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
MOSINEE PAPER CORPORATION
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1) Amount Previously Paid: ___________________________
(2) Form, Schedule or Registration Statement No: __________________
(3) Filing Party: ___________________________
(4) Date Filed: _____________
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_______________
To Our Shareholders:
The annual meeting of shareholders of Mosinee Paper Corporation will
be held at the Westwood Conference Room, Westwood Center, Wausau Insurance
Companies, 1800 West Bridge Street, Wausau, Wisconsin, on Thursday, April
17, 1997, at 11:00 a.m., for the following purposes:
1. To elect two Class II directors for terms which will expire at
the annual meeting of shareholders to be held in 2000;
2. To consider and approve certain amendments to the Company's 1994
Stock Option Plan which would increase the number of shares
available for the granting of options and provide for the
automatic granting of options to directors;
3. To approve the appointment of Wipfli Ullrich Bertelson LLP as
independent auditors for the year ending December 31, 1997; and
4. To transact such other business as may properly come before the
meeting.
PLEASE PROMPTLY VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE.
DATED: March 17, 1997
MOSINEE PAPER CORPORATION
Gary P. Peterson
Secretary
________________________
A RETURN ENVELOPE REQUIRING NO POSTAGE IF MAILED IN THE UNITED STATES IS
ENCLOSED FOR YOUR CONVENIENCE IN SUBMITTING YOUR PROXY.
<PAGE>
MOSINEE PAPER CORPORATION MARCH 17, 1997
1244 KRONENWETTER DRIVE
MOSINEE, WISCONSIN 54455
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 17, 1997
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Mosinee
Paper Corporation (the "Company") for use at the annual meeting of
shareholders to be held on April 17, 1997, and at any adjournment thereof
(the "Annual Meeting") for the purposes set forth in the foregoing notice.
Officers, directors and employees of the Company may solicit proxies
by telephone, telegraph, facsimile, electronic mail or in person in
addition to solicitation by mail. None of these persons will receive
additional compensation. Expenses incurred in connection with the
solicitation of proxies, including the reasonable expenses of brokers,
fiduciaries and other nominees in forwarding proxy material, will be borne
by the Company.
VOTING OF PROXIES
Each holder of the Company's common stock is entitled to one vote in
person or by proxy for each share held of record on all matters to be
voted upon at the Annual Meeting. Only shareholders of record on
February 26, 1997 are entitled to notice of and to vote at the Annual
Meeting.
If a shareholder is a participant in the Company's Dividend
Reinvestment Plan (the "DRP"), the proxy card will also serve to direct
the administrator of the DRP with respect to the voting of any shares of
common stock held for the participant under the DRP at the close of
business on the record date. Shares beneficially owned by participants in
the DRP for which no proxy or other voting instructions are received will
not be voted.
With respect to the election of directors, shareholders may vote in
favor of the nominees specified on the accompanying form of proxy or may
withhold their vote. Votes that are withheld will be excluded entirely
from the voting for directors and will have no effect. The nominees
receiving the largest number of votes will be elected as directors of the
Company.
On all matters other than the election of directors, shareholders may
vote in favor of a proposal, against a proposal or abstain from voting.
Abstentions on any matter presented to the Annual Meeting will be treated
as shares that are present and entitled to vote for purposes of
determining whether a quorum is present, but such abstentions shall be
treated as unvoted for purposes of determining whether the matter has been
approved by the shareholders. If the votes cast in favor of a proposal
(other than the election of directors) exceed the votes cast against the
proposal, the matter will be approved by the shareholders.
<PAGE>
Brokers who hold shares of the Company's common stock in street name
for customers may have discretionary authority to vote on certain matters
when they have not received instructions from beneficial owners, but may
not have authority to vote the shares on other matters. As to matters for
which the broker cannot vote shares held in street name, the shares will
be recorded as a "broker non-vote." Shares reported as broker non-votes
will not be considered present and entitled to vote with respect to the
matter and will not be counted for purposes of determining whether a
quorum is present.
A shareholder who executes a proxy may revoke it at any time before it
is voted by giving written notice to the Secretary of the Company or oral
notice to the presiding officer at the Annual Meeting.
The persons named in the accompanying form of proxy, as members of the
Proxy Committee of the Board of Directors, will vote the shares subject to
each proxy. The proxy in the accompanying form will be voted as specified
by each shareholder, but if no specification is made, each proxy will be
voted:
(1) TO ELECT Messrs. Daniel R. Olvey and Richard G. Jacobus to terms
of office as Class II directors which will expire at the annual
meeting of shareholders to be held in 2000 (see "Election of
Directors");
(2) TO APPROVE amendments to the 1994 Stock Option Plan which will
increase the number of shares available under the plan to 300,000
and provide for the granting of options to directors (see
"Approval of Amendments to 1994 Stock Option Plan");
(3) TO APPROVE the appointment of Wipfli Ullrich Bertelson LLP as the
Company's independent auditors for the year ending December 31,
1997 (see "Approval of Independent Auditors"); and
(4) IN THE BEST JUDGMENT of those named as proxies on the enclosed
form of proxy on any other matters to properly come before the
Annual Meeting (see summary of Company bylaw requirements under
"Shareholder Proposals" and accompanying form of proxy).
ELECTION OF DIRECTORS
The Company's restated articles of incorporation, as amended, provide
that the number of directors shall be determined by the Board of Directors
pursuant to the bylaws, but that there shall be not less than three nor
more than ten directors, divided into three classes to be as nearly equal
in size as possible. Except in cases of the appointment of a director by
the Board to fill a vacancy resulting from the creation of a new
directorship, one class of directors is to be elected each year to serve a
three-year term. The Board has fixed the number of directors at six,
consisting of two Class I, Class II and Class III directors, respectively.
At the Annual Meeting, Messrs. Daniel R. Olvey and Richard G. Jacobus
will be candidates for reelection to the Board of Directors. Each of the
nominees has consented to serve if elected, but in case one or both of the
nominees is not a candidate at the Annual Meeting it is the intention of
the Proxy Committee to vote for such substitute or substitutes as may be
designated by the Board.
<PAGE>
The following information is furnished with respect to the nominees
and all other directors:
<TABLE>
<CAPTION>
CLASS
NAME, AGE, AND YEAR
PRINCIPAL OCCUPATION IN WHICH YEAR FIRST
OR EMPLOYMENT AND TERM WILL BECAME A
OTHER AFFILIATIONS EXPIRE DIRECTOR
<S> <C> <C>
Nominees For a Three-Year Term
Daniel R. Olvey, 48, Class II 1993
President and Chief Executive 2000
Officer; Mr. Olvey has served
in several executive capacities
of increasing responsibility with
the Company since 1989
Richard G. Jacobus, 67, Class II 1985
Chairman and CEO, Jacobus Wealth 2000
Management, Inc. (personal investment
management); formerly, President and
Chief Executive Officer, Johnson
International, Inc.
CONTINUING DIRECTORS
Richard L. Radt, 65, Class I 1988
Vice Chairman of the Board; 1999
previously, President and
Chief Executive Officer of
the Company
Walter Alexander, 62, Class I 1987
President of Alexander 1999
Lumber Co.; also a director
of Old Second Bancorp, Inc.
San W. Orr, Jr., 55, Class III 1972
Chairman of the Board; 1998
Attorney, Estates of A. P. Woodson
& Family; also Chairman of the
Board of Wausau Paper Mills
Company, Vice Chairman of the
Board of MDU Resources Group, Inc.,
and a director of Marshall & Ilsley
Corporation
Harry R. Baker, 64 Class III 1995
President and Chief Executive 1998
Officer, Marathon Electric
Manufacturing Corporation; also a
director of Wausau Paper Mills Company
</TABLE>
<PAGE>
COMMITTEES AND COMPENSATION OF BOARD OF DIRECTORS
COMMITTEES AND MEETINGS
The Board of Directors annually establishes Audit, Nominating and
Executive Compensation & Bonus Committees.
<PAGE>
During 1996, Messrs. Jacobus, Baker and Alexander served as members of
the Audit Committee. The Audit Committee held two meetings during 1996 to
review the audit of the previous fiscal year, the scope of the current
year's audit engagement, the range of audit fees and the nature of
consulting fees.
The Nominating Committee consists of Messrs. Orr, Alexander and Radt.
The Nominating Committee met once in 1996 to consider and recommend to the
Board of Directors nominees for election as directors. Inquiries
concerning nominations with pertinent background information should be
directed to the Chairman of the Nominating Committee in care of the
Company. Pursuant to the Company's bylaws, shareholders entitled to vote
at the annual meeting of shareholders to be held in 1998 may make
nominations from the floor only if proper notice of the proposed
nomination has been provided to the Secretary of the Company not earlier
than January 17, 1998 and not later than February 16, 1998. The precise
requirements, including the information required to be provided in the
notice and the procedures for notice in the event the date of the annual
meeting is changed, are set forth in the Company's bylaws which may be
obtained from the Secretary of the Company.
Messrs. Orr, Jacobus and Baker served as members of the Executive
Compensation & Bonus Committee during 1996. The Committee met three times
during 1996 to review and establish executive compensation. The Committee
is responsible for the establishment and implementation of executive bonus
programs. See subcaption "Committees' Report on Executive Compensation
Policies," page 10.
During 1996, the Board of Directors met eight times, including its
annual organizational meeting. All of the directors of the Company
attended at least 75% of the aggregate number of meetings of the Board and
meetings of committees of the Board on which they served.
DIRECTOR COMPENSATION
Directors received a base annual fee of $12,000 and $1,000 for each
meeting of the Board attended in 1996. No additional compensation is paid
to directors for service on committees. Directors are reimbursed for
normal and customary travel expenses relating to meetings of the Board of
Directors and Company business.
Under the Company's Deferred Compensation Plan for Directors,
directors may elect each year to defer fees otherwise payable in cash
during the year. Amounts deferred become payable in a lump sum or in
quarterly installments after the director's termination of service as a
director. Payments are made in a lump sum in the event a director's
service terminates as the result of a change of control of the Company, as
defined by the plan. During the period of deferral, a director may make
annual elections that the deferred fees be credited with interest at the
prime rate in effect as of each calendar quarter at The Chase Manhattan
Bank of New York or that the deferred fees be converted into stock
equivalent units. If stock equivalent units are elected, the director's
account is also credited with common stock equivalent units representing
the shares of common stock which could, hypothetically, have been
purchased with the hypothetical cash dividends which would have been paid
on the accumulated stock equivalent units if they had been actual shares
of stock. Upon distribution, stock units are converted to cash based upon
the fair market value of the Company's common stock at the time of
distribution. During 1996, all directors other than Mr. Radt deferred the
directors' fees otherwise payable to them.
<PAGE>
The Company maintains a supplemental retirement benefit plan under
which Mr. Orr is entitled to receive a monthly retirement benefit in an
amount equal to 50% of his highest five-year average monthly compensation
beginning on the last to occur of his termination of employment or
attainment of age 60. Upon Mr. Orr's death, his surviving spouse will be
entitled to receive 50% of the monthly benefit otherwise payable to Mr.
Orr. The plan is unfunded and provides for the accelerated payment of the
present value of benefits in a lump sum in the event of a change of
control of the Company, as defined in the plan.
BENEFICIAL OWNERSHIP OF COMMON STOCK
As of the close of business on February 26, 1997, the record date, the
Company had 10,405,949 shares of common stock outstanding (including
252,264 shares subject to options exercisable within 60 days).
The following table sets forth, based on statements filed with the
Securities and Exchange Commission or otherwise made to the Company, the
amount of common stock of the Company which is known by the Company to be
beneficially owned as of December 31, 1996 by each person then known to
the Company to be the beneficial owner of more than 5% of the outstanding
shares of the Company's common stock.
<TABLE>
<CAPTION>
Common Stock Percent
Name and Address Beneficially Owned of Class
<S> <C> <C>
Wilmington Trust Company 1,061,610(1) 10.20%
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
David L. Babson & Co., Inc. 554,745 5.33%
One Memorial Drive
Cambridge, MA 02142-1300
<FN>
(1) Includes 1,057,656 shares, representing 10.16% of the Company's
common stock, which are held in several trusts for the benefit of the
descendants of A.P. Woodson and family.
</TABLE>
The following table sets forth, based on statements filed with the
Securities and Exchange Commission or otherwise made to the Company, the
amount of common stock of the Company which is beneficially owned as of
the record date by each of the directors, each nominee for election as a
director at the Annual Meeting and each of the executive officers of the
Company named in the summary compensation table on page 7 and all
directors and executive officers as a group.
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common Stock
Name Beneficially Owned Percent of Class
<S> <C> <C>
Walter Alexander 7,720 *
Richard G. Jacobus 7,333 *
San W. Orr, Jr. 161,913(1) 1.56%
Richard L. Radt 4,574<dagger> *
Harry R. Baker 1,474 *
Daniel R. Olvey 114,798(2) 1.10%
Gary P. Peterson 35,625(3) *
Stuart R. Carlson 35,552<dagger>(3) *
David L. Canavera 49,867<dagger>(4) *
Dennis M. Urbanek 14,289<dagger>(5) *
All directors and
executive officers
as a group (10 persons) 433,145<dagger>(1)(6) 4.16%
<FN>
* Less than 1%
dagger> Includes shares held by spouse and/or children.
(1) Includes 118,837 shares which are held in several trusts for the
benefit of the descendants of A.P. Woodson and family of which Mr. Orr
is a co-trustee with shared voting and investment power.
(2) Includes 113,332 shares subject to options exercisable within 60
days.
(3) Includes 35,332 shares subject to options exercisable within 60 days.
(4) Includes 41,600 shares subject to options exercisable within 60 days.
(5) Includes 13,333 shares subject to options exercisable within 60 days.
(6) Includes 238,930 shares subject to options described in footnotes
(2)-(5).
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers and persons who own more than 10% of the
Company's common stock ("reporting persons") to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"SEC"). Reporting persons are also required by SEC regulations to furnish
the Company with copies of all section 16(a) forms filed by them with the
SEC. Based solely on its review of the copies of the section 16(a) forms
received by it or upon written representations from certain of these
reporting persons in lieu of such forms as to compliance with the section
16(a) regulations, the Company is of the opinion that during the 1996
fiscal year, all filing requirements applicable under section 16 to the
reporting persons were satisfied.
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth compensation awarded, earned or paid by the
Company and its subsidiaries for services in all capacities during each of
the three years ended December 31, 1996, 1995 and 1994, to the Company's
Chief Executive Officer ("CEO") during the 1996 fiscal year and each
executive officer of the Company, other than the CEO, as of December 31,
1996,whose total annual salary and bonus compensation for the most recent
fiscal year exceeded $100,000.
<PAGE>
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Compensa-
Annual Compensation tion Awards
Other Securities
Name and Annual Underlying All Other
Principal Compen- Options/ Compen-
Position Year Salary(1) Bonus sation SARs (#) sation
<S> <C> <C> <C> <C> <C> <C>
Daniel R. Olvey 1996 $282,600 $282,500 $0 0 $41,091(2)
President and 1995 $258,439 $229,197 $0 40,000(3) $31,162
CEO 1994 $229,689 $ 52,574 $0 18,333(3) $30,800
Gary P. Peterson 1996 $162,025 $161,925 $0 0 $22,091(4)
Peterson; Senior 1995 $151,720 $138,244 $0 13,333(3) $13,162
Vice President, 1994 $142,730 $ 55,152 $0 0 $10,800
Finance,
Secretary and
Treasurer
Stuart R. 1996 $166,800 $166,700 $0 0 $22,091(4)
Carlson; Senior 1995 $149,650 $125,281 $0 13,333(3) $13,162
Vice President, 1994 $139,975 $ 49,571 $0 0 $10,800
Specialty Papers
David L. 1996 $149,600 $124,339 $0 32,267 $22,091(4)
Canavera; Senior
Vice President,
Towel and Tissue
Dennis M. 1996 $134,595 $ 96,206 $0 0 $22,091(4)
Urbanek; Vice
President,
Engineering and
Environmental
Services
<FN>
(1) Includes compensation deferred by participants under the Mosinee
Thrift Plan (401(k)).
(2) Includes 401(k) contribution of $22,091 and directors' fees of
$19,000. Mr. Olvey's fees were deferred under the Deferred
Compensation Plan for Directors described under the caption
"Committees and Compensation of the Board of Directors".
(3) Stock options, adjusted for 4-for-3 stock split paid in 1996.
(4) Company contributions under the 401(k) plan.
</TABLE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The Company maintains stock option plans and a stock appreciation
rights plan. The following table presents certain information with
respect to grants of stock options during fiscal 1996 to executive
officers named in the summary compensation table. No stock appreciation
rights were granted in 1996 to executive officers.
<PAGE>
<TABLE>
Option/SAR Grants in Last Fiscal Year
<CAPTION>
Alternative
Individual Grants Grant Date
Value
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or Grant Date
Options/SARs Employees in Base Price Expiration Present
Name Granted (#) Fiscal Year ($/Sh) Date Value $(1)
<S> <C> <C> <C> <C> <C>
Mr. Canavera 32,267* 76.3% $26.375 7/30/16 $851,042
<FN>
*Options.
(1) The estimated grant date present value reflected in the above table
is determined using the Black-Scholes pricing model. The material
assumptions and adjustments incorporated into the Black-Scholes
model in estimating the value of the options reflected in the above
table include: (a) the exercise price on the options granted is
equal to the market value of the underlying stock on the date of
grant, (b) an option term of 10 years to reflect the expected life
of the options, (c) an interest rate of 7.0% that represents the
interest rate on long-term U.S. Treasury securities with a maturity
date corresponding to the option term, (d) volatility of 23.82%,
calculated using monthly stock prices for the three-year period
prior to the date of grant, and (e) dividend yield of 1.32% based
on the average dividend yield over the preceding three years. The
actual value, if any, an optionee will realize upon exercise of an
option will depend on the excess of the market value of the
Company's common stock over the exercise price on the date the
option is exercised. There is no assurance that the market price
of the common stock will increase as assumed for purposes of this
pricing model and no projections as to the actual future value of
the Company's common stock are intended or made. See subcaption
"Stock Based Compensation" on page 12.
</TABLE>
The following table sets forth information regarding the exercise of
stock options or stock appreciation rights ("SARs") in fiscal 1996 by each
of the executive officers named in the summary compensation table and the
December 31, 1996 value of unexercised stock options or SARs held by such
officers.
<PAGE>
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
<CAPTION>
Number Number of Shares
of Shares Underlying Value of Unexercised In-
Underlying Unexercised Options/SARs the-Money Options/SARs
Options/ Value at FY-End at FY-End ($)(1)
SARs Realized
Name Exercised ($) Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Mr. Olvey N/A N/A 40,000* N/A $690,624* N/A
18,333* $278,434*
18,333* $215,882*
18,333* $153,458*
6,600* $ 77,719*
11,733* $138,151*
36,667<dagger> $763,447<dagger>
14,667<dagger> $261,603<dagger>
22,000<dagger> $566,722<dagger>
Mr. Peterson N/A N/A 13,333* N/A $230,202* N/A
7,333* $111,371*
7,333* $ 86,350*
7,333* $ 61,382*
22,000<dagger> $403,107<dagger>
Mr. Carlson N/A N/A 13,333* N/A $230,202* N/A
7,333* $111,371*
7,333* $ 86,350*
7,333* $ 61,382*
22,000<dagger> $408,094<dagger>
Mr. Canavera 2,445 $20,888 9,333* 32,267*(2) $161,140* $298,973*(2)
3,667<dagger> $ 73,848<dagger>
11,000<dagger> $189,798<dagger>
Mr. Urbanek N/A N/A 13,333* $202,496*
8,800<dagger> $156,227<dagger>
<FN>
* Options.
<dagger> SARs exercisable only for cash.
(1) Includes the value of hypothetical shares credited to grantee under
provisions of SARs which assume cash dividends are paid on
underlying shares and invested in Company common stock; based on
$35.64 value at December 31, 1996.
(2) Options which become exercisable on January 30, 1997.
</TABLE>
PENSION PLAN BENEFITS
MOSINEE RETIREMENT PLAN
The following table reflects illustrative estimated single life normal
retirement benefits payable at age 65 by the Retirement Plan on an annual
basis to participants in selected remuneration and years of service
classifications. In estimating the annual benefit, it is assumed that
covered compensation and the factor for Social Security benefits for years
after 1996 will continue at the same level as 1996. The benefit amounts
listed in the table are based on five-year average compensation paid to a
participant and are not subject to any deduction for Social Security
benefits or other offset amounts. Benefits are limited by Internal
Revenue Service rules which specify the maximum compensation which can be
<PAGE>
used to determine benefits. At December 31, 1996, the credited years of
service and the approximate average remuneration covered by the Retirement
Plan for the persons named in the summary compensation table were:
Messrs. Olvey, 7 years, $177,000; Peterson, 5 years, $163,000; Carlson, 6
years, $152,000; Canavera, 5 years, $133,500; and Urbanek, 6 years,
$147,200.
<TABLE>
<CAPTION>
Final Average Years of Service
EARNINGS 15 20 25 30*
<S> <C> <C> <C> <C>
$125,000..........$18,450 $24,600 $30,750 $36,900
$150,000..........$22,200 $29,600 $37,000 $44,400
$175,000..........$25,950 $34,600 $43,250 $51,900
$200,000..........$29,700 $39,600 $49,500 $59,400
$225,000..........$33,450 $44,600 $55,700 $66,900
$250,000..........$37,200 $49,600 $62,000 $74,400
$275,000..........$40,950 $54,600 $68,250 $81,900
$300,000..........$44,700 $59,600 $74,500 $89,400
<FN>
*Maximum number of years credited for benefit accrual purposes.
</TABLE>
SUPPLEMENTAL RETIREMENT PLANS
The Company maintains a supplemental retirement plan for the President
and Vice Presidents and certain officers of the Company's subsidiaries and
divisions. The plan provides that each participant who attains age 55 and
completes 10 years of service as an executive officer of the Company is
entitled to receive 50% of his highest five-year average salary and bonus
reduced by any benefits under the Retirement Plan. Reduced benefits are
available for retirement prior to age 62. The plan also provides for
benefits to a surviving spouse in an amount equal to 50% of the benefit
which would have been payable to the executive officer and for certain
reduced surviving spouse benefits if the executive officer dies or becomes
disabled prior to becoming eligible for a benefit. Accrued benefits will
be paid in a lump sum in the event of a change of control of the Company,
as defined in the plan. Based on average covered compensation as of
December 31, 1996, the following annual benefits would be payable from the
plan upon retirement at age 62: Messrs. Olvey, $146,592; Peterson,
$92,664; Carlson, $90,252; Canavera, $65,556; and Urbanek, $69,228. As of
December 31, 1996, no current executive officer of the Company had
acquired a vested right to an early or normal retirement benefit.
COMMITTEES' REPORT ON EXECUTIVE COMPENSATION POLICIES
Compensation policies are established by the Executive Compensation &
Bonus Committee of the Board of Directors (the "Compensation Committee")
which establishes and reviews base salaries of executive officers other
than the Chairman of the Board and is also responsible for the
establishment and implementation of executive bonus and incentive
programs. The salary of Mr. Orr, the Chairman of the Board of the
Company, is approved by the Board of Directors as a whole.
The Company's compensation program for executive officers may include
various grants under the Company's stock option and stock appreciation
rights ("SAR") plans. The Company's SAR and 1994 stock option plans are
administered by separate committees appointed by the Board of Directors.
The committees generally consider recommendations of the Compensation
Committee with respect to grants, but each committee has full discretion
and control over whether a grant will be made and the amount and terms of
<PAGE>
any such grant. Insofar as this report includes a description of the
compensation policies relating to the SAR and 1994 stock option plans,
this report is a joint report of the Compensation Committee, the SAR plan
committee and the 1994 stock option plan committee.
This report describes the policies of the committees and the Company
as in effect in 1996. As circumstances change and one or more of the
committees deem it appropriate, policies in effect from time to time for
years after 1996 may change.
GENERAL
The Company's executive compensation policies are designed to attract
and retain individuals who have experience in the paper industry or who
otherwise have particular training or skills which will satisfy particular
requirements of the Company. These policies are also intended to reward
job performance which the Compensation Committee believes to be at or
above the level expected of the Company's executive officers. The total
compensation paid to executive officers and the retirement and other
fringe benefits provided by the Company are designed to offer a level of
compensation which is competitive with other paper companies or, in some
cases, the operating units of larger paper companies which are comparable
to the Company. Some, but not all, of the comparable companies used for
purposes of compensation comparisons are included in the fifty-four
companies which comprise the Media General MG Industry Group 381 index of
paper company stock performance under the heading "Stock Price Performance
Graph." In making compensation comparisons, the Committee uses only those
companies whose operations are similar to the Company or, in some cases,
have operating units similar to the Company. Given the disparity in size
between companies which operate in the paper industry and the difficulty
in determining the precise duties of executive officers of other
companies, it is difficult to draw exact comparisons with the compensation
policies of other companies. The determination of appropriate
compensation levels by the Compensation Committee is, therefore,
subjective.
The Company's overall compensation policy is designed so that a
significant portion of each executive officer's compensation package is
directly tied to the performance of the Company through a combination of
annual incentive bonuses which are based on the Company's financial
performance during each fiscal year and stock based incentive programs
which reflect the performance of the Company's common stock. The value of
the stock based incentive awards to executive officers increases or
decreases in value as the price of the Company's common stock increases or
decreases on The Nasdaq Stock Market.
The Company may not deduct compensation paid to the CEO and each of
the four most highly paid executive officers named in the summary
compensation table who are officers on the last day of the year to the
extent the compensation paid to the individual officer exceeds $1 million.
This limitation is subject to certain exceptions for compensation paid
pursuant to performance based plans and amounts received through the
exercise of stock options and SARs provided certain requirements are met.
Amounts receivable by Company officers under stock options or SARs granted
before February 18, 1993 are not subject to this limit. The Company
believes that all of its plans involving incentive compensation or options
granted after February, 1993, qualify for the exception for performance
based plans. The Compensation Committee continues to review this limit
and its application to the Company's compensation policies.
<PAGE>
BASE SALARIES AND BENEFITS
The Compensation Committee considers a general survey of paper
industry compensation prepared by an independent compensation and benefit
consultant to assist it in determining an appropriate and comparable level
of base salary and benefits for executive officers. Annual increases in
base salary are determined by the overall objective of maintaining
competitive salary levels, more general factors, such as the rate of
inflation, and individual job performance. Individual job performance,
including satisfaction of individual performance objectives and goals and
the accomplishment of specified programs in appropriate cases, is the most
important factor considered by the Compensation Committee in determining
appropriate increases in base salary.
In the case of executive officers other than the Chairman and Vice
Chairman of the Board and the CEO, the assessment of an individual's job
performance is based on annual performance evaluations conducted by the
CEO. The CEO's base salary is determined by the Compensation Committee on
the same basis as that of the Company's other executive officers, except
that it is the Compensation Committee which may annually establish
performance criteria for the CEO and review his performance.
INCENTIVE COMPENSATION BASED ON FINANCIAL PERFORMANCE OF THE COMPANY
AND INDIVIDUAL PERFORMANCE
The Company maintains incentive plans for executive officers which
provide for the payment of annual cash bonuses to participants if annual
Company financial and, in some cases, individual performance objectives
are met. The Compensation Committee, in its sole discretion, annually
establishes performance levels for the plans and may throughout the year
review and adjust the performance standards and the maximum cash bonuses
(as a percentage of base salary) to be paid.
During 1996, Mr. Olvey participated in an incentive compensation plan
which provided for a bonus opportunity ranging from 0% of base salary if
1996 earnings per share were at or below $1.20 to 100% if 1996 earnings
per share were at least $2.03. Mr. Peterson and Mr. Carlson participated
in similar plans which provided for a maximum bonus equal to 75% and 50%,
respectively, of their base salary based upon the same $1.20 to $2.03
range of earnings per share. Earnings per share were adjusted for
accruals on SARs, bonus expense and extraordinary items. Mr. Peterson and
Mr. Carlson also participated in plans which provided for a maximum bonus
of 25% of base salary upon satisfaction of individual performance
objectives established at the beginning of the year by the President and
CEO and Mr. Carlson participated in an incentive compensation plan based
on the operating profit of the Converted Products Division which provided
for a maximum bonus of 25% of Mr. Carlson's base salary.
STOCK BASED COMPENSATION
Executive officers participate in the Company's stock option and SAR
plans at various levels. The committees which administer the plan may
impose conditions or restrictions as to exercise or vesting of grants
under the respective plans. None of the committees have established
formal criteria by which the size of plan grants are determined, but each
committee considers the amount and terms of each grant already held by an
executive officer in determining the size and amount of any new grant.
<PAGE>
The value of stock option and SAR grants are principally related to
the long-term performance of the Company's common stock and therefore
provide an identity of interests between the Company's executive officers
and its shareholders. However, grantees of SARs benefit from the increase
in value of the underlying common stock and from the value of the
hypothetical cash dividends which would be paid with respect to a share of
stock to which the grant relates. Therefore, executive officers who
exercise SARs will benefit from such grants regardless of an increase in
the price of the Company's common stock, but such value will be enhanced
by increases in the price of the Company's common stock and will be of
maximum value to the executive officer only if such increase in the price
of the common stock occurs. It is the intention of the Company that the
hypothetical dividend features of the SARs will place the executive
officers in a position similar to shareholders of the Company, thereby
enhancing the officers long-term incentive and increasing his identity
with the shareholders. Options and SARs can be, but are not necessarily,
granted on an annual basis. See tables on pages 8 and 9.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Orr is Chairman of the Compensation Committee and, as Chairman of
the Board of the Company, he is considered an employee of the Company.
See "Committees and Compensation of the Board of Directors." Mr. Orr is
also Chairman of the Board of Marathon Electric Manufacturing Corporation
and Mr. Baker, who is President and CEO of Marathon Electric, serves on
the committees named below.
<TABLE>
<CAPTION>
Executive Compensation 1988 SAR and 1994 Stock
& Bonus Committee Option Plan Committees
<S> <C>
San W. Orr, Jr. Richard G. Jacobus
Richard G. Jacobus Harry R. Baker
Harry R. Baker Walter Alexander
</TABLE>
STOCK PRICE PERFORMANCE GRAPH
The following graph and table compare the yearly percentage change in
the cumulative total shareholder return on the Company's common stock for
the five-year period beginning December 31, 1991 with two indices
published by Media General Financial Services. The Media General Nasdaq
Market Index indicates the performance of all stocks which have been
traded on the Nasdaq National Market System during the entire five-year
period. The Media General MG Industry Group 381-Paper Products Index
indicates the performance of fifty-four paper products industry stocks.
The graph and table assume that the value of the investment in the
Company's common stock and each index on December 31, 1991 was $100 and
that all dividends were reinvested.
[Stock Price Performance Graph Filed pursuant
to Rule 304(d) of Regulation S-T]
<TABLE>
<CAPTION>
Value of Hypothetical Investment
December 31
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Mosinee Paper Corporation $100.00 $139.90 $118.60 $146.39 $130.00 $144.39
MG Paper Industry Group 381 Index $100.00 $125.84 $132.40 $138.33 $154.57 $192.08
MG Nasdaq Market Index $100.00 $128.38 $129.64 $155.50 $163.26 $211.77
</TABLE>
<PAGE>
APPROVAL OF AMENDMENTS TO 1994 STOCK OPTION PLAN
THE FOLLOWING SUMMARY OF THE MATERIAL FEATURES OF THE PROPOSED
AMENDMENTS TO THE COMPANY'S 1994 STOCK OPTION PLAN DOES NOT PURPORT TO BE
COMPLETE AND IS QUALIFIED BY REFERENCE TO THE TEXT OF THE PLAN WHICH IS
AVAILABLE UPON REQUEST FROM THE SECRETARY OF THE COMPANY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENTS TO
THE 1994 STOCK OPTION PLAN.
AMENDMENT OF PLAN
In 1994, the shareholders of the Company approved the adoption of the
1994 Executive Stock Option Plan. In October, 1996, the Board of
Directors adopted amendments to the plan which redefined those directors
who were eligible to serve on the committee which administers the plan
(see "Eligibility and Administration", below) and provided that the
committee could permit an optionee to transfer an option to a member of
the optionee's immediate family. Neither of these amendments required
shareholder approval as they did not constitute material amendments to the
plan within the meaning of either securities or tax regulations and, in
fact, reflected revised rules of the Securities and Exchange Commission
("SEC") with respect to persons eligible to administer the plan.
In December, 1996, the Board made further amendments to the plan
which, among other things, renamed the plan, increased the number of
shares available from 146,667 to 300,000, and provided for the granting of
options to directors of the Company on the terms described below. At the
Annual Meeting, the shareholders will be asked to consider and approve the
amendments to the plan adopted by the Board in December, 1996. These
amendments require shareholder approval in order to satisfy certain tax
requirements relating to the deductibility of compensation paid to
participants in the plan.
The plan as originally approved by the shareholders and subsequently
amended by the Board in October, 1996, is hereinafter referred to as the
"1994 Plan". The plan, as amended by the Board in December, 1996 and as
now submitted for approval of the shareholders at the Annual Meeting, is
hereinafter referred to as the "Amended 1994 Plan".
The Board of Directors believes that the Amended 1994 Plan, which
extends participation to directors, is desirable because it will serve to
promote the interests of the Company and its shareholders by increasing
the directors' proprietary interest in the Company and thereby more
closely aligning their interests with those of the shareholders. The
Board also believes that opportunity for new directors to acquire a
proprietary interest through the plan will assist the Company to attract
and retain qualified individuals to serve as directors.
The purpose of the 1994 Plan was to attract and retain key executive
employees through the granting of options to purchase common stock of the
Company. The options are intended to furnish additional inducements to
participating employees to continue with the Company and increase their
efforts to promote the best interests of the Company and its shareholders.
The Board believes that increasing the number of shares for which options
may be granted under the Amended 1994 Plan is necessary as options with
respect to all of the shares originally provided for under the Plan have
been granted. In order to carry out the purposes of the 1994 Plan as
adopted and expand its coverage to directors as described above,
additional shares must now be authorized.
<PAGE>
ELIGIBILITY AND ADMINISTRATION
Approximately 10 to 20 employees who are employed in management,
administrative or professional capacities are eligible to participate in
the Amended 1994 Plan. Under the Amended 1994 Plan, each of the Company's
six directors are also eligible to participate solely with respect to
their status as directors; three of such directors are also now, and will
remain, eligible to participate as executive officers of the Company.
The Amended 1994 Plan will continue to be administered by the 1994
Plan Committee which is appointed by the Board of Directors. The
Committee consists of not less than two members of the Board who may not
be employees of the Company and must satisfy other conditions prescribed
for independent directors under SEC Rule 16b-3 and section 162(m) of the
Internal Revenue Code. Prior limitations on members of the Committee
(none of whom could have been granted or awarded equity securities of the
Company, including SARs or options, pursuant to any plan of the Company
during the one year period prior to their appointment), as required under
former SEC Rule 16b-3, were repealed by the Board in October 1996.
Messrs. Baker, Jacobus and Alexander currently serve on the Committee.
OPTION GRANTS - NEW PLAN BENEFITS
EMPLOYEES
No change will be effected under the Amended 1994 Plan in the manner
in which options are granted to key employees. The Committee is
authorized, in its sole discretion, to select those eligible employees who
will receive stock option grants, determine the number of shares covered
by such grants, impose conditions on the exercise of options, and
administer and interpret the plan.
DIRECTORS
Under the Amended 1994 Plan, subject to shareholder approval, each
director of the Company was granted an option on January 1, 1997 for that
number of shares of common stock which is equal to the product of (1)
1,000 multiplied by (2) the number of whole and partial years remaining in
such person's term as a director. On June 1, 1997 and on each June 1
thereafter, each director who has been elected, re-elected or appointed as
a director during the previous twelve months will receive an option for
that number of shares of common stock which is equal to the product of (1)
1,000 multiplied by (2) the number of years in the term to which such
person was elected, re-elected or appointed. Directors who are also
employees of the Company are also eligible to receive discretionary grants
of options from the Committee.
NEW PLAN BENEFITS
As of the date hereof, options with respect to a total of 146,667
shares have been granted to key employees and are outstanding under the
1994 Plan. The following additional options have been granted to key
employees and directors, subject to shareholder approval, under the terms
of the Amended 1994 Plan:
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF OPTIONS
<S> <C>
Daniel R. Olvey, 1,000(1)
President and CEO
and a director
Richard L. Radt, 13,000
Vice Chairman of
the Board
Executive Officer Group 16,000
Non-Executive Director 6,000(1)
Group
Non Executive Officer 0
Employee Group
<FN>
(1) Under the terms of the Amended 1994 Plan, options to acquire an
additional 3,000 shares will be granted to Messrs. Olvey and
Jacobus on June 1, 1997 if they are reelected as directors at the
Annual Meeting and they are in office on such date.
</TABLE>
SHARES SUBJECT TO OPTIONS
The maximum number of shares of the Company's common stock with
respect to which options may be granted under the Amended 1994 Plan,
including options now outstanding and subsequently exercised, shall not
exceed 300,000 shares, an increase from the 146,667 shares available under
the 1994 Plan as adopted and subject, in each case, to adjustment for
future stock splits, stock dividends or other similar increases in the
number of shares of the Company). No employee may be granted options with
respect to more than 50,000 shares of common stock (subject to adjustment
for future stock splits, stock dividends or other similar increases in the
number of shares of the Company) in any calendar year.
OPTIONS GENERALLY
As was the case under the 1994 Plan, options granted to employees
under the Amended 1994 Plan may be either qualified incentive stock
options ("ISOs") under section 422 of the Internal Revenue Code (the
"Code") or options which do not satisfy the requirements of the Code for
ISOs ("non-qualified options"). All options granted by reason of an
individual's status as a director shall be non-qualified options.
All options must be granted at an option price which is not less than
the fair market value of the common stock on the date the option is
granted. As of February 10, 1997, the aggregate fair market value of the
shares covered by the Amended 1994 Plan, as determined by the mean between
the high and low prices at which the shares were traded on such date on
The Nasdaq Stock Market, was $11,287,500.
No consideration is received by the Company for the granting of an
option. Upon exercise, the Company will receive consideration equal to
the exercise price in the form of cash or, with the consent of the
Committee, tendering common stock having a fair market value equal to the
exercise price, or delivering a broker's promise to promptly pay the
Company an amount equal to the exercise price.
<PAGE>
The Amended 1994 Plan will terminate on October 19, 2004 unless action
is taken by the Board of Directors to terminate the plan at an earlier
date.
ISOS
All ISOs must be exercised within ten years of their date of grant.
No option will qualify as an ISO to the extent the aggregate fair market
value of the shares for which the option is exercisable for the first time
during a calendar year exceeds $100,000 (or such other limit which may be
imposed under the Code).
In the opinion of counsel for the Company, no optionee will recognize
any income at the time an ISO is granted. If no disposition of the
underlying shares is made within two years of the date of grant of the ISO
and within one year of the date of exercise (the "minimum holding
periods"), any gain on the difference between the exercise price and the
disposition price will be treated as long-term capital gain. If
disposition occurs prior to the expiration of the minimum holding periods,
the optionee will recognize ordinary income on the lesser of (1) the
difference between the exercise price and the fair market value of the
shares on the date of exercise or (2) the difference between the exercise
price and the disposition price. The Company receives no income tax
deduction with respect to the granting or exercise of an ISO to or by an
optionee if the shares are held for the minimum holding periods. If the
shares are disposed of prior to the expiration of the minimum holding
periods, the amount realized by the optionee as ordinary income will be
deductible by the Company in the year of disposition of the common stock
by the optionee.
NON-QUALIFIED OPTIONS
Non-qualified options must be exercised within twenty years of their
date of grant. In the opinion of counsel for the Company, upon exercise
of a non-qualified option, the optionee will recognize ordinary income in
an amount in excess of the fair market value of the shares on the date of
exercise over the option price. Upon exercise of a non-qualified option
by an optionee, the Company is entitled to a deduction equal to the amount
of the ordinary income realized by the optionee.
VOTE REQUIRED FOR APPROVAL OF THE AMENDED 1994 PLAN
The Amended 1994 Plan was adopted by the Board of Directors subject to
the approval of the shareholders of the Company. In addition, shareholder
approval is required in order to be eligible for exemptions from
deductible compensation limits otherwise imposed under section 162(m) of
the Internal Revenue Code of 1986 and may be relied upon by participants
for certain exemptions from certain reporting and short-swing profit
requirements otherwise imposed on certain plan participants under section
16 of the Securities and Exchange Act of 1934, as amended. Shareholder
approval of the Amended 1994 Plan requires that a majority of the shares
of common stock represented and voted at the Annual Meeting be voted for
the approval of the Plan. Abstentions and broker non-votes are not
counted as votes cast either for or against the adoption of the plan.
All shareholders are requested to specify their vote on the enclosed
form of proxy. If no specification is made, the proxy will be voted for
approval of the Amended 1994 Plan. Copies of the Amended 1994 Plan may be
obtained upon request to the Secretary of the Company.
<PAGE>
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS
THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF THE AMENDED 1994 PLAN.
APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors will present to the Annual Meeting a resolution
that the shareholders ratify the appointment of the firm of Wipfli Ullrich
Bertelson LLP as independent auditors to audit the books, records and
accounts of the Company for the year ending December 31, 1997. The firm
has audited the Company's books annually since 1931.
Representatives of Wipfli Ullrich Bertelson LLP will be present at the
Annual Meeting and will have an opportunity to make a statement or respond
to appropriate questions.
SHAREHOLDER PROPOSALS
If any shareholder desires to submit a proposal for inclusion in the
proxy statement to be used in connection with the annual meeting of
shareholders to be held in 1998, the proposal must be in proper form and
be received by the Company no later than November 17, 1997.
Pursuant to the Company's bylaws, shareholders entitled to vote at the
annual meeting of shareholders to be held in 1998 may bring business
before the 1998 annual meeting for consideration only if proper notice of
the proposed business has been provided to the Secretary of the Company
not earlier than January 17, 1998 and not later than February 16, 1998.
The precise requirements, including the information required to be
provided in the shareholder notice and the procedures for notice in the
event the date of the annual meeting is changed, are set forth in the
Company's bylaws which may be obtained from the Secretary of the Company.
See "Committees and Compensation of Board of Directors" regarding bylaw
requirements relating to nominations from the floor at the annual meeting
of shareholders to be held in 1998.
OTHER MATTERS
At this date, there are no other matters the Board of Directors
intends to present or has reason to believe others will present to the
Annual Meeting. If other matters now unknown to the Board of Directors
are properly presented at the Annual Meeting, those named as proxies will
vote in accordance with their judgment.
DATED: March 17, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
GARY P. PETERSON,
Secretary
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
<PAGE>
PROXY
MOSINEE PAPER CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING APRIL 17, 1997
The undersigned, having received the notice of annual meeting, proxy
statement, and annual report for the year ended December 31, 1996, hereby
appoint(s) San W. Orr, Jr., Daniel R. Olvey and Richard L. Radt, and each of
them, with full power of substitution, proxies of the undersigned to vote all
shares of the undersigned in Mosinee Paper Corporation at the annual meeting
of shareholders to be held on April 17, 1997 and at any adjournments thereof.
The directors recommend a vote FOR the election of each nominee, approval of
the amendments to the 1994 Stock Option Plan and approval of the appointment
of auditors.
1. Election of directors: FOR WITHHOLD
DANIEL R. OLVEY [ ] [ ]
RICHARD G. JACOBUS [ ] [ ]
2. Approval of amendments to 1994 Stock Option Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of appointment of Wipfli Ullrich Bertelson LLP as independent
auditors for the year ending December 31, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In their discretion, the proxies are authorized to vote upon matters not
known to the Board of Directors as of the date of the accompanying proxy
statement, approval of minutes of the prior annual meeting, matters
incident to the conduct of the meeting and to vote for any nominee of the
Board whose nomination results from the inability of an above-named
nominee to serve.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE PROXIES SHALL VOTE FOR
THE ELECTION OF THE LISTED NOMINEES, APPROVAL OF THE AMENDMENTS TO THE 1994
STOCK OPTION PLAN AND APPROVAL OF THE APPOINTMENT OF AUDITORS.
(Continued and to be signed on reverse side).
<PAGE>
(Continued from the other side)
Dated ________________________, 1997
____________________________________
Signature
____________________________________
Signature if held jointly
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title. If a
corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person. Please sign exactly
as name appears below. When shares are
held by joint tenants, both should sign.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
