May 1, 1997, May 1, 1998 and May 1, 1999. At December 31,
1994, the aggregate fair market value of such shares was $2,480,000.
(5) Consists of $25 payable to employees at the Company's Spring Grove mill
with service to the Company in excess of 25 years and the remainder in
Company matching contributions under the Company's Employee Stock Purchase
Plan.
(6) At December 31, 1994, 50,000 shares of restricted stock were held, all of
which will vest on May 1, 1996. At December 31, 1994, the fair market value
of such shares was $775,000.
(7) Consists of Company matching contributions under the Company's Employee
Stock Purchase Plan.
(8) Individuals were first elected as executive officers in 1993.
5
<PAGE>
YEAR-END OPTION VALUES
The following table sets forth information concerning the value of
unexercised options to purchase Common Stock held by the named executive
officers at December 31, 1994.
AGGREGATED OPTION EXERCISES IN 1994
AND OPTION VALUES AT DECEMBER 31, 1994
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT 12/31/94 (#) OPTIONS AT 12/31/94 ($) (1)
ACQUIRED ON VALUE ------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. C. Norris............ 0 n/a 11,250 33,750 0 0
R. W. Wand.............. 0 n/a 6,250 18,750 0 0
J. F. Myers............. 0 n/a 6,250 18,750 0 0
G. H. Glatfelter II..... 0 n/a 6,250 18,750 0 0
R. S. Lawrence.......... 0 n/a 6,250 18,750 0 0
</TABLE>
- --------
(1) The exercise price exceeded the market value of the Company's Common Stock
on December 31, 1994.
EMPLOYEE BENEFIT PLANS
Profit Sharing Plans
The Company has Profit Sharing Plans for its salaried employees for each of
its four profit centers: Corporate (divided into two groups, one of which
excludes, and the other of which includes, profits and equity attributable to
the Ecusta Division), Spring Grove mill, Neenah mill and Ecusta Division. The
operating rules for each of these Plans provide for an annual contribution
equal to a percentage of each participant's salary that varies with the
performance of his profit center, with a maximum award of 15% of salary. For
1994, only salary up to $150,000 annually was considered in determining a
participant's profit sharing award. Each award under a Profit Sharing Plan
remains in the Plan for later payment, generally on retirement.
Salary Continuation Plan
The Company has a Salary Continuation Plan which provides for the payment for
ten years following the retirement or death of the participant of an amount
which on an actuarial basis as computed in 1987, was expected to equal the
difference between 55% of the participant's then projected compensation at age
60 and the sum of then projected Social Security and Company pension plan
retirement benefits to which the participant is entitled. If the participant
dies prior to retirement, the benefits are payable to the participant's
beneficiary. Compensation for purposes of the Salary Continuation Plan
generally includes salary plus cash received and deferred compensation accrued
under the Company's Management Incentive Plans and Salaried Employees' Profit
Sharing Plans and Company contributions under the Employee Stock Purchase Plan.
The Company has purchased insurance on the lives of the participants to provide
funds to help offset the costs of benefits payable under the Plan. T.C. Norris
and R.W. Wand are the only two executive officers of the Company who are
participants in the Plan.
Pension Plans
Officers and directors who are full time employees of the Company participate
either in the Spring Grove Division Pension Plan for salaried employees or the
Ecusta Division Pension Plan for salaried employees (the "Pension Plans").
Benefits payable under the Pension Plans are based upon years of service and
average annual compensation for the five consecutive calendar years during the
ten years preceding the year of retirement that yield the highest average.
Participants in the Spring Grove Division Pension Plan who have been
participating since before May 1, 1970 ("Certain Participants") may receive a
benefit, if greater, which
6
<PAGE>
does not give effect to years of service, based on plan earnings, which consist
of the sum of average compensation in excess of annual base salary for the five
year period prior to the year of actual retirement, or, if earlier, the year in
which the employee attains age 60, and the annual base salary as of the April
30th closest to the retirement date or, if earlier, the April 30th closest to
the 60th birthday. The retirement benefits under the Spring Grove Division
Pension Plan are not subject to any deduction for Social Security benefits.
Retirement benefits accrued under the Ecusta Division Pension Plan are reduced
by the amount of any pension benefits payable under the Olin Corporation
Salaried Pension Plan, which Plan was applicable to salaried employees of Olin
Corporation's Ecusta paper and film group prior to its sale on July 24, 1985.
Annual compensation for purposes of the Pension Plans generally includes salary
plus cash received under the Management Incentive Plans in the year, other than
cash that had been deferred from a prior year, in certain cases includes
amounts paid under the Profit Sharing Plans and does not include awards under
the 1988 Restricted Common Stock Award Plan or the Long-Term Incentive Plan, or
Company contributions under the Company's Employee Stock Purchase Plan. To the
extent deferral of an award under the Company's Management Incentive Plans
causes a reduction in a participant's pension under the Company's Pension Plan
applicable to him, the Management Incentive Plans provide a pension supplement.
For participants who retire after 1988, annual compensation for purposes of the
Pension Plans is limited by law ($150,000 for 1994).
Annual benefits under the Company's Pension Plans are limited by law
($118,800 for 1994), subject to adjustment for cost-of-living increases.
Further, the annual benefits of Certain Participants are also limited by the
Tax Reform Act of 1986 to the extent that accrued benefits are in excess of a
benefit frozen as of December 31, 1988. The Company has a Supplemental
Executive Retirement Plan which provides participants with pension benefits
that would have been payable under the Company's Pension Plans but for such
limits and the limit on annual compensation described in the preceding
paragraph. Benefits are payable under this Plan at the time the participant
receives benefits from the Company's Pension Plans, although a participant who
retires prior to age 65 may elect to defer payments until as late as age 65.
The benefits payable under this Plan to each participant are equal to the
difference between the benefits that would have been payable under the
applicable Pension Plan in the absence of any legal limits and the benefits
actually payable under the applicable Pension Plan. Participants may elect to
receive the benefits in any form permitted under the applicable Pension Plan,
or in the form of a single sum. Employees become eligible to participate at
such times as the pension benefits to which they would otherwise be entitled
exceed the limits on benefits payable from a Pension Plan.
The following table shows the estimated annual retirement benefits payable in
the form of a single life annuity at normal retirement age under the Pension
Plans for salaried employees, the Supplemental Executive Retirement Plan and
the pension supplement provided under the Management Incentive Plan.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
AVERAGE ANNUAL ESTIMATED ANNUAL RETIREMENT BENEFIT BASED ON YEARS OF SERVICE
FIVE YEAR PLAN ----------------------------------------------------------------
COMPENSATION 15 20 25 30 35
-------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
125,000 25,782 34,376 42,970 46,095 49,220
150,000 31,032 41,376 51,720 55,470 59,220
175,000 36,282 48,376 60,470 64,845 69,220
200,000 41,532 55,376 69,220 74,220 79,220
250,000 52,032 69,376 86,720 92,970 99,220
300,000 62,532 83,376 104,220 111,720 119,220
400,000 83,532 111,376 139,220 149,220 159,220
500,000 104,532 139,376 174,220 186,720 199,220
600,000 125,532 167,376 209,220 224,220 239,220
700,000 146,532 195,376 244,220 261,720 279,220
800,000 167,532 223,376 279,220 299,220 319,220
</TABLE>
7
<PAGE>
The following executive officers who participate in the Pension Plans had the
indicated credited years of service at December 31, 1994: T. C. Norris: 35
years, R. W. Wand: 29 years, J. F. Myers: 27 years, G. H. Glatfelter II: 18
years, and R. S. Lawrence: 34 years.
Of the named executive officers at December 31, 1994, Mr. Norris and Mr.
Myers were participants in the Spring Grove Division Pension Plan before May 1,
1970 and their accrued benefits at age 65 in the form of a single life annuity
under such plan, calculated without respect to service, were $243,449 and
$100,909 per year, respectively.
Mr. Lawrence's accrued benefit under the Ecusta Division Pension Plan would
be offset by accrued benefits payable by Olin Corporation.
The Company has a Supplemental Management Pension Plan which provides for the
payment of an early retirement supplement to any participant who retires before
reaching age 65 and elects to defer receipt of benefits under one of the
Company's Pension Plans until he reaches age 65 or, if earlier, until the first
day of the 36th month following his retirement. The monthly payment equals the
monthly amount calculated for the participant under the Pension Plan, but with
the addition of three years to the participant's age. Payments end when the
participant or the participant's beneficiary begins to receive payments under
the Pension Plan or, if there is no beneficiary, at death.
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
The Compensation Committee consists of five members of the Board of
Directors: J. W. Kennedy (Chairman), P. H. Glatfelter III, R. S. Hillas, P. R.
Roedel and R. L. Smoot. Mr. Glatfelter is Chairman Emeritus and a former
Chairman of the Board and President of the Company, and is also a principal
shareholder of the Company (see "Ownership of Common Stock" below). No member
of this Committee is an executive officer of a company of which an executive
officer of the Company serves as a director.
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee reviews and approves the elements of the Company's
executive compensation program and assesses the effectiveness of the program as
a whole. The Compensation Committee's responsibilities include: (i) reviewing
and establishing the level of salaries and benefits for corporate officers and
other key senior management employees of the Company, including but not limited
to benefits under the Company's long-term incentive plan, profit sharing plans,
defined benefit plans and other welfare benefit plans, (ii) reviewing annually
with the Company's Chief Executive Officer, T. C. Norris, the job performance
of corporate officers and key senior management as measured against financial
and other objectives and the Company's achievements as compared to certain
other companies in the paper and forest products industry, and (iii) reviewing
and approving the participants in and the operating rules for awards under the
Company's Management Incentive Plan.
The Compensation Committee from time to time reviews the Company's entire
executive compensation structure through an examination of compensation
information for comparable companies and certain broader-based data, including
data relating to the geographic areas in which the Company has facilities,
compiled by compensation and other consulting firms. As used herein, comparable
companies refer to other companies in the paper and forest products industry
(both publicly and privately owned) selected by management as being the
companies in the industry which on an overall basis are most similar to the
Company in relation to size, products and financial and other characteristics.
Certain of the comparable companies are included in the Dow Jones Paper
Products Industry Group and/or the S&P 500, and therefore
8
<PAGE>
are represented in the Stock Performance Chart below. In examining the
compensation paid by the comparable companies, the Compensation Committee does
not analyze the stock performance of such companies, but does examine their
general financial performance.
Executive Compensation Policies
The Compensation Committee has generally structured the Company's executive
compensation program (i) to be competitive with compensation programs of
comparable companies in order to attract and retain high caliber executive
officers and senior management personnel and (ii) to align individual
compensation with the Company's operating performance in order to provide
strong incentives to achieve the Company's short-term and long-term goals. The
elements of the Company's executive compensation program are salary, annual
incentive compensation and long-term incentive compensation and other benefits.
From time to time the Compensation Committee solicits the advice of
compensation consulting firms to evaluate the Company's executive compensation
program in order to ensure that such program is competitive with compensation
programs of comparable companies. The Compensation Committee will consider
whether any revisions to the Company's executive compensation program are
appropriate due to Section 162(m) of the Internal Revenue Code and proposed
regulations relating thereto which limit deductibility of compensation over $1
million paid to an executive officer in a year.
Salary
The Company's policy is to pay fair salaries at levels which are sufficient
to attract and retain high caliber individuals based on the relative value of
each position, as measured against comparable companies. The Compensation
Committee assigns each executive position a salary range based on the salary
level for similar positions at comparable companies. Ranges are adjusted by the
Committee periodically.
Generally, executive officer salaries are reviewed and approved annually. The
salary for each executive is set by the Compensation Committee within the
established range for the position after an assessment of his or her
performance and the relation of his or her salary to the midpoint for the
relevant salary range, as well as the Company's financial results and general
economic conditions. Although a general salary increase was granted to the
Company's salaried employees in 1994, the Company's executive officers
recommended to the Compensation Committee, in light of the difficult market
conditions for the Company's products and the Company's financial results, that
such executive officers receive no salary increase in 1994, which
recommendation was accepted.
Annual Incentive Compensation
The Compensation Committee establishes incentive bonus opportunities designed
to motivate salaried employees to increase the profits of the Company. The
incentive bonus opportunities potentially represent a significant portion of
total compensation and are intended to correlate with the financial performance
of the Company or one or more divisions thereof. The Compensation Committee
believes that executive officers should not receive any incentive bonus if the
Company does not achieve the annually established minimum financial objectives.
The Board of Directors, upon the recommendation of the Compensation
Committee, on December 21, 1993, amended and restated the Company's Management
Incentive Plan effective January 1, 1994. Consistent with the purpose of the
previous Management Incentive Plan (the "Old Plan"), the Amended and Restated
Management Incentive Plan (the "New Plan") is intended to provide an incentive
to greater efforts on the part of key salaried employees to increase the
profits of the Company. The underlying objectives of the New Plan are to assure
that incentive bonus awards are at risk annually, to reward key mill management
personnel on the basis of both mill and corporate financial results, and to
provide a potential above average maximum incentive bonus award to key salaried
employees of the Company.
9
<PAGE>
To establish financial targets for payment of incentive awards, the Company
and each of its mills are treated as separate profit centers. In addition, the
Glatfelter Paper Group profit center represents a combination of the Spring
Grove and Neenah mill profit centers. The incentive award for all profit
centers, exclusive of the Corporate profit center, is based on a combination of
the return on capital employed (as defined for each of the individual mill
profit centers), and the return on shareholders' equity (as defined) of the
Company. The incentive bonus award for the Corporate profit center is based
solely on return on shareholders' equity (as defined) of the Company.
The New Plan represents a shift in philosophy regarding incentive pay by
rewarding plan participants based primarily on the attainment of current, as
opposed to long-term, objectives of the Company. The Compensation Committee
establishes maximum and minimum financial objectives to be achieved for each
profit center each year. Under the New Plan, the Compensation Committee
considers the current economic climate and the Company's historical financial
results when establishing the maximum and minimum financial objectives. This
methodology is intended to induce management to enhance the profitability of
the Company throughout the full business cycle, and therefore should provide
value to the shareholders of the Company. Because in 1994 the Company did not
achieve the minimum levels of return on shareholders' equity and return on
capital employed required for bonuses to be paid, no incentive bonuses were
paid to executive officers for such year.
Long-Term Incentive Compensation
The Company's Long-Term Incentive Plan, which was approved by shareholders in
1992, enables the Company to offer key employees of the Company equity
interests in the Company and other incentive awards, including performance-
based stock incentives. Certain features of the Plan (i.e. stock options,
performance awards, performance units and restricted stock) are similar to
long-term incentives offered by many of the comparable companies. The primary
purposes of the Plan are attracting, retaining and rewarding key employees, and
strengthening the mutuality of interests between key employees and the
Company's shareholders. Long-term incentive awards under the Plan are granted
by the Compensation Committee based on the attainment of specific performance
goals or such other factors or criteria as the Committee shall determine. None
of the Company's executive officers received a long-term incentive award in
1994.
CEO Compensation
Mr. Norris' salary has not increased since April 1, 1993. Mr. Norris, along
with the Company's other executive officers, recommended to the Compensation
Committee, in light of the difficult market conditions for the Company's
products and the Company's financial results, that he receive no salary
increase in 1994, which recommendation was accepted. Mr. Norris did not receive
a bonus for 1994 because, as noted above, the Company did not achieve the
established minimum level of return on shareholders' equity required to pay
bonuses. As a result, the sum of the salary and incentive bonus paid to Mr.
Norris for 1994 was approximately $7,000 less than in 1993 and significantly
less than the sum of the salary and incentive bonus paid to him for many prior
years.
Mr. Norris did not receive a long term incentive award in 1994.
J. W. Kennedy
P. H. Glatfelter III
R. S. Hillas
P. R. Roedel
R. L. Smoot
10
<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 years
ended December 31, 1994 with the cumulative total return on the S&P 500
Composite Index and the Dow Jones Paper Products Industry Group. The comparison
assumes $100 was invested on December 31, 1989 in the Company's Common Stock
and in each of the foregoing indices and assumes reinvestment of dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
AMONG P. H. GLATFELTER COMPANY, S&P COMPOSITE 500 INDEX
AND DOW JONES PAPER PRODUCTS INDUSTRY
[MAC GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
S&P Dow P.H.
500 Jones Glatfelter
Market Paper Company
------ ----- -------
<S> <C> <C> <C>
1989 100 100 100
1990 96.88 87.4 102.53
1991 126.42 111.57 129.42
1992 136.08 108.62 88.4
1993 149.8 121.08 96
1994 151.78 132.15 83.22
</TABLE>
CERTAIN TRANSACTIONS
R. L. Smoot, a director of the Company, is President and Chief Executive
Officer of PNC Bank, National Association, Philadelphia. PNC Bank, National
Association ("PNC Bank"), an indirect subsidiary of PNC Bank Corp., has a
banking relationship with the Company and provides general banking services and
credit facilities. The Company has a line of credit with PNC Bank in the amount
of $45,000,000, in respect of which the Company paid $250,819 in interest for
1994. The maximum outstanding principal balance in 1994 was $30,600,000. All
transactions between the Company and PNC Bank have been made in the ordinary
course of business and on substantially the same terms as those prevailing at
the time for comparable transactions with other persons.
11
<PAGE>
OWNERSHIP OF COMMON STOCK
The following table sets forth as of March 1, 1995 the holdings of (i) each
person who is known by the Company to own beneficially more than 5% of the
Common Stock of the Company, (ii) each director and certain executive officers
and (iii) all directors and executive officers of the Company as a group. All
stock with respect to which a person has the right to acquire beneficial
ownership within 60 days is considered beneficially owned by that person.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENTAGE
(NUMBER OF SHARES) OF CLASS
----------------------------- (IF
VOTING AND/OR GREATER
NAME DIRECT(1) INVESTMENT POWER(2) THAN 1%)
---- --------- ------------------- ----------
<S> <C> <C> <C>
Principal Holders
PNC Bank Corp..................... 0 17,207,890 (3) 38.9%
Fifth Ave. & Wood St.
Pittsburgh, Pa.
P. H. Glatfelter III.............. 0 10,440,047 (4)(5) 23.6%
Spring Grove, Pa.
G. H. Glatfelter.................. 0 4,796,477 (5)(6) 10.9%
Spring Grove, Pa.
P. H. Glatfelter Family........... 0 13,512,468 (7) 30.6%
Shareholders' Voting Trust
c/o PNC Bank
17th and Chestnut Streets
Philadelphia, Pa.
Directors and certain officers (other than those listed above)
G. Baldwin, Jr.................... 0 2,000 --
R. E. Chappell.................... 0 2,000 --
G. H. Glatfelter II............... 0 25,110 (8) --
R. S. Hillas...................... 6,000 0 --
M. A. Johnson II.................. 10,544 1,536 --
J. W. Kennedy..................... 14,800 2,000 --
R. S. Lawrence.................... 3,412 12,500 (9) --
J. F. Myers....................... 58,964 17,919 (9) --
T. C. Norris...................... 45,680 35,795 (10) --
P. R. Roedel...................... 200 0 --
J. M. Sanzo....................... 500 0 --
R. L. Smoot (11).................. 200 0 --
R. W. Wand........................ 40,470 26,493 (9) --
All directors and executive offi-
cers as a group.................... 182,361 11,591,103 (12) 26.2%
</TABLE>
- --------
(1) Reported in this column are shares held of record.
(2) Does not include shares reported in Direct Ownership column. For purposes
of the table, shares of Common Stock are considered beneficially owned by
a person if such person has or shares voting or investment power with
respect to such stock. As a result, the same security may be beneficially
owned by more than one person and, accordingly, in some cases, the same
shares are listed opposite more than one name in the table. Also includes,
in some cases, shares beneficially held by wives or minor children, as to
which beneficial ownership is disclaimed.
12
<PAGE>
(3) Consists of 9,006,843 shares as to which PNC Bank Corp. has sole voting
power; 7,975,631 shares as to which PNC Bank Corp. has shared voting
power; 9,067,525 shares as to which PNC Bank Corp. has sole investment
power; and 7,892,645 shares as to which PNC Bank Corp. has shared
investment power. The amounts specified for shared voting power and shared
investment power both include 6,224,471 and 88,964 shares held by PNC Bank
as co-trustee with P. H. Glatfelter III and G. H. Glatfelter,
respectively. In addition, 13,512,468 shares of the total amount of shares
beneficially held by PNC Bank Corp. are deposited in the Voting Trust (see
footnotes (5) and (7)). Of the 17,207,890 shares beneficially held by PNC
Bank Corp., all such shares are also considered to be beneficially held by
its subsidiary, PNC Bancorp, Inc., and 17,207,590 shares are considered to
be beneficially held by PNC Bank.
(4) Includes 6,224,471 shares held as co-trustee with PNC Bank; 1,260,746
shares (of which 990,602 shares are also included in the total number of
shares which he holds as co-trustee) which P. H. Glatfelter III has the
right to withdraw from certain trusts of which PNC Bank is trustee;
3,806,352 shares (all of which are held in trusts of which PNC Bank is
trustee) which P. H. Glatfelter III and G. H. Glatfelter have the
collective right, on certain conditions, to purchase; and 869,424 shares
(all of which are also included in the total number of shares which he
holds as co-trustee) which P. H. Glatfelter III has the right, on certain
conditions, to purchase.
(5) All shares beneficially owned by P. H. Glatfelter III and G. H. Glatfelter
are deposited in the Voting Trust (see footnote (7)).
(6) Includes 88,964 shares held as co-trustee with PNC Bank, 905,577 shares
(of which 4,416 shares are also included in the number of shares which he
holds as co-trustee) which G. H. Glatfelter has the right to withdraw from
certain trusts of which PNC Bank is trustee and 3,806,352 shares which P.
H. Glatfelter III and G. H. Glatfelter have the collective right, on
certain conditions, to purchase.
(7) Consists of shares beneficially owned by certain descendants of Philip H.
Glatfelter or the spouses of such descendants, including shares
beneficially owned by P. H. Glatfelter III, G. H. Glatfelter and G. H.
Glatfelter II, which were deposited in the P. H. Glatfelter Family
Shareholders' Voting Trust dated July 1, 1993 (the "Voting Trust"). Shares
deposited in the Voting Trust may be withdrawn subject to certain
conditions. Co-trustees for the Voting Trust are William M. Eyster II,
Patricia G. Foulkrod, Phillip H. Glatfelter IV, William L. Glatfelter III,
Irene G. Fegley and PNC Bank. Co-trustees other than PNC Bank each
represent a family group. The shares deposited in the Voting Trust may be
voted only in accordance with a majority of votes cast by the co-trustees
pursuant to a weighted formula in which (i) each co-trustee (other than
PNC Bank) is entitled to cast such number of votes as is equal to the
number of shares deposited in the Voting Trust in which members of his or
her family group have an interest and (ii) PNC Bank is entitled to cast
such number of votes as is equal to the number of shares deposited in the
Voting Trust in which any fiduciary trust of which PNC Bank is a trustee
and which is for the benefit of one or more Glatfelter family members has
an interest. The co-trustees have no dispositive power with regard to the
shares deposited in the Voting Trust. The Voting Trust will continue until
it is terminated by the co-trustees or all of the shares deposited in the
Voting Trust are withdrawn. The address for each of the co-trustees is c/o
PNC Bank, 17th and Chestnut Streets, Philadelphia, Pa.
(8) Includes 12,500 shares subject to the currently exercisable portion of an
option. Of the shares beneficially owned by G. H. Glatfelter II, 11,580
are subject to the Voting Trust (see footnote (7)).
(9) Includes 12,500 shares subject to the currently exercisable portion of an
option.
(10) Includes 22,500 shares subject to the currently exercisable portion of an
option.
(11) R. L. Smoot was required to file a Form 3 with the Securities and Exchange
Commission disclosing his initial ownership of the Company's equity
securities within 10 days of his election to the Board of Directors on
March 16, 1994. Mr. Smoot did not file the Form 3 until August 15, 1994.
Mr. Smoot did not own any equity securities of the Company at any time
between March 16, 1994 and August 15, 1994.
13
<PAGE>
(12) Includes 10,231 shares held in participants' accounts under the Company's
Salaried Employee Stock Ownership Plan and 22,788 shares held in
participants' accounts under the Company's Employee Stock Purchase Plan.
Also includes 102,000 shares subject to currently exercisable portions of
options. The Form 3 filed by R. P. Newcomer after his election as Vice
President and Treasurer of the Company in April 1993, did not reflect 58
shares beneficially owned by Mr. Newcomer through a brokerage company's
dividend reinvestment plan. In addition, Mr. Newcomer did not file Form 4s
to reflect the acquisition of an aggregate of 103 additional shares by Mr.
Newcomer and his wife every three months thereafter through such plan. Mr.
Newcomer filed a Form 5 on February 13, 1995 to disclose the beneficial
ownership of all such shares.
P. H. Glatfelter III, G. H. Glatfelter, the Voting Trust, PNC Bank Corp., PNC
Bancorp, Inc. and PNC Bank may be deemed to be "control persons" of the Company
for purposes of the proxy rules and regulations of the Securities and Exchange
Commission.
OTHER BUSINESS
The Board of Directors does not intend to present to the meeting any business
other than the election of directors. If any other matter is presented to the
meeting which under applicable proxy regulations need not be included in this
proxy statement or which the Board of Directors did not know would be presented
a reasonable time before this solicitation, the persons named in the
accompanying proxy will have discretionary authority to vote proxies with
respect to such matter in accordance with their best judgment.
DEADLINE FOR SHAREHOLDER PROPOSALS
The Company must receive any proposal which a shareholder wishes to submit to
the 1996 annual meeting of shareholders by November 15, 1995, if the proposal
is to be considered by the Board of Directors for inclusion in the proxy
material for that meeting.
R. S. WOOD,
Secretary
March 17, 1995
14
<PAGE>
Printed on Ecusta Nyalite
Manufactured by the Ecusta Division of the
P. H. Glatfelter Company
[Basis 25x38--35 lb.]
<PAGE>
PROXY
P.H. GLATFELTER COMPANY
SPRING GROVE, PENNSYLVANIA
--------------------------
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD APRIL 26, 1995
The undersigned shareholder of P.H. Glatfelter Company hereby appoints R.E.
Chappell, T.C. Norris and R.L. Smoot and each of them, attorneys and proxies,
with power of substitution in each of them, to vote and act for and on behalf of
the undersigned at the annual meeting of shareholders of the Company to be held
at the Company's principal office, Spring Grove, Pennsylvania, on Wednesday,
April 26, 1995, and at all adjournments thereof, according to the number of
shares which the undersigned would be entitled to vote if then personally
present, as indicated hereon and in their discretion upon such other business as
may come before the meeting, all as set forth in the notice of the meeting and
in the proxy statement furnished herewith, copies of which have been received
by the undersigned; and hereby ratifies and confirms all that said attorneys and
proxies may do or cause to be done by virtue hereof.
IT IS AGREED THAT UNLESS OTHERWISE MARKED ON THE OTHER SIDE SAID ATTORNEYS AND
PROXIES ARE APPOINTED WITH AUTHORITY TO VOTE FOR THE ELECTION OF DIRECTORS.
(PLEASE FILL IN, SIGN AND DATE ON THE OTHER SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE)
(Continued and to be signed on reverse side)
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE NOMINEES.
1. Election of Directors: Nominees: Term Expiring in 1998, P.H. Glatfelter III,
R.S. Hillas, P.R. Roedel and J.M. Sanzo. To withhold authority to vote for
any individual nominee, write that nominee's name in the space below:
-----------------------------------------------------------------------------
(Mark only one)
[_] VOTE for all nominees listed above, except as indicated above
[_] VOTE WITHHELD from all nominees
Signature should be the same as the name printed
at the left. Executors, administrators,
trustees, guardians, attorneys, and officers of
corporations should add their title when
signing.
Signature: Date:
---------------------- -----------
Signature: Date:
---------------------- -----------
