<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
The 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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO]
The Mead Corporation
Mead World Headquarters
Courthouse Plaza Northeast
Dayton, Ohio 45463
March 9, 1999
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 22, 1999 at 11:00 a.m. Formal Notice of the Meeting
and Proxy Statement accompany this letter.
Promptly signing and returning your proxy will 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/ JERRY
Jerome F. Tatar
Chairman of the Board
<PAGE>
[LOGO]
Notice of Annual
Meeting of Shareholders
The Mead Corporation Dayton, Ohio
Mead World Headquarters March 9, 1999
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 22, 1999 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 23, 1999 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>
[LOGO]
Proxy Statement
For 1999 Annual Meeting
The Mead Corporation
Mead World Headquarters
Courthouse Plaza Northeast
Dayton, Ohio 45463
March 9, 1999
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 22, 1999 and any adjournment.
The close of business on February 23, 1999 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 101,916,102 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 1999
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 2000.
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 wants 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 the shareholder's shares, or to distribute the 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 the 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 form of proxy.
2
<PAGE>
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Nominees for Director for a one-year term expiring in 2000
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John C. Bogle Mr. Bogle is Senior Chairman of the Board of The Vanguard
Group of Investment Companies, and Senior Chairman of the
mutual funds in The Vanguard Group, Inc.
Age: 69
Director Since: 1978
Committees:
Audit, Corporate Objectives, Executive, Finance, Nominating
& Organization
Other Directorships:
Commercial General Union and Chris-Craft Industries, Inc.
John G. Breen Mr. Breen is Chairman, Chief Executive Officer and a
Director of The Sherwin-Williams Company.
Age: 64
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.
Age: 64
Director Since: 1993
Committees:
Corporate Objectives, Corporate Responsibility, Executive,
Finance, Nominating & Organization
Other Directorships:
Detroit Diesel Corporation and Capital Automotive REIT
3
<PAGE>
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Nominees for Director for a one-year term expiring in 2000
- --------------------------------------------------------------------------------
James G. Kaiser Mr. Kaiser is Chairman, Chief Executive Officer and a
Director of Avenir Partners, Inc. Prior to that he was
President and Chief Executive Officer of Quanterra
Incorporated from 1990 to 1996. He was also President and
CEO of Enseco, a business unit of Corning Incorporated, from
1993 to 1994.
Age: 56
Director Since: 1995
Committees:
Corporate Objectives, Corporate Responsibility, Finance,
Nominating & Organization
Other Directorships:
The Stanley Works and Sunoco, Inc.
Robert J. Kohlhepp Mr. Kohlhepp is a Director of Cintas Corporation and has
been Chief Executive Officer since 1995. Prior to that he
was President and Chief Operating Officer from 1984 until
1995.
Age: 55
Director Since: 1998
Committees:
Audit, Corporate Objectives, Corporate Responsibility,
Nominating & Organization
John A. Krol Mr. Krol retired as a Director and Chairman of E.I. du Pont
de Nemours and Company in December 1998. He was Chief
Executive Officer from 1995 through January 1998. Prior to
that he was Vice Chairman from April 1992 through September
1995. He was also President from 1995 through October
1997.
Age: 62
Director Since: 1994
Committees:
Corporate Objectives, Corporate Responsibility, Executive,
Finance, Nominating & Organization
Other Directorships:
Armstrong World Industries, Inc., J. P. Morgan and Milliken
& Company Inc.
4
<PAGE>
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Nominees for Director for a one-year term expiring in 2000
- --------------------------------------------------------------------------------
Susan J. Kropf Ms. Kropf has been a Director of Avon Products, Inc. since
January 1998, and Executive Vice President and President,
North America of Avon Products, Inc. since March 1998.
Prior to that, she was Executive Vice President and
President, Avon U.S., 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 from 1994 to July 1996.
Age: 50
Director Since: 1996
Committees:
Audit, Compensation, Corporate Objectives, Nominating &
Organization
Other Directorships:
Green Point Financial Corporation
Charles S. Mechem, Mr. Mechem has been Chairman and a Director of Convergys
Jr. Corporation since January, 1999. Prior to that he was
Chairman of Cincinnati Bell Inc. from 1996 through 1998.
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: 68
Director Since: 1976
Committees:
Compensation, Corporate Objectives, Executive, Finance,
Nominating & Organization
Other Directorships:
Convergys Corporation, Ohio National Life Insurance Company,
J.M. Smucker Company, FIRSTAR Corporation, The Arnold Palmer
Golf Company and Myers Y. Cooper Company
Lee J. Styslinger, Mr. Styslinger is Chairman and a Director of ALTEC
Jr. Industries, Inc.
Age: 65
Director Since: 1992
Committees:
Audit, Compensation, Corporate Objectives, Executive,
Nominating & Organization
Other Directorships:
Global Rental Company, Jemison Investment Company and
Regions Financial Corporation
5
<PAGE>
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Nominees for Director for a one-year term expiring in 2000
- --------------------------------------------------------------------------------
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: 52
Director Since: 1996
Committee:
Executive
Other Directorships:
Robbins & Myers, Inc. and National City Corporation
J. Lawrence Wilson Mr. Wilson is Chairman of the Board, Chief Executive Officer
and a Director of Rohm and Haas Company.
Age: 63
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 1998. The seven
standing committees of the Board and the number of meetings of each committee
during 1998 follow:
<TABLE>
<CAPTION>
Number of
Committee Meetings
--------- --------
<S> <C>
Audit 3
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, Kohlhepp, Kropf, 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, Kohlhepp, Krol, Kropf, Mechem,
- --------
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, Kohlhepp
- --------
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), Mechem (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
- --------
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: Mechem (chair), Bogle, Breen, Hoglund, Kaiser, Kohlhepp, Krol, Kropf,
- --------
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 were not employees in 1998 received $20,500 as an annual payment
for services as a director and $1,200 per meeting for attendance at meetings of
the Board and its committees. Directors who are not employees in 1999 will
receive $24,000 annually for services as a director, $1,500 per meeting for
attendance at meetings of the Board, and $1,200 per meeting for attendance at
committee meetings of the Board. Directors who are Mead employees are not
compensated for their services as directors. In 1998, 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 by which
receipt of compensation for Board service, together with a credited return
thereon, may be deferred until after termination of service.
Non-employee directors receive restricted shares from Mead. The 1987 Restricted
Stock Plan was amended in 1996 by shareholders to provide for annual grants of
Common Shares with a market value of $7,500 commencing in 1998 to non-employee
directors. The Plan also provides for an automatic annual grant to non-employee
directors in an amount calculated by a formula which equaled $5,449 in 1998.
The Plan also permits directors under certain conditions to defer a portion of
their cash retainer in the form of restricted shares.
Non-employee directors receive stock options from Mead. 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, 1998 received a grant of options to purchase 660
shares for an aggregate exercise price of $18,728 (the market value on the date
of grant).
Securities Ownership
Set forth in the following table is information as of January 22, 1999 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 the owner's spouse or children.
Ownership of Mead Common Shares
-------------------------------
as of January 22, 1999/(1)/
<TABLE>
<CAPTION>
Number Beneficially
Owned Including
Option Shares
Which May
Name of All be Acquired
Beneficial Owner Option Shares Within 60 Days/(1)/
---------------- ------------- --------------------
<S> <C> <C>
John C. Bogle............... 2,560 11,135
John G. Breen............... 2,560 11,135
William R. Graber........... 142,122 147,052
William E. Hoglund.......... 2,560 9,187
James G. Kaiser............. 2,560 5,109
Elias M. Karter............. 248,400 259,400
Robert J. Kohlhepp.......... 1,280 2,418
John A. Krol................ 2,560 5,728
Susan J. Kropf.............. 2,560 5,771
Raymond W. Lane............. 224,600 255,885
Charles S. Mechem, Jr. ..... 2,560 14,039
Thomas E. Palmer............ 144,592 158,154
Lee J. Styslinger, Jr. ..... 2,560 46,875
Jerome F. Tatar............. 463,470 488,611
J. Lawrence Wilson.......... 1,940 5,327
------------------------
All directors, nominees
and executive officers as
a group (19 persons)........ 1,553,544 1,766,646
------------------------
</TABLE>
(1) Includes shares granted under Mead's Restricted Stock Plan and shares held
in the named executive's common stock account as of December 31, 1998 in
the Mead Savings Plan. The named executives may vote and direct the
disposition of shares in their account, except with respect to disposition
to the extent shares constitute Mead matching shares.
10
<PAGE>
As of January 22, 1999, 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 was less than 1% of outstanding.
The following table describes 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 Recent Date
- ------------------------------------- ------------------ -----------------
<S> <C> <C>
Sanford C. Bernstein & Co., Inc., 9,519,574/(1)/ 9.30%
767 Fifth Avenue, New York, New York 10153
The Prudential Insurance Company of America
751 Broad Street, Newark, New Jersey 07102-3777 6,734,514/(2)/ 6.55%
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Source: Schedule 13G dated February 5, 1999, filed by beneficial owner
with the SEC.
(2) Source: Schedule 13G dated February 1, 1999, filed by beneficial owner
with the SEC.
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
11
<PAGE>
competitive peers. These peers (the "FP Peers") are Boise Cascade Corporation,
Champion International Corporation, Consolidated Paper Corporation, Georgia-
Pacific Corporation, International Paper Company, Potlatch Corporation, Smurfit
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 1998 salary was not adjusted in 1998 from the level set by the Board
for his recent November 1997 promotion.
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
company's cost of capital. The Mead ROTC comparison to the ROTC of each of the
FP Peers and to the company's cost of capital is weighted equally.
Mead's financial performance for 1998 declined from 1997 levels due to continued
poor market prices, but reflected strong operational performance. For incentive
purposes, Mead's 1998 operating ROTC of 6.2% excludes the effect of a number of
strategic actions, such as the sale of Zellerbach and Northern Hardwoods. As a
result of this financial performance, the 1998 annual incentives for all named
executives, including Mr. Tatar, were below target levels. The payout was
delivered as 100% cash for all participants, except Mr. Tatar. The Board of
Directors delivered a portion of the payout as cash to Mr. Tatar with a
mandatory deferral of the balance until retirement.
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.
12
<PAGE>
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 the compensation
package reflects awards for long-term results. Mead's long-term compensation can
be delivered in three plans:
. Performance Unit Plan
. Restricted Stock Plan
. Stock Option Plan
The Corporate Long-Term Incentive Plan (the "LTIP") is a performance unit plan
that provides long term incentive awards for attaining shareholder value at or
above the median of the FP Peers and is adjusted for a comparison of Mead total
shareholder return ("TSR") to that of the S&P 500 Index of companies. The plan
compares relative TSR over a two year period.
For the two-year performance period ending December 31, 1998, Mead's TSR was at
the median of the FP Peers, and significantly below the S&P 500 Index TSR. The
resulting payout determined by the LTIP to all the named executives was well
below target levels. For all participants, including Mr. Tatar, the payout was
delivered as 100% 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. As indicated previously,
100% of the LTIP payout was delivered as restricted stock to all named
executives, including Mr. Tatar.
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.
For 1998, Mr. Tatar received a grant of 150,000 stock options, consisting of a
grant of 100,000 options which the Compensation Committee believed appropriate
with respect to the size of competitive grants for Mr. Tatar's grade level plus
a grant of 50,000 options associated with Mr. Tatar's promotion to Chairman and
Chief Executive Officer.
13
<PAGE>
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 believes 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 1998, all named executives elected to participate through compensation
deferrals and/or the 401(k) Top-Up. In addition, the Board of Directors
mandated that a portion of Mr. Tatar's annual incentive payouts be deferred
until retirement in order to plan for the maximum tax deduction in 1998.
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 1998, Mr. Tatar's compensation would
normally have exceeded one million dollars. To manage executive compensation in
the best interests of the company's shareowners, the Committee recommended and
the Board of Directors approved a mandatory deferral of a portion of Mr. Tatar's
annual incentive payment to avoid 1998 compensation levels that would place Mr.
Tatar over the Section 162(m) limit.
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 operating
financial results increased in 1998 compared to the operating results of the FP
Peers. Appropriate with the design of Mead's executive program, 1998
compensation levels for all named executive officers reflected this improved
financial performance relative to the competition.
The Compensation Committee remains confident 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, 1996, 1997 and 1998 for Mr. Tatar and each of the other four most highly
compensated executive officers is as follows. No stock appreciation rights were
issued to the named executives during 1996-1998.
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 Award(s) Options/ Payouts(6) sation(7)
Position Year Salary($) Bonus($)(1) ($)(2) ($)(3) SARs(#)(4)(5) ($) ($)
- -------- ---- --------- ----------- ------- -------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jerome F. 1998 $700,008 $625,000 $18,631 $144,900 150,000 $ 0 $43,211
Tatar, 1997 499,174 382,100 14,192 0 146,300 0 27,995
Chairman, 1996 382,529 285,000 2,571 67,300 73,570 67,300 21,321
President
and CEO
Raymond 1998 $381,940 $240,000 $30,116 $ 62,200 41,000 $ 0 $22,906
W. Lane, 1997 349,800 212,200 16,028 0 50,000 0 18,630
Exec. VP 1996 309,690 200,000 4,683 51,900 44,474 51,900 18,007
Eli M. 1998 $378,396 $240,000 $66,973 $ 62,200 41,800 $ 0 $25,076
Karter, 1997 359,024 201,800 71,444 0 59,570 0 21,159
Exec. VP 1996 331,997 200,000 55,434 51,900 49,700 51,900 20,932
Thomas E. 1998 $322,052 $210,000(8) $ 0 $ 42,000 25,000 $ 0 $23,285
Palmer, 1997 300,216 141,800 0 0 30,000 0 17,552
VP/GC 1996 280,140 150,000 531 41,850 27,992 41,850 18,399
and
Secretary
William R. 1998 $317,373 $180,000 $89,507 $ 42,800 25,000 $ 0 $19,770
Graber, 1997 277,710 141,800 30,466 0 32,262 0 16,538
VP/CFO 1996 253,488 150,000 29,416 41,850 28,000 41,850 16,073
</TABLE>
______________________
(footnotes on following page)
16
<PAGE>
(1) Bonuses are earned in the year specified and paid in the following year.
Except as otherwise noted, cash bonuses for 1998 consist of payments under
the Corporate Annual Incentive Plan. Mr. Tatar deferred receipt of a
portion of the award until after the completion of his Mead employment
service.
(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) The value of the restricted stock for purposes of the table is based on
closing market prices on the date of the award. Dividends are paid on
Restricted Stock in the same manner and amount as paid on Mead's common
shares.
(4) Includes "reload options" granted for ISO exercises and stock held in
1996, 1997 or 1998, if any.
(5) Numbers adjusted to give retroactive effect resulting from a two-for-one
stock split distributed December 1, 1997.
(6) The LTIP is a performance unit plan based on Total Shareholder Return
versus the Total Shareholder Return of the S&P 500 Index and Mead's ranking
within the selected Forest Products peer group. The performance period
included 1997 and 1998. The payout for the performance period was made in
February 1999, was delivered as 100% restricted stock, is reported under
"Restricted Stock Award(s)" and carries a restriction period of six months.
Shares awarded: Mr. Tatar - 4,860; Mr. Lane - 2,086; Mr. Karter -2,086; Mr.
Palmer - 1,409; Mr. Graber - 1,436.
(7) Amounts consist solely of executive life insurance premiums paid by Mead
and matching contributions by Mead to qualified and non-qualified savings
plans.
(8) Includes special award related to the sale of Zellerbach.
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, 1998.
No stock appreciation rights were granted in 1998.
<TABLE>
<CAPTION>
Individual Grants
- ----------------------------------------------------------
Potential
Percent of Realizable Value at
Number of Total Assumed Annual
Securities Options/ Rates of Stock Price
Underlying SARs Appreciation
Options/ Granted to Exercise for Option Term(2)
SARs Employees or Base Expira- ------------------------------
Granted in Fiscal Price tion
Name (#)(1) Year ($/Sh) Date 0% ($) 5%($) 10%($)
- ---- ------- ---------- -------- ------- ------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerome F. Tatar 150,000 8.68% $34.2188 02/25/08 $0 $3,227,991 $8,180,374
Raymond W. Lane 41,000 2.37% 34.2188 02/25/08 0 882,317 2,235,969
Eli M. Karter 37,000 2.14% 34.2188 02/25/08 0 796,238 2,017,826
4,800 .28% 31.3438 10/30/08 0 94,617 239,779
Thomas E. Palmer 25,000 1.45% 34.2188 02/25/08 0 537,998 1,363,396
William R. Graber 25,000 1.45% 34.2188 02/25/08 0 537,998 1,363,396
----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION> 0%(3) 5%(3) 10%(3)
----- ----- ------
<S> <C> <C> <C>
Assumed Stock Price $34.2188 $55.74 $88.75
Market Value of All Shareholdings $3.49 billion $5.68 billion $9.04 billion
Named Executives Percentage 0.28% 0.28%
</TABLE>
- --------------------
(1) Options are granted with terms of ten years and may be exercised beginning
one year or up to three years after date of grant, depending on the terms
of the option. Limited Rights (described on page 24) 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 exercise. Also, reload option rights were included with the
grant of incentive stock options (2,922 shares were granted to each named
executive officer as an incentive stock option in 1998). 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 $34.2188 per share (the market price on the
grant date) to $55.74 per share, and the aggregate market value of all
shareholder holdings as of the grant date would increase from $3.49 billion
to $5.68 billion. At an assumed 10% stock price appreciation over a ten-
year period, Mead's stock price would increase from $34.2188 per share to
$88.75 per share, and the aggregate market value of all shareholder
holdings as of the grant date would increase to $9.04 billion. The named
executives would receive 0.28% of any such increase in market value.
18
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table shows information about stock option exercises during 1998
and unexercised stock options at year end 1998 for the named executive
officers. No stock appreciation rights were granted or exercised in 1998.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)(2)
Shares
Acquired Exercisable/ Exercisable/
Name on Exercise(#) Value Realized ($)(1) Unexercisable Unexercisable
- ---- -------------- --------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Jerome F. Tatar 4,000 $ 41,125.20 295,600/167,870 $659,583/35,071
5,700 92,268.75
3,000 48,843.90
4,800 49,350.24
Raymond W. Lane -0- -0- 179,126/45,474 614,611/13,562
Eli M. Karter 4,800 41,250.24 187,330/61,070 692,498/19,403
5,770 107,646.85
Thomas E. Palmer 2,460 32,979.50 113,600/30,992 348,210/12,413
5,460 61,937.15
3,500 47,250.00
William R. Graber -0- -0- 108,860/33,262 329,299/18,187
- ----------------------
</TABLE>
(1) Based upon the difference between the fair market value (the average of the
high and the low prices) of Mead common shares on the date of exercise and
the grant price of the stock option.
(2) Based upon the difference between the fair market value (the average of the
high and the low prices) of Mead common shares on the last trading day of
1998 and the grant price of the stock option.
19
<PAGE>
LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR
The following table shows, for the named executive officers, additional
information about the LTIP plan eligibility for the performance period that
commenced in 1998.
<TABLE>
<CAPTION>
Performance or Estimated Future Payouts
Number of Other Period Under Non-Stock
Shares, Until Price - Based Plans
Units or Maturation(1) ---------------------------------------
Name Other Rights(#) or Payout Threshold($) Target($) Maximum($)
- ---- --------------- -------------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Jerome F. Tatar 823,600 1/1/98 to 12/31/99 $0 $823,600 $1,647,200
Raymond W. Lane 310,000 1/1/98 to 12/31/99 0 310,000 620,000
Eli M. Karter 310,000 1/1/98 to 12/31/99 0 310,000 620,000
Thomas E. Palmer 210,100 1/1/98 to 12/31/99 0 210,100 420,200
William R. Graber 236,500 1/1/98 to 12/31/99 0 236,500 473,000
</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, 1997
to December 31, 1999.
20
<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, 1993 in
Mead common stock, in the S&P 500 Index, in the S&P Paper and Forest Products
Composite Index and in the S&P Basic Materials Index. The information on these
indices have 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: 1993-1998
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Mead Corporation S&P 500 Index S&P Paper & F. P. S&P Basic Materials
<S> <C> <C> <C> <C>
Measurement Pd -
FYE 12/31/93 100.00 100.00 100.00 100.00
FYE 12/31/94 110.42 101.32 104.20 103.67
FYE 12/31/95 121.00 139.40 114.72 122.47
FYE 12/31/96 137.52 171.40 126.90 132.96
FYE 12/31/97 135.06 228.59 136.07 135.60
FYE 12/31/98 144.33 293.91 138.77 129.33
</TABLE>
<TABLE>
<CAPTION>
YEAR
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Mead 100.00 110.42 121.00 137.52 135.06 144.33
S&P 500 100.00 101.32 139.40 171.40 228.59 293.91
S&P Paper & F.P. 100.00 104.20 114.72 126.90 136.07 138.77
S&P Basic Materials 100.00 103.67 122.47 132.96 135.60 129.33
</TABLE>
Assumes $100 invested on December 31, 1993 in Mead common stock, S&P Index, S&P
Forest Products Index, and S&P Basic Materials Index. Assumes reinvestment of
dividends.
21
<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,
24; Mr. Karter, 16; Mr. Lane, 23; Mr. Palmer, 6; Mr. Graber, 6. 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 the 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, $429,893; Mr. Karter, $292,523; Mr. Lane, $289,276; Mr.
Palmer, $239,792 and Mr. Graber, $230,348.
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 LTIP, 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 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 the 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
deficiency.
22
<PAGE>
Termination Arrangements
General Severance Program. Mead has 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)
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, 1998, the
amounts payable to each of them would have been as follows: Mr. Tatar, $700,008;
Mr. Karter, $266,436; Mr. Lane, $320,058; Mr. Palmer, $143,175 and Mr. Graber,
$159,878.
Severance Agreements. Mead has in place severance agreements with executive
officers and other 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 the period, as such terms are defined
in the 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 the most
recent annual award under the plans. Based on levels of compensation as of
December 31, 1998, 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, $4,249,816; Mr. Karter, $1,913,304; Mr. Lane,
$1,917,696; Mr. Palmer, $1,422,000 and Mr. Graber, $1,488,608.
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.
23
<PAGE>
Limited Stock Appreciation Rights
Mead's stock option plans authorize the Compensation Committee to grant limited
stock appreciation 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 1998.
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. The notice deadline regarding
discretionary authority for voting at the 2000 Annual Meeting of Shareholders is
January 31, 2000. Notice must be received by Mead at Courthouse Plaza,
Northeast, Dayton, Ohio 45463, Attention: Secretary.
24
<PAGE>
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, 1999. Deloitte & Touche LLP served in such capacity for the fiscal year
ended December 31, 1998. 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 2000 Annual Meeting of Shareholders must be received
by Mead at Courthouse Plaza Northeast, Dayton, Ohio 45463, Attention: Secretary,
on or before November 18, 1999 in order to be eligible for such inclusion.
Solicitation of Proxies
The entire cost of solicitation will be paid 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, telegram, or electronically, if authorized by law.
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 to aid in the solicitation of proxies, for which Mead
will pay an estimated $14,000. In addition, Mead will reimburse Kissel-Blake,
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
25
<PAGE>
THE 1999 ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, APRIL 22, 1999 AT 11:00 A.M.
SINCLAIR COMMUNITY COLLEGE, BLAIR AUDITORIUM
DAYTON, OHIO
ME217A DETACH HERE
- --------------------------------------------------------------------------------
[X] Please mark
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 2000.
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
[ ] ___________________________________________
For all except as noted above
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Receipt is acknowledged of Notice of the Annual Meeting and Proxy
Statement.
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:_________________
<PAGE>
ME217B DETACH HERE
- --------------------------------------------------------------------------------
CONFIDENTIAL VOTING INSTRUCTIONS
TO: FIDELITY MANAGEMENT TRUST COMPANY AS TRUSTEE
UNDER THE MEAD SAVINGS PLAN
Annual Meeting of Shareholders: April 22, 1999
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 22, 1999, 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 SAVINGS PLAN. 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)
SEE REVERSE SEE REVERSE
SIDE SIDE
<PAGE>
THE DIRECTORS OF THE MEAD CORPORATION
INVITE YOU TO ATTEND
THE 1999 ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, APRIL 22, 1999 AT 11:00 A.M.
SINCLAIR COMMUNITY COLLEGE, BLAIR AUDITORIUM
DAYTON, OHIO
JEROME F. TATAR
CHAIRMAN, CHIEF EXECUTIVE OFFICER & PRESIDENT
MED16A DETACH HERE
- --------------------------------------------------------------------------------
[X] Please mark
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 2000.
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
[ ] ___________________________________________
For all except as noted above
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Receipt is acknowledged of Notice of the Annual Meeting and Proxy
Statement.
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:_________________
<PAGE>
MED16B DETACH HERE
- -------------------------------------------------------------------------------
THE MEAD CORPORATION
Annual Meeting of Shareholders, April 22, 1999
The undersigned holder(s) of Common Shares of THE MEAD CORPORATION, an Ohio
corporation (hereinafter referred to 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 22, 1999 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 [SEE REVERSE
SIDE] SIDE]
