<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
TUSCARORA INCORPORATED
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TUSCARORA INCORPORATED
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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
LOGO
800 FIFTH AVENUE
NEW BRIGHTON, PENNSYLVANIA 15066
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 14, 1995
To The Shareholders:
The Annual Meeting of Shareholders of Tuscarora Incorporated (the
"Company") will be held at the Pittsburgh Airport Marriott, Parkway West,
Coraopolis, Allegheny County, Pennsylvania on Thursday, December 14, 1995 at
10:30 A.M., Pittsburgh time, for the purpose of considering and acting upon the
following:
(1) The election of three persons to serve as directors for a three-year
term expiring at the annual meeting of shareholders in 1998;
(2) The ratification of the appointment of S.R. Snodgrass, A.C. as
independent public accountants to audit the financial statements of the
Company and its subsidiaries for the 1996 fiscal year; and
(3) Such other business as may properly come before the Annual Meeting or
any adjournment thereof.
By Order of the Board of Directors,
HAROLD F. REED, JR.
-------------------------
Harold F. Reed, Jr.,
Secretary
New Brighton, Pennsylvania
November 13, 1995
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY SO THAT
YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE
PRESENCE OF A QUORUM MAY BE ASSURED AT THE ANNUAL MEETING. THE GIVING OF YOUR
PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE
MEETING. PLEASE INDICATE ON THE PROXY YOU RETURN WHETHER OR NOT YOU WILL ATTEND
THE MEETING.
<PAGE> 3
NOVEMBER 13, 1995
TUSCARORA INCORPORATED
800 FIFTH AVENUE
NEW BRIGHTON, PENNSYLVANIA 15066
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 14, 1995
This Proxy Statement is furnished to shareholders in connection with the
solicitation by the Board of Directors of Tuscarora Incorporated (the "Company")
of proxies in the accompanying form for use at the Annual Meeting of
Shareholders of the Company to be held on December 14, 1995 and at any
adjournment thereof. If a proxy in the accompanying form is duly executed and
returned to the Company, the shares represented will be voted at the Meeting
and, where a choice is specified, will be voted in accordance with the
specification made. Any shareholder who gives a proxy has the power to revoke it
at any time before it is exercised by notice to the Secretary. A later-dated
proxy will revoke an earlier proxy, and shareholders who attended the Meeting
may, if they wish, vote in person even though they have submitted a proxy, in
which event the proxy will be deemed to have been revoked.
The Company's Articles provide that the Company has the authority to issue
20,000,000 shares of Common Stock, without par value (the "Common Stock"), and
1,000,000 shares of Preferred Stock, par value $.01 per share. Only shares of
Common Stock have been issued. As of the close of business on October 27, 1995,
6,184,486 shares of Common Stock were issued and outstanding.
Holders of record of the Common Stock as of the close of business on
October 27, 1995 have the right to receive notice of and to vote at the Annual
Meeting. These shareholders are entitled to one vote for each share held on all
matters to be considered and acted upon at the Meeting. Under the Company's
Articles, the shareholders do not have cumulative voting rights in the election
of directors.
The Annual Report to Shareholders for the fiscal year ended August 31,
1995, which includes consolidated financial statements, is enclosed with this
Proxy Statement.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Under the proxy rules of the Securities and Exchange Commission (the
"SEC"), a person who directly or indirectly has or shares voting power and/or
investment power with respect to a security is considered as a beneficial owner
of the security. Voting power includes the power to vote or direct the voting of
shares, and investment power includes the power to dispose of or direct the
disposition of shares. Shares as to which voting power and/or investment power
may be acquired within 60 days are also considered as beneficially owned under
these proxy rules.
MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of shares of the Company's Common Stock as of the close of business on
October 27, 1995 by (i) each director, (ii) each person named in the Summary
Compensation Table included in this Proxy Statement and (iii) all directors and
executive officers of the Company as a group. Unless otherwise indicated in the
footnotes to the table,
<PAGE> 4
each person named has sole voting power and sole investment power with respect
to the shares included in the table.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF COMMON STOCK
------------------------
NUMBER OF PERCENT
NAME SHARES OF CLASS
-------------------------------------------------- ---------- ---------
<S> <C> <C>
James T. Anderson, Jr. (1) 218,386 3.53%
Thomas S. Blair 136,238 2.20%
James H. Brakebill (2)(3) 32,686 0.53%
David I. Cohen (4) 2,000 0.03%
Abe Farkas (1)(4)(5) 283,900 4.59%
Karen L. Farkas (4) 13,000 0.21%
Robert W. Kampmeinert (1)(6)(7) 13,000 0.21%
Brian C. Mullins (1)(2)(3) 44,203 0.71%
David C. O'Leary (2)(3)(4)(6) 103,833 1.68%
John P. O'Leary, Jr. (2)(3)(4)(6)(8)(9) 204,740 3.30%
Harold F. Reed, Jr. (1)(4) 55,300 0.89%
James I. Wallover (1) 100,000 1.62%
Thomas P. Woolaway (1) 225,553 3.65%
All directors and executive officers of the
Company as a group (13 persons)(2) 1,432,839 22.84%
</TABLE>
- ---------
(1) Includes shares held of record in the names of their wives as follows: James
T. Anderson, Jr., 116,792 shares; Abe Farkas, 60,000 shares; Robert W.
Kampmeinert, 1,000 shares; Brian C. Mullins, 5,400 shares; Harold F. Reed,
Jr., 1,000 shares; James I. Wallover, 40,000 shares; and Thomas P. Woolaway,
51,426 shares. Beneficial ownership of these shares is disclaimed.
(2) Includes shares covered by stock options exercisable within 60 days as
follows: James H. Brakebill, 24,750 shares; Brian C. Mullins, 26,790 shares;
David C. O'Leary, 12,500 shares; and John P. O'Leary, Jr., 25,000 shares. In
computing the percentage ownership for each executive officer and all
directors and executive officers as a group, the shares covered by the stock
options held by each executive officer and the group are deemed outstanding.
(3) Includes shares credited to their accounts under the Company's Common Stock
Purchase Plan for Salaried Employees as follows: James H. Brakebill, 857
shares; Brian C. Mullins, 571 shares; David C. O'Leary, 389 shares; and John
P. O'Leary, Jr., 153 shares.
(4) Includes shares held jointly with their spouses, as to which voting power
and investment power are shared, as follows: David I. Cohen, 2,000 shares;
Abe Farkas, 111,200 shares; Karen L. Farkas, 500 shares; David C. O'Leary,
23,412 shares; John P. O'Leary, Jr., 11,112 shares and Harold F. Reed, Jr.,
9,000 shares.
(5) Includes 91,500 shares held by the wife of Abe Farkas as trustee under
trusts for children and grandchildren. Beneficial ownership of these shares
is disclaimed.
(6) Includes shares held in custodian accounts for children as follows: Robert
W. Kampmeinert, 2,000 shares; David C. O'Leary, 6,018 shares; and John P.
O'Leary, Jr., 8,292 shares. Beneficial ownership of these shares is
disclaimed.
(7) Includes 10,000 shares held by Parker/Hunter Incorporated. Beneficial
ownership of these shares is disclaimed.
(8) Includes 21,300 shares held by a trust created under the Will of a former
employee of the Company as to which John P. O'Leary, Jr. shares voting power
and investment power as co-trustee with a bank. Beneficial ownership of
these shares is disclaimed.
(9) Includes 70,190 shares held by the trust for the individual account defined
contribution pension plans of the Company and its subsidiaries. John P.
O'Leary, Jr. is a named fiduciary with respect to this trust and
2
<PAGE> 5
although he has no economic interest in these shares, he has sole power to
direct the trustee as to the acquisition and disposition, and the voting, of
the Company's Common Stock held by the trust.
The information in the above table does not include 166,776 shares of the
Company's Common Stock held by the Estate of John P. O'Leary, Sr. and 59,043
shares held by a trust established under the Will of John P. O'Leary, Sr. Mr.
O'Leary, Sr., co-founder of the Company, was Chief Executive Officer of the
Company from its formation in 1962 through 1989 and was Chairman of the Board of
the Company at the time of his death on June 28, 1994. John P. O'Leary, Jr.,
David C. O'Leary and Kerry O'Leary Zombeck, (the children of Mr. O'Leary, Sr.)
and Mellon Bank, N.A., are the Executors of the Estate and all these persons
plus Mrs. John P. O'Leary, Sr. are the trustees of the trust. The above table
also does not include 102,854 and 32,089 shares of the Company's Common Stock
beneficially owned by Mrs. John P. O'Leary, Sr. and Kerry O'Leary Zombeck,
respectively.
OTHER BENEFICIAL OWNERS
Information with respect to the only persons known by the Company to be the
beneficial owners of more than 5% of the Company's Common Stock as of the close
of business on October 27, 1995 is as follows:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF COMMON STOCK
------------------------
NUMBER OF PERCENT
NAME AND ADDRESS SHARES OF CLASS
-------------------------------------------------- ---------- ---------
<S> <C> <C>
Jack Farkas
6315 Forbes Avenue
Pittsburgh, PA 15212 324,000 5.24%
David L. Babson & Co., Inc.
One Memorial Drive
Cambridge, MA 02142 324,700 5.25%
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, PA 15258 329,000 5.32%
</TABLE>
Jack Farkas is the brother and uncle, respectively, of Abe Farkas and Karen
L. Farkas, both of whom are directors. Jack Farkas has sole voting power and
sole investment power with respect to the shares.
The information presented for David L. Babson & Co., Inc. is based upon its
Schedule 13G dated February 10, 1995 filed with the SEC. It reports sole voting
power over 236,200 shares and shared voting power over 88,500 shares, and sole
investment power over all 324,700 shares.
The information presented for Mellon Bank Corporation is based upon its
Schedule 13G dated February 2, 1995 filed with the SEC. It reports sole voting
and investment power over 26,000 shares and shared voting and investment power
over 303,000 shares.
REPORTS UNDER SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file with the SEC reports of beneficial
ownership and changes in beneficial ownership of the Company's Common Stock.
These persons are required to furnish the Company with copies of all Section
16(a) reports they file. John P. O'Leary, Jr. filed a Form 5 report at the end
of the 1995 fiscal year which disclosed that during the fiscal year a report
covering one transaction was inadvertently not filed. Based on written
representations of its directors and executive officers and copies of the
reports that they have filed, the Company believes that all other reports
required to be filed under Section 16(a) by the Company's directors and
executive officers for the 1995 fiscal year were timely filed.
3
<PAGE> 6
ELECTION OF DIRECTORS
Three directors will be elected at the Annual Meeting to serve until the
annual meeting of shareholders in 1998 and until their successors are elected.
The Board of Directors has nominated David I. Cohen, Abe Farkas and John P.
O'Leary, Jr. and recommends a vote for their election. Each of the nominees has
consented to be named as a nominee. All the nominees are presently directors.
The term of James T. Anderson, Jr. expires at the Annual Meeting. Mr. Anderson
has decided not to stand for reelection.
Unless authority to so vote is withheld, it is intended that the proxies
solicited by the Board of Directors will be voted for the election of the three
nominees. In the event that at the date of the Annual Meeting any of the
nominees should for any reason not be available for election, the proxies
solicited by the Board will be voted for the election of the other nominees and
such substitute nominees as shall be designated by the Board.
The Board of Directors does not have a nominating committee. The Company's
Articles provide that nominations for the election of directors at a meeting of
shareholders may be made only by the Board, a committee of the Board or a
shareholder of record entitled to vote in the election of the directors to be
elected; provided, however, that a nomination may only be made by a shareholder
of record at a meeting of shareholders if written notice that the nomination is
to be made is received by the Secretary of the Company prior to the meeting. In
the case of an annual meeting, the written notice must be received 90 days prior
to the anniversary date of the immediately preceding annual meeting and must
contain certain information with respect to the nominee as set forth in the
Articles. Information with respect to the nominating procedure may be obtained
by a shareholder from the Secretary of the Company. No written notice that a
nomination would be made by a shareholder at the Annual Meeting was received by
the Company.
Information with respect to the nominees, each of whom is presently a
director, and the other directors whose terms of office will continue after the
Annual Meeting is set forth in the table below. The nominees and other directors
have held the positions shown for more than five years unless otherwise
indicated.
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION OR
NAME SINCE EMPLOYMENT; DIRECTORSHIPS; AGE
- ------------------------------------- ----------------------------------------------------
<S> <C> <C>
Nominees for a term expiring in 1998:
David I. Cohen 1993 Partner of Titus & McConomy (law firm), Pittsburgh,
Pennsylvania, since July 1995; Partner of Reed Smith
Shaw & McClay (law firm), Pittsburgh, Pennsylvania
prior to July 1995; Age 44
Abe Farkas 1962 Retired; formerly owner of Beaver Super Market,
Beaver, Pennsylvania; Age 79
John P. O'Leary, Jr. 1974 President and Chief Executive Officer of the Company
(also Chairman of the Board of Directors of the
Company); Director of First Western Bancorp and
Matthews International Corporation; Age 48
Continuing directors with a term expiring in 1997:
Karen L. Farkas 1994 President and Treasurer of Heart Smart Foods Ltd.
(wholesaler/retailer of specialty foods), Alberta,
Canada; Tutor and seminar instructor in corporate
finance, investments and individual finance at
Athabasca University, Alberta, Canada; Age 48
Robert W. Kampmeinert 1994 President and Chief Executive Officer of
Parker/Hunter Incorporated (investment banking);
Pittsburgh, Pennsylvania; Also Chairman of
Parker/Hunter Incorporated since January 1991; Age
52
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION OR
NAME SINCE EMPLOYMENT; DIRECTORSHIPS; AGE
- ------------------------------------- ----------------------------------------------------
<S> <C> <C>
David C. O'Leary 1985 Vice President, Sales and Manufacturing, of the
Company since April 1994; Vice President-Southern
Division of the Company prior to April 1994; Age 46
Harold F. Reed, Jr. 1969 Senior Partner of Reed, Luce, Tosh, McGregor and
Wolford (law firm), Beaver, Pennsylvania; Director
of First Western Bancorp; Age 68
Continuing directors with a term expiring in 1996:
Thomas S. Blair 1962 Chairman of the Board of Blair Strip Steel Company
(manufactures cold-rolled strip steel), New Castle,
Pennsylvania; Age 73
James I. Wallover 1962 Chairman of the Board of Wallover Enterprises, Inc.
(blends and recycles lubricating oils), East
Liverpool, Ohio; Age 74
Thomas P. Woolaway 1962 Retired Chief Operating Officer of the Company; Vice
Chairman of the Directors of Board of the Company;
Age 64
</TABLE>
During the 1995 fiscal year, there were seven meetings of the Board of
Directors. Average attendance at those meetings was 98.7%.
John P. O'Leary, Jr. and David C. O'Leary are brothers and Karen L. Farkas
is the daughter of Abe Farkas. Harold F. Reed, Jr. is also Secretary of the
Company.
VOTE REQUIRED
Only affirmative votes are counted in the election of directors. The three
nominees for election as directors at the Annual Meeting who receive the highest
number of votes cast for the election of directors by the holders of the
Company's Common Stock present in person or voting by proxy, a quorum being
present, will be elected as directors.
COMMITTEES OF BOARD OF DIRECTORS
The Board of Directors has an Executive Committee, Compensation Committee
and Audit Committee.
The members of the Executive Committee are John P. O'Leary, Jr. (Chairman),
Thomas S. Blair, David C. O'Leary, Harold F. Reed, Jr. and Thomas P. Woolaway.
The Executive Committee may exercise all the power and authority of the Board in
the management of the affairs of the Company except for matters expressly
reserved by law for Board action. It is intended that the Executive Committee
will meet only infrequently as necessary between regular meetings of the Board.
The Executive Committee did not meet during the 1995 fiscal year.
The members of the Compensation Committee are Thomas S. Blair (Chairman),
Robert W. Kampmeinert, Harold F. Reed, Jr. and Thomas P. Woolaway. The
responsibilities of the Compensation Committee include recommending to the Board
the base salary and any bonuses of the Company's executive officers, granting
stock options and making any other awards under the Company's 1989 Stock
Incentive Plan and making recommendations to the Board with respect to other
forms of compensation for the executive officers. The Compensation Committee
administers the 1989 Stock Incentive Plan and its predecessor, the 1985
Incentive Stock Option Plan, as well as the Company's Common Stock Purchase Plan
for Salaried Employees. The Compensation Committee also makes recommendations to
the Board with respect to director compensation and administers the Deferred
Compensation Plan for Non-Employee Directors. During the 1995 fiscal year, there
were two meetings of the Compensation Committee.
5
<PAGE> 8
The members of the Audit Committee are David I. Cohen (Chairman), James T.
Anderson, Abe Farkas, Karen L. Farkas and James I. Wallover. The
responsibilities of the Audit Committee include assuring direct and open lines
of communication between the Board of Directors and the Company's accounting
personnel and independent public accountants and reviewing the annual financial
statements of the Company and its subsidiaries with the management of the
Company and the independent public accountants. The Audit Committee verifies the
independence of the independent public accountants, recommends to the Board the
retention or selection of the independent public accountants, reviews the
quality and depth of staffing in the Company's financial and accounting
departments and reviews proposed changes in accounting principles as they may
materially affect the Company. During the 1995 fiscal year, there were two
meetings of the Audit Committee.
COMPENSATION OF DIRECTORS
Each non-employee director receives an annual retainer of $5,000.
Non-employee directors who serve on the Executive Committee also receive an
annual fee of $1,500 and non-employee directors who serve as Chairmen of Board
Committees also receive an annual fee of $1,000. In addition, non-employee
directors receive $1,500 for each Board meeting and $750 for each meeting of the
Compensation Committee and Audit Committee they attend. Non-employee directors
receive reimbursement for travel expenses to attend Board and Committee
meetings. Directors who are employees of the Company do not receive compensation
for serving as a director.
The Company maintains a Deferred Compensation Plan for Non-Employee
Directors to permit the deferral by a participant of receipt of his or her
compensation to be earned for services as a director until after termination of
service as a director. Participants under the plan can defer compensation into
an account which bears interest or an account which credits the participant with
units measured by the value of the Company's Common Stock. Payments are made to
a participant after the participant ceases to be a director of the Company in a
lump sum or up to ten annual installments.
The Company also has a Retirement Policy and Plan for Non-Employee
Directors. The retirement policy is that non-employee directors may not be
nominated by the Board of Directors for reelection as directors after they reach
the age of 70. The policy does not, however, apply to any person who was a
director at the time the policy became effective in June 1991. Under the
retirement plan, an annual retirement benefit will be received by any
non-employee director who (i) has retired from the Board, (ii) has reached the
age of 60 and (iii) has completed at least five years of service on the Board at
the time of retirement. The annual retirement benefit is an amount equal to 50%
of the maximum amount payable each year to active non-employee directors as a
retainer and for attendance at Board meetings. The benefits commence immediately
upon retirement from the Board and terminate upon the earliest to occur of (i)
expiration of a period of time equal to the period of time the non-employee
director served as a director, (ii) the death of the non-employee director or
(iii) the tenth anniversary of the date on which the non-employee director
retires from the Board. There are no survivor benefits payable under the
retirement plan.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the compensation paid
for services rendered in all capacities to the Company and its subsidiaries for
the last three fiscal years to those persons who were at August 31, 1995 the
Chief Executive Officer of the Company and the Company's other executive
officers:
6
<PAGE> 9
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -----------
---------------------------------------------- AWARDS
-----------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(1) ($)(2) ($)(3) (#)(4) ($)(5)
- --------------------------- ------ -------- -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
John P. O'Leary, Jr. 1995 $225,000 $140,000 $ -- 8,000 $ 9,936
President and 1994 205,000 90,000 -- 5,000 14,651
Chief Executive Officer 1993 196,000 58,000 -- 4,000 13,906
Brian C. Mullins 1995 150,000 70,000 -- 4,000 9,853
Vice President and 1994 143,500 50,000 -- 2,500 11,318
Treasurer 1993 137,500 35,500 -- 2,000 11,318
James H. Brakebill 1995 140,000 70,000 -- 4,000 10,010
Vice President, 1994 123,000 45,000 -- 2,500 9,801
Manufacturing 1993 118,000 29,000 -- 2,000 9,735
David C. O'Leary 1995 140,000 70,000 -- 4,000 10,043
Vice President, Sales 1994 123,000 45,000 -- 2,500 9,818
and Marketing 1993 116,000 31,000 -- 2,000 9,545
<FN>
- ---------
(1) Represents base salary and includes the tax deferred contributions made by
the Company on behalf of the executive officers under the Company's Section
401(k) Plan.
(2) Cash bonuses are awarded to the executive officers following the end of each
fiscal year.
(3) The dollar value of perquisites and other personal benefits is required to
be disclosed under this column if the amount for any executive officer
equals or exceeds $50,000 or 10% of the total of annual salary and bonus.
The dollar value of the perquisites and other personal benefits did not
exceed the threshold amount for any of the executive officers named for any
of the fiscal years covered in the table.
(4) Represents the number of shares of the Company's Common Stock for which
stock options were granted under the Company's 1989 Stock Incentive Plan.
(5) This column includes employer contributions for the accounts of the named
executive officers under (i) the Company's individual account defined
contribution pension plan for salaried employees, (ii) the Company's
Section 401(k) Plan and (iii) the Company's Common Stock Purchase Plan for
Salaried Employees. For the 1995 fiscal year, the breakdown of the employer
contributions among the plans is as follows:
</TABLE>
<TABLE>
<CAPTION>
COMMON
STOCK
PENSION SECTION PURCHASE
PLAN 401(K) PLAN PLAN
------- ----------- --------
<S> <C> <C> <C>
John P. O'Leary, Jr.............................. $ 8,250 $ 1,326 $360
Brian C. Mullins................................. $ 8,250 $ 1,363 $240
James H. Brakebill............................... $ 8,250 $ 1,400 $360
David C. O'Leary................................. $ 8,250 $ 1,433 $360
</TABLE>
Option Grants. The following table sets forth as to the persons named in
the Summary Compensation Table additional information with respect to the stock
options granted during the 1995 fiscal year, including the potential realizable
value from the stock options assuming they are exercised at the end of the
option term and assuming 5% and 10% annual rates of stock price appreciation
during the option term:
7
<PAGE> 10
OPTION GRANTS IN 1995 FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
INDIVIDUAL GRANTS(1) ASSUMED ANNUAL RATES
------------------------------------------------------- OF STOCK PRICE
NUMBER OF % OF TOTAL EXERCISE APPRECIATION FOR
SECURITIES OPTIONS GRANTED PRICE OPTION TERM(2)
UNDERLYING TO EMPLOYEES IN PER SHARE EXPIRATION --------------------
NAME OPTIONS(#) 1994 FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- -------------------------- ----------- ---------------- --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
John P. O'Leary, Jr....... 8,000 8.650% $ 16.75 10/24/04 $84,272 $213,561
Brian C. Mullins.......... 4,000 4.325% 16.75 10/24/04 42,136 106,781
James H. Brakebill........ 4,000 4.325% 16.75 10/24/04 42,136 106,781
David C. O'Leary.......... 4,000 4.325% 16.75 10/24/04 42,136 106,781
<FN>
- ---------
(1) The stock options for the number of shares shown were granted on October 25,
1994 and became exercisable on April 25, 1995. The exercise price per share
was 100% of the fair market value of the Company's Common Stock on the date
of grant. Fair market value is the average of the high and low sales prices
of the Company's Common Stock on the date of grant on the NASDAQ National
Market System as reported in The Wall Street Journal. The exercise price may
be paid in cash, in shares of the Common Stock which have been held for at
least one year or in any combination of cash and such shares.
(2) The 5% and 10% assumed annual rates of stock price appreciation do not
reflect actual changes in the fair market value of the Company's Common
Stock since the date of grant. The information in the table is provided in
accordance with the rules of the SEC regarding the disclosure of
compensation of executive officers. The information is not intended to
forecast possible future stock price appreciation, if any.
</TABLE>
Option Exercises and Values. The following table sets forth as to the
persons named in the Summary Compensation Table information with respect to the
number of shares of the Company's Common Stock acquired upon the exercise of
stock options during the 1995 fiscal year, the value realized from such
exercises, the number of shares covered by unexercised stock options held at
August 31, 1995 and the value of such unexercised stock options at August 31,
1995:
AGGREGATED OPTION EXERCISES IN 1995 FISCAL YEAR AND
1995 FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
VALUE 1995 FISCAL 1995 FISCAL
SHARES ACQUIRED REALIZED YEAR END YEAR END
NAME ON EXERCISE (#) ($)(1) (#)(2) ($)(3)
- ------------------------ --------------- --------- ------------ --------------------
<S> <C> <C> <C> <C>
John P. O'Leary, Jr..... 7,200 $88,200 25,000 $175,890
Brian C. Mullins........ -- -- 26,790 293,493
James H. Brakebill...... -- -- 24,750 263,446
David C. O'Leary........ 3,600 44,100 12,500 87,945
</TABLE>
- ---------
(1) The value realized is the difference between the aggregate fair market value
of the shares acquired on exercise and the aggregate exercise price.
(2) The outstanding stock options at 1995 fiscal year end include stock options
granted under the Company's 1985 Incentive Stock Option Plan as well as
stock options granted under the present plan. All the outstanding stock
options at 1995 fiscal year end were exercisable.
(3) The value of unexercised in-the-money stock options is the difference
between the aggregate fair market value of shares covered by stock options
with an exercise price less than fair market value at 1995 fiscal
8
<PAGE> 11
year end and the aggregate exercise price of such stock options. All
outstanding stock options at 1995 fiscal year end were in-the-money.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
David I. Cohen, a director of the Company, was a partner in the law firm of
Reed Smith Shaw & McClay during the 1995 fiscal year until July 18, 1995. Reed
Smith Shaw & McClay rendered professional services to the Company during this
period.
For information regarding transactions involving Harold F. Reed, Jr. and
Robert W. Kampmeinert, directors of the Company, see "Compensation Committee
Interlocks and Insider Participation" below.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the 1995 fiscal year, the members of the Compensation Committee were
Thomas S. Blair (Chairman), D. Robert Beglin (until the 1994 Annual Meeting),
Robert W. Kampmeinert (after the 1994 Annual Meeting), Harold F. Reed, Jr. and
Thomas P. Woolaway (after the 1994 Annual Meeting).
Robert W. Kampmeinert is the Chairman, President and Chief Executive
Officer of Parker/Hunter Incorporated, an investment banking firm which performs
services for the Company from time to time.
Harold J. Reed is the Secretary of the Company and a partner in the law
firm of Reed, Luce, Tosh, McGregor and Wolford which rendered professional
services to the Company during the 1995 fiscal year.
Thomas P. Woolaway, a co-founder of the Company, was an officer of the
Company from its formation until his retirement on January 31, 1994.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation program for its executive officers is
administered by the Compensation Committee of the Board of Directors, all the
members of which are non-employee directors. The program is composed primarily
of cash compensation, consisting of base salary and a bonus, but also includes
noncash compensation consisting of the grant of a stock option. As of August 31,
1995, the Company had four executive officers, each of whom is named in the
Summary Compensation Table included in this Proxy Statement.
Base Salary and Bonus. The base salary and bonus of each executive officer
for each fiscal year is established by the Board of Directors upon
recommendation of the Committee. Base salary is determined at the beginning of
each fiscal year and the bonus is awarded after the financial results for the
fiscal year have become available.
The base salary of each executive officer depends primarily on the office
and responsibilities of the executive officer and is reviewed annually.
Increases are normally affected by the Company's financial performance. In
determining the base salary for John P. O'Leary, Jr., the Company's Chief
Executive Officer, for the 1995 fiscal year, the Committee took into account
that the Company's financial results for the 1994 fiscal year were outstanding
in every respect. Increases in revenues and profitability in the 1994 fiscal
year over the prior year were in excess of expectations and in particular the
Committee noted that the acquisitions during the year positively affected both
sales and profits. As a result, the Committee recommended and Mr. O'Leary
received a 9.8% base salary increase for the 1995 fiscal year as compared with a
5.1% increase for the preceding fiscal year. Increases in base salary for the
other executive officers ranged from 4.5% to 13.8%. Two of the executive
officers received increases designed to bring their base salaries in line with
increased responsibilities.
As to bonuses, the Committee strongly believes that executive officers
should have a meaningful portion of their total compensation tied to the
profitability of the Company. Accordingly, financial results for the fiscal year
in question are a primary consideration in the awarding of a bonus; but other
factors have significance as well, especially the individual performance of each
executive officer. There is no plan requiring that bonuses be paid if certain
criteria are met, there is no established relationship between a bonus and base
salary and there
9
<PAGE> 12
is no formula under which established weights are given to the various factors
considered. In general, the Committee compares the factors for the current year
against compensation in recent years and acts accordingly. Thus, since the
financial results for the 1995 fiscal year as compared with fiscal 1994 were
even better than the results for the 1994 fiscal year as compared with fiscal
1993, the Committee recommended and the executive officers received greater
increases in bonuses for the 1995 fiscal year as shown in the Summary
Compensation Table. Mr. O'Leary's bonus was 38.4% of total cash compensation;
the bonuses of the other executive officers was approximately one-third of total
cash compensation.
The Committee has not generally recommended base salaries or bonuses based
on compensation at other companies although for the 1995 fiscal year in
particular the Committee reviewed a study of compensation patterns at 100
similar sized companies, concluding that the Company's executive compensation is
appropriate.
Stock Options. Stock options are granted by the Committee and are the only
form of long-term compensation presently received by the Company's executive
officers. The Committee views stock options as particularly beneficial long-term
incentives because stock options meld the interests of the employee/optionholder
with those of the shareholders inasmuch as any value to the employee is tied
directly to stock price increases. The decisions of the Committee with respect
to the stock option granted to each employee are based upon the employee's
responsibilities and performance, as well as the employee's potential and past
award history. In October 1994, stock options for an aggregate of 92,500 shares
of the Company's Common Stock were granted to 85 employees as compared with
stock options for an aggregate of 44,200 shares granted to 60 employees in
October 1993. The increases were due to the excellent financial results during
the 1995 fiscal year and the inclusion of additional employees as a result of
acquisitions during the 1995 fiscal year. John P. O'Leary, Jr. received a stock
option for 8,000 shares of the Company's Common Stock and the other executive
officers each received a stock option for 4,000 shares. Mr. O'Leary, by virtue
of his top management position, receives a stock option each year for a greater
number of shares than the other executive officers. The other stock option
grants ranged from 2,500 to 500 shares.
In October 1994, the Committee recommended that the Company's Board of
Directors amend the Company's 1989 Stock Incentive Plan to increase the number
of shares of the Company's Common Stock for which stock options may be granted
thereunder by 300,000 shares. The Board followed this recommendation and the
amendment was approved by the Company's shareholders at the Annual Meeting of
Shareholders held on December 15, 1994. The amendment reflects the Committee's
commitment to stock options as the appropriate form of long-term compensation
for the Company's executive officers and other optionees.
Other. The executive officers may participate in the Company's Section
401(k) Plan and Common Stock Purchase Plan for Salaried Employees and will
receive retirement benefits under the Company's individual account defined
contribution pension plan for salaried employees. The Company provides certain
perquisites and other personal benefits to certain of its employees, including
its executive officers, which in the aggregate are not significant.
The names of the present members of the Committee are listed below. D.
Robert Beglin served as a member of the Committee until the 1994 Annual Meeting
of Shareholders and participated in all of the actions referred to above except
the recommendation of the bonuses for the 1995 fiscal year. Messrs. Kampmeinert
and Woolaway were elected as members of the Committee after the 1994 Annual
Meeting and only participated in the recommendation of the bonuses for the 1995
fiscal year.
Respectfully submitted,
Thomas S. Blair, Chairman
Robert W. Kampmeinert
Harold F. Reed, Jr.
Thomas P. Woolaway
10
<PAGE> 13
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following line graph compares the cumulative total shareholder return
on the Company's Common Stock over the 1991-1995 fiscal years with the
cumulative total return of the NASDAQ Stock Market (U.S.) Index and of the Dow
Jones Containers and Packaging Industry Group over the same period. The graph
assumes a $100 investment on August 31, 1990 in the Common Stock and in each of
the indices and assumes the reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE DOW JONES CONTAINERS
AND PACKAGING INDUSTRY GROUP
<TABLE>
<CAPTION>
DOW JONES
MEASUREMENT PERIOD NASDAQ STOCK CONTAINERS
(FISCAL YEAR COVERED) THE COMPANY MARKET (U.S.) AND PACKAGING
- ----------------------------- ----------- ------------- -------------
<S> <C> <C> <C>
1990 100 100 100
1991 115 142 148
1992 179 154 162
1993 141 203 148
1994 148 211 176
1995 238 284 201
</TABLE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed S.R. Snodgrass, A.C. as independent
public accountants to audit the financial statements of the Company and its
subsidiaries for the 1996 fiscal year. S.R. Snodgrass, A. C. has audited the
financial statements of the Company and its subsidiaries since 1967. Although
the appointment of independent public accountants is not required to be
submitted to a vote of the shareholders, the Board believes the shareholders
should participate in the selection of the independent public accountants
through the ratification process.
The Board of Directors recommends a vote For the ratification of the
appointment of S.R. Snodgrass, A.C. and unless otherwise directed therein, the
proxies solicited by the Board will be voted for the ratification of the
appointment of S.R. Snodgrass, A.C. In the event the shareholders fail to ratify
the appointment, the Board will consider such vote as a direction to appoint
other independent public accountants for the 1997 fiscal year.
Representatives of S.R. Snodgrass, A.C. will be present at the Annual
Meeting. The representatives will have the opportunity to make a statement if
they choose to do so and will be available to respond to appropriate questions.
VOTE REQUIRED
Under Pennsylvania law, the affirmative vote of a majority of the votes
cast at the Annual Meeting by the holders of the Company's Common Stock voting
in person or represented by proxy and entitled to vote, a
11
<PAGE> 14
quorum being present, is necessary for the ratification of the appointment of
S.R. Snodgrass, A.C. An abstention from voting by a shareholder present in
person or represented by proxy and entitled to vote is not a vote cast "for" or
"against" the proposal and is therefore not counted in determining whether the
required vote for ratification has been obtained.
OTHER MATTERS
No business other than that set forth above is expected to come before the
Annual Meeting or any adjournment thereof. Should other business properly come
before the Meeting or any adjournment thereof, the proxy holders will vote upon
the same according to their discretion and best judgment.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies for the Annual Meeting will be paid by
the Company. In addition to the solicitation of proxies by mail, the officers
and regular employees of the Company may solicit proxies in person or by
telephone or telegraph. Brokerage houses and other nominees, custodians or
fiduciaries will forward proxy soliciting material and the Company's Annual
Report to Shareholders to the beneficial owners of the shares of the Company's
Common Stock held of record by them, and the Company will reimburse these record
holders for their reasonable out-of-pocket expenses incurred in so doing.
1996 SHAREHOLDER PROPOSALS
A proposal submitted by a shareholder for the regular annual meeting of
shareholders to be held in 1996 must be received by the Secretary, Tuscarora
Incorporated, 800 Fifth Avenue, New Brighton, Pennsylvania 15066 on or prior to
July 13, 1996 in order to be eligible for inclusion in the Company's Proxy
Statement for that annual meeting.
By Order of the Board of Directors,
HAROLD F. REED, JR.
----------------------
Harold F. Reed, Jr.,
Secretary
12
<PAGE> 15
PROXY
TUSCARORA INCORPORATED
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
PITTSBURGH AIRPORT MARRIOTT, PARKWAY WEST,
CORAOPOLIS, ALLEGHENY COUNTY, PENNSYLVANIA
THURSDAY, DECEMBER 14, 1995, 10:30 A.M., PITTSBURGH TIME
The undersigned shareholder of Tuscarora Incorporated (the "Company")
hereby appoints John P. O'Leary, Jr., Harold F. Reed, Jr. and Brian C. Mullins,
and each of them acting individually, as proxies of the undersigned to vote at
the Annual Meeting of Shareholders of the Company to be held December 14, 1995,
and at all adjournments thereof, all the shares of Common Stock of the Company
which the undersigned may be entitled to vote, on the matters set forth on the
reverse side of this proxy and, in their discretion, upon any other business
which may properly come before the Meeting.
The undersigned shareholder hereby revokes all previous proxies for the
Annual Meeting, acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement, both dated November 13, 1995, and of the Annual Report to
Shareholders for the 1995 fiscal year, and hereby ratifies all that said
proxies may do by viture hereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER. IF NO DIRECTION IS GIVEN, THE SHARES WILL BE VOTED "FOR" ITEMS 1
AND 2.
(Continued, and to be signed, on the other side)
FOLD AND DETACH HERE
<PAGE> 16
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
<TABLE>
<C> <S> <C>
Item 1--The election of Directors for a three year term expiring at the annual meeting of shareholders in 1998.
FOR ALL WITHHOLD Nominees: David I. Cohen, Abe Farkas and John P. O'Leary, Jr. A Vote FOR includes
NOMINEES AUTHORITY discretionary authority to vote for a substituted nominee if any of the nominees listed
(EXCEPT AS TO VOTE FOR becomes unable to serve or for good cause will not serve. (To withhold authority to
indicated) ALL NOMINEES vote for any individual nominee, print that nominee's name on the line below.)
0 0
______________________________________________________________________________________
Item 2--The ratification of the appointment of S. R. Snodgrass, A.C. as
independent public accountants to audit the financial statements of the
Company and its subsidiaries for the 1996 fiscal year.
FOR AGAINST ABSTAIN
0 0 0
</TABLE>
PLEASE DATE AND SIGN BELOW EXACTLY AS YOUR
NAME APPEARS ON THIS CARD. IF YOU ARE
ACTING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
GUARDIAN OR TRUSTEE, PLEASE SO INDICATE
WITH YOUR FULL TITLE WHEN SIGNING.
CORPORATE HOLDERS SHOULD SIGN IN FULL
CORPORATE NAME BY DULY AUTHORIZED OFFICER.
IF SHARES ARE HELD JOINTLY, EACH SHAREHOLDER
NAMED SHOULD SIGN.
Dated: ____________________________, 1995
_________________________________________
_________________________________________
WITH RESPECT TO THE ANNUAL MEETING
I/WE WILL ATTEND _____ I/WE WILL NOT ATTEND _____
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
FOLD AND DETACH HERE
PLEASE INDICATE IN THE SPACE PROVIDED ABOVE
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
YOU ARE URGED TO PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A QUORUM
MAY BE ASSURED AT THE MEETING.
<PAGE> 17
November 13, 1995
TO: Participants in the Tuscarora Incorporated
Common Stock Purchase Plan for Salaried Employees
Dear Participant:
In accordance with Section 12 of the Tuscarora Incorporated Common Stock
Purchase Plan for Salaried Employees (the "Plan"), Mellon Bank, N.A., as record
holder of the shares of Common Stock of Tuscarora Incorporated ("Tuscarora") in
which you have a beneficial interest under the Plan, will vote your shares at
the Annual Meeting of Shareholders of Tuscarora to be held on December 14,
1995, and at any adjournment thereof, in accordance with your written
direction. Enclosed are the Notice of Annual Meeting and Proxy Statement, both
dated November 13, 1995, and the Annual Report to Shareholders for the 1995
fiscal year.
If you wish to instruct us in the voting of your shares, you may sign on the
reverse side exactly at your name appears thereon and date and return this card
in the enclosed envelope. By doing so, you are directing us to execute and file
a proxy IN THE FORM SOLICITED BY THE BOARD OF DIRECTORS OF TUSCARORA,
authorizing the proxies therein appointed to vote your shares at the Annual
Meeting on the matters set forth on the reverse side and, in their discretion,
upon any other business which may properly come before the Annual Meeting. The
Board of Directors of Tuscarora recommends a vote FOR Items 1 and 2 and your
shares will be so voted unless you otherwise indicate.
MELLON BANK, N.A.
(Continued, and to be signed, on the other side)
FOLD AND DETACH HERE
<PAGE> 18
<TABLE>
<C> <S> <C>
Item 1--The election of Directors for a three year term expiring at the annual meeting of shareholders in 1998.
FOR ALL WITHHOLD Nominees: David I. Cohen, Abe Farkas and John P. O'Leary, Jr. A Vote FOR includes
NOMINEES AUTHORITY discretionary authority to vote for a substituted nominee if any of the nominees listed
(EXCEPT AS TO VOTE FOR becomes unable to serve or for good cause will not serve. (To withhold authority to vote
INDICATED) ALL NOMINEES for any individual nominee, print that nominee's name on the line below.)
0 0
______________________________________________________________________________________
Item 2--The ratification of the appointment of S. R. Snodgrass, A.C. as
independent public accountants to audit the financial statements of the
Company and its subsidiaries for the 1996 fiscal year.
FOR AGAINST ABSTAIN
0 0 0
</TABLE>
PLEASE DATE AND SIGN BELOW EXACTLY AS YOUR
NAME APPEARS ON THIS CARD. IF SHARES ARE
HELD JOINTLY, EACH SHAREHOLDER NAMED
SHOULD SIGN.
Dated: ____________________________, 1995
_________________________________________
_________________________________________
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY
CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
