MEAD CORP, DEF 14A, 1998-03-10

MEAD CORP
DEF 14A, 1998-03-10
PAPERBOARD MILLS

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

Mead Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[_] 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:

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(2) Aggregate number of securities to which transaction applies:

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(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):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] 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:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

<PAGE>

[MEAD LOGO]

The Mead Corporation
Mead World Headquarters
Courthouse Plaza Northeast
Dayton, Ohio 45463

March 10, 1998

To the Holders of Common Shares:

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 23, 1998 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.

Very truly yours,

/s/ Jerome F. Tatar

Jerome F. Tatar
Chairman of the Board
<PAGE>

[MEAD LOGO]

Notice of Annual
Meeting Of Shareholders

The Mead Corporation
Mead World Headquarters Dayton, Ohio
Courthouse Plaza Northeast March 10, 1998
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 23, 1998 at 11:00 a.m.,
for the following purposes:

1. To elect eleven directors for a term of one year;

2. To transact such other business as may properly come before the meeting
or any adjournment.

The close of business on February 24, 1998 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
Thomas E. Palmer
Secretary
<PAGE>

[MEAD LOGO]

Proxy Statement
For 1998 Annual Meeting

The Mead Corporation
Mead World Headquarters
Courthouse Plaza Northeast
Dayton, Ohio 45463

March 10, 1998

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 23, 1998 and any adjournment.
The close of business on February 24, 1998 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 103,912,400 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 in the proxy.
<PAGE>

Election of Directors
Mead's Regulations provide for the annual election of directors. At the 1998
Annual Meeting, the terms of John C. Bogle, John G. Breen, William E. Hoglund,
James G. Kaiser, Robert J. Kohlhepp, John A. Krol, Susan J. Kropf, Charles S.
Mechem, Jr., Lee J. Styslinger, Jr., Jerome F. Tatar and J. Lawrence Wilson
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 one-year term expiring at the Annual Meeting in 1999.

Paul F. Miller, Jr., a member of the Board of Directors for 35 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 are set forth on pages 3 through 6.

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 form of proxy, unless authorization to do so is withheld, to vote
for the election of the eleven 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 the shareholder desires the voting at
the election of directors to be cumulative, and if an announcement of the giving
of the notice is made upon the convening of the meeting by or on behalf of the
shareholder giving the 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. 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 specify the desire on the proxy card.

2
<PAGE>

- --------------------------------------------------------------------------------
Nominees for Director for a one-year term expiring in 1999
- --------------------------------------------------------------------------------

John C. Bogle Mr. Bogle is Chairman of the Board of The Vanguard
Group of Investment Companies, and Chairman of the
mutual funds in The Vanguard Group, Inc. since 1974.

Age: 68

Director Since: 1978

Committees:
Audit, Corporate Objectives, Executive, Finance,
Nominating & Organization

Other Directorships:
The General Accident Group of Insurance Companies,
Chris-Craft Industries, Inc., and National Constitution
Center

John G. Breen Mr. Breen is Chairman, Chief Executive Officer and a
Director of The Sherwin-Williams Company.

Age: 63

Director Since: 1986

Committees:
Compensation, Corporate Objectives, Executive, Finance,
Nominating & Organization

Other Directorships:
National City Corporation, Parker-Hannifin Corporation
and The Goodyear Tire & Rubber Company

William E. Hoglund Mr. Hoglund retired as Director and Executive Vice
President, Corporate Affairs and Staff Support Group of
General Motors Corporation in January 1995. He was
Executive Vice President and Chief Financial Officer of
GM from April 1992 through November 1992.

Age: 63

Director Since: 1993

Committees:
Corporate Objectives, Corporate Responsibility,
Executive, Finance, Nominating & Organization

Other Directorships:
Detroit Diesel Corporation, The Sloan Foundation
(Trustee) and Capital Automative REIT

3
<PAGE>

James G. Kaiser Mr. Kaiser retired as President and Chief Executive
Officer of Quanterra Incorporated in 1996. Prior to
that he was President and CEO of Enseco Incorporated
from 1992 to 1994

Age: 55

Director Since: 1995

Committees:
Corporate Objectives, Corporate Responsibility,
Finance, Nominating & Organization

Other Directorships:
The Stanley Works and The Sun Company

Robert J. Kohlhepp Mr. Kohlhepp has been a Director of Cintas Corporation
since 1979 and Chief Executive Officer since 1995.
Prior to that he was President and Chief Operating
Officer from 1984 until 1995.

Age: 54

Director Since: 1998

John A. Krol Mr. Krol has been Chairman of E.I. du Pont de Nemours
and Company since October 1997. He has been a Director
since April 1992. He was Chief Executive Officer from
1995 through January 1998. He was Vice Chairman from
April 1992 through September 1995. He was President
from 1995 through October 1997.

Age: 61

Director Since: 1994

Committees:
Corporate Objectives, Corporate Responsibility,
Executive, Finance, Nominating & Organization

Other Directorships:
Armstrong World Industries, Inc. and J.P. Morgan

4
<PAGE>

Susan J. Kropf Ms. Kropf has been a Director of Avon Products, Inc.
since January 1998 and Executive Vice President and
President North America since March, 1997. Prior to
that, she was Senior Vice President of Avon Products,
Inc. and President, New and Emerging Markets since July
1996. Prior to that, she was Senior Vice President -
Global Product and Business Development since 1994 to
July 1996. Prior to that, she was Group Vice President,
U.S. Product Marketing Group from 1992 to 1994.

Age: 49

Director Since: 1996

Committees:
Audit, Compensation, Corporate Objectives, Nominating
& Organization

Other Directorships:
Green Point Financial Corporation

Charles S. Mechem, Jr. Mr. Mechem is Chairman of Cincinnati Bell Inc. Prior to
that he was Commissioner of the LPGA from 1991 through
1995. He was also Chairman of United States Shoe
Corporation from April 1993 thru May 1995.

Age: 67

Director Since: 1976

Committees:
Compensation, Corporate Objectives, Finance, Nominating
& Organization

Other Directorships:
Cincinnati Bell, Ohio National Life Insurance Company,
J.M. Smucker Company, Star Banc Corporation, Star Bank,
N.A., The Arnold Palmer Golf Company and Myers Y.
Cooper Company

Lee J. Styslinger, Jr. Mr. Styslinger is Chairman and a Director of ALTEC
Industries, Inc.

Age: 64

Director Since: 1992

Committees:
Audit, Compensation, Corporate Objectives, Executive,
Nominating & Organization

Other Directorships:
Global Rental Company, Jemison Investment Company,
Regions Financial Corporation and Southern Research
Technology

<PAGE>

Jerome F. Tatar Mr. Tatar was elected Chairman of the Board, President
and Chief Executive Officer effective November 1, 1997.
Prior to that he was elected President and Chief
Operating Officer in April 1996. Prior to that he
served as Vice President - Operating Officer since July
1994. Prior to that he was President of Mead Fine Paper
Division since 1987.

Age: 51

Director Since: 1996

Other Directorships:
Robbins & Myers Corporation

J. Lawrence Wilson Mr. Wilson is Chairman of the Board, Chief Executive
Officer and a Director of Rohm and Hass Company since
1988.

Age: 62

Director Since: 1997

Committees:
Audit, Compensation, Corporate Objectives, Nominating &
Organization

Other Directorships:
Cummins Engine Company and The Vanguard Group of Mutual
Funds

6
<PAGE>

Certain Information Concerning the Board of Directors

There were seven meetings of the Board of Directors during 1997. The seven
standing committees of the Board and the number of meetings of each committee
during 1997 follow:

<TABLE>
<CAPTION>
Number of
Committee Meetings
--------- --------
<S> <C>
Audit 2
Compensation 3
Corporate Objectives 3
Corporate Responsibility 2
Executive 0
Finance 2
Nominating & Organization 2
</TABLE>

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 are as follows:

The Audit Committee recommends annually to the Board for its approval the
engagement of the independent certified public accountants, verifies and assures
their independence, reviews the professional services they provide, reviews the
fees charged for audit and non-audit services, reviews the broad scope of the
internal and 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.

Members: Styslinger (chair), Bogle, Kropf, Miller, Wilson

The Compensation Committee is charged with the broad responsibility for assuring
that officers and key management personnel are effectively compensated in terms
which are internally equitable and externally competitive. The Committee
authorizes the compensation of officers and senior management and recommends to
the Board the compensation of the Chairman of the Board and the President and
reviews the salaries of other key 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.

Members: Breen (chair), Kropf, Mechem, Styslinger, Wilson

7
<PAGE>

The Corporate Objectives Committee is charged with reviewing Mead's objectives
and strategies and evaluating management's recommendations for long-term growth
and profitability. The Committee also makes appropriate recommendations to the
full Board with regard to specific proposals by management of major strategic
importance, including acquisitions. The Committee monitors growth programs to
measure progress and reviews the potential impact of economic and technological
trends on operations.

Members: Hoglund (chair), Bogle, Breen, Kaiser, Krol, Kropf, Mechem, Miller,
Styslinger, Wilson

The Corporate Responsibility Committee is charged with questioning and
evaluating Mead's plans and responses relating to changing needs and concerns of
those major constituencies (both internal and external) which can be expected to
judge Mead's behavior and social performance.

Members: Krol (chair), Hoglund, Kaiser, Miller

The Executive Committee is empowered under Ohio law to exercise the full
authority of the Board, except as to matters not delegable. However, in
practice, there are no scheduled meetings of this Committee and such powers
would be exercised only in special situations.

Members: Tatar (chair), Miller (vice chair), Bogle, Breen, Hoglund, Krol,
Styslinger

The Finance Committee is charged with overseeing Mead's financial affairs and
recommending those financial actions and policies that are most appropriate to
accommodate Mead's strategic and operating strategies while maintaining a sound
financial condition. The Committee reviews programs designed to inform,
maintain and improve shareholder and financial community relations.

Members: Bogle (chair), Breen, Hoglund, Kaiser, Krol, Mechem, Miller

The Nominating & Organization Committee has as its principal concerns the
nomination of candidates to the Board, the development of criteria and
evaluation of the performance of the Chief Executive Officer, organizational
development, and review of shareholder proposals and suggestions. The Committee
also furnishes its evaluation of the Chief Executive Officer to the Compensation
Committee and reviews the compensation set by the Compensation Committee to
ensure it appropriately relates to shareholder value.

Members: Miller (chair), Bogle, Breen, Hoglund, Kaiser, Krol, Kropf, Mechem,
Styslinger, Wilson

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 the nomination. In
addition to any nominations made under Mead's Regulations, the Nominating &
Organization Committee will consider other suggestions for nominations to the
Board as may be offered by shareholders. Such suggestions for nominations should
be submitted

8
<PAGE>

to Thomas E. Palmer, Secretary. 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 $1,200 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 1997, each director other than Mr. Krol 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 a credited return
thereon, may be deferred until after termination of service.

In 1987, Mead adopted a Restricted Stock Plan ("Plan") under which directors who
were not employees or officers of Mead received grants of Common Shares with a
market value of $37,500 at five-year intervals. Grants were made in January
1988 and January 1993. A pro rata portion of $37,500 was granted to such
directors who were elected during the five-year period. The shares were subject
to forfeiture if the director left Mead within five years, unless the director
left as a result of death, disability or normal retirement (in which event, all
restrictions lapsed with respect to a pro rata portion of the restricted
shares). Additionally, all rights to the shares would vest upon the occurrence
of certain "change in control" events. The Plan was amended in 1996 to eliminate
future multi-year grants and provide for annual grants of $7,500 commencing in
1998. The Plan was also amended by shareholders in 1996 to provide for an
automatic annual grant to non-employee directors in an amount calculated by a
formula which equaled $5,085 in 1997. The Plan also permits directors under
certain conditions to defer a portion of their cash retainer in the form of
restricted shares.

The 1996 Stock Option Plan approved by shareholders provides for automatic
grants of non-qualified options to non-employee directors calculated by a
formula. Each non-employee director as of January 3, 1997 received a grant of
options to purchase 620 shares for an aggregate exercise price of $18,115 (the
market value on the date of grant).

Securities Ownership
Set forth in the following table is information as of January 23, 1998 with
respect to the number of Common Shares beneficially owned by each director, each
of the named executive officers, and by all directors and executive officers as
a group.

A person is considered to "beneficially own" any shares: (i) over which the
person exercises sole or shared voting or investment power, or (ii) of which the
person has the right to acquire beneficial ownership at any time within 60 days
(e.g., through the exercise of stock options).

9
<PAGE>

Unless otherwise indicated, voting and investment power is exercised solely by
the beneficial owner or is shared with such owner's spouse or children.

Ownership of Mead Common Shares
-------------------------------
as of January 23, 1998/(1)/
<TABLE>
<CAPTION>

Number Beneficially
Owned Including
Option Shares
Which May
Name of be Acquired
Beneficial Owner Option Shares Within 60 Days/(1)/
- ---------------- ------------- -------------------
<S> <C> <C>
John C. Bogle.................. 1,880 10,034
John G. Breen.................. 1,880 10,034
William R. Graber.............. 117,122 122,075
William E. Hoglund............. 1,880 8,086
James G. Kaiser................ 1,880 4,008
Elias M. Karter................ 217,170 226,247
John A. Krol................... 1,880 3,783
Susan J. Kropf................. 1,880 4,641
Raymond W. Lane................ 183,600 209,637
Charles S. Mechem, Jr.......... 1,880 12,697
Paul F. Miller, Jr............. 1,880 32,934
Thomas E. Palmer............... 131,012 141,581
Lee J. Styslinger, Jr.......... 1,880 45,774
Jerome F. Tatar................ 330,970 296,215
J. Lawrence Wilson............. 1,260 3,626

- ----------------------

All directors, nominees
and executive officers as
a group (18 persons)........... 1,236,514 1,397,393

- ----------------------
</TABLE>

(1) Includes restricted shares granted under Mead's Restricted Stock Plan,
and shares held in the named executive's common stock account as of
December 31, 1997, in the Mead Salaried Savings Plan. The named
executives may vote and direct the disposition of shares in their
account, except with respect to disposition to the extent such shares
constitute Mead matching shares.

10
<PAGE>

As of January 23, 1998, the number of shares beneficially owned (excluding
option shares which may be acquired within 60 days) (i) by the directors and
executive officers as a group was less than 1% of outstanding, and (ii) by all
directors and executive officers individually, less than 1% of outstanding.

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>
Percent of Common
Number of Common Shares Shares Outstanding
Name and Address of Beneficial Owners Beneficially Owned as of February 4, 1998
- ------------------------------------- ----------------------- ----------------------
<S> <C> <C>
Sanford C. Bernstein & Co., Inc., 6,292,943 6.0%(1)
767 Fifth Avenue, New York, New York 10153
- ------------------------------------
(1) Source: Schedule 13G dated February 4, 1998, filed by beneficial owner with SEC.
</TABLE>

Report of Compensation Committee on Executive Compensation

The Compensation Committee is comprised of five 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. Tatar, Chairman of the Board, President 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 designed to directly link to the financial performance of the
company; align the interests of the executives with company performance, thus
increasing shareholder value; to attract, retain and motivate executive talent;
and provide a balanced total compensation package that recognizes the individual
contributions of the executive and the business results of the company.

Base Pay
- --------

Salary range midpoints are set to approximate those midpoints of industrial
companies of similar size to Mead, as annually reported in the Hay Industrial
Management USA survey, representing 371 parent organizations and 552 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,
Consolidated Paper Corporation, Georgia-Pacific Corporation,

11
<PAGE>

International Paper Company, Potlatch Corporation, Stone Container Corporation,
Temple-Inland Inc., Union Camp Corporation, Westvaco Corporation, Weyerhaeuser
Company, and Willamette Industries, Inc.

Salary increases for the executive group as a whole are determined primarily by
a review of Mead's competitive position relative to the Hay Competition, and an
assessment of competitive salary increase movement for the upcoming year. The
salary increase for each named executive officer is determined by individual
performance, influenced to a minor degree by that individual's position in the
salary range. A fundamental basis of Mead's compensation philosophy is to
deliver moderate salary increases, in favor of incentive payouts that reward for
the performance of the company and the contribution of the executive.

Mr. Tatar's 1997 salary reflects his promotion to Chairman and Chief Executive
Officer.

The salaries of the other named executives remain well below the Mead midpoint
for their respective grades, and also lag the Hay Competition.

Annual Incentives
- -----------------

Annual incentive targets 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 under Mead's Corporate Annual Incentive
Plan which is funded 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
approximately 750 major industrial, retail and transportation 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.

Mead's financial performance for 1997 declined from 1996 levels due to continued
poor market prices, but reflected strong operational performance. For incentive
purposes, Mead's 1997 operating ROTC of 5.9% resulted in annual incentives for
all named executives, including Mr. Tatar, that were below target levels.

For 1998, the Committee modified the formula for determination of the annual
incentive award to include a factor that compares Mead ROTC to the company's
cost of capital, to forge a link between the executive's incentive and the
financial return realized by shareholders. This factor replaces the comparison
of Mead ROTC to the return of the Industrial Composite.

Long-Term Incentives
- --------------------

The Compensation Committee believes that a significant portion of senior
executive compensation must reflect the desire for sustained operational
excellence, reward competitive long-term financial results, and be linked to the
returns realized by shareholders. Thus, a major portion of

12
<PAGE>

the compensation package reflects awards for long-term results. Mead's long-term
compensation is delivered in three plans:

1. Performance Unit Plan
2. Restricted Stock Plan
3. Stock Option Plan

The Corporate Long-Term Incentive Plan (the "LTIP") is a performance unit plan
that provides incentive awards for attaining acceptable ROTC while growing
productive capital. The plan provides significant financial reward when the
return to shareowners exceeds Mead's cost of capital, particularly when
management is growing Mead's business.

The payout is based on these two components, further adjusted by the Competitive
Industry Factor: the formula involving competitive ROTC performance including
the FP Peers and the Industrial Composite.

The current plan measured business results over a 2-year period: capital growth
over the period 1996 through 1997, and the ROTC achieved in 1997. The resulting
payout to executives determined by the plan was so significantly below target
payout that the Committee determined that a zero payout was most appropriate.
No participants, including Mr. Tatar, received any long term incentive award.

For 1998, the Committee approved a change in Mead's Corporate Long Term
Incentive Plan to reflect a direct measure of shareholder value to determine the
level of long term incentive payout: Mead's two-year Total Shareholder Return
(share appreciation plus dividend reinvestment) is compared to two external
measures, the Total Shareholder Return (TSR) of the S&P 500 and the TSR of the
FP Peers, described above. Payout will be totally delivered as restricted
stock.

Restricted stock with a minimum of six-month 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. No restricted stock was
granted to named executives in 1997.

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. Significant discretionary adjustments (plus or minus 30%)
are made to grants to recognize the future potential of the individual.

13
<PAGE>

For 1997, Mr. Tatar received a grant of 146,300 stock options, which the
Compensation Committee believed appropriate with respect to the size of
competitive grants for Mr. Tatar's grade level. This includes a grant of 50,000
options associated with Mr. Tatar's promotion to Chairman and Chief Executive
Officer.

Stock Ownership Guidelines
- --------------------------

It is felt that executives are more significant contributors to the success of
the business if they have a significant ownership position in the organization.
The Compensation Committee feels that the design of Mead's executive
compensation plans deliver adequate opportunity for each executive to acquire
Mead shares. For the named executive officers, the company has established
guidelines that define a level of stock ownership that each executive is
expected to achieve and maintain.

The 1996 Stock Option Plan includes a strategic feature that will enhance
executive stock ownership: a provision of the new plan provides Reload Stock
Options, to be granted only to each executive who, upon exercising Incentive
Stock Options, purchased and held shares. The Reload Stock Option is
exercisable if the underlying shares from the Incentive Stock Option exercise
are held for a minimum of three years.

Compensation Deferral Opportunities
- -----------------------------------

Mead maintains the Executive Capital Accumulation Plan (the "ExCAP") to provide
executives with the opportunity to elect deferrals of earned compensation: base
salary, annual incentive payout and long-term incentive payout (cash portions
only). In addition, the plan provides for 401(k) contributions above the
qualified plan limit to be placed in the same non-qualified account, along with
a company match that is determined by the 401(k) formula.

Funds deferred are credited at a rate set by one of several market-driven
investment indices offered by the company. Payment of those amounts deferred
commence in accordance with the executive's deferral election, and generally
start at retirement or termination, or on a fixed date.

For 1997, all named executives elected to participate through compensation
deferrals and/or the 401(k) Top-Up.

Deductibility of Executive Compensation
- ---------------------------------------

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction
to public companies for individual compensation over one million dollars paid to
the company's Chief Executive Officer and to the four other most highly
compensated executive officers. For 1997, Mr. Tatar's compensation did not
exceed one million dollars.

14
<PAGE>

Summary
- -------

The Mead compensation program delivered as the mix of compensation elements
(base pay, annual incentives, long term incentives and deferral opportunities)
is an effective tool in supporting executive excellence. Mead's financial
results decreased in 1997; resulting in Mead's 1997 returns that surpass the
return of the FP Peers, but lag the Industrial Composite return.

The Compensation Committee remains confident that these elements of the
executive compensation program are key in rewarding executives who contribute to
the success of the company and in the demonstrated increase in shareholder
value.

Compensation Committee members:
John G. Breen (chair)
Susan J. Kropf
Charles S. Mechem, Jr.
Lee J. Styslinger, Jr.
J. Lawrence Wilson

Jerome F. Tatar (ex-officio, nonvoting member)

15
<PAGE>

Compensation Tables
The compensation for services performed during the fiscal years ended December
31, 1995, 1996 and 1997 for Mr. Tatar, each of the other four most highly
compensated executive officers and Mr. Steven C. Mason (who retired effective
November 1, 1997) is as follows. No stock appreciation rights were issued to the
named executives during 1995-1997.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long-Term Compensation
-------------------------------------------------------------
Annual Compensation Awards Payouts
------------------------------------------------ -------------------------------------------------------------

Other
Name Annual Restricted Securities All Other
and Compen- Stock Underlying LTIP Compen-
Principal sation/(2)/ Award(s)/(3)/ Options/ Payouts sation/(5)/
Position Year Salary($) Bonus($)/(1)/ ($) ($) SARs(#)/(4)(6)/ ($) ($)
- -------- ---- --------- -------- ----------- ------------ ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jerome F. 1997 $499,174 $382,100 $14,192 $0 146,300 $0 $27,995
Tatar, 1996 382,529 285,000 2,571 67,300 73,570 67,300 21,321
Chairman, 1995 261,344 219,700 0 0 21,400 296,100 12,760
President
and CEO

Eli M. 1997 $359,024 $201,800 $71,444 $0 59,570 $0 $21,159
Karter, 1996 331,997 200,000 55,434 51,900 49,700 51,900 20,932
Exec. VP 1995 292,980 219,700 64,743 0 21,400 296,100 16,871

Raymond 1997 $349,800 $212,200 $16,028 $0 50,000 $0 $18,630
W. Lane, 1996 309,690 200,000 4,683 51,900 44,474 51,900 18,007
Exec. VP 1995 252,504 219,700 641 0 21,400 296,100 13,722

Thomas E. 1997 $300,216 $141,800 $0 $0 30,000 $0 $17,552
Palmer, 1996 280,140 150,000 531 41,850 27,992 41,850 18,399
VP/GC 1995 259,256 198,300 0 0 21,400 266,700 5,392
and
Secretary

William R. 1997 $277,710 $141,800 $30,466 $0 32,262 $0 $16,538
Graber, 1996 253,488 150,000 29,416 41,850 28,000 41,850 16,073
VP/CFO 1995 230,760 198,300 13,462 0 21,400 266,700 12,176

Steven C. 1997 $615,000 $423,100 $413,715 $0 179,136 $0 $46,934
Mason, 1996 680,834 475,000 206,942 0 103,210 301,400 47,721
retired 1995 635,004 875,000 85,123 0 140,000 498,400 46,564
CEO
</TABLE>
- ---------------
(footnotes on following page)

16
<PAGE>

(1) Bonuses are earned in the year specified and paid in the following year.
Cash bonuses for 1997 consist of payments under the Corporate Annual
Incentive Plan.

(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, 1997: Mr. Tatar, 1,022 shares
($28,616 value); Mr. Karter, 1,126 shares ($31,528 value); Mr. Lane, 1,022
shares ($28,616 value); Mr. Palmer 1,126 shares ($31,528 value) and Mr.
Graber, 1,126 shares ($31,528 value). 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 December 31, 1997.

(4) Includes options transferred to family members and "reload options" granted
for ISO exercises and stock held in 1996 and 1997.

(5) Amounts consist solely of executive life insurance premiums paid by Mead
and matching contributions by Mead to qualified and non-qualified savings
plans.

(6) Numbers adjusted to give retroactive effect resulting from a two-for-one
stock split distributed December 1, 1997.

17
<PAGE>

OPTION/SAR GRANTS IN LAST FISCAL YEAR

The following table shows, for the named executive officers, additional
information about option grants during the fiscal year ended December 31, 1997.
No stock appreciation rights were granted in 1997.
<TABLE>
<CAPTION>
Individual Grants
- ---------------------------------------------------
Percent of Potential
Number of Total Realizable Value at
Securities Options/ Assumed Annual
Underlying SARs Rates of Stock Price
Options/ Granted to Exercise Appreciation/(2)/
SARs Employees or Base Expira- for Option Term
Granted/(1)(4)/ in Fiscal Price/(4)/ tion ----------------------------------------
Name (#) Year ($/Sh) Date 0%($) 5%($) 10%($)
- ---- ------------- --------- -------- -------- ----- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerome F. Tatar 96,300 5.08% $29.6250 02/26/07 $0 $1,794,166 $4,546,768
50,000 2.64% 30.9375 10/31/07 0 972,821 2,465,320
Eli M. Karter 50,000 2.64% 29.6250 02/26/07 0 931,550 2,360,731
2,060 0.11% 31.9375 06/25/07 0 41,376 104,854
7,510 0.40% 30.9375 10/31/07 0 146,178 370,291
Raymond W. Lane 50,000 2.64% 29.6250 02/26/07 0 931,550 2,360,731
Thomas E. Palmer 30,000 1.58% 29.6250 02/26/07 0 558,930 1,416,439
William R. Graber 30,000 1.58% 29.6250 02/26/07 0 558,930 1,416,439
2,262 0.12% 31.9375 06/25/07 0 45,433 115,136
Steven C. Mason 140,000 7.39% 29.6250 02/26/07 0 2,608,340 6,610,047
39,136 2.06% 30.9375 10/31/07 0 761,447 1,929,656
- --------------------------------------------------------------------------------------------------------------
0%/(3)/ 5%/(3)/ 10%/(3)/
------ ------ -------
Assumed Stock Price $29.6250 $48.26 $76.84
Market Value of All Shareholdings $3.09 billion $5.03 billion $8.01 billion
Named Executives Percentage 0.48% 0.48%
</TABLE>

18
<PAGE>

(1) Options are granted with terms of ten years and may be exercised beginning
one year or three years after date of grant, depending on the terms of the
option. Limited Rights (described on page 26) have been granted to each of
the named executive officers in an amount equal to the stock options
granted. 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. Also, reload option rights were included with
the grant of incentive stock options (3,374 shares were granted to each
named executive officer as an incentive stock option in 1997). Reload
options include an option price which is the fair market value as of the
date of exercise (not grant) of the original option, and is not exercisable
unless the shares purchased upon exercise of the original option are owned
for at least three years.

(2) The dollar amounts under the 5% and 10% columns are set by the Securities
and Exchange Commission and are not intended to forecast possible future
appreciation of Mead's stock.

(3) At an assumed 5% stock price appreciation over a ten-year period, Mead's
stock price would increase from $29.6250 per share (the market price on the
grant date) to $48.26 per share, and the aggregate market value of all
shareholder holdings as of the grant date would increase from $3.09 billion
to $5.03 billion. At an assumed 10% stock price appreciation over a ten-
year period, Mead's stock price would increase from $29.6250 per share to
$76.84 per share, and the aggregate market value of all shareholder
holdings as of the grant date would increase to $8.01 billion. The named
executives would receive only 0.48% of any such increase in market value.

(4) Numbers adjusted to give retroactive effect resulting from a two-for-one
stock split distributed December 1, 1997.

19
<PAGE>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

The following table shows information about stock option exercises during 1997
and unexercised stock options at year end 1997 for the named executive officers.
No stock appreciation rights were granted or exercised in 1997.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End(#)/(3)//(4)/ FY-End ($)/(2)//(4)/
Shares
Acquired Exercisable/ Exercisable/
Name On Exercise(#)/(3)/ Value Realized($)/(1)/ Unexercisable Unexercisable
- ---- ----------------- -------------------- ------------- ------------
<S> <C> <C> <C> <C>
Jerome F. Tatar 6,300 $91,350.00 173,100/157,870 $745,171/28,563
3,490 59,221.11
Eli M. Karter 2,060 31,479.00 147,900/69,270 707,928/14,072
5,940 73,878.75
7,200 107,550.00
8,700 138,384.81
7,510 166,746.03
10,490 234,713.75
Raymond W. Lane 4,800 71,700.00 129,126/54,474 541,977/11,045
1,200 17,925.00
2,000 28,062.60
2,400 47,700.00
Thomas E. Palmer -0- -0- 95,020/35,992 407,000/9,114
William R. Graber 262 3,979.13 78,860/38,262 284,940/14,812
3,138 48,736.91
5,540 73,058.75
2,000 25,687.60
Steven C. Mason 23,940 448,501.54 569,724/192,346 2,794,087/-0-
6,060 116,276.25
4,800 74,550.24
6,300 128,953.44
62,490 1,435,320.31
5,460 98,109.65
4,596 66,785.85
4,474 62,356.37
3,678 33,447.00
3,768 36,738.00

- -----------------------------
</TABLE>
20
<PAGE>

(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 grant 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 on the last trading day of
1997 and the grant price of the stock option.

(3) Numbers adjusted to give retroactive effect resulting from a two-for-one
stock split distributed December 1, 1997.

(4) Includes options transferred to family members.

21
<PAGE>

LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR

The following table shows, for the named executive officers, additional
information about the LTIP plan eligibility for the performance period that
commenced in 1997.
<TABLE>
<CAPTION>

Performance or Estimated Future Payouts
Number of Other Period Under Non-Stock
Shares, Until Price - Based Plans
Units or Maturation/(1)/ --------------------------------
Name Other Rights(#) or Payout Threshold($) Target($) Maximum($)
- ---- --------------- ------------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Jerome F. Tatar 658,500 1/1/97 to 12/31/98 $0 $658,500 $1,317,000
Eli M. Karter 282,700 1/1/97 to 12/31/98 0 282,700 565,400
Raymond W. Lane 282,700 1/1/97 to 12/31/98 0 282,700 565,400
Thomas E. Palmer 191,000 1/1/97 to 12/31/98 0 191,000 382,000
William R. Graber 191,000 1/1/97 to 12/31/98 0 191,000 382,000

- ----------------------
</TABLE>

(1) Plan based on Mead's two-year Total Shareholder Return (share price growth
plus dividends reinvested) versus the Total Shareholder Return - TSR - of
the S&P 500 Index and Mead's TSR ranking within the selected Forest
Products peer group. The TSR performance period is from December 31, 1996
to December 31, 1998.

22
<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, 1992 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: 1992-1997

[GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
Measurement Period Mead S&P S&P Paper
(Fiscal Year Covered) Corporation 500 INDEX & F.P.
<S> <C> <C> <C>
Measurement Pd-

FYE 12/31/92 $100.00 $100.00 $100.00
FYE 12/31/93 120.30 110.08 110.21
FYE 12/31/94 132.83 111.53 114.84
FYE 12/31/95 145.56 153.45 126.44
FYE 12/31/96 165.43 188.68 139.86
FYE 12/31/97 162.47 251.63 149.97
</TABLE>

<TABLE>
<CAPTION>
YEAR
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Mead 100 120.30 132.83 145.56 165.43 162.47
S&P 500 100 110.08 111.53 153.45 188.68 251.63
S&P Paper & F.P. 100 110.21 114.84 126.44 139.86 149.97
</TABLE>

Assumes $100 invested on December 31, 1992 in Mead common stock, S&P index, and
S&P Forest Products Index. Assumes reinvestment of dividends.

<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 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. Tatar,
23; Mr. Karter, 15; Mr. Lane, 22; Mr. Palmer, 5; Mr. Graber, 5. Earnings used
for calculation of retirement income for the named executives are salary, bonus
and incentive compensation (other than long-term incentive payments) paid as
described in the Summary Compensation Table. The benefits payable under Mead's
plan are reduced 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 calculated under Mead's non-contributory
retirement plan 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
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 pension plans of Mead and from
pension 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. Tatar, Karter, Lane,
Palmer and Graber 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, the excess and
supplemental retirement plans, based on compensation levels to date and assuming
retirement at age 62, calculated prior to the offsets described above, are as
follows: Mr. Tatar, $313,294; Mr. Karter, $271,933; Mr. Lane, $264,678; Mr.
Palmer, $236,090 and Mr. Graber, $220,127.

The lump sum amount paid, payable or accrued in 1997 under the retirement plan,
the excess and supplemental retirement plans for Mr. Steven C. Mason was
$7,908,876.

Benefit Trust
A Benefit Trust has been established to preserve the benefits earned under
Mead's unfunded supplemental retirement plan, incentive compensation election
plan, the deferred compensation plan for directors, the former directors
retirement plan, the excess earnings benefit plan, the directors capital
accumulation plan, the executive capital accumulation plan, and the Section 415
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

24
<PAGE>

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 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, 1997, the amounts payable to each of them would
have been as follows: Mr. Tatar, $700,000; Mr. Karter, $238,970; Mr. Lane,
$274,153; Mr. Palmer, $122,738 and Mr. Graber, $108,240.

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 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, 1997, 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.
Tatar, $3,317,000; Mr. Karter, $1,785,568; Mr. Lane, $1,767,400; Mr. Palmer,
$1,337,448 and Mr. Graber, $1,292,448.

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 counseling. 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.

25
<PAGE>

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.

Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership of such securities with the
Securities Exchange Commission and the New York Stock Exchange. Copies of these
reports must also be furnished to the Company. Based solely upon a review of
the copies of the forms filed under Section 16(a) and furnished to the Company,
or written representations from reporting persons after inquiry, the Company
believes that all filing requirements applicable to its executive officers and
directors were complied with during 1997.

Compensation Committee Interlocks and Insider Participation
The members of the Board's Compensation Committee are Messrs. Breen, Mechem,
Styslinger, Wilson and Ms. Kropf. In addition, Mr. Tatar, Mead's Chairman,
Chief Executive Officer and President, is an ex-officio nonvoting member of the
Board's standing committees, including the Compensation Committee (although Mr.
Tatar did not participate in any Compensation Committee discussions regarding
his compensation). Mr. Palmer, Mead's Vice President, General Counsel and
Secretary, is the nonvoting Secretary of the Committee, but is not a member of
the Committee.

Except as described above, none of the members of the Compensation Committee are
or were an officer or employee of Mead, or have any relationship requiring
disclosure under the federal securities rules.

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 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 LLP 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, 1998. Deloitte & Touche LLP served in such

26
<PAGE>

capacity for the fiscal year ended December 31, 1997. Representatives of
Deloitte & Touche LLP 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 1999 Annual Meeting of Shareholders must be received
by Mead at Courthouse Plaza Northeast, Dayton, Ohio 45463, Attention: Thomas E.
Palmer, Secretary, on or before November 19, 1998 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
Jerome F. Tatar
Chairman of the Board

Printed on [50# New Era Matte]

27
<PAGE>

THE MEAD CORPORATION

Annual Meeting of Shareholders, April 23, 1998

The undersigned holder(s) of Common Shares of THE MEAD CORPORATION, an Ohio
corporation (hereinafter referred as the "Company"), hereby appoints Charles S.
Mechem, Jr., Thomas E. Palmer and Jerome F. Tatar, 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 23, 1998 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>

THE DIRECTORS OF THE MEAD CORPORATION
INVITE YOU TO ATTEND
THE 1998 ANNUAL MEETING OF SHAREHOLDERS

PLEASE NOTE THE RETURN OF THE MORNING TIMEFRAME:
THURSDAY, APRIL 23, 1998 AT 11:00 A.M.
SINCLAIR COMMUNITY COLLEGE, BLAIR AUDITORIUM
DAYTON, OHIO

JEROME F. TATAR
CHAIRMAN, CHIEF EXECUTIVE OFFICER & PRESIDENT

Please mark
[x] votes as in
this example

-------------------------------------------------------
The Board recommends a vote FOR the following proposal.
-------------------------------------------------------

1. Election of Directors to serve until the Annual Meeting in the year 1999.
Nominees: John C. Bogle, John G. Breen, William E. Hoglund, James G.
Kaiser, Robert J. Kohlhepp, John A. Krol, Susan J. Kropf, Charles
S. Mechem, Jr., Lee J. Styslinger, Jr., Jerome F. Tatar and J.
Lawrence Wilson

FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[_] [_]

<S> <C>

MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]

[_]______________________________________ MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
For all nominees except as noted above

Receipt is acknowledged of Notice of the Annual Meeting and
Proxy Statement relating thereto.

Shareholder should mark, date this proxy and sign exactly as
name(s) appears hereon and return in the enclosed envelope.
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.
Signature:_________________________________________ Date:____________ Signature: _______________________________ Date:___________

</TABLE>
<PAGE>

PLEASE NOTE THE RETURN OF THE MORNING TIMEFRAME:
THURSDAY, APRIL 23, 1998 AT 11:00 A.M.
SINCLAIR COMMUNITY COLLEGE, BLAIR AUDITORIUM
DAYTON, OHIO

Please mark
[X] votes as in
this example

-------------------------------------------------------
The Board recommends a vote FOR the following proposal.
-------------------------------------------------------

1. Election of Directors to serve until the Annual Meeting in the year 1999.
Nominees: John C. Bogle, John G. Breen, William E. Hoglund, James G. Kaiser,
Robert J. Kohlhepp, John A. Krol, Susan J. Kropf, Charles S.
Mechem, Jr., Lee J. Styslinger, Jr., Jerome F. Tatar and J.
Lawrence Wilson

FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[_] [_]

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MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]

[_]____________________________________ MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
For all nominees except as noted above

Receipt is acknowledged of Notice of the Annual Meeting and Proxy
Statement relating thereto.

Shareholders should mark, date this proxy and sign exactly as name(s)
appears hereon and return in the enclosed envelope. 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.
Signature:_______________________________ Date:__________ Signature:___________________________________________ Date:___________

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CONFIDENTIAL VOTING INSTRUCTIONS
TO: FIDELITY MANAGEMENT TRUST COMPANY AS TRUSTEE
UNDER THE MEAD SALARIED SAVINGS PLAN,
UNDER THE MEAD SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
Annual Meeting of Shareholders: April 23, 1998

As a participant in a Savings Plan, I hereby instruct the Trustee to vote
(in person or by proxy) all Common Shares of THE MEAD CORPORATION which are
credited to my account at the Annual Meeting of Mead to be held at the Blair
Auditorium, Sinclair Community College, 444 West Third Street, Dayton, Ohio, on
Thursday, April 23, 1998, at 11:00 a.m. and at any and all adjournments thereof,
on the matters set forth herein, and, in the Trustee's discretion, on such other
business as may properly come before the meeting.

THIS DIRECTION IS BEING SOLICITED BY FIDELITY MANAGEMENT TRUST COMPANY, AS
TRUSTEE UNDER THE MEAD SALARIED SAVINGS PLAN (MSS) AND, SEPARATELY, AS TRUSTEE
UNDER THE MEAD SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES (BUP), THIS DIRECTION
WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED PARTICIPANT. IF NO INSTRUCTION IS INDICATED, THE TRUSTEE SHALL VOTE
SUCH WHOLE SHARES IN THE SAME PORTION AS THE SHARES FOR WHICH INSTRUCTIONS ARE
RECEIVED FROM OTHER PARTICIPANTS IN SUCH PLAN.

(CONTINUED AND TO BE VOTED AND SIGNED ON REVERSE SIDE)

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