[Page numbers reference to printed version]
The Mead Corporation
Mead World Headquarters
Courthouse Plaza Northeast
Dayton, Ohio 45463
March 14, 1994
To the Holders of Common Shares:
You are cordially invited to attend the Annual Meeting of
Shareholders of The Mead Corporation, which will be
held at the Blair Auditorium, Sinclair Community
College, 444 West Third Street, Dayton, Ohio, on
Thursday, April 28, 1994 at 11:00 a.m. Formal Notice of
the Meeting and Proxy Statement accompany this letter.
A prompt execution and return of your proxy will both
assure the presence of a quorum at the meeting and
minimize the cost of the proxy solicitation. A postage
paid envelope is enclosed for your convenience in
replying. We hope you will be present at the meeting.
Very truly yours,
Steven C. Mason
Steven C. Mason
Chairman of the Board
<PAGE>
Notice of Annual
Meeting Of Shareholders
The Mead Corporation Dayton, Ohio
Mead World Headquarters March 14, 1994
Courthouse Plaza Northeast
Dayton, Ohio 45463
To the Holders of Common Shares of
THE MEAD CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of The Mead Corporation will be held at
the Blair Auditorium, Sinclair Community College, 444
West Third Street, Dayton, Ohio, on Thursday, April 28,
1994 at 11:00 a.m., for the following purposes:
1. To elect four directors for a term of three
years;
2. To vote upon a shareholder proposal
concerning declassification of Mead's
Board of Directors, which is opposed by
the Board of Directors; and
3. To transact such other business as may
properly come before the meeting or any
adjournment.
The close of business on March 1, 1994 has been fixed
as the record date for the determination of the
shareholders entitled to notice of and to vote at the
Annual Meeting and any adjournment. The stock
transfer books will not be closed.
Please complete, sign, date and return the enclosed
proxy promptly so that we may have the fullest
expression possible of the wishes of the shareholders.
By order of the Board of Directors
George J. Maly, Jr.
Secretary
<PAGE>
Proxy Statement
For 1994 Annual Meeting
The Mead Corporation
Mead World Headquarters
Courthouse Plaza Northeast
Dayton, Ohio 45463
March 14, 1994
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of The Mead
Corporation ("Mead") of proxies to be used at the
Annual Meeting of Shareholders to be held on April 28,
1994 and any adjournment. The close of business on
March 1, 1994 has been fixed as the record date for the
determination of the holders of Common Shares entitled
to notice and to vote. There were outstanding on the
record date 59,271,120 Common Shares.
The holders of Common Shares are entitled to one vote
per share upon all matters set forth in the Notice of the
Annual Meeting.
A shareholder signing and returning a proxy has the
power to revoke it at any time prior to its exercise by
giving notice to Mead in writing or in open meeting, but
without affecting any vote previously taken. Unless
revoked, the shares represented by the proxy will be
voted as stated thereon.
<PAGE>
Election of Directors
Mead's Regulations provide that the Board of Directors is
classified into three classes with each class serving a
three-year term and with one class standing for election at
each Annual Meeting. At the 1994 Annual Meeting, the
terms of John C. Bogle, William E. Hoglund, Barbara C.
Jordan, and William S. Shanahan expire, and in
accordance with a recommendation of the Board of
Directors and its Nominating & Organization Committee,
each of them will stand for re-election to a new three-year
term expiring at the Annual Meeting in 1997.
Mr. Hoglund was elected to the Board of Directors on
October 30, 1993 for a term expiring at the 1994 Annual
Meeting.
Vincent L. Gregory, Jr., a member of the Board of
Directors for 17 years, has reached retirement age for
members of the Board and will retire from the Board on
the date of the Annual Meeting.
The business experience and other information concerning
the nominees for director, and the directors continuing in
office after the Annual Meeting, are set forth on pages 3
through 5.
Directors are elected by a plurality of the votes cast.
Abstentions and nonvotes are not considered. It is the
intention of the persons named in the accompanying <PAGE>
form of proxy, unless authorization to do so is withheld,
to vote for the election of the four nominees. The holders
of the proxies may, in their discretion, vote for a
substitute nominee(s) designated by the directors in the
event that any nominee becomes unable to serve for any
reason presently unknown. Under Ohio law, if a
shareholder gives written notice to the President, a Vice
President or the Secretary, not less than 48 hours before
the time fixed for the Annual Meeting, that such
shareholder desires the voting at the election of directors
to be cumulative, and if an announcement of the giving
of such notice is made upon the convening of the
meeting by or on behalf of the shareholder giving such
notice, then the directors will be elected by cumulative
voting. In such event, each shareholder has the right to
give one candidate a number of votes equal to the
number of directors then being elected multiplied by the
number of such shareholder's shares, or to distribute
such shareholder's votes on the same principle among
two or more candidates within such class. In the event
of cumulative voting for directors, unless otherwise
indicated by the shareholder, a vote for the nominees of
the Board of Directors will give the proxyholders
discretionary authority to cumulate all votes to which the
shareholder is entitled and to allocate them in favor of
any one or more of such nominees as the persons
named in the enclosed proxy determine. If a shareholder
desires specifically to allocate votes among one or more
nominees, the shareholder should so specify on the
proxy card.
<PAGE>
Nominees for Director for a three-year term expiring in 1997
Picture of John C. Bogle
John C. Bogle
Mr. Bogle is Chairman of the
Board, Chief Executive Officer
and a director of The
Vanguard Group of
Investment Companies, and
Chairman of the mutual funds
in The Vanguard Group.
Age: 64
Director Since: 1978
Committees:
Compensation
Corporate Objectives
(chairman)
Executive
Finance
Nominating & Organization
Other Directorships:
The General Accident
Group of Insurance
Companies
<PAGE>
Picture of William E.
Hoglund
William E. Hoglund
Mr. Hoglund has been a
director and Executive Vice
President, Corporate Affairs
and Staff Support Group of
General Motors Corporation
since November 1992. He
was Executive Vice
President and Chief
Financial Officer of GM
from April 1992 through
November 1992, and
Executive Vice President,
Automotive Components
Group, from 1988 through
1992.
Age: 59
Director Since: 1993
Committees:
Compensation
Corporate Objectives
Corporate Responsibility
Nominating &
Organization
Other Directorships:
Standard Federal Bank
<PAGE>
Picture of Barbara C.
Jordan
Barbara C. Jordan
Ms. Jordan holds the
Lyndon B. Johnson Chair in
National Policy, Lyndon B.
Johnson School of Public
Affairs, University of Texas
at Austin. Ms. Jordan was
a member of the United
States Congress from 1972
through 1978.
Age: 58
Director Since: 1979
Committees:
Audit
Corporate Objectives
Corporate Responsibility
(chairman)
Nominating & Organization
Other Directorships:
Burlington Northern Inc.
Federal Home Loan
Mortgage Corporation
Northrop Corporation
Texas Commerce
Bancshares, Inc.
<PAGE>
Picture of William S.
Shanahan
William S. Shanahan
Mr. Shanahan was elected
President and Chief Operating
Officer of Colgate-Palmolive
Company in 1992. He was
named Chief Operating
Officer in 1989. Prior to that,
he was Senior Executive Vice
President, Chief of Colgate
Operations since 1984.
Age: 53
Director Since: 1992
Committees:
Compensation
Corporate Objectives
Corporate Responsibility
Nominating & Organization
<PAGE>
Directors whose terms expire in 1995
Picture of Samuel S. Benedict
Samuel S. Benedict
Mr. Benedict was elected
President and Chief Operating
Officer in 1991. Prior to that,
he was President of Mead
Publishing Paper Division
since 1975.
Age: 63
Director Since: 1991
Other Directorships:
Upper Peninsula Energy
Corporation
<PAGE>
Picture of John G. Breen
John G. Breen
Mr. Breen is Chairman,
Chief Executive Officer and
a director of The
Sherwin-Williams Company.
Age: 59
Director Since: 1986
Committees:
Audit (chairman)
Compensation
Corporate Objectives
Executive
Finance
Nominating & Organization
Other Directorships:
National City
Corporation
Parker-Hannifin
Corporation
The Goodyear Tire &
Rubber Company
<PAGE>
Picture of Charles S.
Mechem, Jr.
Charles S. Mechem, Jr.
Mr. Mechem has been the
Commissioner of the Ladies
Professional Golf
Association since 1991, and
Chairman of United States
Shoe Corporation since
March 1993. In 1990, he
retired as Chairman of the
Board, Chief Executive
Officer and a director of
Great American
Broadcasting Company.
Age: 63
Director Since: 1976
Committees:
Compensation; Corporate
Objectives; Executive;
Nominating & Organization
(chairman).
Other Directorships:
AGCO Corporation;
Eagle-Picher Industries,
Inc.; Ohio National Life
Insurance Company; J.M.
Smucker Company; Star
Banc Corporation
<PAGE>
Picture of Thomas B. Stanley,
Jr.
Thomas B. Stanley, Jr.
Mr. Stanley is a private
investor.
Age: 67
Director Since: 1970
Committees:
Corporate Objectives
Executive
Finance (chairman)
Nominating & Organization
Other Directorships:
Piedmont Bankgroup, Inc.
<PAGE>
Directors whose terms expire in 1996
Picture of Vincent L. Gregory,
Jr.
Vincent L. Gregory, Jr.
Mr. Gregory retired as
Chairman of the Board, Chief
Executive Officer and director
of Rohm and Haas Company
in 1988.
Age: 70
Director Since: 1977
Committees:
Compensation (chairman)
Corporate Objectives
Corporate Responsibility
Executive (vice chairman)
Nominating & Organization
<PAGE>
Picture of Steven C. Mason
Steven C. Mason
Mr. Mason was elected
Chairman of the Board and
Chief Executive Officer in
May 1992. Prior to that he
was elected Vice Chairman
in April 1991 and served as
President and Chief
Operating Officer during
1982-1991.
Age: 58
Director Since: 1982
Committees:
Executive (chairman) and
ex-officio member of the
other Committees of the
Board
Other Directorships:
The Duriron Company, Inc.
PPG Industries, Inc.
<PAGE>
Picture of Paul F. Miller, Jr.
Paul F. Miller, Jr.
Mr. Miller is a founding
partner of Miller, Anderson
& Sherrerd, an investment
management firm. He
retired as a general partner
in 1991, and is now a
limited partner with the firm.
Age: 66
Director Since: 1963
Committees:
Audit
Corporate Objectives
Corporate Responsibility
Finance
Nominating & Organization
Other Directorships:
Hewlett-Packard Company
Rohm and Haas Company
SPS Technologies Inc.
Trustee:
The Ford Foundation
<PAGE>
Picture of Lee J. Styslinger,
Jr.
Lee J. Styslinger, Jr.
Mr. Styslinger is Chairman of
the Board of ALTEC
Industries, Inc. He was
President of ALTEC Industries
from 1974 to 1989, and
Chairman of the Board and
Chief Executive Officer from
1989 to 1992.
Age: 60
Director Since: 1992
Committees:
Audit
Corporate Objectives
Finance
Nominating & Organization
Other Directorships:
First Alabama Bancshares,
Inc.
<PAGE>
Certain Information Concerning the Board of Directors
There were seven meetings of the Board of Directors
during 1993. The seven standing committees of the Board
and the number of meetings of each committee during
1993 follow:
Number of
Committee Meetings
--------- --------
Audit. . . . . . . . . . . . . . . . . 3
Compensation . . . . . . . . . . . . . 3
Corporate Objectives . . . . . . . . . 3
Corporate Responsibility . . . . . . . 4
Executive. . . . . . . . . . . . . . . 0
Finance. . . . . . . . . . . . . . . . 2
Nominating & Organization. . . . . . . 2
The Chairman of the Board and Chief Executive Officer
serves as an ex-officio, nonvoting member of all standing
committees, other than the Executive Committee.
Duties and Members
Each standing committee of the Board of Directors is
composed of directors who are not employed by Mead,
except the Executive Committee. The duties and
membership of each committee during 1993 were as
follows:
The Audit Committee recommends annually to the Board Members:
for its approval the engagement of the independent -------
certified public accountants, verifies and assures their Breen (chairman)
independence, reviews the professional services they Jordan
provide, reviews the fees charged for audit and non-audit Miller
services, reviews the broad scope of the internal and Styslinger
external audit programs, and reviews with the independent
certified public accountants, at the completion of their
audit, Mead's financial statements and matters relating to
the audit.
<PAGE>
The Compensation Committee is charged with the broad Members:
responsibility for assuring that officers and key -------
management personnel are effectively compensated in Gregory (chairman)
terms which are internally equitable and externally Bogle
competitive. The Committee authorizes the compensation Breen
of officers and senior management and recommends to Hoglund
the Board the compensation of the Chairman of the Board Mechem
and the President and reviews the salaries of other key Shanahan
executives, reviews executive compensation policies and
recommends modifications in existing retirement or benefit
plans. The Committee also approves grants under and
administers Mead's stock option and restricted stock
plans.
The Corporate Objectives Committee is charged with Members:
reviewing Mead's objectives and strategies and evaluating -------
management's recommendations for long-term growth and Bogle (chairman)
profitability. Further, the Committee makes appropriate Breen
recommendations to the full Board with regard to specific Gregory
proposals by management of major strategic importance, Hoglund
including acquisitions. The Committee also monitors Jordan
growth programs to measure progress, reviews the Mechem
potential impact of economic trends on operations and Miller
reviews technological trends with the view toward Shanahan
allocating resources to areas offering greatest potential Stanley
growth. Styslinger
The Corporate Responsibility Committee is charged with Members:
questioning and evaluating Mead's plans and responses -------
relating to changing needs and concerns of those major Jordan (chairman)
constituencies (both internal and external) which can be Gregory
expected to judge Mead's behavior and social Hoglund
performance. Miller
<PAGE> Shanahan
The Executive Committee is empowered under Ohio law Members:
to exercise the full authority of the Board, except as to -------
matters not delegable. However, in practice, there are no Mason (chairman)
scheduled meetings of this Committee and such powers Gregory (vice
would be exercised only in special situations. chairman)
Bogle
Breen
Mechem
Stanley
The Finance Committee is charged with overseeing Members:
Mead's financial affairs and recommending such financial -------
actions and policies as are most appropriate to Stanley (chairman)
accommodate Mead's strategic and operating strategies Bogle
while maintaining its sound financial condition. The Breen
Committee reviews programs designed to inform and to Miller
maintain and improve shareholder and financial community Styslinger
relations.
The Nominating & Organization Committee has as its Members:
principal concerns the nomination of candidates to the -------
Board, evaluation of the performance of the Chief Mechem (chairman)
Executive Officer, organizational development, and review Bogle
of shareholder proposals and suggestions. The Committee Breen
develops criteria and evaluates the performance of the Gregory
Chief Executive Officer. The Committee also furnishes its Hoglund
evaluation to the Compensation Committee and reviews Jordan
the compensation set by the Compensation Committee to Miller
ensure it appropriately relates to shareholder value. Shanahan
Stanley
Styslinger
Mead's Regulations require nominations for the Board from
any shareholder to be delivered not less than 50 nor more
than 75 days prior to the meeting of the shareholders to
which the nomination relates, and to contain specified
information about the nominee and the shareholder
making such nomination. In addition to any nominations
made pursuant to Mead's Regulations, the Nominating &
Organization Committee will consider such suggestions for
nominations to the Board as may be offered by
shareholders. Such suggestions for nominations should be
submitted to Thomas E. Palmer, Secretary of the
Committee. Directors are selected on the basis of
recognized achievements and their ability to bring essential
skills and experience to the deliberations of the Board.
Directors who are not employees receive $20,500
annually for services as a director and $1,000 per
meeting for attendance at meetings of the Board
and its committees. Directors who are Mead
employees are not compensated for their services
as directors. In 1993, each director other than
Messrs. Bogle and Mechem attended 75% or more
of the Board and committee meetings.
Mead has a Deferred Compensation Plan for
non-employee directors pursuant to which receipt
of compensation for Board service, together with
interest thereon, may be deferred until after
termination of service.
<PAGE>
In 1987, Mead adopted a Restricted Stock Plan under
which directors who are not employees or officers of Mead
will receive grants of Common Shares with a market value
of $37,500 at five-year intervals. Grants have been made
in January 1988 and January 1993. A pro rata portion of
$37,500 is granted to such directors who are elected
during the five-year period. The shares are subject to
forfeiture if the director leaves Mead within five years,
unless the director leaves as a result of death, disability or
normal retirement (in which event, all restrictions will lapse
with respect to a pro rata portion of the restricted shares
granted at five-year intervals). Additionally, all rights to the
shares will earlier vest upon the occurrence of certain
"change in control" events. The plan also permits directors
under certain conditions to defer a portion of their cash
retainer in the form of restricted shares on the same terms.
In 1990, Mead adopted a retirement plan for eligible
outside directors which provides for a payment for the life
of the director of the director's annual cash retainer at the
time of retirement plus one-fifth of the dollar amount
specified in the preceding paragraph paid to directors
under the Restricted Stock Plan. The retirement benefit
commences at age 70 and is paid to all outside directors
who retire with at least 10 years of service on the Board or
who retire at age 70 regardless of years of service.
Securities Ownership
Set forth in the following table is information as of
January 28, 1994 with respect to the number of Common
Shares beneficially owned by each nominee and director,
each of the named executive officers, and by all nominees,
directors and executive officers as a group.
A person is considered to "beneficially own" any shares: (i)
over which such person exercises sole or shared voting or
investment power or (ii) of which such person has the right
to acquire beneficial ownership at any time within 60 days
(e.g., through the exercise of employee stock options).
Unless otherwise indicated, voting and investment power is
exercised solely by the beneficial owner or is shared by
such owner and such owner's spouse or children.
<PAGE>
Ownership of Mead Common Shares
(B)
(A) Number of Shares
Option Shares Beneficially Owned,
Which May including Option Shares
Identity of Be Acquired in Column (A), as of
Individual or Group Within 60 Days January 28 ,1994(1)
- ------------------- -------------- ----------------------
Samuel S. Benedict . . . . . . . . . . . . . 92,900 105,476
John C. Bogle . . . . . . . . . . . . . . . -0- 4,011
John G. Breen. . . . . . . . . . . . . . . . -0- 4,011
William A. Enouen(2) . . . . . . . . . . . . 79,445 96,596
William R. Graber . . . . . . . . . . . . . 15,200 15,516
Vincent L. Gregory, Jr.. . . . . . . . . . . -0- 5,126
William E. Hoglund.. . . . . . . . . . . . . -0- 1,400
Barbara C. Jordan . . . . . . . . . . . . . -0- 3,411
Elias M. Karter. . . . . . . . . . . . . . . 59,500 68,348
Steven C. Mason. . . . . . . . . . . . . . . 190,700 260,371
Charles S. Mechem, Jr. . . . . . . . . . . . -0- 4,305
Thomas E. Palmer . . . . . . . . . . . . . . 23,500 23,757
Paul F. Miller, Jr.. . . . . . . . . . . . . -0- 10,324
William S. Shanahan. . . . . . . . . . . . . -0- 2,173
Thomas B. Stanley, Jr. . . . . . . . . . . . -0- 729,511(3)
Lee J. Styslinger, Jr. . . . . . . . . . . . -0- 6,173
________________________
All directors, nominees
and executive officers as a group
(18 persons). . . . . . . . . . . . . . . . 542,245 1,435,278
_______________________
(1) Includes restricted shares granted under Mead's
Restricted Stock Plan, and shares held in the named
executive's common stock account as of November 30,
1993, in the Mead Salaried Savings Plan. The named
executives may vote and direct the disposition of shares
in their account, except to the extent such shares
constitute Mead matching shares.
(2) Mr. Enouen retired in December 1993.
(3) Includes 471,980 shares held in family trusts with
respect to which Mr. Stanley is one of three co-trustees
who share the voting and investment power.
<PAGE>
As of January 28, 1994, the number of shares beneficially
owned (i) by the directors and executive officers as a
group was approximately 2.4% of outstanding, (ii) by Mr.
Stanley, 1.2% and (iii) by all other directors individually,
less than 1%.
The following table sets forth certain information with
respect to persons known to Mead to be beneficial
owners of more than five percent of the outstanding
Common Shares:
<TABLE>
<CAPTION>
Percent of Common
Number of Common Shares Shares Outstanding
Name and Address of Beneficial Owners Beneficially Owned as of January 28, 1994
- -------------------------------------- ----------------------- ----------------------
<S> <C> <C>
Oppenheimer Group, Inc., Oppenheimer Tower, 6,932,546(1) 11.7%
World Financial Center, New York, NY 10281
State Street Bank and Trust Company, 3,669,677(2) 6.2%
225 Franklin Street, Boston, MA 02110
- -----------
<FN>
(1) Source: Schedule 13G dated February 1, 1994, filed by beneficial owner with SEC.
(2) Source: Schedule 13G dated February 10, 1994, filed by beneficial owner with SEC.
State Street is the Trustee under the Mead Salaried Savings Plan.
</TABLE>
Report of Compensation Committee on Executive
Compensation
The Compensation Committee is comprised of six
Directors of the Board who are not employees of the
company. This Committee is responsible for setting
competitive compensation structures and approving
payout levels for officers and senior management.
Mr. Mason, Chairman of the Board and Chief Executive
Officer, serves as an ex-officio, nonvoting member of the
Board's standing committees, including the Compensation
Committee. He was not present during any discussion of
his compensation.
Mead's executive compensation structure is based on
competitiveness within Mead's business environment. The
actual compensation levels delivered to executives are
directly linked to the financial performance of the
company.
Base Salaries
- -------------
Salary Range Midpoints are set to approximate those
- ----------------------
midpoints of similar sized industrial companies, as
annually reported in the Hay Industrial Management USA
survey, representing 383 parent organizations and 736
independent operating units of all types of industrial
employers in the United States (the "Hay Competition").
Around these midpoints for each salary grade is an
established salary range, characterized by a defined
minimum and maximum.
Actual Salaries paid to executives are targeted to be
- ---------------
competitive with the average salaries for that same
survey group, with a particular comparison to a selected
group of Forest Product company competitive peers.
These peers (the "FP Peers") are Boise Cascade
Corporation, Champion International Corporation,
Georgia-Pacific Corporation, International Paper, James
River Corporation, Potlatch Corporation, Scott Paper
Company, Stone Container Corporation, Temple-Inland
Inc., Union Camp Corporation, Westvaco Corporation,
Weyerhaeuser Company, and Willamette Industries, Inc.
<PAGE>
Mead's past earnings performance, competitive information
and the current economic environment determine the
overall salary increase percentages for the executive group
as a whole. These factors are weighted differently each
year depending on the relative financial impact in a given
year. When setting salary increase for each named
executive officer, individual performance is a significant
factor, and the individual's position in the salary range is
also considered to a lesser degree.
Mr. Mason's 1993 salary was near the bottom of the Mead
salary range and is considered appropriate for the
incumbent who was recently promoted to the position in
1992; but it does demonstrate real salary growth, reflecting
a positive assessment of his leadership. His salary is
approximately 20% lower than the average of both the Hay
Competition and the FP Peers.
For the other named executives, Mead has been
conservatively paying below midpoint - the salaries for
these positions also lagging both the Hay Competition and
FP Peers.
Mead Management Incentive Plan
- ------------------------------
Annual Incentive Targets under the Mead Management
- ------------------------
Incentive Plan are set at levels that achieve a combined
salary midpoint plus incentive target that equals actual
competitive average base salaries plus annual bonuses, as
determined by an analysis of the total cash compensation
paid by the Hay Competition.
Actual Incentive Payouts are determined by a comparison
- ------------------------
of Mead Return on Total Capital (ROTC) to both the FP
Peers (as measured in the Value Line Report) and also to
the Value Line Industrial Composite (the "Industrial
Composite"), representing over 800 major industrial
companies that account for about 80% of the income
earned by all U.S. nonfinancial corporations. The Mead
ROTC comparison to the ROTC of each of the FP Peers
and the Industrial Composite is weighted equally.
In 1991 no annual incentives for Mead performance were
paid to any executive of the named group, because Mead
did not reach acceptable threshold ROTC. In 1992 the
incentives paid to the named executives other than Mr.
Mason reflect an improvement in competitive return,
while Mr. Mason received an adjusted stock option grant
in lieu of an incentive payment.
Financial performance for 1993 has continued to
improve, with Mead ROTC of 6.2% (versus 4.7% in 1992)
compared to 3.7% for the FP Peers (4.2% in 1992) and
9.5% for the Industrial Composite (8.0% in 1992). As a
result, annual incentives at near-target levels were paid
for the other named executives. Mr. Mason received
approximately 75% of his incentive payout as cash. For
the balance, the Compensation Committee adjusted
upward Mr. Mason's stock option award.
Direction 2000 Incentive Plan
- -----------------------------
The Direction 2000 Executive Incentive Plan is a newly
- -------------------------------------------
implemented performance unit plan. The Direction 2000
Plan supports an 8-year business strategy of improving
ROTC to attain cost of capital while aggressively growing
sales revenues, thus focusing executive attention to
achieving the long term goals of the corporation.
Performance milestones have been set for each of the 8
years 1993 to 2000, based on a weighting of two criteria:
the ROTC achieved each year compared to the
milestone set, and the sales revenue growth while
maintaining adequate ROTC compared to the 8-year
objective. Based on these two components, and using
an additional formula involving competitive ROTC
performance including the FP Peers and the Industrial
Composite, the plan delivers periodic annual payouts.
The form of payout for all active participants in 1993 was
delivered as 30% cash and 70% restricted stock.
Actual Direction 2000 Payouts are based on a direct
- -----------------------------
calculation of year end results compared to the
milestones defined in the plan for 1993. The 1993
business results were below the milestones set in the
Direction 2000 Plan, and the resulting payout to
executives determined by the plan was 9% of their long
term incentive target. Mr. Mason received $12,700 cash
and 665 restricted shares ($29,717 market value).
<PAGE>
Restricted Stock
- ----------------
Restricted Stock with three to five year restrictions may be
- ----------------
granted to encourage retention of key executives, or in lieu
of payment of cash incentives or for any other reason
consistent with the purposes of Mead's Restricted Stock
Plan. Restricted shares are granted at market prices.
The Direction 2000 Plan is designed to provide 70% of
payout as restricted stock. Each of the named executives
received three-year restricted stock for the 1993 payout,
with the exception of Mr. Mason whose stock carried a five
year restriction.
Stock Options
- -------------
Stock Option Grants are based on competitive practices of
- -------------------
the Hay Competition (rather than Mead's past corporate
performance), are granted at market price and cannot be
exercised for one year. The objective of stock option
grants is to incent future company performance, rather
than to reward for past contribution. Mead also believes
that granting stock options to senior management further
aligns their interests with shareholders.
The size of annual option grants is based on the grade
level of each recipient. Generally, the number of options
granted increases approximately 30% with each grade
level increase. Minor adjustments (+/-10%) are made to
grants to recognize the future potential of the individual.
In February 1993, Mr. Mason received a grant of 37,500
stock options, which the Compensation Committee
believed appropriate in light of the size of competitive
grants; Mr. Mason's grade level; and Mr. Mason's
individual performance. In addition, 10,300 stock options
were granted in February 1994 in lieu of a portion of Mr.
Mason's 1993 annual cash incentive. The size of the
additional option grant was based upon the Committee's
assessment of the equivalent value of the cash incentive
being replaced with stock options. In addition, the
Committee believed it important to increase Mr. Mason's
potential stock ownership and strengthen the link between
his compensation and shareholder returns.
Summary
- -------
Although new federal tax laws limit the deductibility of
executive compensation, the Committee currently
believes that these laws will not impact Mead's tax
deduction for compensation in 1994.
The compensation delivered by the aggregate of the
above five elements is considered to be highly effective
in supporting management's aggressive cost
management and operations streamlining across all
divisions. Mead has posted improvement in returns that
equal the gains in return of the Industrial Composite.
Within the competitive sector, Mead ROTC performance
is in the top (fourth) quartile of the FP Peers.
The Compensation Committee is confident that these
elements of the executive compensation program are
key in rewarding executives who contribute to the
success of the Corporation and in the demonstrated
increase in shareholder value.
Compensation Committee members:
Vincent L. Gregory, Jr. (chairman)
John C. Bogle
John G. Breen
William E. Hoglund
Charles S. Mechem, Jr.
William S. Shanahan
Steven C. Mason (ex-officio, nonvoting member)
<PAGE>
Compensation Tables
The compensation for services performed during the fiscal
years ended December 31, 1991, 1992 and 1993 for Mr.
Mason, each of the other four most highly compensated
executive officers and Mr. William A. Enouen (who
retired effective December 1, 1993) is as follows. No
stock appreciation rights were issued to the named
executives during 1991-1993.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
----------------------------------------------
Annual Compensation Awards Payouts
-------------------------------------- ----------------------------------------------
Other
Name Annual Restricted Securities All Other
and Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($)(1) ($)(2) ($)(3) SARs Granted(#) ($)(4) ($)(5)
- -------- ---- -------- ---------- ------- --------- --------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steven C. 1993 $518,751 $433,100 (7) $59,315 $ 29,717 47,800(7) $ 0 $ 4,497
Mason, 1992 471,336 0 (8) 55,127 0 45,000(8) 0 4,800
Chairman 1991 414,000 0 47,523 0 35,000 76,200 24,518
and CEO(6)
Samuel S. 1993 $376,500 $409,100 $19,558 $ 21,316 30,000 $ 0 $ 8,757
Benedict, 1992 328,500 120,000 (10) 18,756 103,089 (10) 25,000 0 4,800
President 1991 265,354 16,600 16,169 0 22,000 30,700 19,451
and
COO(9)
Eli M. 1993 $245,799 $150,200 $26,617 $ 8,088 8,500 $ 0 $ 4,497
Karter, VP 1992 228,552 86,000 25,803 44,400 8,500 0 4,800
Mfg. & 1991 206,052 0 22,437 191,250 12,000 30,000 13,204
Tech.
Thomas E. 1993 $216,834 $160,600 $ 0 $ 8,088 10,000 $ 0 $ 4,497
Palmer, VP 1992 203,340 86,000 0 0 8,500 0 12,800
General 1991 54,168 30,000 0 0 5,000 2,500 2,627
Counsel(11)
William R. 1993 $178,343 $138,100 $ 0 $ 4,290 5,000 $ 0 $ 4,497
Graber, 1992 166,008 80,000 0 0 5,500 8,300 4,616
VP/CFO(11) 1991 113,331 40,000 0 0 4,700 3,900 6,880
William A. 1993 $240,180 $180,600 $34,985 $ 0 12,000 $ 0 $ 4,497
Enouen(12) 1992 240,844 95,000 33,041 59,200 11,600 0 4,800
1991 232,368 0 28,484 127,500 17,500 36,800 23,055
_____________________
(footnotes on following page)
</TABLE>
<PAGE>
(1) Bonuses are earned in the year specified and paid in
the following year. Cash bonuses for 1993 consist of
payments under the Mead Management Incentive Plan
("MMIP"), an annual incentive plan, and the Direction
2000 Plan, an eight year business plan. The Direction
2000 Plan pays out in 30% cash and 70% restricted
stock. The restricted stock awards for 1993 are
reported in the table under the column "Restricted
Stock Awards." A portion of Mr. Mason's MMIP bonus
for 1993 was paid in stock options which are reported
in the table.
(2) Consists solely of interest on deferred compensation in
excess of the applicable federal rate. Mead owns life
insurance on the lives of employees participating in
this deferred compensation program which supports
the interest rates used.
(3) Restricted stock holdings at December 31, 1993
(excluding restricted stock awarded in February 1994
under the Direction 2000 Plan): Mr. Mason, 6,750
shares ($303,750 value); Mr. Benedict, 2,594 shares
($116,730 value); Mr. Karter, 7,200 shares ($324,000
value); Mr. Palmer, Mr. Graber and Mr. Enouen, no
shares. Dividends are paid on restricted stock in the
same manner and amount as paid on Mead's common
shares. The value of the restricted stock for purposes
of the table is based on closing market prices on the
date of the grant; however, for purposes of this
footnote (3), it is based on closing market prices at the
end of 1993. Restricted stock awards made in
February 1994 were the 1993 payout under the
Direction 2000 Plan, and are reported in the table.
(4) Long-term incentive payments are earned in the year
specified and paid in the following year. Direction
2000 Plan cash payouts are reported under "Bonuses"
and restricted stock payouts are reported under
"Restricted Stock Awards."
(5) Amounts in 1993 consist solely of salaried savings
plan matching contributions by Mead and, in the
case of Mr. Benedict, an additional $4,260 of life
insurance premiums paid by Mead.
(6) Mr. Mason was elected Chairman and Chief
Executive Officer in May 1992.
(7) Mr. Mason was granted 37,500 stock options in
February 1993, and in addition 10,300 stock
options were granted to Mr. Mason in February
1994 at the market price on the date of the grant in
lieu of a portion of his 1993 annual cash incentive
payment.
(8) Mr. Mason was granted 30,000 stock options in
January 1992, and in addition 15,000 stock options
were granted to Mr. Mason in February 1993 at the
market price on the date of grant in lieu of his 1992
annual cash incentive payment.
(9) Mr. Benedict was elected President and Chief
Operating Officer in April 1991, prior to which he
was President of Mead's Publishing Paper division.
His bonus in 1991 relates solely to the Publishing
Paper division's performance.
(10) Mr. Benedict received 1,500 shares of restricted
stock ($55,500 value on grant date) in January
1992, and in February 1993 he received 1,094
shares of restricted stock ($47,589 value on grant
date) in lieu of a portion of his 1992 annual cash
incentive payment.
(11) Mr. Palmer was hired in September 1991, and Mr.
Graber was hired in April 1991.
(12) Mr. Enouen retired as Senior Vice President and
Chief Financial Officer effective December 1, 1993.
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table shows, for the named executive officers
and Mr. Enouen, additional information about option grants
<PAGE>
during the fiscal year ended December 31, 1993. No
stock appreciation rights were granted in 1993.
<TABLE>
<CAPTION>
Individual Grants
% of Potential
Number of Total Realizable Value at
Securities Options/ Assumed Annual
Underlying SARs Rates of Stock Price
Options/ Granted to Exercise Appreciation
SARs Employees or Base Expira- for Option Term(2)
Granted in Fiscal Price tion ---------------------------------------
Name (#) (1) Year ($/Sh) Date 0% ($) 5% ($) 10% ($)
- ---- --------- --------- ------- ------ ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Steven C. Mason 37,500 (3) 5.2% $43.50 02/24/03 $0 $1,025,884 $2,599,792
10,300 (4) 1.2% 44.6875 02/23/04 0 289,468 733,570
Samuel S. Benedict 30,000 4.2% 43.50 02/24/03 0 820,707 2,079,834
Eli M. Karter 8,500 1.2% 43.50 02/24/03 0 232,534 589,286
Thomas E. Palmer 10,000 1.4% 43.50 02/24/03 0 273,569 693,278
William R. Graber 5,000 .7% 43.50 02/24/03 0 136,785 346,639
William A. Enouen 12,000 1.7% 43.50 02/24/03 0 328,283 831,934
--------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
0%(5) 5%(5) 10%(5)
------ ----- --------
<S> <C> <C> <C>
Assumed Stock Price $ 43.500 $70.857 $112.828
Market Value of All Shareholdings $2.6 billion $4.2 billion $6.7 billion
Named Executives Percentage 0.17% 0.17%
______________________
</TABLE>
(1) Options are granted with terms of ten years and may
be exercised beginning one year after date of grant.
Limited stock appreciation rights (described on page
19) have been granted to each of the named executive
officers and Mr. Enouen in an amount equal to the
stock options granted. In addition, the holders of
stock options may under certain conditions pay
withholding taxes due upon the exercise of stock
options using shares issued upon such exercise.
(2) The dollar amounts under the 5% anf 10% columns
are set by the Securities and Exchange Commission
and are not intended to forecast possible future
appreciation of Mead's stock. Mead is also not
aware of any formula that determines with
reasonable accuracy the present value of stock
options based on future unknown or volatile factors.
(footnotes continued on following page)
<PAGE>
(3) Excludes 15,000 stock options granted to Mr. Mason
in February 1993 in lieu of his 1992 annual cash
incentive payment.
(4) 10,300 stock options were granted to Mr. Mason in
February 1994 in lieu of a portion of his 1993 annual
cash incentive payment.
(5) At an assumed 5% stock price appreciation over a ten-
year period, Mead's stock price would increase from
$43.50 per share (the market price on the grant date) to
$70.857 per share, and the aggregate market value of all
shareowner holdings as of the grant date would increase
from $2.6 billion to $4.2 billion. At an assumed 10%
stock price appreciation over a ten-year period, Mead's
stock price would increase from $43.50 per share to
$112.828 per share, and the aggregate market value of
all shareowner holdings as of the grant date would
increase to $6.7 billion. The named executives and Mr.
Enouen would receive only .17% of any such increase in
market value.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table shows information about stock option
exercises during 1993 and unexercised stock options at
year end 1993 for the named executive officers and Mr.
Enouen. No stock appreciation rights were granted or
exercised in 1993.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)(2)
Shares
Acquired Exercisable/ Exercisable/
Name on Exercise(#) Value Realized ($)(1) Unexercisable Unexercisable
- ---- -------------- --------------------- ------------- --------------
<S> <C> <C> <C> <C>
Steven C. Mason 14,000 (3) $294,875 (3) 138,200/62,800 (4) $1,819,046/$82,031(4)
Samuel S. Benedict -0- -0- 62,900/30,000 746,804/46,875
Eli M. Karter 2,200 50,338 51,000/8,500 652,816/13,281
Thomas E. Palmer -0- -0- 13,500/10,000 143,053/15,625
William R. Graber -0- -0- 10,200/5,000 113,631/7,813
William A. Enouen 9,755 216,417 67,445/12,000 1,029,692/18,750
______________________
</TABLE>
(1) Based upon the difference between the fair market
value (the average of the high and the low prices) of
Mead common shares on the date of exercise and the
exercise price of the stock option.
(2) Based upon the difference between the fair market
value (the average of the high and the low prices) of
Mead common shares at the end of 1993 and the
exercise price of the stock option.
(3) Mr. Mason exercised 14,000 stock options using
previously owned shares. The shares acquired upon
exercise were placed in Mr. Mason's living trust.
(4) Includes 10,300 stock options granted to Mr. Mason
in February 1994, at the market price on the date of
grant, in lieu of a portion of his 1993 annual cash
incentive payment. The "value" of these options at
year-end 1993 is deemed to be zero.
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares Mead's
cumulative total shareholder return over a five year period,
assuming $100 invested at December 31, 1988 in Mead
common stock, in the S&P 500 Index and in the S&P
Paper and Forest Products Composite Index. The
information on these indices has been provided by
Standard & Poor's Corporation. Shareholder return is
based on increases in share price and dividends paid,
assuming reinvestment of dividends.
THE MEAD CORPORATION
CUMULATIVE TOTAL RETURN: 1988-1993
[GRAPH APPEARS HERE]
Measurement Period
(Fiscal Year Covered) Mead Corporation S&P 500 Index S&P Paper & F. P.
Measurement Pt -
FYE 12/31/88 $100.00 $100.00 $100.00
FYE 12/31/89 $96.23 $131.69 $121.28
FYE 12/31/90 $69.70 $127.60 $109.57
FYE 12/31/91 $96.40 $166.47 $138.98
FYE 12/31/92 $109.70 $179.15 $158.91
FYE 12/31/93 $131.97 $197.21 $175.13
YEAR
1988 1989 1990 1991 1992 1993
Mead 100.00 96.23 69.70 96.40 109.70 131.97
S&P 500 100.00 131.69 127.60 166.47 179.15 197.21
S&P Paper & F.P. 100.00 121.28 109.57 138.98 158.91 175.13
<PAGE>
Retirement Plans
All salaried employees of Mead are participants in Mead's
non-contributory retirement plan which provides retirement
income based upon years of employment and average
annual earnings for the five highest consecutive years
during the last eleven years of employment. Benefits under
the retirement plan become vested after five years.
The named executives have the years of credited service
indicated: Mr. Mason, 35; Mr. Benedict, 37; Mr. Karter, 11;
Mr. Palmer, 1; Mr. Graber, 1. Mr. Enouen had 33 years of
credited service credited upon his retirement in December
1993. Earnings used for calculation of retirement income
for the named executives are salary, bonus and incentive
compensation (other than Direction 2000 Plan and other
long-term incentive payments) paid as described in the
Summary Compensation Table. The benefits payable
under Mead's plan are deducted by one-half of the primary
Social Security benefit.
Under the Employee Retirement Income Security Act, an
individual's normal annual benefit from a qualified
retirement plan such as Mead's may not exceed specified
limits. To the extent that the amounts shown in the table
exceed such limits, Mead pays the excess under an
unfunded excess benefit plan.
Mead also maintains an unfunded supplemental retirement
plan for senior level management personnel who become
eligible to participate in the plan after they have completed
three years of employment in a qualified job classification.
The plan provides annual retirement benefits for 55% of a
participant's final average earnings (earnings include
bonuses and incentive compensation other than Direction
2000 Plan and other long-term incentive payments, but
may not exceed two times base compensation for any
year) for the three highest years during the last eleven
years of employment, less benefits received from other
retirement plans of Mead and from retirement plans of
previous employers. Benefits are also reduced by one-half
of a participant's primary Social Security Benefit. A
participant may receive full benefits under this plan after
he attains age 62. Messrs. Mason, Benedict and Karter
are currently eligible to participate in this plan.
The approximate annual benefits, on a straight life
annuity basis, payable to the named executive officers
under the retirement plan and the excess and
supplemental retirement plans, based on compensation
levels to date and assuming normal retirement age,
calculated prior to the offsets described above, are as
follows: Mr. Mason, $378,414; Mr. Benedict, $197,515;
Mr. Karter, $149,526; Mr. Palmer, $141,501; and Mr.
Graber, $117,757.
Benefit Trust
In 1986, a Benefit Trust was established to preserve the
benefits earned under Mead's unfunded supplemental
retirement plan, incentive compensation election plan,
directors retirement plan and excess benefit plan (the
"Plans") in the event of a change in control. Upon the
occurrence of any potential change in control, as
defined in the Benefit Trust, Mead will be obligated to
contribute an amount of cash and other property to the
Benefit Trust which is intended to be sufficient to pay, in
accordance with the terms of the Plans, the benefits
authorized under such Plans and certain related
expenses. If the funds in the Benefit Trust are
insufficient for any reason to pay amounts due under the
Plans, Mead will remain obligated to pay any such
deficiency.
Termination Arrangements
General Severance Program. Mead has formalized a
company-wide severance program for its salaried
employees who are involuntarily terminated. The basic
program provides severance pay in a lump sum equal to
one week's salary for each full year of service plus an
additional week for each $20,000 of base salary (or
increment thereof) subject to enhancement following a
change in control. Medical, dental and life insurance
coverages will be provided for a period of time equal to
the number of weeks of severance, provided certain
<PAGE>
conditions are met. The maximum period for severance
pay, depending on the salary level of the employee, will be
limited to either 52 or 26 weeks. Based on current
compensation, if the individuals named in the Summary
Compensation Table had been terminated on
December 31, 1993, the amounts payable to each of them
would have been as follows: Mr. Mason, $525,000; Mr.
Benedict, $384,000; Mr. Karter, $114,945; Mr. Palmer,
$55,914 and Mr. Graber, $48,461. Mr. Enouen retired
December 1, 1993.
Severance Agreements. Mead has in place severance
agreements with executive officers and other key
executives (collectively, the "Key Executives"). The
severance agreements provide for the payment of certain
benefits to a Key Executive (in lieu of amounts payable
under the general severance program) if employment is
terminated by Mead other than for "cause," or on account
of death, disability or normal retirement, within two years
after a "change in control" of Mead, or if employment is
terminated by the Key Executive for "good reason" within
such period, as such terms are defined in the respective
severance agreements. In general, under such
circumstances, the Key Executive is entitled to a cash
payment of two times (and three times, in the cases of the
Chairman and the President) the sum of (i) the Key
Executive's then current annual base salary, and (ii) the
greater of the Key Executive's current target incentive
under Mead's incentive plans or his most recent annual
award thereunder. Based on levels of compensation as of
December 31, 1993, if the individuals named in the
Summary Compensation Table had been terminated on
such date, the amounts payable to each of them would
have been as follows: Mr. Mason, $4,554,598; Mr.
Benedict, $3,392,720; Mr. Karter, $1,100,408; Mr. Palmer,
$1,071,162; and Mr. Graber, $877,291. Mr. Enouen retired
December 1, 1993.
The severance agreements also provide for (i) the
cancellation of all outstanding stock options granted to the
Key Executive under any stock option plan of Mead in
consideration for a cash payment equal to the number of
shares covered by the option multiplied by the
difference between the exercise price per share and the
higher of (a) the reported closing price per share on the
date of the Key Executive's termination or (b) the highest
price paid per share in connection with any change in
control; (ii) a continuation of benefits under Mead's life
insurance, medical and dental plans (or substantially
similar benefits); and (iii) out placement counselling. If
the aggregate severance benefits to any executive would
be subject to an excise tax under the Internal Revenue
Code, the actual benefits will be reduced to the extent
necessary to avoid the imposition of the excise tax.
Limited Stock Appreciation Rights
Mead's stock option plans authorize the Compensation
Committee to grant limited stock appreciation rights
("Limited Rights") with respect to all or any portion of the
shares covered by options. The Committee may grant
Limited Rights simultaneously with the grant of an option
or at any time during their respective terms. Limited
rights have been granted to all named executive officers
in an amount equal to stock options granted. In general,
Limited Rights are exercisable only after certain events
which constitute a change in control of Mead. Upon the
exercise of a Limited Right, an optionee will receive an
amount in cash equal to the difference between (1) the
exercise price per share of the option to which the
Limited Right relates, and (2) a price which in general
represents the value placed upon a Common Share in
the change in control situation. When Limited Rights are
exercised, the options to which they relate will cease to
be exercisable.
Certain Transactions
Mr. Mason has the power to direct distributions from a
charitable trust he established in 1988 to hold his shares
of a corporation in which he has a minority interest.
Mead paid this corporation approximately $3.2 million in
the ordinary course of business during 1993 for the
purchase of paper machine supplies and equipment.
Such purchases did not constitute a material portion of
such corporation's business and were made in
accordance with Mead's normal purchasing policy.
<PAGE>
Mr. Mason inadvertently failed to timely file a report with
the SEC under Section 16 of the Securities Exchange Act
of 1934 when he automatically became successor trustee
of a trust established by his deceased father. Among the
trust's assets were 100 shares of Mead stock. In addition,
Mr. Palmer reported one transaction late when funds in a
Mead Salaried Savings Plan account were transferred to
other accounts.
Compensation Committee Interlocks and Insider
Participation
The members of the Board's Compensation Committee are
Messrs. Bogle, Breen, Gregory, Hoglund, Mechem and
Shanahan. In addition, Mr. Mason, Mead's Chairman and
Chief Executive Officer, is an ex-officio nonvoting member
of the Board's standing committees, including the
Compensation Committee (although Mr. Mason did not
participate in any Compensation Committee discussions
regarding his compensation). Mr. Palmer, Mead's Vice
President and General Counsel, is the nonvoting Secretary
of the Committee, but is not a member of the Committee.
One of the mutual funds in which participants in Mead's
Salaried and Hourly Savings Plans invest monies was
administered during 1993 by The Vanguard Group of
Investment Companies. Mr. Bogle, a member of the
Compensation Committee, is Chairman, Chief Executive
Officer and a director of The Vanguard Group, and
Chairman of the mutual funds in The Vanguard Group. At
December 31, 1993, these Plans had approximately $48.3
million invested in the fund. All of the monies in this fund
will be transferred to different funds unaffiliated with
Vanguard and Mr. Bogle during 1994.
Except as described above, none of the members of the
Compensation Committee is or was an officer or employee
of Mead, or has any relationship requiring disclosure under
the federal securities rules.
Shareholder Proposal on Declassification of Board
The United Paperworkers International Union, of P.O. Box
1475, Nashville, Tennessee 37202, has represented that, as
of November 10, 1993, it owned 50 shares of Mead's
common stock, and has notified Mead that it intends to
introduce a resolution relating to declassifying the Board
of Directors at the Annual Meeting. To be adopted, the
resolution, which is OPPOSED by the Board of
Directors, would require the affirmative vote of a majority
of shares entitled to vote on the proposal and held by
persons present in person or by proxy at the Annual
Meeting. Abstentions will, while broker nonvotes will not,
be treated as "present" for purposes of the preceding
sentence. Abstentions and broker nonvotes will not be
counted as "affirmative votes."
The resolution reads as follows:
"BE IT RESOLVED: That the stockholders of The Mead
Corporation ('Company') urge that the Board of
Directors take the necessary steps, in compliance with
Ohio state law, to declassify the Board of Directors for
the purpose of director elections. The Board
declassification shall be done in a manner that does not
affect the unexpired terms of directors previously
elected."
In support of the resolution, the shareholder has
submitted the following statement:
"The Board of Directors of the Company is divided into
three classes serving staggered three-year terms. It is
our belief that the classification of the Board of Directors
is not in the best interests of the Company and its
shareholders. The elimination of the staggered board
would require each director to stand for election
annually. This procedure would allow shareholders an
opportunity to annually register their views on the
performance of the board collectively and each director
individually. Concern that the annual election of all
directors would leave the Company without experienced
board members in the event that all incumbents are
voted out is unfounded. If the owners should choose to
replace the entire board, it would be obvious that the
incumbent directors' contributions were not valued.
"It is our belief that a company's corporate governance
procedures and practices, and the level of management
accountability they impose, are related to the financial
<PAGE>
performance of the company. In the Company's 1992
annual report, our Chairman and Chief Executive Officer
admitted that 'our performance has been only slightly
better than average.' In fact, the board of directors' 1993
proxy statement shows that cumulative total shareholder
return in our Company has been lower than Standard &
Poor's Paper and Forest Products Composite Index each
year since 1989.
"A classified board of directors protects the incumbency of
the board of directors and current management which in
turn limits accountability to stockholders. It is our belief
that this protection for incumbents reduces management's
accountability to shareholders and negatively impacts
financial performance.
"We urge your support for this proposal."
Management's Statement in Opposition
The Board of Directors recommends a vote AGAINST this
proposal.
At the 1985 annual meeting of shareholders the
shareholders voted to revise Mead's Regulations to
provide, among other things, for a Board of Directors
divided into three classes of approximately equal size, with
one class being elected each year. The Board stated in
the proxy statement relating to that meeting, its belief that
the classification of the Board, among other changes made
to the Regulations, should increase the likelihood of
continuity and stability in both the composition of the
Board and the long-range policies formulated by the
directors. The Board further stated its belief that this
continuity and stability, in turn, will permit it more
effectively to represent the interests of all shareholders,
including responding to circumstances created by
demands or action by a minority shareholder or group.
The Board continues to believe that the above reasons are
valid and that a classified Board is in the best interest of
the shareholders. Contrary to proponent's assertion that
Mead has imposed measures to protect the incumbency
and limit accountability to shareholders, the Board,
consistent with its fiduciary duty, has adopted only those
measures reasonably necessary to ensure that all
shareholders interests are protected, while continually
evaluating the changing business environment and
shareholders sentiment.
It should be noted that adoption of this proposal would
not in itself eliminate Board classification and reinstate
annual election of directors. Eliminating Board
classification requires the affirmative vote of the holders
of record of at least 75% of the voting power of Mead at
a meeting of shareholders called for that purpose.
ACCORDINGLY, THE BOARD OF DIRECTORS
BELIEVES THAT THE REASONS FOR WHICH THE
CLASSIFIED BOARD WAS ADOPTED ARE STILL VALID
TODAY AND, THEREFORE, RECOMMENDS THAT
SHAREHOLDERS VOTE AGAINST THIS PROPOSAL.
Other Business
The Board of Directors does not intend to present, and
has no knowledge that others will present, any other
business at the meeting. However, if any other matters
are properly brought before the meeting (including any
shareholder proposal properly omitted from this proxy
statement), it is intended that the holders of proxies will
vote thereon in their discretion.
Independent Public Accountants
The independent certified public accounting firm of
Deloitte & Touche has been appointed by the Board of
Directors to serve as independent public accountants for
Mead and its subsidiaries for the fiscal year ending
December 31, 1994. Deloitte & Touche served in such
capacity for the fiscal year ended December 31, 1993.
Representatives of Deloitte & Touche will be present at
the Annual Meeting, will have an opportunity to make a
statement if they desire to do so, and will be available to
respond to appropriate questions from shareholders.
Shareholder Proposals
Any proposal by a shareholder intended for inclusion in
Mead's proxy statement and form of proxy for the 1995
Annual Meeting of Shareholders must be received by
Mead at Courthouse Plaza Northeast, Dayton, Ohio
45463, Attention: George J. Maly, Jr., Secretary, on or
<PAGE>
before November 14, 1994 in order to be eligible for such
inclusion.
Solicitation of Proxies
The entire cost of solicitation will be borne by Mead. In
addition to the use of the mails, proxy solicitations may be
made by officers and employees of Mead, personally or by
telephone and telegram. It is also anticipated that banks,
brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward soliciting material to
their principals and to obtain authorization for the
execution of proxies. Mead has retained Kissel-Blake Inc.
to aid in the solicitation of proxies, for which Mead will pay
an estimated $12,500. In addition, Mead will reimburse
Kissel-Blake Inc., banks, brokerage houses and other
custodians, nominees and fiduciaries for their out-of-pocket
expenses.
By order of the Board of Directors
Steven C. Mason
Chairman of the Board
Printed on Mead 50# New Era Matte
<PAGE>
GRAPHICS APPENDIX
1. Page 3 contains photographs of each of the four nominee directors of the
Company for election at the Company's 1994 Annual Meeting of Shareholders;
and pages 4 through 5 contain photographs of each of of the Company.
2. Performance graph appears on page 17. A paper copy of the graph was sent
under separate cover to Charles Leber, Branch Chief.
<PAGE>
THE MEAD CORPORATION
Annual Meeting of Shareholders, April 28, 1994
The undersigned holder of Common Shares of THE MEAD CORPORATION, an Ohio
corporation (hereinafter referred to as the "Company"), hereby appoints S. C.
Mason, C. S. Mechem, Jr. and T. B. Stanley, Jr., and each of them, attorneys
of the undersigned, with power of substitution, to vote all of the Common
Shares of the undersigned entitled to vote at the Annual Meeting of the
Company to be held at the Blair Auditorium, Sinclair Community College, 444
West Third Street, Dayton, Ohio on Thursday, April 28, 1994 at 11:00 a.m. and
at any and all adjournments of such meeting, upon the matters set forth on the
reverse side hereof, and in their discretion, the Proxies are authorized to
vote upon such other business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO INSTRUCTION IS
INDICATED, THE SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE DIRECTORS. IN THE EVENT OF CUMULATIVE VOTING FOR DIRECTORS, EXCEPT AS
OTHERWISE INDICATED BY THE UNDERSIGNED, A VOTE FOR THE NOMINEES LISTED HEREIN
WILL GIVE THE PROXYHOLDERS DISCRETIONARY AUTHORITY TO CUMULATE ALL VOTES TO
WHICH THE UNDERSIGNED IS ENTITLED AND TO ALLOCATE THEM IN FAVOR OF ANY ONE OR
MORE OF THE NOMINEES, AS THE PROXYHOLDERS DETERMINE.
(CONTINUED AND TO BE VOTED AND SIGNED ON REVERSE SIDE) SEE REVERSE
SIDE
<PAGE>
Please mark
[X] votes as in
this example.
________________________________________________
|THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR|
|PROPOSAL NO. 1: ---|
- ------------------------------------------------
1. Election of Directors to serve until the Annual Meeting
in the year 1997.
Nominees: John C. Bogle, William E. Hoglund,
Barbara C. Jordan and William S. Shanahan
FOR WITHHELD
[ ] [ ]
[ ]
- ---------------------------------------------
For all nominees except as noted above
____________________________________________
|THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE|
|AGAINST PROPOSAL NO. 2: |
|------- |
- --------------------------------------------
FOR AGAINST ABSTAIN
2. Shareholder Proposal on [ ] [ ] [ ]
Declassification of Board.
Receipt is acknowledged of Notice of the Annual
Meeting and Proxy Statement relating thereto.
Shareholders should date this proxy and sign exactly
as name appears hereon. If stock is held jointly,
both owners should sign this proxy. Executors,
administrators, trustees, guardians and others signing
in a representative capacity should indicate the
capacity in which they sign.
Please mark, date, sign and MARK HERE
return the proxy card FOR ADDRESS [ ]
promptly using the enclosed CHANGE AND
envelope. NOTE AT LEFT
Signature:________________________ Date:____________
Signature:________________________ Date:____________
<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The Mead Corporation
(Name of Registrant as Specified in Its Charter)
Jeffrey L. Hayman
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transactions applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
[ ] 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:
N/A
(2) Form, schedule or registration statement no.:
N/A
(3) Filing party:
N/A
(4) Date filed:
N/A
