<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
POTLATCH 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.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF POTLATCH CORPORATION]
POTLATCH CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
May 20, 1999
----------------
NOTICE AND PROXY STATEMENT
<PAGE>
[LOGO OF POTLATCH CORPORATION]
Potlatch Corporation
601 West Riverside Ave.,
Suite 1100
Spokane, Washington 99201
Telephone (509) 835-1500
FAX (509) 835-1555
March 29, 1999
Dear Potlatch Stockholder:
I am pleased to invite you to Potlatch's Annual Meeting of Stockholders. The
meeting will be at 11:00 a.m. on Thursday, May 20, 1999 at the Saint Paul
Hotel, 350 Market Street, Saint Paul, Minnesota.
At the meeting, you and the other stockholders will elect four directors to
the Potlatch Board and ratify the selection of independent auditors. You also
will have the opportunity to hear what has happened in our business in the
past year and to ask questions. You will find other detailed information about
Potlatch and its operations, including its audited financial statements, in
the enclosed Annual Report.
We hope you can join us on May 20. Whether or not you can attend, please
read the enclosed Proxy Statement. When you have done so, please mark your
votes on the enclosed proxy, sign and date the proxy, and return it to us in
the enclosed envelope. Your vote is important, so please return your proxy
promptly.
Sincerely,
/s/ John M. Richards
John M. Richards
Chairman of the Board and
Chief Executive Officer
<PAGE>
[LOGO OF POTLATCH CORPORATION]
POTLATCH CORPORATION
601 West Riverside Avenue, Suite 1100
Spokane, Washington 99201
March 29, 1999
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 20, 1999
Potlatch Corporation will hold its Annual Meeting of Stockholders at the
Saint Paul Hotel, 350 Market Street, Saint Paul, Minnesota, on Thursday, May
20, 1999 at 11:00 a.m.
We are holding this meeting:
. to elect four directors to serve until the 2002 Annual Meeting of
Stockholders;
. to ratify the selection of independent auditors; and
. to transact any other business that properly comes before the meeting.
Your Board of Directors has selected March 23, 1999 as the record date for
determining stockholders entitled to vote at the meeting. A list of
stockholders on that date will be available for inspection at the offices of
Oppenheimer Wolff & Donnelly, First Bank Building, 332 Minnesota Street, Saint
Paul, Minnesota, for ten days before the meeting.
This Proxy Statement, proxy and Potlatch's 1998 Annual Report to
Stockholders are being distributed on or about March 30, 1999.
By Order of the Board of Directors
/s/ Betty R. Fleshman
Betty R. Fleshman
Secretary
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL INFORMATION....................................................... 1
ELECTION OF DIRECTORS..................................................... 3
Nominees for Election for a Three-Year Term Ending with the 2002 Annual
Meeting................................................................ 3
Directors Continuing in Office Until the 2000 Annual Meeting of
Stockholders........................................................... 3
Directors Continuing in Office Until the 2001 Annual Meeting of
Stockholders........................................................... 4
Committees of the Board of Directors; Meetings.......................... 5
STOCK OWNERSHIP........................................................... 6
Beneficial Ownership of Certain Stockholders, Directors and Executive
Officers............................................................... 6
Section 16(a) Beneficial Ownership Reporting Compliance................. 7
COMPENSATION OF DIRECTORS AND THE NAMED EXECUTIVE OFFICERS................ 8
Compensation of Directors............................................... 8
Compensation of the Named Executive Officers--Summary Compensation
Table.................................................................. 9
Option/SAR Grants in Last Fiscal Year................................... 10
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values...................................................... 11
Other Employee Benefit Plans............................................ 11
Certain Transactions.................................................... 12
EXECUTIVE COMPENSATION AND PERSONNEL POLICIES COMMITTEE REPORT ON
EXECUTIVE COMPENSATION................................................... 13
Compensation Policy..................................................... 13
1998 Company Performance................................................ 14
1998 Executive Compensation............................................. 14
1998 Chief Executive Compensation....................................... 14
PERFORMANCE GRAPH......................................................... 15
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS......................... 16
</TABLE>
For directions to the meeting, you will find a map on the back cover of this
Proxy Statement
<PAGE>
GENERAL INFORMATION
Q: Who is soliciting my proxy?
A: We--the Board of Directors of Potlatch Corporation--are sending you this
Proxy Statement in connection with our solicitation of proxies for use at
Potlatch's 1999 Annual Meeting of Stockholders. Certain directors, officers
and employees of Potlatch and D.F. King (a proxy solicitor) also may
solicit proxies on our behalf by mail, phone, fax or in person.
Q: Who is paying for this solicitation?
A: Potlatch will pay for the solicitation of proxies, including D.F. King's
estimated fee of $8,000 plus out-of-pocket expenses. Potlatch also will
reimburse banks, brokers, custodians, nominees and fiduciaries for their
reasonable charges and expenses to forward our proxy materials to the
beneficial owners of Potlatch common stock.
Q: What am I voting on?
A: The election of Kenneth T. Derr, Toni Rembe, Charles R. Weaver and William
T. Weyerhaeuser to the Board of Directors and the ratification of the
selection of KPMG Peat Marwick LLP as independent auditors.
Q: Who can vote?
A: Only those who owned common stock at the close of business on March 23,
1999, the record date for the Annual Meeting, can vote. If you beneficially
owned common stock on the record date, you have either four votes or one
vote per share for each director up for election at the Annual Meeting. You
have four votes per share if you have owned the share continuously since
March 1, 1995, or you acquired it through Potlatch's tax-qualified employee
benefit plans or its dividend reinvestment plan. You have one vote per
share in all other circumstances. If you own your shares of common stock in
"street" or "nominee" name, we assume that each of your shares has only one
vote. To have four votes per share, you must prove that you have
beneficially owned the shares continuously from March 1, 1995. You can do
this by signing the certification on your proxy. Potlatch may still require
additional evidence of continuous ownership.
Q: What does "beneficially owned" mean?
A: Under the Securities and Exchange Commission's definition, "beneficial
ownership" of shares means shares over which a person has sole or shared
voting or investment power.
Q: When do I get four votes a share?
A: You get four votes per share when you hold the share for at least 48
consecutive calendar months (dating from the first day of the first full
month on or after the date you acquire beneficial ownership of the share)
before the record date for a stockholders' meeting. On certain matters,
Potlatch's Restated Certificate of Incorporation gives you only one vote
per share.
Q: How do I vote?
A: You may vote your shares either in person or by proxy. To vote by proxy,
you should mark, date, sign and mail the enclosed proxy in the prepaid
envelope. Giving a proxy will not affect your right to vote your shares if
you attend the Annual Meeting and want to vote in person. By voting in
person, you automatically revoke your proxy. You also may revoke your proxy
at any time before the voting by giving the Secretary written notice of
your revocation or by submitting a later-dated proxy. If you return your
proxy but do not mark your voting preference, the individuals named as
proxies will vote your shares FOR the election of the nominees for director
and FOR the ratification of the selection of independent auditors.
Q: What constitutes a quorum?
A: On the record date, Potlatch had 28,937,632 shares of common stock, $1.00
par value, outstanding. Voting can take place at the
1
<PAGE>
Annual Meeting only if stockholders owning a majority of the voting power
of the common stock (that is, a majority of the total number of votes
entitled to be cast) and one-third of the total number of shares
outstanding on the record date are present in person or represented by
effective proxies. If you do not vote, or if a broker holding your shares
in "street" or "nominee" name indicates to us on a proxy that you have not
voted and it lacks discretionary authority to vote your shares, we will not
consider your shares as present or entitled to vote for any purpose.
Directors need the affirmative vote of holders of a majority of the voting
power present and entitled to vote to be elected.
Ratification of the selection of independent auditors also requires the
affirmative vote of holders of a majority of the voting power present and
entitled to vote.
Q: What happens if I withhold my vote for an individual director?
A: Withheld votes are counted as "no" votes for the individual director.
Q: When are stockholder proposals for the 2000 Annual Meeting due?
A: To be considered for inclusion in management's proxy statement for
Potlatch's 2000 Annual Meeting of Stockholders, a stockholder proposal must
be received at Potlatch's offices no later than November 29, 1999. All
stockholder proposals must meet the requirements of Rule 14a-8 of the
Securities Exchange Act of 1934.
Q: What matters may be presented to the stockholders at an Annual Meeting?
A: Potlatch's By-laws specify the matters that may be presented to
stockholders at an Annual Meeting as:
. matters listed in the notice of meeting;
. matters presented by the Board of Directors; and
. matters properly presented by stockholders. See the next question.
Q: If I did not submit a stockholder proposal to Potlatch by the deadline for
inclusion in the proxy statement, how do I present matters to stockholders
at an Annual Meeting?
A: Under Potlatch's By-laws, a stockholder must notify the Secretary by a
specified date of the matter to be presented at the Annual Meeting. To
present a matter at the 1999 Annual Meeting, the stockholder must have
given written notice to the Secretary by February 22, 1999. To present a
matter at an Annual Meeting after 1999, a stockholder must give the
Secretary written notice of the matter each year by February 1 before the
Annual Meeting.
Q: If any other matter is presented at the Annual Meeting, who has authority
to vote on the matter?
A: We do not expect any matters, other than those included in the proxy
statement, to be presented at the 1999 Annual Meeting. If other matters are
presented, the individuals named as proxies will have discretionary
authority to vote your shares on the matter.
Q: How do I recommend someone to be a nominee for Potlatch director?
A: A stockholder may recommend nominees for director to the Nominating and
Corporate Governance Committee by giving the Secretary a written notice by
February 1 before the Annual Meeting of stockholders. The notice must
include the full name, age, business and residence addresses, and principal
occupation or employment of the nominee. It must also include the number of
shares of Potlatch common stock the nominee beneficially owns, any other
information about the nominee that must be disclosed in proxy solicitations
under Rule 14(a) of the Securities Exchange Act of 1934 and the nominee's
written consent to the nomination and to serve, if elected.
Q: What happens if a nominee for election as a director at the Annual Meeting
is unable to serve?
A: If a nominee is unable to serve or for good cause will not serve, the
individuals named as proxies will have authority to vote your shares for
another nominee for director.
2
<PAGE>
ELECTION OF DIRECTORS
Potlatch's Board of Directors is divided into three classes serving
staggered three-year terms. At the Annual Meeting, you and the other
stockholders will elect four individuals to serve as directors until the 2002
Annual Meeting or until the end of the calendar year in which a director
becomes 72. Each of the nominees is now a member of the Board of Directors.
Mr. Richard M. Rosenberg has decided to retire from the Board of Directors on
May 20, 1999 and therefore will not be a nominee for election.
The individuals named as proxies will vote the enclosed proxy for the
election of all nominees unless you direct them to withhold your votes. If any
nominee becomes unable to serve as a director before the meeting (or decides
not to serve), the individuals named as proxies may vote for a substitute or
we may reduce the number of members of the Board. We recommend a vote FOR each
nominee.
Below are the names and ages of the directors, the years they became
directors, their principal occupations or employment for at least the past
five years and certain of their other directorships.
Nominees for Election for a Three-Year Term Ending with the 2002 Annual
Meeting
.Kenneth T. Derr Age 62, a director since 1994. Chairman of the
Board and Chief Executive Officer of Chevron
Corporation (an international oil company). Also
a director of AT&T and Citicorp.
.Toni Rembe Age 62, a director since 1975. A partner of
Pillsbury Madison & Sutro LLP (a law firm). Also
a director of Transamerica Corporation and SBC
Communications Inc.
.Charles R. Weaver Age 70, a director since 1987. Retired Chairman
of the Board and Chief Executive Officer of The
Clorox Company (a household consumer products
company). Also a director of Unocal Corporation.
.William T. Weyerhaeuser* Age 55, a director since 1990. A Clinical
Psychologist in Tacoma, Washington and owner and
Chairman of the Board of Yelm Telephone Company.
Also a director of Clearwater Management Company,
Inc. and Columbia Banking System, Inc.
Directors Continuing in Office Until the 2000 Annual Meeting of Stockholders
.Richard B. Madden Age 69, a director since 1971. Retired; our
Chairman of the Board and Chief Executive Officer
from December 1977 to May 1994. Also a director
of CNF Transportation Inc., PG&E Corporation and
URS Corporation.
.John M. Richards Age 61, a director since 1991. Our Chairman of
the Board and Chief Executive Officer since May
1994 and our President and Chief Operating
Officer from May 1989 to May 1994. He will be our
Chairman of the Board and Chief Executive Officer
until he retires from such position upon the
adjournment of the 1999 Annual Meeting of
Stockholders.
- --------
*Dr. W.T. Weyerhaeuser and Mr. F.T. Weyerhaeuser are first cousins.
3
<PAGE>
.Reuben F. Richards Age 69, a director since 1974. Retired; Chairman
of the Board of Terra Industries Inc. (an
agricultural company) from May 1983 through April
1996, and Chairman of the Board of Minorco
(U.S.A.) Inc. (a natural resources company) from
May 1990 through March 1996 and its President and
Chief Executive Officer from February 1994
through March 1996. Also a director of Ecolab
Inc., Engelhard Corporation and Santa Fe Energy
Resources, Inc.
. Judith M. Runstad Age 54, a director since 1999. Of counsel,
formerly a partner, of Foster Pepper & Shefelman
PLLC (a law firm) and immediate past Chairman of
the Board of the Federal Reserve Bank of San
Francisco. Also a director of Wells Fargo Bank
and SAFECO Corporation.
.Frederick T. Weyerhaeuser*Age 67, a director since 1960. Retired Chairman
of the Board and Treasurer of Clearwater
Investment Trust (a financial management
company).
Directors Continuing in Office Until the 2001 Annual Meeting of Stockholders
.Richard A. Clarke Age 68, a director since 1985. Retired; Chairman
of the Board of Pacific Gas and Electric Company
(a public utility) from July 1994 through June
1995 and its Chief Executive Officer from May
1986 through June 1994. Also a director of CNF
Transportation Inc., PG&E Corporation and Pacific
Gas and Electric Company.
.George F. Jewett, Jr. Age 71, a director since 1957. Our Vice Chairman
of the Board.
.Vivian W. Piasecki Age 68, a director since 1992. Chairman of the
Board of Overseers for the University of
Pennsylvania School of Nursing and Penn Nursing
Network (a health service and educational
institution).
.Robert G. Schwartz Age 70, a director since 1973. Retired Chairman
of the Board of Metropolitan Life Insurance
Company (a life insurance company). Also a
director of COMSAT Corporation, Consolidated
Edison Company of New York, Inc., Lone Star
Industries, Inc., Lowe's Companies, Inc.,
Metropolitan Life Insurance Company and Mobil
Corporation.
.L. Pendleton Siegel Age 56, a director since 1997. Our President and
Chief Operating Officer since May 1994 and our
Executive Vice President--Pulp-Based Operations
from August 1993 to May 1994. Mr. Siegel will
succeed Mr. J.M. Richards as our Chairman of the
Board and Chief Executive Officer upon the
adjournment of the 1999 Annual Meeting of
Stockholders.
- --------
*Dr. W.T. Weyerhaeuser and Mr. F.T. Weyerhaeuser are first cousins.
4
<PAGE>
Committees of the Board of Directors; Meetings
We have four standing committees.
The Audit Committee
. Reviews with the independent auditors the auditors' annual report and
scope of the next audit.
. Nominates the independent auditors to the Board of Directors.
. Reviews any consulting services provided by the independent auditors and
evaluates the effect this may have on the auditors' independence.
. Reviews with external and internal auditors the adequacy of internal
accounting and control systems.
. Reviews with management and auditors the accounting and financial
reporting requirements and practices.
The members are Richard A. Clarke, Kenneth T. Derr, George F. Jewett, Jr.,
Richard B. Madden, Vivian W. Piasecki and Richard M. Rosenberg (until May
20, 1999). The Audit Committee met twice in 1998.
The Executive Compensation and Personnel Policies Committee
. Reviews annually and recommends to the Board of Directors our Chairman
and Chief Executive Officer's total compensation.
. Reviews annually our Chairman and Chief Executive Officer's
recommendations on base salaries and incentive awards for certain senior
officers.
. Administers the stock incentive plans and the Management Performance
Award Plan.
. Reviews compensation and benefit plans and practices, and recommends
changes.
The members are Reuben F. Richards, Robert G. Schwartz, Charles R. Weaver,
Frederick T. Weyerhaeuser and William T. Weyerhaeuser. The Executive
Compensation and Personnel Policies Committee met four times in 1998.
The Nominating and Corporate Governance Committee
. Recommends the size of the Board of Directors.
. Recommends nominees for election as directors and for service on
Committees of the Board.
. Reviews compensation and retirement policies for directors, and
recommends changes.
. Reviews and makes recommendations on our corporate governance guidelines
and other governance issues.
The members are Richard A. Clarke, George F. Jewett, Jr., Richard B.
Madden, Toni Rembe and Robert G. Schwartz. The Nominating and Corporate
Governance Committee met four times in 1998.
The Finance Committee
. Reviews and makes recommendations on financings and other financial
matters.
The members are Toni Rembe, John M. Richards, Reuben F. Richards, Richard
M. Rosenberg (until May 20, 1999) and William T. Weyerhaeuser. The Finance
Committee met three times in 1998.
5
<PAGE>
STOCK OWNERSHIP
Beneficial Ownership of Certain Stockholders, Directors and Executive Officers
This table shows as of January 1, 1999: (1) the beneficial owner of more
than 5% of the common stock and the number of shares it beneficially owned;
and (2) the number of shares each director, each executive officer named in
the Summary Compensation Table on page 9 and all directors and executive
officers as a group beneficially owned, as reported by each person. Except as
noted, each person has sole voting and investment power over the shares shown
in this table.
<TABLE>
<CAPTION>
Amount and Nature of
Common Stock Beneficially Owned
------------------------------------------
Common
Number of Shares Right to Percent of Stock
Beneficially Owned Acquire(1) Class Units(2)
------------------ ---------- ---------- --------
<S> <C> <C> <C> <C>
Stockholders
Capital Research and
Management Company..... 1,813,800(3) -- 6.3% --
333 South Hope Street
Los Angeles, CA 90071
Directors (4) and Other
Named Executive
Officers
Richard A. Clarke....... 4,091 (5) 1,750 * 4,950
Kenneth T. Derr......... 500 1,750 * 2,652
George F. Jewett, Jr.... 808,314 (6) 1,750 2.8% --
Richard B. Madden....... 27,011 (5) 1,750 * 2,188
Vivian W. Piasecki...... 115,866 (7) 1,750 * 6,816
Toni Rembe.............. 3,378 1,750 * 8,216
John M. Richards........ 28,888 (8) 193,650 * --
Reuben F. Richards...... 1,200 1,750 * 7,084
Judith M. Runstad....... -- -- * --
Robert G. Schwartz...... 2,000 1,750 * 12,888
L. Pendleton Siegel..... 19,973 101,800 * 2,139
Charles R. Weaver....... 1,000 1,750 * 4,950
Frederick T.
Weyerhaeuser........... 1,386,713 (9) 1,750 4.8% 4,950
William T.
Weyerhaeuser........... 920,094 (10) 1,750 3.2% 12,360
Richard L. Paulson...... 1,928 24,600 * --
Charles R. Pottenger.... 11,918 61,175 * --
Thomas J. Smrekar....... 16,829 49,000 * --
Directors and
executive officers as
a group (18 persons
including those named
above)............... 2,524,836 (11) 466,075 10.2% 69,193
</TABLE>
* Less than 1%.
(1) Shares the officers and directors could acquire by exercising stock
options within 60 days of January 1, 1999.
(2) Common stock units are not actual shares of common stock and have no
voting power. For directors other than Mr. Siegel, the units represent
deferred directors' fees and the vested portion of the common stock units
received when the directors' retirement plan was terminated in 1996. For
Mr. Siegel, the units represent deferred Management Performance Award Plan
incentive payments. Potlatch converts the units into cash and pays the
person according to an election the person makes prior to deferring fees
or incentives.
(3) According to a Schedule 13G dated February 11, 1999.
(notes continued on next page)
6
<PAGE>
(4) Includes directors who are nominees for election as a director at the May
20, 1999 Annual Meeting and those directors continuing in office.
(5) Includes the following numbers of shares held jointly with the person's
spouse as to which the person named shares voting and investment power:
Mr. Clarke, 4,091; and Mr. Madden, 10,456.
(6) Includes 601,400 shares held by a trust where Mr. Jewett is the trustee
and shares voting and investment power; 129,864 shares held by a
foundation where he is a trustee and shares voting and investment power;
40,954 shares held by a revocable trust for his and his spouse's benefit
where he shares voting and investment power; and 36,096 shares held by a
revocable trust for his spouse's benefit where he shares voting and
investment power. Mr. Jewett disclaims beneficial ownership of the 129,864
shares held by the foundation and the 36,096 shares held by the revocable
trust for his spouse's benefit.
(7) Does not include 4,220 shares held by Mrs. Piasecki's spouse and 17,020
shares held by trusts where he is a trustee and shares voting and
investment power. Mrs. Piasecki disclaims beneficial ownership of all
these shares.
(8) Does not include 200 shares held by Mr. J.M. Richards' spouse as custodian
for his minor child. Mr. Richards disclaims beneficial ownership of these
shares.
(9) Includes a total of 1,346,980 shares held by trusts where Mr. F.T.
Weyerhaeuser is a trustee and shares voting and investment power for
1,239,180 shares and 233 shares held by a foundation where Mr. F.T.
Weyerhaeuser is a member of the investment committee and shares investment
power. Does not include 8,032 shares held by his spouse's revocable trust.
Mr. F.T. Weyerhaeuser disclaims beneficial ownership of all these shares.
(10) Includes a total of 880,361 shares held by trusts where Dr. W.T.
Weyerhaeuser is a trustee and shares voting power for 37,300 shares, and
voting and investment power for 789,129 shares. Also includes 233 shares
held by a foundation where Dr. W.T. Weyerhaeuser is a trustee and shares
investment power. Does not include 2,700 shares held by his spouse. Dr.
W.T. Weyerhaeuser disclaims beneficial ownership of all these shares.
(11) Includes the shares stated in the table for each director and named
executive officer without duplication of 601,400 shares attributable to
both Mr. Jewett and Mr. F.T. Weyerhaeuser and 232,777 shares attributable
to both Mr. F.T. Weyerhaeuser and Dr. W.T. Weyerhaeuser.
Section 16(a) Beneficial Ownership Reporting Compliance
Under U.S. securities laws, directors, certain executive officers and
persons holding more than 10% of Potlatch's common stock must report their
initial ownership of the common stock and any changes in that ownership to the
Securities and Exchange Commission. The Securities and Exchange Commission has
designated specific due dates for these reports and Potlatch must identify in
this Proxy Statement those persons who did not file these reports when due.
Based solely on its review of copies of the reports filed with the Securities
and Exchange Commission and written representations of its directors and
executive officers, Potlatch believes all persons subject to reporting filed
the required reports on time in 1998.
7
<PAGE>
COMPENSATION OF DIRECTORS AND THE NAMED EXECUTIVE OFFICERS
This section describes the compensation paid or payable to, or deferred for
the accounts of, the directors, the Chief Executive Officer and each of the
four other most highly compensated executive officers for his or her services
to Potlatch in 1998.
Compensation of Directors
Annual Compensation. Each outside director, that is a director who is not a
Potlatch employee, receives a fixed annual fee of $24,000. Each outside
director also receives a $1,200 fee for each meeting of the Board of Directors
or a committee of the Board that the director attends in person or by
telephone. In addition, each committee chairman receives an additional annual
fee of $3,000. Directors may defer receiving any of these fees.
When a director defers fees, he or she elects to have the deferred fees
credited with interest, or converted into common stock units. These common
stock units are then credited with amounts equal to the dividends that are
paid on the same amount of common stock.
During 1998, Potlatch paid to directors, or deferred on their behalf, a
total of $567,600 in fees. Potlatch also reimbursed the directors for their
reasonable out-of-pocket expenses in attending Board and committee meetings.
The Board of Directors met nine times in 1998. With the exception of Richard
M. Rosenberg, each director attended at least 75% of the total Board and
applicable committee meetings.
Stock Options. Under the Potlatch Corporation 1995 Stock Incentive Plan,
Potlatch grants each outside director a nonqualified stock option to purchase
2,000 shares of common stock in December of his or her first year as a
director. Each December after that, Potlatch grants each outside director an
additional nonqualified option to purchase 1,000 shares. In December 1998,
Potlatch granted each outside director options to purchase 1,000 shares of
common stock at an exercise price of $37.75 per share. These options will vest
in two equal installments on the first and second anniversaries of the grant
date. The options will expire ten years after the grant date unless earlier
terminated or exercised.
8
<PAGE>
Compensation of the Named Executive Officers--Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual Compensation Securities All
-------------------- Underlying Other
Name and Principal Position Year Salary Bonus(1) Options/SARs Compensation(2)
--------------------------- ---- ------ ---------------------- ---------------
<S> <C> <C> <C> <C> <C>
John M. Richards......... 1998 $ 561,675 $ 276,700 -- (3) $ 23,590
Chairman of the Board
and Chief Executive 1997 541,970 -- 60,000 129,916
Officer 1996 524,200 284,700 39,350 31,676
L. Pendleton Siegel...... 1998 $ 403,400 $ 165,600 34,000 $ 49,883
President and Chief 1997 389,705 -- 17,500 23,541
Operating Officer 1996 377,275 170,800 21,050 21,726
Charles R. Pottenger..... 1998 $ 303,175 $ 87,100 16,000 $ 12,733
Group Vice President, 1997 292,920 -- 9,650 16,078
Pulp and Paper 1996 283,820 89,900 11,650 15,360
Thomas J. Smrekar........ 1998 $ 264,400 $ 76,000 16,000 $ 11,105
Group Vice President, 1997 252,700 -- 8,200 13,839
Wood Products 1996 242,500 76,800 9,850 12,915
Richard L. Paulson....... 1998 $ 211,500 $ 63,800 16,000 $ 8,883
Vice President, 1997 199,500 -- 5,200 10,660
Minnesota Pulp and Paper 1996 180,075 54,300 6,600 22,300
</TABLE>
(1) Paid 80% in cash and 20% in common stock (or common stock units). When an
executive officer defers bonus compensation, 20% (or more if the executive
elects) is deferred in the form of common stock units. No bonuses were
paid for 1997 under the Management Performance Award Plan because
Potlatch's earnings did not meet the minimum requirements under the plan.
(2) This column represents matching contributions by Potlatch under the
Salaried Employees' Savings Plan. Mr. Richards' 1997 amount includes
$95,196 for unused vacation payable under California law. Mr. Siegel's
1998 amount and Mr. Paulson's 1996 amount include $32,940 and $16,000,
respectively, as relocation costs.
(3) Mr. Richards was not granted any options in 1998 because he will retire in
1999.
9
<PAGE>
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants(1)
----------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted To Exercise Grant Date
Options/SARs Employees in Price Expiration Present
Name Granted Fiscal Year Per Share Date Value(2)
---- ------------ ------------ --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
John M. Richards........ -- -- -- -- --
L. Pendleton Siegel..... 34,000 8% $37.75 12/03/08 $199,240
Charles R. Pottenger.... 16,000 4% 37.75 12/03/08 93,760
Thomas J. Smrekar....... 16,000 4% 37.75 12/03/08 93,760
Richard L. Paulson...... 16,000 4% 37.75 12/03/08 93,760
</TABLE>
(1) These options were granted on December 3, 1998, and become exercisable for
50% of the shares on December 3, 1999 and for the remaining 50% on
December 3, 2000. If a "change in control" of Potlatch occurs after June
3, 1999, these options become exercisable in full and would include stock
appreciation rights. What constitutes a "change in control" for this
purpose is described on page 12.
(2) We calculated this amount using the Black-Scholes option pricing model, a
complex mathematical formula that uses six different market-related
factors to estimate the value of stock options. The factors are stock
price at date of grant, option exercise price, option term, risk-free rate
of return, stock volatility and dividend yield. The Black-Scholes model
generates an estimate of the value of the right to purchase a share of
stock at a fixed price over a fixed period. The actual value, if any, an
executive realizes will depend on whether the stock price at exercise is
greater than the grant price, as well as the executive's continued
employment through the two-year vesting period and the 10-year option
term. The following assumptions were used to calculate the Black-Scholes
value:
<TABLE>
<S> <C> <C>
Stock price at date of grant = $37.75
Option exercise price = $37.75
Option term = 10 years
Risk-free rate of return = Based on 10-year U.S. Treasury Notes
Company stock volatility = Based on prior 3-year monthly stock price
Company dividend yield = 4.61%
Calculated Black-Scholes Value = $5.86 per option
</TABLE>
If the Black-Scholes option pricing model were applied to all outstanding
Potlatch shares as of December 3, 1998, the grant date, the assumed
increased present value for all stockholders would be about $170 million.
There is no assurance that the value received by the named executive
officers or Potlatch's stockholders will be at or near the estimated value
derived by the Black-Scholes model.
10
<PAGE>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares At Fiscal Year-End At Fiscal Year-End(1)
Acquired on Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John M. Richards........ -- -- 193,650 30,000 $12,975 --
L. Pendleton Siegel..... -- -- 101,800 42,750 8,250 --
Charles R. Pottenger.... -- -- 61,175 20,825 7,713 --
Thomas J. Smrekar....... -- -- 49,000 20,100 19,319 --
Richard L. Paulson...... -- -- 24,600 18,600 1,500 --
</TABLE>
(1) Based on the closing stock price in The New York Stock Exchange Composite
Transactions Report for Potlatch's common stock at December 31, 1998 of
$36.875 per share.
Other Employee Benefit Plans
Pension Plan Table. This table shows the estimated annual pension benefits
payable under Potlatch's Salaried Employees' Retirement Plan and Supplemental
Benefit Plan at normal retirement date to a person with the average annual
earnings and years of credited service shown.
<TABLE>
<CAPTION>
Average Years of Credited Service
Annual --------------------------------------------
Earnings 20 25 30 35 40
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000...................... $ 56,694 $ 70,868 $ 85,041 $ 99,215 $109,215
400,000...................... 116,694 145,868 175,041 204,215 224,215
600,000...................... 176,694 220,868 265,041 309,215 339,215
800,000...................... 236,694 295,868 355,041 414,215 454,215
1,000,000...................... 296,694 370,868 445,041 519,215 569,215
</TABLE>
In calculating final average annual earnings, the Retirement Plan and the
Supplemental Benefit Plan recognize overtime, awards under the Management
Performance Award Plan and other incentive payments (excluding stock option
gain) paid or deferred after 1987. The plans recognize incentives in the year
paid. For participants who must retire at 65, the plans calculate benefits as
if the participant received a standard award under the Management Performance
Award Plan. Benefits under the plans are computed as straight-life annuity
amounts and are not subject to reduction by Social Security or other benefits.
The 1998 compensation of Mr. J.M. Richards and the other named executive
officers recognized by the Retirement Plan and the Supplemental Benefit Plan
and their years of service for calculation of retirement plan benefits are:
<TABLE>
<CAPTION>
Name Compensation Years of Service
---- ------------ ----------------
<S> <C> <C>
John M. Richards............................... $886,857 34
L. Pendleton Siegel............................ 598,253 20
Charles R. Pottenger........................... 405,697 31
Thomas J. Smrekar.............................. 352,845 25
Richard L. Paulson............................. 281,325 38
</TABLE>
11
<PAGE>
Severance Program for Executive Employees. Under the Severance Program for
Executive Employees, participants who are terminated for reasons other than
misconduct, who resign within two years after a material change in
compensation, benefits, assigned duties, responsibilities, privileges or
perquisites, or who resign rather than relocate at Potlatch's request can
receive severance pay of up to 12 months' base salary and benefits for the
same period under Potlatch's medical, dental, basic accidental death and
dismemberment, and life insurance plans.
Participants who are terminated or resign under the circumstances described
above after a "change in control" of Potlatch can receive severance pay of up
to 2 1/2 times their base salary, plus standard bonus, benefits for up to 2
1/2 years under Potlatch's medical, dental, disability, basic accidental death
and dismemberment, and life insurance plans, and the value of their unvested
benefits, if any, in the Salaried Employees' Savings Plan, Retirement Plan and
Supplemental Benefit Plan. We will reduce the benefits that fall under the
excess parachute payment provisions of the Internal Revenue Code if the
reduced payment produces a higher net after-tax benefit for the participant.
In general, a "change in control" occurs when (i) Potlatch is no longer an
independent publicly owned corporation or sells or disposes of all or
substantially all of its assets, (ii) more than one-third of the incumbent
directors were not directors three years earlier, or elected or nominated with
the approval of a majority of the directors then in office who were directors
three years earlier, (iii) a person becomes the beneficial owner of 20% or
more of Potlatch's voting power through a tender offer or (iv) Potlatch
dissolves, liquidates, or does not survive a merger or consolidation. All
principal officers, appointed vice presidents and other designated employees
are eligible to participate in the program.
Certain Transactions
From time to time, Potlatch engages in transactions with companies where one
of Potlatch's executive officers or directors or a member of his or her
immediate family has a direct or indirect interest. All of these transactions,
including those described below, are in the ordinary course of business and at
competitive rates and prices.
Pillsbury Madison & Sutro LLP, where Ms. Rembe is a partner, provides legal
services to Potlatch.
Potlatch also purchases products from and has from time to time sold
products to Idaho Forest Industries, Inc., where Mr. J.M. Richards has an
equity interest and where Mr. Richards' brother, W. Thomas Richards, is
President and a director. In 1998, Potlatch purchased approximately $4.8
million in products from, and sold approximately $8.4 million in products to,
Idaho Forest Industries, Inc.
In addition, Potlatch employs Todd Smrekar, the son of Thomas J. Smrekar, as
a plant manager. In 1998, Potlatch paid Todd Smrekar $81,080 for his services,
$17,449 for moving expenses and made matching contributions of $2,838 under
the Salaried Employees' Savings Plan.
12
<PAGE>
EXECUTIVE COMPENSATION AND PERSONNEL POLICIES COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Compensation Policy
Our goal is to attract, retain and reward a highly competent and productive
employee group. To do so, we try to provide a total compensation package that
competes favorably with those offered within the paper and forest products
industry, general industry and the geographic areas in which Potlatch
operates. Our current compensation package includes a mix of base salary,
short-term and long-term incentive opportunities and other employee benefits.
Changes in compensation are based on an individual's performance, Potlatch's
profits and the competitive marketplace. Our intent is that this compensation
be deductible under the Internal Revenue Code's $1 million limitation. We
believe that what we pay under the stock incentive plans and the Management
Performance Award Plan is deductible because a participant must defer any
Management Performance Award Plan payment that causes the participant's
compensation to exceed $1 million.
Our Executive Compensation and Personnel Policies Committee administers
executive compensation programs, policies and practices. As part of its
responsibilities, the Committee periodically reviews our executive pay
structure to make sure that our target and actual cash and incentive
compensation programs are competitive. It does this by examining surveys of
general industry and paper and forest products industry information on base
salaries and short-term and long-term incentives prepared by an independent
compensation consulting firm. These surveys include data from a broad base of
general industry companies and from a base of paper and forest products
companies. This latter base is broader than the S&P Paper & Forest Products
Index. The Committee includes general industry surveys in its review because
it believes that Potlatch competes for executive talent against a wider
spectrum of companies than those in the paper and forest products industry.
The Committee considers the median level of the market as competitive.
Base Salary. The base salary policy provides for compensation at competitive
levels. We draw comparative data from independent, job-specific compensation
surveys that, depending on participation and on the position under review,
cover between 15 and 30 paper and forest products companies, many of which are
in the S&P Paper & Forest Products Index, and over 300 general industry
companies. The Committee considers the median level of the market as
competitive. It awards increases in executive base salary for individual
performance based on the executive's performance plan. These performance plans
contain specific measures, both quantitative and qualitative, related to
higher earnings, increased productivity, improved safety performance, and
compliance with environmental requirements. Increases generally reflect
established merit increase guidelines applicable to all salaried employees.
Management Performance Award Plan. The Management Performance Award Plan
provides the potential for annual incentives that are paid in cash or in a
combination of cash and Potlatch common stock. We designed the plan to create
an incentive for key employees, including the Chief Executive Officer and the
other named officers, who are in a position to contribute to and therefore
influence Potlatch's annual profit performance on an ROE basis. The plan does
not permit awards unless Potlatch's earnings meet specified minimum
requirements. The plan also permits us to limit the amount or change the time
and form of incentive payment if total awards exceed 4% of pre-tax earnings.
Beginning in 1996, the Management Performance Award Plan required at least 20%
of all awards be paid in common stock or common stock units.
Stock Incentive Plans. The purpose of the stock incentive plans is to
further align employees' interests with Potlatch's long-term performance and,
therefore, the long-term interests of the stockholders. We grant options to
employees who are in the position to influence business results. We
13
<PAGE>
base target grants on specific gain objectives by responsibility level. The
goal is to provide a grant opportunity at the median level of competitive
practice as measured by a survey of long-term incentive grant practices among
major industrial companies. We consider individual performance against
performance plans and potential in determining the actual amount of the grant.
Since the exercise prices provided in the options represent the fair market
value of the common stock when granted, the options have no value unless the
common stock price appreciates in the future. The options vest in 50%
increments on the first and second anniversaries of the grant. Optionees may
exercise their options using either cash or shares of Potlatch common stock.
1998 Company Performance
In 1998, Potlatch's basic earnings per share were $1.28 for a return on
common stockholders' equity (or ROE) of 3.9%. Potlatch's ROE of 3.9% was above
the industry's average ROE performance of 3.1% in 1998, as measured by a
sample of 17 major forest products companies.*
1998 Executive Compensation
Potlatch's executive compensation for 1998 consisted of three elements: base
salary, a cash and common stock bonus payment under the Management Performance
Award Plan and stock options under the stock incentive plans.
The Committee determined base salaries for Messrs. Siegel, Pottenger,
Smrekar and Paulson following the principles set forth above--namely,
competitive levels and each individual's performance against his performance
plan. In determining bonus payments for 1998 under the Management Performance
Award Plan, the Committee considered Potlatch's ROE performance against the
forest products companies* as well as each individual's performance against
his performance plan. The Committee also considered each individual's
performance against his performance plan, and each individual's potential, in
recommending 1998 stock option grants.
1998 Chief Executive Compensation
The compensation of our Chairman and Chief Executive Officer, Mr. J.M.
Richards, similarly consisted of base salary and a cash and common stock bonus
payment under the Management Performance Award Plan. In determining Mr.
Richards' base salary, the Committee considered chief executive officer pay
information for approximately 25 paper and forest products companies and over
200 general industry companies and the Company's guidelines for all salaried
employees, which resulted in a 3.6% increase from his previous base salary. In
determining Mr. Richards' bonus for 1998 under the Management Performance
Award Plan, the Committee considered Potlatch's ROE performance against the
forest products companies* as well as his performance against his performance
plan. Because of Mr. Richards' planned retirement in 1999, no options were
granted in 1998.
The Executive Compensation and
Personnel Policies Committee Members
F.T. Weyerhaeuser, Chair
R.F. Richards
R.G. Schwartz
C.R. Weaver
W.T. Weyerhaeuser
- --------
* The paper and forest products industry base we use for ROE comparison
purposes consists of 17 major paper and forest products companies, a broader
base than the 10 companies that make up the S&P Paper & Forest Products
Index. Using this base has in the past created a more challenging ROE
comparison than the S&P Paper & Forest Products Index since it includes
companies whose ROEs have on average exceeded the ROEs of the companies
included in the S&P Paper & Forest Products Index.
14
<PAGE>
PERFORMANCE GRAPH
Comparison of Five-Year Total Returns*
[PERFORMANCE CHART APPEARS HERE]
- --------
* Assumes $100 was invested on December 31, 1993. Total return assumes
quarterly reinvestment of dividends.
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Potlatch Corporation........................... $100 $ 82 $ 92 $103 $107 $ 96
S&P Paper and Forest Products.................. 100 105 117 131 142 146
S&P 500 Composite.............................. 100 102 139 170 227 293
</TABLE>
15
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(Proposal Two on the Proxy Card)
We recommend a vote FOR this proposal.
We selected KPMG Peat Marwick LLP as the independent auditors for Potlatch
for 1999 and recommend that the stockholders ratify the selection. If the
stockholders do not ratify KPMG Peat Marwick LLP, we will consider the
selection of other independent auditors.
KPMG Peat Marwick LLP and its predecessors, independent certified public
accountants, have been the auditors for Potlatch for 47 years.
Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting and available to answer questions. They will also have an opportunity
to make a statement.
16
<PAGE>
POTLATCH'S ANNUAL MEETING OF STOCKHOLDERS
SAINT PAUL HOTEL
350 MARKET STREET
SAINT PAUL, MINNESOTA
[MAP OF SAINT PAUL, MINNESOTA]
[LOGO OF POTLATCH CORPORATION]
<PAGE>
POTLATCH CORPORATION
PROXY PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby authorizes JOHN M. RICHARDS, L. PENDLETON SIEGEL and
BETTY R. FLESHMAN, as Proxies with full power in each to act without the other
and with the power of substitution in each, to represent and to vote all the
shares of stock the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Potlatch Corporation to be held on May 20, 1999, or at any
adjournment thereof.
1. ELECTION OF FOUR DIRECTORS TO SERVE UNTIL THE 2002 ANNUAL MEETING OF
STOCKHOLDERS:
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY to
(except as marked to vote for all nominees
the contrary below) listed below
Kenneth T. Derr, Toni Rembe, Charles R. Weaver, William T. Weyerhaeuser
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
-----------------------------------------------------------------------------
2. RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS
[_] FOR [_] AGAINST [_] ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
The Board of Directors unanimously recommends a vote FOR all items.
(Continued and to be signed on other side)
_______________________________________________________________________________
(Continued from other side)
This proxy will be voted as directed but if not otherwise directed, FOR all
items.
By signing below, the undersigned certifies that:
(i) there has been NO change in the beneficial ownership of shares
of Common Stock covered hereby from and including March 1, 1995; and
(ii) there has been a change in the beneficial ownership (such as a
purchase) of shares of Common Stock since that date.
If no certification is made, it will be deemed for purposes of this proxy that
there has been a change in the beneficial ownership of all shares of Common
Stock covered hereby subsequent to March 1, 1995.
Dated: _____________________, 1999
----------------------------------
----------------------------------
(Sign name exactly as imprinted
hereon. For joint accounts, both
owners should sign. In signing as
attorney, executor, administrator,
trustee or guardian, give full
title as such. If signer is a
corporation, give full corporate
name and sign by duly authorized
officer, showing the officer's
PLEASE DATE, SIGN AND RETURN title.)
<PAGE>
(LETTERHEAD OF POTLATCH CORPORATION)
601 W. Riverside Ave.
Suite 1100
Spokane, WA 99201
Telephone (509) 835-1500
March 29, 1999
Dear Bank, Broker or Nominee:
Under the Restated Certificate of Incorporation of Potlatch Corporation,
stockholders who were the beneficial owners of shares of Common Stock on the
record date for the upcoming meeting of stockholders and who have owned such
shares continuously from and including March 1, 1995 will be entitled to four
(4) votes per share for each such share upon submitting acceptable evidence of
beneficial ownership to the Company. Stockholders who own shares of Common Stock
in "street" or "nominee" name or through a broker, clearing agency, voting
trustee, bank, trust company or other nominee are presumed to be entitled to
exercise one (1) vote per share for each such share. To become entitled to four
(4) votes per share, a stockholder must provide written proof that there has
been no change in the beneficial ownership of his or her shares from and
including March 1, 1995. Such proof must at least consist of a written
certification in the form provided on the proxy.
In certain circumstances, the Company may rely on your representation with
respect to the beneficial owners of shares of Common Stock of Potlatch
Corporation held in your name who are entitled to exercise four (4) votes per
share, provided that such beneficial owners have completed and returned to you
for your records written certifications in the form provided on the proxy card
as to their beneficial ownership and you have forwarded a summary of such voting
information on the summary proxy card on the reverse side of this letter to
Potlatch Corporation or its agent. However, the Company unconditionally reserves
the right to review each and every written certification on any proxy card
completed by a beneficial owner of shares of Common Stock of Potlatch
Corporation to determine whether such beneficial owner is entitled to exercise
the claimed four (4) votes per share.
Very truly yours,
/s/ Betty R. Fleshman
Betty R. Fleshman
Secretary
<PAGE>
PROXY POTLATCH CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby authorizes JOHN M. RICHARDS, L. PENDLETON SIEGEL and
BETTY R. FLESHMAN, as Proxies with full power in each to act without the other
and with the power of substitution in each, to represent and to vote all the
shares of stock the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Potlatch Corporation to be held on May 20, 1999, or at any
adjournment thereof.
Shares as to which
there has been NO Shares as to which
change in beneficial there has been a change
ownership since in beneficial ownership
March 1, 1995 since March 1, 1995
----------------------- -----------------------
(Post number of shares (Post number of shares
not number of votes) not number of votes)
For Withhold For Withhold
--- -------- --- --------
1. ELECTION OF FOUR DIRECTORS
TO SERVE UNTIL THE 2002
ANNUAL MEETING OF
STOCKHOLDERS:
K. T. Derr shs. shs. shs. shs.
--- --- --- ---
T. Rembe shs. shs. shs. shs.
--- --- --- ---
C. R. Weaver shs. shs. shs. shs.
--- --- --- ---
W. T. Weyerhaeuser shs. shs. shs. shs.
--- --- --- ---
For Against Abstain For Against Abstain
--- ------- ------- --- ------- -------
2. RATIFICATION OF THE
SELECTION OF KPMG PEAT
MARWICK LLP AS
INDEPENDENT AUDITORS
shs. shs. shs. shs. shs. shs.
-- -- -- -- -- --
Post only record position. Do not tabulate votes.
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
The Board of Directors unanimously recommends a vote FOR all items.
This proxy will be voted as directed but if not otherwise directed, FOR all
items.
If the summary voting table above is not completed, it will be deemed for
purposes of this proxy that there has been a change in the beneficial
ownership of all Common Shares covered hereby subsequent to March 1, 1995.
Dated: _________________________, 1999
--------------------------------------
--------------------------------------
--------------------------------------
(Sign name exactly as imprinted
hereon. In signing as attorney,
executor, administrator, trustee or
guardian, give full title as such. If
signer is a corporation, give full
corporate name and sign by duly
authorized officer, showing the
officer's title.)
PLEASE DATE, SIGN AND RETURN
<PAGE>
POTLATCH CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
The Board of Directors unanimously recommends a vote FOR all items.
1. Election of four Directors to serve until FOR ALL
the 2002 Annual Meeting of FOR WITHHOLD (Except as
Stockholders--Nominees: Kenneth T. Derr, ALL ALL written below)
Toni Rembe, Charles R. Weaver, William [ ] [ ] [ ]
T. Weyerhaeuser.
-----------------------------------------
2. Ratification of the selection of KPMG FOR AGAINST ABSTAIN
Peat Marwick LLP as independent auditors. [ ] [ ] [ ]
3. In their discretion, the proxies are
authorized to vote upon such other
business as may properly come before the
meeting.
THIS PROXY WILL BE VOTED AS
DIRECTED BUT IF NOT OTHERWISE
DIRECTED, FOR ALL ITEMS.
Dated: , 1999
--------------
-----------------------------
Signature
----------------------------
Signature
(Sign name exactly as
imprinted hereon. For joint
accounts, both owners should
sign. In signing as attorney,
executor, administrator,
trustee, or guardian, give
full title as such. If signer
is a corporation, give full
corporate name and sign by
duly authorized officer,
showing the officer's title.)
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE.
<PAGE>
PROXY PROXY
POTLATCH CORPORATION
Proxy for Annual Meeting of Stockholders to be Held May 20, 1999
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby authorizes JOHN M. RICHARDS, L. PENDLETON SIEGEL and
BETTY R. FLESHMAN as Proxies with full power in each to act without the other
and with the power of substitution in each, to represent and to vote all the
shares of stock the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Potlatch Corporation to be held on May 20, 1999, or at any
adjournment thereof.
IMPORTANT--This proxy must be signed and dated on the reverse side.
- --------------------------------------------------------------------------------
<PAGE>
[LETTERHEAD OF PUTNAM FIDUCIARY TRUST COMPANY]
March 31, 1999
Dear Participant of the Potlatch Savings Plan:
The Board of Directors of Potlatch Corporation is soliciting proxies to be used
at the Annual Meeting of Stockholders to be held on May 20, 1999 and any
adjournment thereof. Enclosed is Potlatch Corporation's Proxy Statement for its
1999 Annual Meeting of the Stockholders and a card on which you can indicate
your voting instructions.
The stock in your account under the Savings Plan is held by us as Trustee.
Please see the enclosed Confidential Voting Card for details on how your shares
will be voted. In accordance with the time-phased voting provision of Potlatch
Corporation's Restated Certificate of Incorporation, you are entitled to four
votes for each share in your account on the matters to be voted upon at this
year's Annual Meeting. The matters to be presented at the meeting are described
in detail in the attached Notice of Meeting and Proxy Statement.
Please mark your voting instructions on the enclosed card and date, sign and
return this card in the enclosed envelope. Your vote will be held in confidence.
Very Truly Yours,
Putnam Fiduciary Trust Company
<PAGE>
POTLATCH ------------
FIRST CLASS
Potlatch Corporation U.S. POSTAGE
PAID
601 W. Riverside Ave. PROXY
Suite 1100 TABULATOR
Spokane, WA 99201 ------------
IMPORTANT
---------
YOUR PROXY CARD IS
ENCLOSED IN
THIS ENVELOPE
PLEASE VOTE, SIGN AND RETURN PROMPTLY
. Please fold and detach card at perforation before mailing .
POTLATCH CORPORATION
SALARIED EMPLOYEES' SAVINGS PLAN
CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE MARK YOUR VOTING INSTRUCTIONS ON THE REVERSE SIDE OF THIS CARD.
YOUR SHARES WILL BE VOTED AS DIRECTED, BUT IF NOT OTHERWISE DIRECTED,
FOR THE ELECTION OF FOUR DIRECTORS AND FOR PROPOSAL 2.
IF YOU DO NOT RETURN THIS CARD, THE TRUSTEE MUST VOTE YOUR PLAN SHARES IN THE
SAME PROPORTION AS VOTED BY OTHER PLAN PARTICIPANTS.
---------------------------------------------------
(Please sign exactly as name appears to the left)
Dated: __________________________, 1999
<PAGE>
. Please fold and detach card at perforation before mailing .
Putnam Fiduciary Trust Company, Trustee:
POTLATCH CORPORATION
SALARIED EMPLOYEES' SAVINGS PLAN
CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
You are authorized and instructed to vote all stock in my Accounts under the
Potlatch Corporation Salaried Employees' Savings Plan at the Annual Meeting of
Stockholders of Potlatch Corporation to be held on May 20, 1999, or at any
adjournment thereof.
1. ELECTION OF FOUR DIRECTORS TO SERVE UNTIL THE 2002 ANNUAL MEETING OF
STOCKHOLDERS:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed
contrary below) below
Kenneth T. Derr, Toni Rembe, Charles R. Weaver, William T. Weyerhaeuser
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
---------------------------------------------------------------
2. RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE SAID MEETING.
The Board of Directors unanimously recommends a vote FOR all items.
(Continued and to be signed on other side)
<PAGE>
POTLATCH ------------
FIRST CLASS
Potlatch Corporation U.S. POSTAGE
PAID
601 W. Riverside Ave. PROXY
Suite 1100 TABULATOR
Spokane, WA 99201 ------------
IMPORTANT
---------
YOUR PROXY CARD IS
ENCLOSED IN
THIS ENVELOPE
PLEASE VOTE, SIGN AND RETURN PROMPTLY
. Please fold and detach card at perforation before mailing .
POTLATCH CORPORATION
SAVINGS PLAN FOR HOURLY EMPLOYEES
CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE MARK YOUR VOTING INSTRUCTIONS ON THE REVERSE SIDE OF THIS CARD.
YOUR SHARES WILL BE VOTED AS DIRECTED, BUT IF NOT OTHERWISE DIRECTED,
FOR THE ELECTION OF FOUR DIRECTORS AND FOR PROPOSAL 2.
IF YOU DO NOT RETURN THIS CARD, THE TRUSTEE MUST VOTE YOUR PLAN SHARES IN THE
SAME PROPORTION AS VOTED BY OTHER PLAN PARTICIPANTS.
---------------------------------------------------
(Please sign exactly as name appears to the left)
Dated: __________________________, 1999
<PAGE>
. Please fold and detach card at perforation before mailing .
Putnam Fiduciary Trust Company, Trustee:
POTLATCH CORPORATION
SAVINGS PLAN FOR HOURLY EMPLOYEES
CONFIDENTIAL VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
You are authorized and instructed to vote all stock in my Accounts under
the Potlatch Corporation Savings Plan for Hourly Employees at the Annual Meeting
of Stockholders of Potlatch Corporation to be held on May 20, 1999, or at any
adjournment thereof.
1. ELECTION OF FOUR DIRECTORS TO SERVE UNTIL THE 2002 ANNUAL MEETING OF
STOCKHOLDERS:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed
contrary below) below
Kenneth T. Derr, Toni Rembe, Charles R. Weaver, William T. Weyerhaeuser
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
---------------------------------------------------------------
2. RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE SAID MEETING.
The Board of Directors unanimously recommends a vote FOR all items.
(Continued and to be signed on other side)
