<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
- --------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Wellman, Inc.
(Name of Registrant as Specified In Its Charter)
Wellman, Inc.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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> 2
WELLMAN, INC.
1040 BROAD STREET, SUITE 302
SHREWSBURY, NEW JERSEY 07702
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 1996
To the Stockholders of
Wellman, Inc.
Notice is hereby given that the Annual Meeting of the Stockholders of
Wellman, Inc. (the "Corporation") will be held at the Oyster Point Hotel, 146
Bodman Place, Red Bank, New Jersey, on Tuesday, May 21, 1996 at 10:00 A.M.,
Eastern Daylight Time, for the following purposes:
(1) To elect directors of the Corporation for the ensuing year, and
until their successors are duly elected and qualified.
(2) To ratify the selection by the Board of Directors of Ernst & Young
LLP as independent auditors to audit the Corporation's books and accounts
for the fiscal year ending December 31, 1996.
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof, including consideration of the
stockholder proposal set forth in the accompanying proxy statement, if such
proposal is presented at the meeting.
By Order of the Board of Directors,
DAVID K. DUFFELL
Secretary
April 16, 1996
Mailed at New York, New York
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT AS PROMPTLY
AS POSSIBLE. IF YOU ATTEND THE MEETING AND VOTE IN PERSON, THE PROXY WILL NOT BE
USED.
<PAGE> 3
WELLMAN, INC.
1040 BROAD STREET, SUITE 302
SHREWSBURY, NEW JERSEY 07702
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies to be used at the Annual Meeting of Stockholders of Wellman, Inc. (the
"Corporation") to be held on May 21, 1996 and at any adjournment thereof, for
the purposes set forth in the accompanying notice of such meeting. All
stockholders of record of the Corporation's Common Stock at the close of
business on April 1, 1996 will be entitled to vote. The stock transfer books
will not be closed.
Proxies in the form enclosed are solicited on behalf of the Board of
Directors. Any stockholder giving a proxy in such form has the power to revoke
it at any time before it is exercised by filing a later proxy with the
Corporation, by attending the meeting and voting in person, or by notifying the
Corporation of the revocation in writing to its President at 1040 Broad Street,
Suite 302, Shrewsbury, New Jersey 07702. Any such proxy, if received in time for
the voting and not revoked, will be voted at the Annual Meeting in accordance
with the directions of the stockholder. Any proxy which fails to specify a
choice with respect to any matter to be acted upon will be voted for the
election of each nominee for director, in favor of Proposal 2, and against the
stockholder proposal referred to herein.
As of April 1, 1996, the Corporation had outstanding and entitled to vote
33,553,731 shares of Common Stock. Each share of such stock entitles the holder
thereof to one vote on the matters to be voted upon at the Annual Meeting with
all holders of Common Stock voting as one class. With regard to the election of
directors, votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on all proposals other than
the election of directors and will be counted as present for purposes of the
item on which the abstention is noted. Abstentions on the ratification of
accountants and the stockholder proposal will have the same legal effect as a
vote against such matter. Under the rules of the New York Stock Exchange,
brokers holding shares in street name have the authority to vote on certain
matters when they have not received instructions from the beneficial owners.
Brokers that do not receive instructions are entitled to vote on the election of
directors and the ratification of accountants. As a result, broker non-votes
will have no effect on the outcome of the election of directors and the
ratification of accountants. Broker non-votes will have the same legal effect as
a vote against the stockholder proposal.
The holders of a majority of the issued and outstanding shares of Common
Stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum for the transaction of business. Abstentions and broker
non-votes will be counted in determining if a quorum is present. In the absence
of a quorum, the Annual Meeting may be postponed from time to time until
stockholders holding the requisite amount are present or represented by proxy.
<PAGE> 4
As of April 1, 1996, insofar as is known to the management of the
Corporation, the following persons owned beneficially more than 5% of the
outstanding Common Stock of the Corporation, the only capital stock of the
Corporation currently outstanding. Except as otherwise stated in the footnotes
below, the named persons have sole voting and investment power with regard to
the shares shown as owned by such persons.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT
---------------- ----------------- -------
<S> <C> <C>
J.P. Morgan & Co. Incorporated................................. 5,436,648(1) 16.2%
60 Wall Street
New York, NY 10260
The Equitable Companies Incorporated........................... 2,007,500(2) 6.0%
787 Seventh Avenue
New York, NY 10019
<FN>
- ---------------
(1) According to its Schedule 13G on file with the Securities and Exchange
Commission ("SEC"), J.P. Morgan & Co. Incorporated has sole voting power
with respect to 3,123,133 shares, sole dispositive power with respect to
5,383,448 shares and shared dispositive power with respect to 8,500 shares.
(2) According to their joint Schedule 13G on file with the SEC, The Equitable
Life Assurance Society of the United States and Alliance Capital
Management, L.P., subsidiaries of The Equitable Companies Incorporated
operating under independent management, have sole voting power with respect
to 66,500 and 1,518,200 shares, respectively, shared voting power with
respect to 0 and 35,000 shares, respectively, and sole dispositive power
with respect to 66,500 and 1,941,000 shares, respectively.
</TABLE>
The approximate date on which the Proxy Statement and accompanying proxy
card will first be mailed to the stockholders of the Corporation is April 16,
1996.
2
<PAGE> 5
ELECTION OF DIRECTORS
The persons named below have been nominated for election at the Annual
Meeting as directors of the Corporation. The directors who are elected shall
hold office until their respective successors shall have been duly elected and
qualified. In accordance with Delaware General Corporation Law, directors are
elected by a plurality of the votes of the shares present in person or
represented by proxy at the Annual Meeting.
All nominees are members of the present Board. Each of the nominees for
director has consented to being named a nominee in this Proxy Statement and has
agreed to serve as a director, if elected at the Annual Meeting. It is the
intention of the persons named in the proxy to vote for the following nominees.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING DIRECTOR
NAME AND AGE THE PAST FIVE YEARS SINCE
----------- --------------------------- --------
<S> <C> <C>
Thomas M. Duff, 48................. President, Chief Executive Officer and August, 1985
director of the Corporation since its
inception in 1985.
James B. Baker, 50................. Partner of River Associates, LLC August, 1994
(private equity investment fund) since
1993. Prior to 1993, President and
Chief Operating Officer (1991-1992) and
Senior Vice President (1987-1991) of
CONSTAR International, Inc. (plastic
container manufacturer). Also a
director and chairman of the
Compensation Committee of U.S. Xpress
Enterprises, Inc.
C. William Beckwith, 64............ Vice President of the Corporation. November, 1988
Since 1972, Chief Executive Officer of
Wellman International Limited ("WIL").
Clifford J. Christenson, 46........ Executive Vice President of the November, 1995
Corporation since 1993 and Chief
Operating Officer since 1995. Prior to
1993, Chief Financial Officer and
Treasurer since 1985.
Peter H. Conze, 75................. Retired. From 1956 until retirement in March, 1988
1983, various positions with Celanese
Corp. (a chemicals and synthetic fibers
company), including consultant from
1979 until 1983 and Vice Chairman and
director from 1970 until 1978.
Allan R. Dragone, 70............... Retired. From 1988 until 1989, Chairman August, 1990
of the Board of Fiber Industries, Inc.
From 1986 until 1990, President and
Chief Executive Officer of Akzo
America, Inc., the U.S. subsidiary of
the Dutch conglomerate Akzo N.V. Also a
director and member of the Compensation
Committee of Arcadian Chemical
Corporation and United Water Resources
Corporation and a director of Purina
Mills Inc.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING DIRECTOR
NAME AND AGE THE PAST FIVE YEARS SINCE
------------ --------------------------- --------
<S> <C> <C>
Richard F. Heitmiller, 67.......... President of Richard F. Heitmiller, November, 1988
Inc. (consulting firm) since 1982. From
1971 until 1982, various executive
positions with Arthur D. Little, Inc.
(management consultants) and Vice
President of its Decision Resources
subsidiary.
Jonathan M. Nelson, 39............. Co-Chairman of Providence Ventures Inc. August, 1985
(investment advisor) since its
inception in 1990. Managing Director of
Narragansett Capital, Inc. (investment
advisor) since its inception in 1986.
Also a managing general partner of
Providence Ventures LP which is the
general partner of the general partner
of Providence Media Partners L.P.
(venture capital fund). Also a general
partner of the general partner of
Narragansett Capital Partners-A and -B,
L.P. (venture capital funds) ("NCPAB").
James E. Rogers, 50................ Partner of SCI Investors Inc. September, 1993
(investment company) since April, 1993
and Chairman of Custom Papers Group
Inc. (a paper manufacturer) since
November, 1993. From 1991 until 1992,
President and Chief Executive Officer
of Specialty Coatings International
Inc. (a manufacturer). Prior to 1991,
Senior Vice President and Group
Executive of James River Corporation (a
paper manufacturer). Mr. Rogers is also
a director and member of the
Compensation and Executive Committees
of Owens & Minor, Inc. (a medical and
surgical supplies distributor) and a
director and member of the Compensation
and Audit Committees of Caraustar
Industries, Inc. (a paper
manufacturer).
Raymond C. Tower, 71............... Retired. From 1977 until retirement in August, 1990
1990, President and Chief Operating
Officer of FMC Corp. (a manufacturer of
machinery and chemicals). Also a
director of Morton International Inc.,
Inland Steel Industries, Inc. and
Household International, Inc.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING DIRECTOR
NAME AND AGE THE PAST FIVE YEARS SINCE
------------ --------------------------- --------
<S> <C> <C>
Roger A. Vandenberg, 48............ President of Cariad Capital, Inc. August, 1985
(investment advisor) since its
inception in 1992. Managing Director of
Narragansett Capital, Inc. (investment
advisor) since its inception in 1986.
Also a general partner of the general
partner of NCPAB and a general partner
of the general partner of Narragansett
First Fund (a venture capital fund).
Mr. Vandenberg is also a director and
member of the Compensation Committee of
Monaco Coach Corporation (a
manufacturer of motor homes).
</TABLE>
Although the management does not expect that any of the persons named above
will be unable to serve as a director, should any of them be unable to accept
election, it is intended that the proxies will be voted for the election of a
substitute nominee selected by the persons named in the proxy.
The number of shares of the Corporation's Common Stock owned beneficially,
directly or indirectly, as of April 1, 1996 by the nominees, by the executive
officers named in the Summary Compensation Table below, and by all executive
officers and directors as a group is as follows:
<TABLE>
<CAPTION>
AMOUNT PERCENTAGE
BENEFICIALLY OF
NAME OWNED COMMON STOCK
---- ------------ ------------
<S> <C> <C>
Thomas M. Duff................................................. 582,589(1) 1.7%
James B. Baker................................................. 5,300(2)(3) (4)
C. William Beckwith............................................ 151,000(1) (4)
Clifford J. Christenson........................................ 145,900(1) (4)
Peter H. Conze................................................. 5,867(2) (4)
Allan R. Dragone............................................... 7,000(2) (4)
Richard F. Heitmiller.......................................... 7,000(2) (4)
Jonathan M. Nelson............................................. 9,000(2) (4)
James E. Rogers................................................ 6,000(2) (4)
Raymond C. Tower............................................... 8,000(2) (4)
Roger A. Vandenberg............................................ 11,000(2)(5) (4)
James P. Casey................................................. 152,893(1) (4)
Paul D. Apostol................................................ 105,583(1) (4)
All Directors and Executive Officers as a Group
(18 persons)................................................. 1,446,082 4.2%
<FN>
- ------------
(1) Includes the following shares of Common Stock reserved for issuance upon
exercise of stock options outstanding pursuant to the Wellman, Inc. Amended
and Restated 1985 Incentive Stock Option Plan (the "Option Plan"): Mr.
Duff, 203,000 shares; Mr. Beckwith, 150,000 shares; Mr. Christenson,
143,000 shares; Mr. Casey, 99,000 shares; Mr. Apostol, 105,000 shares; and
all directors and executive officers as a group, 934,812 shares.
(2) Includes the following shares of Common Stock reserved for issuance upon
exercise of stock options outstanding pursuant to the Wellman, Inc.
Directors Stock Option Plan: Mr. Baker, 2,000 shares;
</TABLE>
5
<PAGE> 8
Mr. Conze, 5,000 shares; Mr. Dragone, 5,000 shares; Mr. Heitmiller, 5,000
shares; Mr. Nelson, 5,000 shares; Mr. Rogers, 3,000 shares; Mr. Tower,
5,000 shares, Mr. Vandenberg, 5,000 shares; and all directors and executive
officers as a group, 35,000 shares.
(3) Includes 200 shares owned by Mr. Baker's wife.
(4) Less than 1%.
(5) Includes 4,000 shares owned by Mr. Vandenberg, 1,000 shares held by a trust
for the benefit of his two children and 1,000 shares owned by his wife as
custodian for their two children.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a Compensation Committee, currently comprised of
Messrs. Dragone, Nelson and Rogers (Chairperson), which is responsible for
reviewing certain of the Corporation's compensation programs and making
recommendations to the Board of Directors with respect to compensation. The
Compensation Committee met twice during the Corporation's last fiscal year.
The Board of Directors has a Finance and Audit Committee, currently
comprised of Messrs. Baker, Conze, Heitmiller and Vandenberg (Chairperson),
which is responsible for reviewing the Corporation's internal auditing
procedures and accounting controls and considering the selection and
independence of the Corporation's outside auditors. The Finance and Audit
Committee met three times during the Corporation's last fiscal year.
The Board of Directors has a Nominating Committee, currently comprised of
Messrs. Heitmiller, Rogers and Tower (Chairperson), which is responsible for
considering the qualifications and recommending to the stockholders the election
of directors of the Corporation. Stockholders may recommend nominees for
election as directors by writing to the President of the Corporation. The
Nominating Committee met once during the Corporation's last fiscal year.
The Corporation's Board of Directors held a total of six meetings during
1995. Each member of the Board of Directors attended at least 75% of the
aggregate number of meetings of the Board and all committees on which he served.
COMPENSATION OF DIRECTORS AND OFFICERS
DIRECTORS COMPENSATION
Each director of the Corporation who is not an employee receives fees of
$24,000 per year, plus $1,500 for each Board or Committee meeting attended in
person and $750 for each telephonic meeting attended. Directors who are
employees receive no additional compensation for serving as directors or
attending Board or Committee meetings.
The Corporation maintains a Restricted Stock Plan pursuant to which each
non-employee director of the Corporation is eligible to receive a total of 2,000
shares of the Corporation's Common Stock which vest over a period of three years
commencing on the date he was first elected to the Board, provided he has
continuously served as a director for the preceding twelve months.
The Corporation also maintains a Directors Stock Option Plan pursuant to
which each non-employee director of the Corporation is eligible to receive
annually options to acquire 1,000 shares of the Corporation's Common Stock.
6
<PAGE> 9
On an annual basis, each non-employee director is eligible to participate
in the Directors' Deferred Compensation Plan which allows the deferral of all or
a portion of directors compensation (excluding expense reimbursement) payable
from time to time. Directors participating in this Plan may elect to have the
deferred compensation invested in an interest-bearing account, a share
equivalent account representing the Corporation's Common Stock, or a combination
of the two. The interest-bearing account accrues interest at the rate equal to
the total return earned by the Lehman Aggregate Bond Index. Deferred
compensation in the share equivalent account is treated as though it were
invested in Common Stock. If a participant makes a share election, dividend
equivalents accrue to a participant's account quarterly and each account is
adjusted to reflect share ownership changes resulting from events such as a
stock split. Participants have no voting rights with respect to the share
equivalent account. All distributions from accounts are made in cash. Messrs.
Baker, Nelson and Vandenberg have each elected to defer their compensation and
to invest in the share equivalent account.
In addition, upon voluntary retirement from the Board of Directors,
non-employee directors who have served as directors for three or more years are
entitled to receive total retirement payments equal to the annual directors fee
in effect at the date of retirement multiplied by the number of full years of
continuous service as a director of the Corporation.
EXECUTIVE COMPENSATION
The following table summarizes the compensation for the years ended
December 31, 1995, 1994 and 1993 of the Corporation's chief executive officer
and the four other most highly compensated executive officers whose salary and
bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------- ------------
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER
COMPEN- OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SATION(1) SARS(2) SATION(3)
-------------------------- ---- -------- -------- ------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Thomas M. Duff....................... 1995 $620,000 $534,705 $62,954 40,000 $218,200
President, CEO 1994 $605,000 $462,449 $54,453 30,000 $159,634
1993 $560,000 $203,218 $47,960 30,000 $128,260
Clifford J. Christenson.............. 1995 $296,250 $255,494 $28,955 30,000 $101,295
Executive Vice President, COO 1994 $280,000 $214,026 $27,270 25,000 $ 72,661
1993 $265,000 $ 96,166 $31,911(4) 25,000 $ 59,307
C.W. Beckwith........................ 1995 $290,160 $185,066 $17,910 20,000 --
Vice President; CEO, WIL 1994 $274,075 $166,170 $17,750 15,000 --
1993 $259,857 $ 92,159 $15,911 15,000 --
James P. Casey....................... 1995 $252,500 $217,763 $23,956 20,000 $ 74,128
Vice President; 1994 $237,501 $119,682 $24,607 20,000 $ 66,902
President, Fibers Group 1993 $215,004 $109,839 $21,482 20,000 $ 47,621
Paul D. Apostol...................... 1995 $222,500 $191,890 $23,225 20,000 $ 75,460
Vice President, 1994 $211,250 $187,825 $22,225 15,000 $ 57,306
Packaging 1993 $196,875 $ 88,644 $24,627 15,000 $ 42,434
Products Group
</TABLE>
7
<PAGE> 10
- ------------
(1) Includes the Corporation's contributions to life insurance premiums or
payments in lieu thereof (Mr. Duff, $62,954; Mr. Christenson, $28,955; Mr.
Beckwith, $17,910; Mr. Casey, $23,956; and Mr. Apostol, $23,225 in 1995).
(2) None of the options granted were options with tandem SARs and no
free-standing SARs were granted.
(3) Consists of the Corporation's contributions to employee retirement (Mr.
Duff, $20,460; Mr. Christenson, $20,460; Mr. Beckwith, $-0-; Mr. Casey,
$20,460; and Mr. Apostol, $20,460 in 1995), supplemental retirement (Mr.
Duff, $193,240; Mr. Christenson, $76,335; Mr. Beckwith, $-0-; Mr. Casey,
$49,168; and Mr. Apostol, $50,500 in 1995), and savings plans (Mr. Duff,
$4,500; Mr. Christenson, $4,500; Mr. Beckwith, $-0-; Mr. Casey, $4,500; and
Mr. Apostol, $4,500 in 1995).
(4) Includes $10,800 payment made to Mr. Christenson upon exercise of options
converted into non-qualified options as compensation for taxes payable.
The following table sets forth certain information relating to option
grants pursuant to the Option Plan in the year ended December 31, 1995 to the
individuals named in the Summary Compensation Table above.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR
OPTIONS/ EMPLOYEES BASE EXPIRA- GRANT
SARS IN FISCAL PRICE TION DATE
NAME GRANTED(1)(2) YEAR ($/SH) DATE VALUE(3)
---- ------------- ------------ ------ --------- --------
<S> <C> <C> <C> <C> <C>
Thomas M. Duff.................... 40,000 9.5% $22.75 12/20/06 $434,000
Clifford J. Christenson........... 30,000 7.1% $22.75 12/20/06 $325,500
C.W. Beckwith..................... 20,000 4.8% $22.75 12/20/06 $217,000
James P. Casey.................... 20,000 4.8% $22.75 12/20/06 $217,000
Paul D. Apostol................... 20,000 4.8% $22.75 12/20/06 $217,000
<FN>
- ------------
(1) None of the options granted were options with tandem SARs and no
free-standing SARs were granted.
(2) All options granted to the named executive officers were granted on December
20, 1995 pursuant to the Option Plan. The options become exercisable in 20%
increments on December 20, 1996, 1997, 1998, 1999 and 2000, respectively.
If a Change of Control (as defined in the Option Plan) occurs, these
options would become immediately exercisable.
(3) Based on the Black-Scholes option pricing model. The Corporation's use of
this model should not be construed as an endorsement of its accuracy at
valuing options. The actual value, if any, an executive may realize will
depend on the excess of the stock price over the exercise price on the date
the option is exercised, so that there is no assurance the value realized
by an executive will be at or near the value estimated by the Black-Scholes
model. The estimated values under that model are based on the following
assumptions:
</TABLE>
<TABLE>
<S> <C>
Stock price..................................................... $22.75
Exercise price.................................................. $22.75
Expected option term............................................ 10 years
Stock price volatility.......................................... .3140
Dividend yield.................................................. 0.95%
Risk-free interest rate......................................... 5.71%
</TABLE>
8
<PAGE> 11
The following table sets forth certain information with respect to
unexercised options to purchase the Corporation's Common Stock granted under the
Option Plan to the individuals named in the Summary Compensation Table above. No
options were exercised in 1995 by such individuals.
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END FY-END(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Thomas M. Duff...................... 99,000 104,000 $ 264,500 $ 151,000
Clifford J. Christenson............. 66,000 77,000 $ 191,250 $ 109,125
C.W. Beckwith....................... 97,000 53,000 $ 448,125 $ 76,875
James P. Casey...................... 43,000 56,000 $ 96,500 $ 83,000
Paul D. Apostol..................... 56,000 49,000 $ 147,500 $ 66,875
<FN>
- ---------------
(1) Based on the closing price on the New York Stock Exchange of the
Corporation's Common Stock on December 29, 1995 ($22.75).
</TABLE>
Pension Plan. The Corporation's subsidiary, Fiber Industries, Inc.
("FII"), maintains the Fiber Industries, Inc. Retirement Income Plan (the
"Pension Plan"), a tax-qualified defined benefit pension plan for eligible
employees of FII, which included Messrs. Casey and Apostol. Effective July 1,
1991, no additional employees became Participants in the Pension Plan.
Participants are entitled to a monthly retirement benefit if they retire
(i) at or after age 65 (normal retirement age) or (ii) at or after age 55 with
either five or ten years of vesting service depending on whether they retire
directly from employment with FII or are transferred Celanese employees.
Participants whose employment with FII terminates after five years of vesting
service will also be eligible for a monthly retirement benefit. If benefits are
paid prior to normal retirement age they may be reduced, depending on the date
benefits begin and the Participant's age and service.
A Participant's normal retirement benefit is calculated under a formula
which takes into consideration final average compensation, years of service up
to 35, and benefits to be derived through Social Security and certain employee
benefit plans. Final average compensation covered by the Pension Plan is based
on the combined amounts set forth under the headings "Salary" and "Bonus" of the
Summary Compensation Table for Messrs. Casey and Apostol.
Benefits, computed on the basis of a straight life annuity, are payable
upon early, normal and late retirement, and upon death of a Participant with at
least five years of service. If benefits are paid in a form other than a
straight life annuity to the Participant, they are adjusted actuarially to
reflect the features of such other form.
9
<PAGE> 12
The following table illustrates the estimated annual normal retirement
benefits payable under the Pension Plan. These benefit levels assume an
employee's retirement at age 65 during 1995 and payment in the form of a single
life annuity.
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE ---------------------------------------------------
EARNINGS 15 20 25 30 35
- -------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
$125,000 18,661 28,063 37,466 46,868 56,271
$150,000 21,743 32,855 43,967 55,079 66,191
$175,000 23,588 35,408 47,229 59,050 70,871
$200,000 26,932 40,477 54,022 67,567 81,112
$225,000 30,276 45,546 60,815 76,084 91,354
$250,000 33,620 50,614 67,608 84,602 101,596
$275,000 35,408 52,243 69,738 87,234 104,730
$300,000 35,408 52,243 69,738 87,234 104,730
$400,000 35,408 52,243 69,738 87,234 104,730
$450,000 35,408 52,243 69,738 87,234 104,730
$500,000 35,408 52,243 69,738 87,234 104,730
$600,000 35,408 52,243 69,738 87,234 104,730
$700,000 35,408 52,243 69,738 87,234 104,730
</TABLE>
Notwithstanding the above table, benefits under the Pension Plan may not
exceed certain limits imposed by the Internal Revenue Code (the "Code"). The
maximum benefit payable in 1995 is $120,000. The table incorporates the Code
limitations on compensation allowable under a qualified pension plan. The limit
on compensation allowable in 1995 is $150,000. In addition, the above estimated
benefits are subject to limitations for employees who also participate in the
Wellman, Inc. Retirement Plan and the Wellman, Inc. Employee Stock Ownership
Plan. The estimated credited years of service under the Pension Plan for Messrs.
Casey and Apostol are 27 and 25 years, respectively.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors of the Corporation
(the "Committee"), which is composed entirely of non-employee directors, met
twice during fiscal 1995. The Committee has responsibility for administering the
Corporation's annual Management Incentive Compensation and 1985 Incentive Stock
Option Plans. The Committee is also responsible for making compensation
recommendations to the Board with respect to the five executive officers whose
fiscal 1995 compensation is disclosed on the Summary Compensation Table on page
7 of this proxy statement. In this capacity, the Committee determines the
salary, management incentive plan awards and stock option grants for those
executive officers, following administrative policies and practices which it
establishes from time to time in accordance with the terms and provisions of the
plans. This Committee Report describes the Corporation's officer compensation
program strategy, the components of the compensation program, and the manner in
which 1995 compensation determinations were made by the Committee with respect
to the President and Chief Executive Officer, Mr. Thomas M. Duff. Similar
determinations were made by the Committee with respect to the other four
executive officers, based on recommendations submitted by Mr. Duff.
Compensation Strategy. The Committee endeavors to maintain an officer
compensation program which is competitive with the practices of public
corporations of similar revenue size. The Committee believes a substantial
component of executive officer total compensation should be based on the
Corporation's profitability and on the increase in market value of its
stockholders' investment. The Management Incentive Plan compensates executive
officers commensurate with the Corporation's annual growth and profitability,
and
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<PAGE> 13
annual stock option grants ensure that their longer-term incentive compensation
is directly related to increases in the market value of the Corporation's stock.
The remainder of this Committee Report describes the components of the
Corporation's officer compensation program and the manner in which these were
administered in fiscal 1995.
Base Salary. Base salary forms the competitive foundation of the officer
compensation program. Executive officer salaries are administered by the
Committee so as to ensure they remain competitive with practices of companies of
comparable revenue size. The Committee has periodically engaged compensation
consultants to survey market practices to ensure executive officer salaries
remain competitive in a manner which properly reflects the performance of the
incumbent officers. Such surveys have included the practices of some, but by no
means all, of the companies included in the peer group shown on the Stock
Performance Graph.
Mr. Duff's salary was last adjusted by the Committee in November 1993. In
determining Mr. Duff's salary, the Committee took into account his salary in
relation to competitive salary data furnished by its compensation consultant and
its subjective evaluation of Mr. Duff's performance. The Committee considered
similar information in approving salary recommendations submitted by Mr. Duff
with respect to the other executive officers. Mr. Duff's 1995 annual salary
falls within the fourth quartile (above the 75th percentile) of competitive
practice for corporations with revenues of comparable size. The average 1995
salaries of the other executive officers fall within the third quartile (between
the 50th and 75th percentiles) of competitive practice for their peers in
corporations with revenues of comparable size.
Management Incentive Plan. The Management Incentive Plan ("MIP") was first
implemented in 1992. Annual bonuses earned by the executive officers, and other
plan participants, are directly related to, and based upon, corporate (and for
operating executives, their operating unit's) profit growth. Under the terms of
the MIP, profit is defined as operating profit less a capital charge based on
the net assets employed to generate these profits. The plan pays awards based on
growth in annual profits. Unless profits exceed a base level established at the
start of the year, no MIP awards are paid. The base level established for 1995
was exceeded. The base profit level increases each year reflecting the profit
growth of the business to ensure that bonuses are directly related to
incremental profit growth -- i.e., the added value created for the Corporation's
stockholders. The maximum MIP award which may be paid is 1.5x target levels.
Payment of any awards earned in excess of this amount is deferred.
Mr. Duff's target MIP award is 50% of base salary; the target awards for
the other executive officers range from 30% to 50%. All of the executive
officers named in the Summary Compensation Table achieved their targeted MIP
award.
For fiscal 1995, the Committee recommended the payment of an annual bonus
of $534,705 for Mr. Duff, which was consistent with the Corporation's
profitability and the terms of the MIP.
Stock Options. Annual stock option grants represent the third component of
the Corporation's officer compensation program. Stock option grants permit
optionees to share in the future growth in market value of the Corporation's
common stock by allowing them to purchase shares of stock for a period of eleven
years following the date of grant at a price equal to the price of a share of
common stock on the date the options were granted. To ensure stock options
provide a longer-term stockholder value-based incentive, 20% of the options
granted in a year become exercisable (i.e., the optionee can purchase the option
shares) on the first through fifth anniversaries of the grant date, provided the
optionee remains an employee of the Corporation.
The Chief Executive Officer of the Corporation submits proposed stock
option grants for the executive officers (other than himself) to the Committee
for approval. In making the final determination of option grants, the Committee
considers the individual executive's scope of responsibility, individual
performance, the
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<PAGE> 14
levels of profits and return on assets of the Corporation and of its operating
divisions (with no specific target levels being established), competitive levels
of option grants, and the aggregate number of options awarded to the executive
to date. The Committee, in its discretion, assigns relative weights to these
factors as it deems appropriate.
The Option Grants Table on page 8 of this proxy statement shows the terms
and size of 1995 stock option grants made to the executive officers named in the
Summary Compensation Table. The Committee and the Board approved the grant of
these options effective December 20, 1995. These grants fall within the second
quartile of competitive practice for Mr. Duff, and the average grants for the
other executive officers fell within the third quartile of competitive practice
for corporations of comparable revenue size.
The values shown under the "Grant Date Value" column of this table
represent an estimate of the potential value of these grants. These projections
should not be construed as a forecast of future stock price or the compensation
that will be realized from the actual exercise of these option share grants.
Unless the future price of the Corporation's stock is higher than $22.75 per
share, the price at the time the 1995 options were granted, these options will
have no value.
The table on page 9 of this proxy statement entitled "FY-End Option/SAR
Values" shows the total number of exercisable and unexercisable options which
each executive officer was granted as of December 31, 1995 and the appreciated
value of these grants based on the market price of the Corporation's common
stock on that date. The Committee believes it is important for the executive
officers to have a significant incentive based on increases in the market value
of the Corporation. The option grants shown on the table reflect actions taken
by the Committee and the Board of Directors which are fully consistent with this
intention and the compensation strategy previously described in this Committee
Report.
Based upon the performance-based provisions of the MIP, the Committee
believes that the Corporation's compensation programs are in conformity with the
IRS definitions of performance-based compensation to assure full deductibility
of the executive's compensation.
This report has been provided by the Compensation Committee.
Allan R. Dragone
Jonathan M. Nelson
James E. Rogers (Chairperson)
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<PAGE> 15
FIVE-YEAR PERFORMANCE COMPARISON
The following graph compares the five-year cumulative total return for the
Corporation's stock with the Standard & Poor's ("S&P") 500 Stock Index and the
S&P Midcap 400 Index. Due to the unique nature of its operations, the
Corporation believes there exists no appropriate or comparable line of business
or industry index, nor could one be constructed, which would render a meaningful
or accurate performance comparison. The Corporation has derived an average of
approximately 77% of its total sales over the last three years from the sale of
man-made fibers, primarily polyester. The Corporation believes that the
polyester fiber manufacturing operations of its major publicly-owned
competitors, if such operations could be analyzed separately, would not
represent as significant a proportion of their sales or operations. Further, the
Corporation, which is the world's largest plastics recycler, believes it is the
only major polyester fiber producer to utilize a significant amount of recycled
raw materials in its manufacturing operations.
<TABLE>
<CAPTION>
Measurement Period S&P Mid-Cap
(Fiscal Year Covered) Wellman, Inc. S&P 500 400
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 126.51 130.47 150.10
1992 120.78 140.41 167.98
1993 106.92 154.56 191.41
1994 163.98 156.60 184.55
1995 132.28 215.45 241.66
</TABLE>
The above graph assumes $100 invested on December 31, 1990 in the
Corporation's stock and $100 invested at that time in each of the two indices.
The comparison assumes that all dividends are reinvested.
EMPLOYMENT CONTRACTS
The Corporation has entered into change of control employment agreements
with six key executives, including Messrs. Duff, Christenson, Casey and Apostol.
These agreements are intended to encourage such executives to remain in the
employ of the Corporation by providing them with greater security and to
reinforce and encourage continued attention and dedication to their duties
without distraction in the face of the potentially disturbing circumstances
arising from the possibility of a change in control. A change of control is
defined to include the acquisition by any person or group of 20% or more of the
Corporation's then outstanding
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<PAGE> 16
stock, a change in the majority of the Corporation's Board of Directors or
approval of a reorganization, merger or consolidation by the Corporation's
stockholders.
The employment agreements (which include provisions for renewal and for
automatic extension upon a change of control) provide for employment as officers
of the Corporation at base salaries determined by the Board of Directors, plus
participation in the Corporation's executive bonus plan. Provided there has been
no change in control, the employment agreements of the executives other than Mr.
Duff provide the executive's employment may be terminated upon 30 days notice.
In addition, the executives are eligible to participate in all incentive,
savings, retirement and welfare benefit plans applicable to other Corporation
executives and shall receive reimbursement for expenses and automobiles. The
agreements provide that if the executive is terminated after a change of
control, other than for cause, death or disability, or if the executive
terminates for good reason (as defined in the agreements), the executive is
entitled to receive his salary and bonus through the date of termination and a
lump sum severance payment equal to three times the sum of his base salary and
annual bonus (and certain other benefits). Further, an additional payment is
required in an amount such that after the payment of all taxes, income and
excise, the executive will be in the same after-tax position as if no excise tax
under Section 4999 of the Code had been imposed.
Wellman International Investments Limited ("WIIL"), a subsidiary of the
Corporation, is a party to a multi-year employment contract with Mr. Beckwith
which expires on December 31, 1996. Under the agreement, Mr. Beckwith's annual
base salary is L110,000, which is subject to increase from time to time as
agreed upon by the parties. The parties increased Mr. Beckwith's salary to
L179,000 (approximately $276,000) in 1995 and L186,390 (approximately $289,000)
in 1996. WIIL may terminate the agreement at any time for cause or in the event
of Mr. Beckwith's incapacity for a continuous period of 364 days or a total of
364 days (including Saturdays and holidays) in any 24 month period. The
agreement contains a covenant not to compete restricting Mr. Beckwith from
competing with the Corporation or any of its subsidiaries in the United Kingdom
or Ireland for a period of six months.
OTHER INFORMATION
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more than 10% of a
registered class of the Corporation's equity securities ("insiders"), to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). Insiders are required by SEC regulation to furnish the
Corporation with copies of all Section 16(a) forms they file. Based solely on
review of the copies of such forms furnished to the Corporation, the Corporation
believes that during 1995 all Section 16(a) filing requirements applicable to
its insiders were complied with.
Mr. Vandenberg was formerly the President and a director of Glasstech
Industries, Inc. ("Glasstech"), a portfolio company of NCPAB, and a director and
vice chairman of Glasstech's operating company subsidiary. Glasstech filed for
protection under federal bankruptcy laws in 1993 and emerged from bankruptcy in
January 1995.
RATIFICATION OF SELECTION OF AUDITORS
The selection, by a majority of the members of the Board who are not
officers or employees of the Corporation, of Ernst & Young LLP as independent
auditors to audit the books and accounts of the Corporation for the fiscal year
ending December 31, 1996 shall be submitted to the Annual Meeting for
ratification. Such ratification requires the affirmative vote of a majority of
the shares entitled to vote thereon present in person or represented by proxy at
the Annual Meeting when a quorum is present. Representatives of
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<PAGE> 17
Ernst & Young LLP will be present at the Annual Meeting and will be given an
opportunity to make a statement if they desire to do so and will respond to
appropriate questions of stockholders.
The firm of Ernst & Young LLP has advised the Corporation that neither it
nor any of its members has any direct financial interest in the Corporation as a
promoter, underwriter, voting trustee, director, officer or employee.
All professional services rendered by Ernst & Young LLP during the year
ended December 31, 1995 were furnished at customary rates.
The Board recommends a vote FOR ratification of Ernst & Young LLP as
independent auditors for the fiscal year ending December 31, 1996.
STOCKHOLDER PROPOSAL
STOCKHOLDER PROPOSAL
Local 2398, Amalgamated Clothing and Textile Workers Union ("ACTWU"), P.O.
Box 1073, Johnsonville, South Carolina, the beneficial owner of 200 shares of
Common Stock, has advised the Corporation that it intends to introduce the
following resolution (the "Union Proposal") at the Corporation's 1996 Annual
Meeting for the reasons given:
RESOLVED: The shareholders of Wellman, Inc. ("Company") hereby request the
Board of Directors to redeem the shareholder rights issued August
6, 1991, unless said issuance is approved by the affirmative vote
of a majority of outstanding shares at a meeting of shareholders
as soon as practical.
SUPPORTING STATEMENT
This resolution received 54.2% of votes cast at the 1994 Annual Meeting of
Shareholders.
In August of 1991, the Company's Board of Directors met and issued a
dividend of one common stock purchase right for each outstanding share of common
stock. These rights are a type of corporate anti-takeover device commonly known
as a poison pill.
We believe the terms of the rights are designed to discourage or thwart an
unwanted takeover of our Company. While management and the Board of Directors
should have appropriate tools to ensure that all shareholders benefit from any
proposal to buy the Company, we do not believe that the future possibility of a
takeover justifies the unilateral implementation of such a poison pill-type
device.
Rights plans like ours have become increasingly unpopular in recent years.
In 1995, a majority of shareholders at Ryder Systems, Super Valu Stores and
Central Maine Power voted in favor of proposals asking management to repeal or
redeem poison pills.
The effects of poison pill rights plans on the trading value of companies'
stock have been the subject of extensive research. A 1986 study by the Office of
the Chief Economist of the U.S. Securities and Exchange Commission on the
economics of the rights plans states that "The stock-returns evidence suggest
that the effect of poison pills to deter prospective hostile takeover bids
outweighs the beneficial effects that might come from increased bargaining
leverage of the target management." Another, more recent, study by Professor
Michael Ryngaert singled out rights plans such as the one authorized by our
Company for their negative effect on shareholder value. A 1992 study by
Professor John Pound of Harvard University's Corporate Research
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<PAGE> 18
Project and Lilli A. Gordon of the Gordon Group found a correlation between high
corporate performance and the absence of poison pills.
A majority of shareholders who cast their votes at the 1993 and 1994 annual
meetings supported our proposal. At the 1989 and 1990 annual meetings management
was unable to garner enough support to enact changes it wanted in the Company's
corporate governance structure. Taken together all of these votes seem to
demonstrate consistent shareholder opposition to anti-takeover initiatives
proposed or enacted by management. We believe this is the reason Wellman
management refuses to agree to a binding vote on the poison pill issue.
In light at what can at best be described as the debatable economic benefit
of our share rights and the undeniably undemocratic way in which they were
assigned to shareholders, we believe these rights should be either redeemed or
voted on.
We urge shareholders to vote FOR this resolution.
BOARD RECOMMENDATION
THE BOARD STRONGLY OPPOSES THE UNION PROPOSAL AND RECOMMENDS A VOTE AGAINST
IT. AT THE 1994 ANNUAL MEETING, ONLY 34% OF THE OUTSTANDING SHARES WERE VOTED IN
FAVOR OF THIS RESOLUTION.
The Corporation's Stockholder Rights Plan (the "Plan") is designed to
provide your Board with the ability to take what the Board believes are the most
effective steps to protect and maximize the value of your investment in the
Corporation. Under Delaware law, the Board has a fiduciary responsibility to
undertake this task and accordingly has a duty to oppose unfair takeover offers.
The Delaware Supreme Court has held that adoption of a rights plan is a valid
exercise of a Board's business judgment when the rights plan is adopted to help
the Board better fulfill its fiduciary duties. Federal and state courts
interpreting Delaware law have repeatedly validated the use of rights plans
during actual takeover contests as a useful and legitimate tool available to
directors in fulfilling their fiduciary duties. Over 1,400 publicly-held
companies have adopted stockholder rights plans.
The Board believes that the Plan preserves and protects value for all
stockholders of the Corporation. The Plan enables the Board of Directors to
respond in an orderly and considered manner to an unsolicited bid. It puts the
Board in a better position to defend against unfair offers, such as coercive,
partial or two-tiered bids and stock accumulation programs in which all
stockholders do not share in the premium associated with a change in control.
The Plan positions the Board to negotiate a higher price for the stockholders,
from the original bidder or a third party, when the sale of the Corporation is
considered to be in the best interests of the Corporation and its stockholders.
The Plan also permits the Board to deal more effectively with "greenmail"
transactions where an acquiring person seeks a large short-term profit at the
expense of the Corporation and its stockholders.
It is important to note that the Plan is not intended to prevent a bidder
from making a tender offer for the Corporation and it will not do so. The basic
objective of the Plan is to encourage prospective acquirors to negotiate with
the Board of Directors. The Board's ability to negotiate with a potential
acquiror on behalf of all stockholders is significantly greater than that of the
stockholders individually.
The Plan also gives the Board a greater period of time within which it can
properly evaluate the proposed offer. This additional time is important because
hostile bidders frequently rely on the twenty business day offering period to
"stampede" stockholders into accepting their offer at an unfair price. The 1986
study by the Office of the Chief Economist of the U.S. Securities and Exchange
Commission, which is referred to in
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<PAGE> 19
ACTWU's Supporting Statement, noted that of thirteen companies that were
acquired, each with a rights plan, all received bids that were superior to those
offered initially.
A March 1988 study by Georgeson & Co., a major proxy solicitor, found that
companies with rights plans received premiums which were on average 69% higher
in takeover contests than the premiums received by companies without such plans.
Even though a bidder may offer a premium over the current market price of the
target company's stock, that premium does not necessarily recognize the inherent
value of the target company. The bidder, of course, can be expected to act in
its own self interest; in other words, to try to acquire the target company as
cheaply as possible and to pressure stockholders into selling. The Plan
provides, in the Board's opinion, valuable stockholder protection against that
happening.
ACTWU suggests that the Plan may have a negative effect on the trading
value of the Corporation's stock. However, there is no evidence that the
adoption of the Plan has depressed the Corporation's stock price.
The Board's overriding objective in adopting the Plan was to preserve the
Corporation's long-term value for the benefit of all of its stockholders. The
Board believes there is strong empirical evidence that such plans better
position the Board to negotiate the most attractive and fair price for all
stockholders.
The Board believes that the proper time to consider redemption of the
rights issued under the Plan is when a specific offer is made to acquire the
Corporation's stock. Redemption of the rights prior to that time would be
premature and would remove any incentive for a potential acquiror to negotiate
with the Board so that the stockholders are treated fairly.
The true test of the benefits of the Plan is how it is used in practice.
The question of a stockholder vote on the Plan misses the point. The real issue
is whether the Corporation's stockholders trust the Board to utilize this tool
properly if and when the need arises. This Board will, as fiduciaries, properly
consider the interest of all stockholders if there is ever such an offer.
For the above reasons, the Board recommends that the shareholders vote
AGAINST the adoption of the Union Proposal.
The affirmative vote of a majority of the total quorum (as such term is
defined in Section 2.11 of the Corporation's by-laws) is necessary to adopt the
Union Proposal. Unless otherwise indicated, the persons named on the proxy will
vote all proxies AGAINST the Union Proposal.
OTHER MATTERS
Management does not know of any matters which will be brought before the
Annual Meeting other than those specified in the notice thereof. However, if any
other matters properly come before the Annual Meeting, it is intended that the
persons named in the form of proxy, or their substitutes acting thereunder, will
vote therein in accordance with their best judgment.
FINANCIAL STATEMENTS
The financial statements of the Corporation are contained in the 1995
Annual Report to Stockholders, which has been provided to the stockholders
concurrently herewith. Such report and the financial statements contained
therein are not to be considered as a part of this soliciting material.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, a record
or beneficial owner of shares of the Corporation's Common Stock may submit
proposals on proper subjects for action at the 1997 Annual Meeting of
Stockholders of the Corporation. All such proposals must be mailed to the
Corporation at 1040
17
<PAGE> 20
Broad Street, Suite 302, Shrewsbury, New Jersey 07702 and must be received at
that address on or before December 18, 1996, in order to be included in the
Corporation's proxy relating to the 1997 Annual Meeting.
EXPENSE OF SOLICITATION OF PROXIES
All the expenses of preparing, assembling, printing and mailing the
material used in the solicitation of proxies by the Board will be paid by the
Corporation. In addition to the solicitation of proxies by use of the mails,
officers and regular employees of the Corporation may solicit proxies on behalf
of the Board by telephone, telegram or personal interview, the expenses of which
will be borne by the Corporation. Arrangements may also be made with brokerage
houses and other custodians, nominees and fiduciaries to forward soliciting
materials to the beneficial owners of stock held of record by such persons at
the expense of the Corporation. The Corporation has retained Georgeson & Co. to
assist in this solicitation at an estimated cost of $15,000 which will be borne
by the Corporation.
By order of the Board of Directors,
DAVID K. DUFFELL
Secretary
New York, New York
April 16, 1996
18
<PAGE> 21
WELLMAN, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION FOR ANNUAL MEETING MAY 21, 1996
The undersigned hereby appoints THOMAS M. DUFF, CLIFFORD J. CHRISTENSON and
DAVID K. DUFFELL, or any one or more of them, attorneys, with full power of
substitution to each for and in the name of the undersigned, with all powers the
undersigned would possess if personally present to vote the Common Stock of the
Undersigned in Wellman, Inc. at the Annual Meeting of its Stockholders to be
held May 21, 1996 or at any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU INSTRUCT THE PROXIES TO VOTE FOR
PROPOSALS 1 AND 2.
1. Election of Directors:
FOR all nominees (except as WITHHOLD AUTHORITY to vote
marked to the contrary below) / / for all nominees listed below / /
JAMES B. BAKER C. WILLIAM BECKWITH CLIFFORD J. CHRISTENSON PETER H.
CONZE ALLAN R. DRAGONE THOMAS M. DUFF
RICHARD F. HEITMILLER JONATHAN M. NELSON JAMES E. ROGERS RAYMOND C.
TOWER ROGER A. VANDENBERG
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. Proposal to ratify the selection of Ernst & Young LLP as independent
auditors of the Corporation for the fiscal year ending December 31, 1996.
FOR / / AGAINST / / ABSTAIN / /
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU INSTRUCT THE PROXIES TO VOTE AGAINST
PROPOSAL 3.
3. Stockholder proposal to recommend redemption of shareholder rights issued
August 6, 1991 unless approved by affirmative vote of the majority of
outstanding shares.
FOR / / AGAINST / / ABSTAIN / /
(Continued from other side)
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND AGAINST PROPOSAL 3.
Dated: .............., 1996
...........................
...........................
SIGNATURE(S)
NOTE: JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
PLEASE SIGN EXACTLY AS NAME
APPEARS HEREON.
