<PAGE>
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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12
Fibreboard Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $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>
PRELIMINARY COPY
NOTICE OF 1996 ANNUAL MEETING AND PROXY STATEMENT
April , 1996
To the Stockholders of
FIBREBOARD CORPORATION:
You are cordially invited to attend the Annual Meeting of Stockholders of
Fibreboard Corporation to be held on June 10, 1996 at 11:00 a.m. at the Embassy
Suites Hotel, 1345 Treat Boulevard, Walnut Creek, California 94596.
The attached Notice of Annual Meeting and Proxy Statement set forth the
details of business to be conducted at the Annual Meeting.
We hope you will attend the Annual Meeting in person. However, whether or
not you plan to attend, please complete, sign, date and return the enclosed
proxy card promptly in the accompanying reply envelope to assure that your
shares will be represented and voted at the Meeting.
Sincerely yours,
John D. Roach
CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
<PAGE>
FIBREBOARD CORPORATION
2121 N. California Blvd., Suite 560
Walnut Creek, CA 94596
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 10, 1996
---------------------
The Annual Meeting of Stockholders of Fibreboard Corporation (the "Company")
will be held at the Embassy Suites Hotel, 1345 Treat Boulevard, Walnut Creek,
California on Monday, June 10, 1996 at 11:00 a.m. for the following purposes:
1. To elect [two] director[s] to Class II of the Board of Directors to
serve for a period of three years or until [their] respective
successor[s] [are] elected and qualified;
2. To approve the adoption of the Company's 1995 Stock Incentive Plan;
3. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock
from 15,000,000 to 50,000,000;
4. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the 1996 fiscal year; and
5. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
Only stockholders of record at the close of business on April 11, 1996 will
be entitled to notice of and to vote at the Annual Meeting and any adjournments
or postponements thereof.
Whether or not you plan to attend the Annual Meeting, please complete, sign,
date and return the enclosed proxy card in the envelope provided. By promptly
returning your proxy card, you will assure that your shares are represented and
voted at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Michael R. Douglas
SECRETARY
Walnut Creek, California
April , 1996
<PAGE>
FIBREBOARD CORPORATION
2121 N. California Blvd., Suite 560
Walnut Creek, California 94596
PROXY STATEMENT
This Proxy Statement, together with the Notice of Annual Meeting of
Stockholders and proxy card enclosed herewith, are being furnished in connection
with the solicitation of proxies by the Board of Directors of Fibreboard
Corporation, a Delaware corporation ("Fibreboard" or the "Company"), for use at
the Annual Meeting of Stockholders of Fibreboard to be held on Monday, June 10,
1996 at 11:00 a.m. at the Embassy Suites Hotel, 1345 Treat Boulevard, Walnut
Creek, California and at any adjournments or postponements thereof. These proxy
materials were first mailed to stockholders on or about April , 1996.
------------------------
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Stockholders.
Each such proposal is described in more detail in subsequent sections of this
Proxy Statement. The Board of Directors knows of no other business which will
come before the Annual Meeting.
VOTING RIGHTS AND SOLICITATION
Fibreboard has one class of stock entitled to vote at the Annual Meeting,
Common Stock, $.01 par value (the "Common Stock"). If you were a stockholder of
record of Common Stock at the close of business on April 11, 1996 (the "Record
Date"), you may attend and vote at the Annual Meeting. Each share of Common
Stock held by you on the Record Date entitles you to one vote on each matter
that is properly presented at the Annual Meeting. At the close of business on
the Record Date, there were shares of Common Stock outstanding.
The holders of a majority of the shares of Common Stock outstanding as of
April 11, 1996, present in person or represented by proxy at the Annual Meeting,
shall constitute a quorum for the transaction of business at the Annual Meeting.
Nominees for election as directors shall be elected by plurality vote of all
votes cast. The affirmative vote of a majority of the shares of Common Stock
present in person or represented and voting at the Annual Meeting is required to
approve Proposals 2 and 4. The affirmative vote of a majority of the outstanding
shares of Common Stock is required to approve Proposal 3. In tabulating votes,
abstentions and broker non-votes have no effect.
If you are unable to attend the Annual Meeting, you may vote by proxy on any
matter that may properly come before the Annual Meeting. When returned properly
completed, the enclosed proxy card will be voted as you instruct in the spaces
provided or, in the absence of such instructions, will be voted FOR (i) [each
of] the nominee[s] for director as described herein under Proposal 1 and FOR
approval of Proposals 2, 3 and 4.
If any other matters properly come before the Annual Meeting or any
adjournment or postponement thereof, the proxy holders intend to vote in
accordance with their best judgment. All proxy cards delivered pursuant to this
solicitation are revocable at any time at the option of the persons executing
them by giving written notice to the Secretary of the Company at the Company's
principal executive offices in Walnut Creek, California, by delivering a duly
executed proxy card bearing a later date or by voting in person at the Annual
Meeting.
1
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Company currently has seven members. The
members of the Board of Directors are divided into three classes, each
consisting of [one], two or three directors who serve for a term of three years,
with the term of office of one of the three classes expiring each year. The term
of office of Class II directors expires on the date of this Annual Meeting. The
term of office of Class III and Class I directors will expire in 1997 and 1998,
respectively. At the Annual Meeting, the stockholders will elect [one]
[two]director[s] to Class II to serve a three-year term expiring in 1999 or
until [his] [their] successors are elected and qualified.
Mr. James F. Miller, currently a Class II director, has determined not to
stand for reelection as a director of the Company when his term expires on the
date of the 1996 Annual Meeting. [The Board of Directors has therefore amended
the Company's bylaws to reduce the number of members of the Board from seven to
six effective as of the date of the Annual Meeting. Accordingly, only one Class
II director will be elected at the Annual Meeting.]
Set forth below [are] the name[s] of the nominee[s] of the Board of
Directors for election as Class II directors, together with certain information
concerning such nominee[s]. In the event that any nominee is unable or declines
to serve as a director at the time of the Annual Meeting, proxy cards
designating the Board's nominees will be voted for a nominee who shall be
designated by the present Board of Directors.
NOMINEE[S] FOR ELECTION TO CLASS II
<TABLE>
<CAPTION>
DIRECTOR
NAME/AGE OF NOMINEE PRINCIPAL OCCUPATION SINCE
- ----------------------------------------------------------------------- --------
<S> <C> <C>
John W. Koeberer (52) Chairman, Tehama County Bank 1988
</TABLE>
JOHN W. KOEBERER has been a director of Fibreboard since June 1988. Mr.
Koeberer was President of the California Ski Industries Association from 1975 to
1976. He was a founder of Tehama County Bank, which is located in Red Bluff,
California, and has been Chairman of its board of directors since 1984. For the
past sixteen years, Mr. Koeberer has been Chairman, President and Chief
Executive Officer of The California Parks Company, which provides concession
services for national, state, county and municipal parks. He has also served as
Chairman of the Lassen Volcanic National Park Foundation for the past ten years.
Since 1992, Mr. Koeberer has been President of the California Parks Hospitality
Association, an organization representing private enterprise in the California
State Park System. He has served on the California Tourism Commission since 1993
and currently serves as a director of the California State Chamber of Commerce
and the Shasta Cascade Wonderland Association.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF THE
BOARD'S NOMINEE[S] TO CLASS II OF THE BOARD OF DIRECTORS.
2
<PAGE>
DIRECTORS NOT CURRENTLY STANDING FOR ELECTION
<TABLE>
<CAPTION>
CLASS AND YEAR
DIRECTOR TERM
NAME/AGE OF NOMINEE PRINCIPAL OCCUPATION SINCE AS DIRECTOR ENDS
- -------------------------- -------------------------------------------------------- --------- ------------------
<S> <C> <C> <C>
Philip R. Bogue (71) Retired Partner in the firm of 1988 Class III-1997
Arthur Andersen LLP
William D. Eberle (72) Chairman, Manchester Associates, Ltd. 1991 Class I-1998
G. Robert Evans (64) Chairman and Chief Executive Officer, 1991 Class I-1998
Material Sciences Corporation
George B. James (58) Senior Vice President & Chief Financial Officer, Levi 1993 Class III-1997
Strauss & Co.
John D. Roach (52) Chairman, President and Chief Executive Officer, 1991 Class III-1997
Fibreboard Corporation
</TABLE>
PHILIP R. BOGUE has been a director of Fibreboard since June 1988. Mr. Bogue
was interim President of the Portland Art Museum from January 1993 to May 1994.
He was Assistant to the President of Portland State University in Portland,
Oregon, from 1983 to 1989. He previously served as Managing Partner of the
Portland office of Arthur Andersen LLP, a major accounting firm. Mr. Bogue is a
director of Good Health Plan of Oregon.
WILLIAM D. EBERLE has been a director of the Company since December 1991.
Mr. Eberle has been Chairman of Manchester Associates, Ltd., an international
consulting firm, for more than the past five years. He has also served as
President and Chief Executive Officer of the U.S. Motor Vehicle Manufacturers
Association (1975-1977), as Chairman and Chief Executive Officer of American
Standard Corporation (1966-1971) and as Vice President of Boise Cascade
Corporation (1959-1966). He was involved in government service as a member of
the Idaho House of Representatives and Speaker of the House (1953-1961), a
United States Trade Representative (1971-1975) and the Director of Cabinet of
the Council for International Economic Policy (1973-1974). Mr. Eberle is
Chairman of America Service Group and Showscan Entertainment, Inc. He is also a
director of Sirrom Capital Corporation, Mitchell Energy and Development
Corporation and Ampco-Pittsburgh Corporation. He currently serves in an "of
counsel" position with the law firm of Kaye, Scholer, Fierman, Hays & Handler.
G. ROBERT EVANS has been a director of the Company since December 1991.
Since February 1991, Mr. Evans has been Chairman and Chief Executive Officer of
Material Sciences Corporation, which develops and commercializes materials
technologies and produces laminates and multi-layer composite materials. From
1990 to 1991 he was President, Chief Executive Officer and a director of
Corporate Finance Associates Illinois, Inc., a financial intermediary and
consulting firm. From 1987 to 1990 he was President, Chief Executive Officer and
a director of Bemrose Group USA, a British-owned holding company engaged in
value added manufacturing and sale of advertising specialty products. Prior to
1987, Mr. Evans served as President and Chief Executive Officer of Allsteel,
Inc. (1984-1987), Southwall Technologies (1983-1984), Arcata Corporation
(1969-1983) and in various executive positions with U.S. Gypsum Company
(1953-1969). He currently serves as a director of Swift Energy Company and
Consolidated Freightways, Inc.
GEORGE B. JAMES has been a director of Fibreboard since June 1993. Mr. James
has been Senior Vice President and Chief Financial Officer of Levi Strauss & Co.
since 1985. From 1982 to 1985 he was Executive Vice President of Crown
Zellerbach Corporation, a paper products manufacturer. Prior to 1982, Mr. James
served as Senior Vice President and Chief Financial Officer of Arcata
Corporation, a wood products manufacturer. He currently serves as a director of
Pacific States Industries, Inc., Crown Vantage, Inc. and Basic Vegetable
Products.
JOHN D. ROACH was elected Chairman, President and Chief Executive Officer of
Fibreboard in July 1991. Prior to his appointment, Mr. Roach was Executive Vice
President of Manville Corporation, a manufacturer of building products,
paperboard packaging, fiberglass and industrial minerals, where he served as
President of its Mining and Minerals Group and President of Celite Corporation,
a wholly-owned
3
<PAGE>
Manville subsidiary. In addition, Mr. Roach served as President of Manville
Sales Corporation, now known as Schuller International, and the Fiberglass and
Specialty Products Groups from 1988 to 1989, and as Chief Financial Officer of
Manville Corporation from 1987 to 1988. Prior to Manville, Mr. Roach was a
strategy consultant and Vice Chairman of Braxton Associates; Vice President and
Managing Director of the Strategic Management Practice for Booz, Allen,
Hamilton; and Vice President and Director of the Boston Consulting Group.
Previous experience at Northrop Corporation included Director of strategic
planning, economic analysis, MIS and co-manager of a venture capital subsidiary.
He currently serves as a director of Thompson PBE, Inc.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of six meetings during
the year ended December 31, 1995. The Board has three standing committees, an
Audit Committee, a Compensation Committee and a Nominating Committee, each
composed of Messrs. Bogue, Eberle, Evans, James, Koeberer and Miller. The
Nominating Committee also includes Mr. Roach. During 1995 the Audit Committee
met four times, the Compensation Committee met twice and the Nominating
Committee met once. Each director attended more than 90% of the total number of
meetings held during 1995 of the Board and the committees on which such director
served, except Mr. James who attended more than 75% of such meetings.
The Audit Committee's responsibilities include selecting the Company's
auditors and reviewing the Company's audit plan, financial statements and
internal accounting and audit procedures. The functions of the Compensation
Committee include establishment of compensation plans for Fibreboard's executive
officers and administration of certain of Fibreboard's employee benefit and
compensation programs. The Nominating Committee's responsibilities include
recommending nominees for election as directors and developing candidate
specifications for membership. The Nominating Committee will consider
recommendations for nominees for directorships submitted by stockholders. From
time to time the Board of Directors may establish other committees to facilitate
its business objectives.
COMPENSATION OF DIRECTORS
Directors who are not employees of Fibreboard receive a quarterly retainer
of $5,000 and are paid $1,000 for each meeting of the Board of Directors that
they attend. Outside Directors also receive the attendance fee for committee
meetings, other than those committee meetings held on the same day as a meeting
of the Board of Directors, as well as $500 for each meeting held by telephone
conference call. The chairmen of the Compensation and Audit Committees also
receive an additional annual retainer of $5,000. Directors are reimbursed for
their expenses incurred in attending meetings of the Board of Directors.
Outside directors also participate in Fibreboard's Restated 1988 Employee
Stock Option and Rights Plan (the "1988 Option Plan"), which provides for
automatic annual grants of options to outside directors for 4,000 shares of
Common Stock at an exercise price equal to 100% of fair market value on the
grant date. Under this plan, new Outside Directors also receive automatic
one-time awards of 2,000 restricted stock rights, which vest over a three-year
period or immediately in full upon a change of control.
The new 1995 Stock Incentive Plan provides for automatic annual option
grants and one-time restricted stock awards to outside directors in the same
amounts and on substantially the same terms and conditions as provided for in
the 1988 Option Plan. Assuming the 1995 Stock Incentive Plan is approved by the
stockholders at the Annual Meeting, outside directors will receive no further
grants under the 1988 Option Plan.
The Board has implemented a program under the 1995 Stock Incentive Plan
whereby outside directors may elect to receive an equivalent number of stock
units in lieu of their annual retainer fees. The number of stock units issued to
a participating director on a quarterly basis is based on the average closing
price of the Common Stock over the preceding quarter. Such program is contingent
upon stockholder approval of the 1995 Stock Incentive Plan.
4
<PAGE>
PROPOSAL 2
APPROVAL OF THE ADOPTION OF
THE 1995 STOCK INCENTIVE PLAN
INTRODUCTION
On November 28, 1995, the Board of Directors adopted the Fibreboard 1995
Stock Incentive Plan (the "Plan"), subject to the approval of the Company's
stockholders. The Plan provides for awards in the form of options (which may
constitute incentive stock options or non-statutory stock options), restricted
shares, stock units and stock appreciation rights ("SARs"), or any combination
thereof.
The Board believes that the Plan will enable the Company to continue to
attract and retain highly qualified individuals capable of implementing the
Company's long-term strategic goals and objectives. The Board further believes
that the Plan will provide the Company with the means to motivate high levels of
performance by key employees in order to increase stockholder value.
The Plan is intended to replace the 1988 Option Plan, under which
approximately 22,000 shares of Common Stock currently remain available for
grant. The Board believes that the number of shares available under the 1988
Option Plan is inadequate to meet the Company's ongoing requirements.
The Compensation Committee expects to use option awards under the Plan as
its primary method of providing stock-based incentive compensation to key
employees over the next few years. During 1993-1994, due to the inadequacy of
the share reserve under the 1988 Option Plan, the Compensation Committee issued
phantom stock grants payable in cash as incentives to key executives. These
grants, while effective in providing performance incentives to management,
resulted in significant variable accounting charges as a result of the
substantial price appreciation of Fibreboard stock since the grant dates.
Approval of the Plan would enable the Compensation Committee to provide similar
performance incentives to management in the form of stock options, without
incurring the potentially significant accounting charges associated with phantom
stock grants. The Plan provides that such options may not be granted at less
than 100% of fair market value of the Common Stock on the grant date, which
means that participants receive nothing unless the Company's stock price
increases over the option term. The Board believes that the Plan directly ties
management's interests to those of stockholders and that approval of the Plan is
in the stockholders' best interests.
PURPOSE
The purpose of the Plan is to promote the long-term success of the Company
and the creation of stockholder value by (a) encouraging key employees to focus
on critical long-range objectives, (b) encouraging the attraction and retention
of key employees with exceptional qualifications, including key executives that
may join the Company in the future as a result of acquisitions, and (c) linking
key employees directly to stockholder interests through increased stock
ownership.
ADMINISTRATION
The Plan will be administered by the Compensation Committee (the
"Committee"), which consists entirely of Outside Directors. The Committee
selects the key employees of the Company or any subsidiary who will receive
awards, determines the size of any award and establishes any vesting or other
conditions.
ELIGIBILITY
Key employees of the Company (including, without limitation, independent
contractors who are not members of the Board) are eligible to receive awards
under the Plan. Directors who are not employees of the Company or any of its
subsidiaries ("Outside Directors") are eligible to receive automatic grants
under the Plan. The Committee may also choose to implement a program whereby
Outside Directors may elect to receive awards under the Plan in lieu of annual
retainer and meeting fees. See "Compensation of Directors"
5
<PAGE>
on page of this Proxy Statement. As of the Record Date, eight executive
officers and the Company's Outside Directors were participants in the Plan. It
is not possible to determine how many eligible employees will participate in the
Plan in the future.
OPTIONS AND STOCK APPRECIATION RIGHTS
Options may include nonstatutory stock options ("NSOs") as well as incentive
stock options ("ISOs") intended to qualify for special tax treatment. The
exercise price of options must be equal to or greater than 100% of the fair
market value of the Common Stock on the date of grant. On , 1996,
the Company's Common Stock closed at $ per share. The term of an ISO
cannot exceed 10 years, and all options and SARs are nontransferable prior to
the optionee'death. The exercise price of an option may be paid in any lawful
form permitted by the Committee, including cash or the surrender of shares of
Common Stock already owned by the optionee.
An SAR permits the participant to elect to receive any appreciation in the
value of the optioned stock directly from the Company, either in shares of
Common Stock or in cash or a combination of the two, in lieu of exercising the
option, with the Committee having the discretion to determine the form in which
such payment will be made. The amount payable on exercise of an SAR is measured
by the difference between the market value of the optioned stock at exercise and
the exercise price. SARs may be granted in combination with options or on a
stand-alone basis.
Upon exercise of an SAR, the corresponding portion of the related option
must be surrendered and cannot thereafter be exercised. Conversely, upon
exercise of an option to which an SAR is attached, the SAR may no longer be
exercised to the extent that the corresponding option has been exercised. The
Committee has no present intention to issue SARs under the Plan except under the
Outside Director automatic grant provisions as described below.
RESTRICTED SHARES AND STOCK UNITS
Restricted stock awards consist of grants of Common Stock of the Company for
no or minimal consideration. Restricted stock awards are subject to such terms,
conditions and restrictions as the Committee may determine. Restricted shares
are subject to forfeiture in the event that the applicable vesting conditions
are not satisfied, and they are generally nontransferable prior to vesting.
Restricted shares have the same voting and dividend rights as other shares of
Common Stock.
Stock unit awards consist of grants of stock units for no consideration,
subject to such terms, conditions and restrictions as the Committee may
determine. A stock unit is an unfunded bookkeeping entry representing the
equivalent of one share of Common Stock, and it is nontransferable prior to the
holder's death. A holder of stock units has no voting rights or other privileges
as a stockholder but may be entitled to receive dividend equivalents.
Stock units, when vested, may be settled by distributing shares of Common
Stock or by a cash payment corresponding to the fair market value of an
equivalent number of shares of Common Stock, or a combination of both. Vested
stock units will be settled at the time determined by the Committee. With the
Committee's consent, the recipient of restricted shares or stock units may pay
all projected withholding taxes relating to the award with Common Stock rather
than cash.
VESTING CONDITIONS
The Committee determines the number of options, SARs, restricted shares and
stock units to be included in the award as well as the vesting and other
conditions. The vesting conditions may be based on the employee's service, his
or her individual performance, the Company's performance or other appropriate
criteria. In general, the vesting conditions will be based on the employee's
service after the date of grant. Vesting may be accelerated in the event of the
employee's death, disability or retirement or in the event of a change of
control.
6
<PAGE>
The events which constitute a change of control for purposes of the Plan are
described under "Employment, Severance and Change of Control Arrangements" on
page of this Proxy Statement.
AUTOMATIC GRANTS TO OUTSIDE DIRECTORS
The Plan provides that Outside Directors will automatically receive an NSO
covering 4,000 shares annually at an exercise price equal to 100% of the market
price of Common Stock on the date of grant. NSOs granted to Outside Directors
become exercisable one year after grant or earlier in the event of a change of
control with respect to the Company. The NSOs expire 10 years after grant,
except that they expire on the second anniversary after the Outside Director's
service terminates. All NSOs granted to Outside Directors include an SAR that is
exercisable for cash only during the 30-day period following a change of control
with respect to the Company.
The Plan also provides that all new Outside Directors will receive 2,000
stock units when they take office. These stock units will be settled by issuing
an equal number of shares of Common Stock. Settlement occurs on the earliest of
(1) the date three years after the date of grant, (2) the date of a change of
control with respect to the Company or (3) the date when the Outside Director's
service terminates for any reason. If settlement occurs because of a termination
of service, the stock units vest on the following schedule: 40% after one year,
an additional 30% after two years and the remaining 30% after three years.
OTHER PROVISIONS
The Committee is authorized, within the provisions of the Plan, to amend the
terms of outstanding restricted shares or stock units, to modify or extend
outstanding options or to exchange new options for outstanding options,
including outstanding options with a higher exercise price than the new options.
The Committee has no present intention to modify the terms of any outstanding
stock-based incentive awards.
NUMBER OF AVAILABLE SHARES
The total number of shares available for grant under the Plan is 500,000,
plus the number of shares then remaining available for grant under the 1988
Option Plan at the time of the adoption of this Plan by the stockholders. In
addition, if awards under the 1988 Option Plan are forfeited or terminated
before being exercised or vested, the corresponding common shares shall become
available for awards under the Plan. If the Plan is approved by the
stockholders, no further awards will be made under the 1988 Option Plan. The
total number of shares available for grant under the Plan shall be subject to
adjustment in the event of stock splits, stock dividends and other similar
recapitalization transactions. If any options, SARs, restricted shares or stock
units are forfeited, or if options terminate for any other reason prior to
exercise (other than the exercise of a related SAR), then the underlying shares
again become available for awards.
NEW PLAN BENEFITS
In November 1995, the Company granted options for an aggregate of 123,500
shares to the Company's executive officers, subject to stockholder approval of
the Plan. Such options have an exercise price of $21.375 per share (the closing
price of the Company's Common Stock on the grant date) and will generally become
exercisable in equal installments over a three-year period. The number of such
options granted to the Named Officers is included in the table captioned "Option
and SAR Grants" on page .
The Committee has full discretion to determine the number of options, SARs,
restricted shares and stock units to be granted to employees under the Plan;
provided, however, that no individual may receive option or SAR grants in a
single calendar year covering more than 200,000 shares. Therefore, the aggregate
benefits and amounts that will be received by each of the Named Officers, the
executive officers as a group and all other employees and under the Plan are not
determinable. Awards to Outside Directors under the Plan are fixed. See
"Automatic Grants to Outside Directors."
7
<PAGE>
TERM OF THE PLAN, AMENDMENT AND TERMINATION
The Board of Directors may at any time amend, modify or terminate the Plan.
An amendment of the Plan shall be subject to the approval of the Company's
stockholders only to the extent required by applicable law. The Plan shall
remain in effect until it is terminated except that no ISOs may be granted after
November 28, 2005.
FEDERAL INCOME TAX CONSEQUENCES
Neither the optionee nor the Company will incur any federal tax consequences
as a result of the grant of an option. The optionee will have no taxable income
upon exercising an ISO (except that the alternative minimum tax may apply), and
the Company will receive no deduction when an ISO is exercised. Upon exercising
an NSO, the optionee generally must recognize ordinary income equal to the
"spread" between the exercise price and the fair market value of the Common
Stock on the date of exercise; the Company ordinarily will be entitled to a
deduction for the same amount. In the case of an employee, the option spread at
the time an NSO is exercised is subject to income tax withholding, but the
optionee generally may elect to satisfy the withholding tax obligation by having
shares of Common Stock withheld from those purchased under the NSO. The tax
treatment of a disposition of option shares acquired under the Plan depends on
how long the shares have been held and on whether such shares were acquired by
exercising an ISO or by exercising a NSO. The Company will not be entitled to a
deduction in connection with a disposition of option shares, except in the case
of a disposition of shares acquired under an ISO before the applicable ISO
holding periods have been satisfied.
REQUIRED VOTE
The adoption of the Plan requires the affirmative vote of not less than a
majority of the shares of Common Stock present in person or represented and
voting at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE FIBREBOARD
1995 STOCK INCENTIVE PLAN.
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO
THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
On February 6, 1996, the Board of Directors approved an amendment to Article
Fourth of the Company's Restated Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 15,000,000 to 50,000,000. The
Board of Directors recommends that the Company's stockholders approve this
amendment. The full text of Article Fourth, as such Article is proposed to be
amended pursuant to this proposal, is set forth in Appendix A hereto.
The Board of Directors believes that it is in the Company's best interests
to increase the number of authorized shares of Common Stock in order to have
additional authorized shares available for issuance to meet strategic
requirements as they arise. The Board believes that the availability of such
shares will provide the Company with the flexibility to issue Common Stock for
various strategic purposes which may be identified in the future, such as stock
dividends, financings or acquisitions. The Board also believes that the
availability of such additional shares will help the Company attract and retain
talented employees through the grant of stock options and other stock-based
incentives.
Of the 15,000,000 shares of Common Stock currently authorized for issuance,
approximately 4,956,000 shares are unissued and unreserved for issuance. These
shares, together with the additional
8
<PAGE>
35,000,000 shares, if the proposed increase is approved by the stockholders,
will be available for issuance at such times and for such corporate purposes as
the Board of Directors may deem advisable without further action by the
Company's stockholders, except as may be required by applicable laws or the
rules of any stock exchange or national securities association trading system on
which the Common Stock may be listed or traded. The Company has no agreements,
understandings or plans at the present time for the issuance or use of the
additional shares of Common Stock proposed to be authorized. Upon issuance, such
shares will have the same rights as the outstanding shares of Common Stock. The
Board of Directors does not intend to issue any Common Stock except on terms
which the Board deems to be in the best interests of the Company and its
then-existing stockholders.
The issuance of additional shares of Common Stock may have a dilutive effect
on earnings per share and on a stockholder's percentage voting power. Holders of
Common Stock do not have preemptive rights. The availability of increased
authorized Common Stock for issuance in the future could render more difficult
or discourage an unsolicited tender offer, proxy contest or other attempt to
obtain control of the Company. Neither the management of the Company nor the
Board of Directors is aware of any existing or planned effort on the part of any
party to accumulate material amounts of Common Stock or to acquire control of
the Company.
The affirmative vote of the holders of a majority of the Company's
outstanding Common Stock is required to approve this proposal. If approved by
the stockholders, the proposed amendment to Article Fourth will become effective
upon the filing of a Certificate of Amendment with the Secretary of State of
Delaware amending the Company's Restated Certificate of Incorporation, which
will occur as soon as reasonably practicable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND ARTICLE
FOURTH OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION AS SET FORTH IN
APPENDIX A.
PROPOSAL 4
RATIFICATION OF SELECTION
OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP served as independent public accountants for
the Company for the fiscal year ended December 31, 1995. The Audit Committee has
selected that firm to continue in this capacity to audit the accounts and
records of the Company for the fiscal year ending December 31, 1996, and to
perform other appropriate services. Ratification by the stockholders will be
sought at the Annual Meeting for the selection of Arthur Andersen LLP as
independent public accountants for the Company for fiscal 1996. In the event
that the stockholders do not ratify the selection of Arthur Andersen LLP, the
Audit Committee will reconsider its selection.
The Company expects that one or more representatives of Arthur Andersen LLP
will be present at the Annual Meeting and will have the opportunity to make a
statement and to respond to appropriate questions.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The functions of the Compensation Committee are to establish and administer
compensation plans for Fibreboard's executive officers, review executive officer
compensation levels and evaluate management performance. The Committee is
composed of six independent, non-employee directors. Set forth below is a report
submitted by the Compensation Committee regarding the Company's compensation
policies and programs for executive officers for 1995.
9
<PAGE>
OVERVIEW OF COMPENSATION POLICY
The primary objective of Fibreboard's management team over the past four
years has been to improve the Company's profitability and increase stockholder
value. During 1992-1995 the Company achieved significant success in this regard.
The operating performance of Fibreboard's businesses improved substantially and
the Company as a whole achieved record operating earnings each year. In
addition, during this period the Company substantially improved its competitive
position and built corporate value through strategic acquisitions in the
building products and resorts industries, as well as through the sale of the
Wood Products Group in 1995.
The Committee believes that the compensation policies and programs which it
has implemented have directly contributed to management's successful track
record and its continuing focus on improving profitability and increasing
stockholder value.
The Committee has developed a compensation policy under which a substantial
portion of the compensation of executive officers is directly linked to the
financial performance of the Company and the enhancement of stockholder value.
To promote this policy, the Committee implemented a compensation program for
1995 that (i) continued the successful annual cash incentive plan first
introduced during 1992, which "pays for performance" and provides bonuses based
on the realization of annual financial goals, and (ii) introduced the 1995 Stock
Incentive Plan, which provides for the grant of stock options and other equity
incentive opportunities that directly tie management's interests to those of
stockholders.
The Committee believes that executive compensation should be highly
leveraged toward the incentive-based programs described above. By placing much
of an officer's compensation "at risk" in this manner, the Company's
compensation program focuses management's efforts on improving financial
performance and effectively integrates executive compensation with the Company's
annual and long-term strategic objectives.
1995 EXECUTIVE OFFICER COMPENSATION PROGRAM
The Committee works regularly with a nationally known compensation
consulting firm to assure that Fibreboard's executive compensation program
remains competitive and that it appropriately reflects the Committee's
compensation philosophy.
After a thorough process involving analysis of the outside consultant's
proposals and reports and Committee deliberations, the Committee implemented the
1995 executive officer compensation program. The components of this program are
described below.
BASE SALARY--The Committee determines the base salary component of executive
compensation by reviewing executive salary levels at a broad group of companies
with comparable revenues engaged in general industry (the "Survey Group")(1), as
well as evaluating the specific job functions and past performance of individual
officers. The Committee believes that base salaries for executive officers in
general fall within the median range of executive salary levels at comparable
companies surveyed by the Committee.
ANNUAL CASH INCENTIVE PROGRAM--The Annual Cash Incentive Program is a
pay-for-performance plan under which cash bonus awards are paid based upon (i)
achievement of annual earnings targets set by the Committee and (ii) evaluation
of an officer's personal performance during the year. Performance criteria under
this program consist of: (i) Company and/or business unit earnings performance,
with threshold, target and maximum challenge earnings objectives established at
the beginning of the year to reflect the Company's goals set forth in its
business plan for that year (75% weight), and (ii) the achievement of individual
performance goals, which reflect business objectives set for each officer for
that year (25% weight). Award amounts for each executive are based upon a
percentage of that participant's base salary, with the percentage varying based
on the executive's level of responsibility.
- ------------------------
(1) This group covers a broad range of industries and is not limited to
companies included in the Dow Jones Building Materials Index used in
formulating the Stock Performance Graph on page hereof.
10
<PAGE>
For performance during 1995, the Company's executives earned an average of
93% of the maximum potential cash bonus awards available under the Annual Cash
Incentive Program based upon the achievement of 1995 earnings targets and the
accomplishment of individual business objectives.
STOCK OPTION GRANTS--In November 1995, the Committee granted an aggregate of
123,500 stock options under the 1995 Stock Incentive Plan to the Company's
executive officers, subject to stockholder approval of the Plan. The Committee
determined the number of options granted to executive officers primarily by
reviewing the levels of executive option grants at companies included in the
Survey Group, as well as by evaluating each officer's respective job
responsibilities, past performance and expected future contributions.
The Committee believes that these stock option grants will more closely
align the long-term interests of senior management with those of stockholders
and assist in the retention of key executives.
LONG-TERM EQUITY INCENTIVE PLAN--This Plan authorizes the grant of phantom
stock units vesting over the term of multi-year performance cycles set by the
Committee. The value of each phantom stock unit is determined based on the
appreciation, if any, in the value of the Company's stock over the applicable
performance cycle, measured by the difference between the grant price and the
price at the maturity date. No award is earned if the stock price at maturity is
the same as or lower than the price at the grant date. Vested phantom stock
units are payable only in cash, with the Committee determining the timing of the
payout. Since the Plan is cash-based, it does not have any dilutive effect on
the number of outstanding shares of Common Stock.
In 1995, the Committee did not grant any phantom stock units to the
Company's executive officers. The Committee believes that the phantom stock
grants made during 1993-1994 continued to provide substantial performance
incentives to the Company's executive officers in 1995. If the 1995 Stock
Incentive Plan is approved by the stockholders, the Committee has no present
intention to grant additional phantom stock units.
COMPENSATION OF CEO--John D. Roach joined the Company as Chairman, President
and CEO in July 1991. The Company entered into an employment agreement with Mr.
Roach at that time, the terms of which were determined pursuant to arms-length
negotiations. Mr. Roach's employment agreement, as amended in January 1995, is
described on Pages - of this Proxy Statement.
The Committee believes that Mr. Roach's base salary for 1995 was set at the
median salary level for his position at comparable companies surveyed by the
Committee.
Mr. Roach earned a cash bonus of $526,338 under the Annual Cash Incentive
Program for performance during 1995, representing 98.8% of the maximum potential
bonus Mr. Roach may earn under this program. Mr. Roach's bonus was based on the
Company achieving certain earnings targets determined at the beginning of the
year (75% weight) and the achievement by Mr. Roach of individual performance
goals set by the Committee (25% weight). The maximum annual bonus that Mr. Roach
may earn under this program is an amount equal to 130% of his base salary.
In 1995, the Committee granted an aggregate of 40,000 stock options to Mr.
Roach under the 1995 Stock Incentive Plan (subject to stockholder approval)
which will vest over three years. The Committee determined the size of the award
by reviewing the number of options granted to CEO's at companies included in the
Survey Group, as well as by evaluating Mr. Roach's job responsibilities, past
performance and expected future contributions.
POLICY ON DEDUCTIBILITY OF COMPENSATION--Section 162(m) of the Internal
Revenue Code provides that a company may not take a tax deduction for that
portion of the annual compensation paid to a named executive officer in excess
of $1 million, unless certain exemption requirements are met. The 1995 Stock
Incentive Plan is designed to meet the exemption requirements of Section 162(m).
The Committee has determined at this time not to seek to qualify the Company's
remaining executive officer compensation programs under Section 162(m).
11
<PAGE>
All aspects of the Company's executive compensation program are subject to
change at the discretion of the Committee. The Committee will monitor the
Company's executive compensation program on an ongoing basis to ensure that it
continues to support a performance-oriented environment and remains properly
integrated with Fibreboard's annual and long-term strategic objectives.
MEMBERS OF COMPENSATION COMMITTEE
<TABLE>
<S> <C>
G. ROBERT EVANS, CHAIRMAN GEORGE B. JAMES
WILLIAM D. EBERLE JOHN W. KOEBERER
PHILIP R. BOGUE JAMES F. MILLER
</TABLE>
12
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Set forth below is information concerning the annual and long-term
compensation for services rendered in all capacities to the Company for the
fiscal years ended December 31, 1995, 1994 and 1993, of those persons who were,
at December 31, 1995, (i) the Chief Executive Officer and (ii) the other four
most highly compensated executive officers of the Company (the "Named
Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ----------------------- ----------
------------------------------------- RESTRICTED SECURITIES LONG-TERM
OTHER ANNUAL STOCK UNDERLYING INCENTIVE
NAME AND COMPENSATION AWARD(S) OPTIONS PLAN ALL OTHER ($)
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) ($)(1) (#) PAYOUTS ($) COMPENSATION (2)
- ------------------------- --------- ---------- ---------- ------------- ---------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JOHN D. ROACH 1995 410,000 526,338 -- -- 40,000 255,600 262,605
Chairman, President & 1994 360,000 434,450 -- -- -- 200,000 212,780
CEO 1993 300,000 438,750 149,619(3) -- -- 200,000 14,790
JAMES P. DONOHUE 1995 217,500 161,086 -- -- 15,000 102,240 51,149
Senior VP & CFO 1994 210,000 196,175 -- -- -- 65,000 36,780
1993 195,000 138,938 25,855(3) -- -- 65,000 14,790
MICHAEL R. DOUGLAS 1995 197,500 142,570 -- -- 15,000 102,240 20,016
Senior VP, General 1994 190,000 130,470 -- -- -- 55,000 10,580
Counsel & Secretary 1993 165,000 220,657 7,707 346,250 -- 55,000 14,790
ROBERT W. JOHNSTON 1995 190,000 79,340 -- -- 10,000 -- 10,500
[VP, Vinyl Siding] 1994 63,000(4) 47,500 -- 149,375 -- -- --
[President, Norandex] 1993 -- -- -- -- -- -- --
HERBERT M. ELLIOTT 1995 155,000 108,895 -- -- 15,000 76,680 63,897
VP, Industrial 1994 150,000 109,690 -- -- -- 70,000 57,380
Insulation 1993 140,000 65,625 32,804(3) -- -- 70,000 14,790
</TABLE>
- ------------------------
(1) As of December 31, 1995, Messrs. Douglas and Johnston held 20,000 and 10,000
restricted stock rights, valued at $447,500 and $223,750, respectively. No
other Named Officer held restricted stock rights as of such date. Under the
terms of such restricted stock rights, shares of Common Stock are not issued
or delivered to holders until the rights vest. No dividends are paid on
restricted stock rights. Mr. Douglas' restricted stock rights will vest on
the third anniversary of the date of grant, or earlier upon final court
approval of either the Company's Global or Insurance Settlement Agreements
relating to asbestos personal injury claims.
(2) Includes Profit Sharing 401(K) Plan contributions to the accounts of the
Named Officers. Also includes the contributions allocated to the accounts of
Messrs. Roach, Donohue and Elliott under the Company's supplemental
retirement plan for executive officers (i) for 1995, $214,200, $29,300 and
$47,200, respectively, and (ii) for 1994, in the amounts of $202,200,
$26,200 and $46,800, respectively.
(3) Includes tax reimbursement payments to Messrs. Roach, Donohue and Elliott
provided for under the Company's supplemental retirement plan for executive
officers in the amounts of $124,698; $20,877 and $32,804, respectively.
(4) Mr. Johnston joined the Company in September 1994 upon the acquisition of
Norandex Inc.
13
<PAGE>
OPTION AND SAR GRANTS
Set forth below is information relating to grants of stock options to the
Named Officers during the fiscal year ended December 31, 1995. Such options were
granted subject to stockholder approval of the 1995 Stock Incentive Plan.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
-------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
% OF TOTAL EXERCISE
OPTIONS OPTIONS GRANTED OR
GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#) (1) FISCAL YEAR ($/SH) (2) DATE 5% ($) 10% ($)
- ------------------------------- --------- --------------- ---------- -------------- ----------- -----------
JOHN D. ROACH 40,000 32.39% $ 21.375 11/28/2000 $ 236,200 $ 521,800
JAMES P. DONOHUE 15,000 12.15% $ 21.375 11/28/2000 $ 88,575 $ 195,675
MICHAEL R. DOUGLAS 15,000 12.15% $ 21.375 11/28/2000 $ 88,575 $ 195,675
ROBERT W. JOHNSTON 10,000 8.1% $ 21.375 11/28/2000 $ 59,050 $ 130,450
HERBERT M. ELLIOTT 15,000 12.15% $ 21.375 11/28/2000 $ 88,575 $ 195,675
</TABLE>
- ------------------------
(1) These options become exercisable in equal annual installments over a
three-year period, except for the options granted to Mr. Johnston, which
become exercisable in equal installments over a two-year period. In the
event of a change of control, the options listed above become immediately
exercisable.
(2) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of already owned shares or by offset of the underlying
shares, subject to certain conditions.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Set forth below is information with respect to the exercise of stock options
by the Named Officers during fiscal year 1995 and the number and value of
unexercised options held by the Named Officers at December 31, 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES VALUED AT FY-END (#) AT FY-END ($) (2)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
JOHN D. ROACH 50,000 1,150,000 350,000 40,000 6,956,250 40,000
JAMES P. DONOHUE 0 0 130,000 15,000 2,583,750(3) 15,000
MICHAEL R. DOUGLAS 90,000 1,622,500 40,000 15,000 795,000 15,000
ROBERT W. JOHNSTON 0 0 0 10,000 0 10,000
HERBERT M. ELLIOTT 10,000 210,000 30,000 15,000 596,250 15,000
</TABLE>
- ------------------------
(1) The value realized on stock option exercises represents the difference
between the grant price of the options exercised and the market price of the
underlying shares of Common stock as of the date of exercise multiplied by
the number of options exercised.
(2) Based on the closing price of the Company's Common Stock on the American
Stock Exchange at 12/31/95 ($22.375).
(3) In connection with the exercise of Mr. Donohue's options, he will be
entitled to receive a cash payment equal to the difference between $1.41 and
$2.50, multiplied by the number of shares purchased upon exercise of such
options.
14
<PAGE>
EMPLOYMENT, SEVERANCE AND CHANGE-OF-CONTROL ARRANGEMENTS
In July 1991, the Company entered into an Employment Agreement with John D.
Roach to serve as Chairman of the Board, President and Chief Executive Officer
of the Company. This agreement, as amended in January 1995, provides for a
minimum annual salary of $410,000, subject to increase as determined by the
Board of Directors, plus a bonus of up to 130% of base salary. The term of the
agreement renews automatically each month for a period of two years, absent
notice of termination by either party.
In the event Mr. Roach's employment is terminated by the Company or by Mr.
Roach under certain circumstances, he is entitled to receive (i) one year's
salary and bonus, (ii) an additional pro-rated bonus for the year of
termination, (iii) consulting fees for one year following termination at his
then current compensation, and (iv) immediate vesting of awards under the
Company's stock incentive plans and any non-qualified deferred compensation or
retirement benefits. If Mr. Roach's employment terminates following a change of
control (as defined in the agreement), Mr. Roach is entitled to two years'
compensation, plus the benefits described under (ii) and (iv) above. Pursuant to
the Agreement, Fibreboard established a trust to fund Mr. Roach's severance
benefits.
The Company has also entered into severance agreements with Messrs. Donohue,
Douglas and Elliott as a means of enabling the Company to attract and retain
such key executive officers. Severance benefits under the agreements include (a)
one year's salary and bonus, (b) an additional pro-rated bonus for the year of
termination, and (c) a one-year continuation of the officer's benefits. If
termination is within one year after a change of control, the officer is
entitled to (i) eighteen (18) months' salary plus one year's bonus, (ii) an
additional pro-rated bonus for the year of termination, and (iii) immediate
vesting of awards under the Company's stock incentive plans and any
non-qualified deferred compensation or retirement benefits.
All outstanding awards under the 1988 Option Plan, the 1995 Stock Incentive
Plan and the Long-Term Equity Incentive Plan become exercisable or fully vested
in the event of a change of control of Fibreboard or other related event,
including (i) a person or entity becomes the beneficial owner of 15% (25% under
the 1988 Option Plan) or more of the voting power of Fibreboard's shares, or
(ii) during any two consecutive years, members of the Board of Directors at the
beginning of such period cease to constitute a majority thereof, unless the
election or nomination of each director is approved by the vote of at least
two-thirds of the directors still in office who were directors at the beginning
of such period, or (iii) the occurrence of any other change of control
reportable under the Exchange Act, or (iv) stockholder approval of a merger or
consolidation of Fibreboard, or (v) the adoption of a plan of complete
liquidation of Fibreboard, or stockholder approval of the sale by Fibreboard of
all or substantially all of its assets. The events described under subparagraphs
(i), (iii) and (iv) above will not be deemed a change of control if so
determined by the Board of Directors.
15
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on a $100 investment in the Company's
Common Stock against the cumulative total return of the Russell 2000 Index and
the Dow Jones Building Materials Index, representing the Company's "peer group"
of building products companies. In addition, the returns of the companies within
the Russell 2000 Index and the Dow Jones Building Materials Index have been
weighted according to their respective market capitalizations.
[GRAPH TO FOLLOW]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
----- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
FBD Common...................... 100 133.33 305.51 1500 1216.62 1988.89
Russell 2000 Index.............. 100 157.75 206.75 284.48 261.19 432.51
Dow Jones Building Materials
Index........................... 100 134.23 170.11 209.34 168.32 228.72
</TABLE>
- ------------------------
*Total return assumes reinvestment of dividends.
16
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of April 11, 1996, the number of shares
of Common Stock beneficially owned by (i) each person known to the Company to
own beneficially more than 5% of the Company's outstanding Common Stock, (ii)
each director and Named Officer, and (iii) all directors and executive officers
of the Company as a group. Except as otherwise indicated below, the persons
listed have advised the Company that they have sole voting and investment power
with respect to the securities shown as owned by them. On the Record Date, there
were shares of the Company's Common Stock outstanding.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY PERCENT OF
NAME OF BENEFICIAL OWNER OWNED (1) CLASS (2)
- ---------------------------------------------------------------------------------------------------- ------------ ----------
<S> <C> <C>
The SC Fundamental Value Fund, L.P. and affiliated entities......................................... 650,200(3) 7.70
Neuberger & Berman, L.P............................................................................. 639,742(4) 7.57
Marvin C. Schwartz.................................................................................. [504,200](5) 5.97
John D. Roach....................................................................................... 373,312 4.24
James P. Donohue.................................................................................... 140,710 1.64
James F. Miller..................................................................................... 66,000 *
Philip R. Bogue..................................................................................... 37,000 *
Herbert M. Elliott.................................................................................. 36,280 *
John W. Koeberer.................................................................................... 36,000 *
George B. James..................................................................................... 32,000 *
Michael R. Douglas.................................................................................. 20,010 *
G. Robert Evans..................................................................................... 22,000 *
William D. Eberle................................................................................... 16,000 *
Robert W. Johnston.................................................................................. 1,400 *
All directors and executive officers as a group (14 persons)........................................ 882,306 9.63
</TABLE>
- ------------------------
(1) Includes shares issuable under the Company's 1988 Option Plan (i) upon the
exercise of stock options which are currently exercisable or exercisable
within 60 days or (ii) upon the vesting of restricted stock within 60 days
in the following amounts: Mr. Roach, 350,000 shares; Mr. Donohue, 130,000
shares; Mr. Douglas, 20,000 shares; Mr. Miller, 20,000 shares; Mr. Elliott,
30,000 shares; Mr. Bogue, 28,000 shares; Mr. Koeberer, 28,000 shares; Mr.
James, 12,000 shares; Mr. Evans, 12,000 shares; Mr. Eberle, 12,000 shares;
and all directors and executive officers as a group, 712,000 shares. In
certain instances, the number of shares shown as being beneficially owned
may not be deemed to be beneficially owned for other purposes. In the event
that final court approval of either the Company's Global or Insurance
Settlement Agreements relating to asbestos personal injury claims is
received by June 10, 1996, Mr. Douglas's beneficial ownership would increase
to 40,010 shares upon the vesting of his 20,000 restricted stock rights.
(2) *--Less than one (1) percent.
(3) Information was derived from a Schedule 13D received by the Corporation on
December 28, 1995.
(4) Information was derived from a Schedule 13G received by the Corporation on
February 20, 1996. Of the 639,742 shares, Neuberger & Berman, L.P. has sole
voting power over 119,000 shares.
(5) Information was derived from a Schedule 13D received by the Corporation on
February 11, 1995.
STOCKHOLDER PROPOSALS
If a stockholder entitled to vote at an annual meeting of stockholders
wishes to nominate a person for election as director or to submit a proposal for
action at that annual meeting, the Company's Bylaws require that certain
procedures be followed in advance. The Bylaws require that the stockholder
provide notice of any such nomination or proposal in writing to the Secretary of
the Company not later than 80 days prior to the date set for the meeting, unless
the meeting date is not announced at least 90 days prior to the meeting, in
which case such notice must be delivered not later than 10 days following the
day on which the date of
17
<PAGE>
the meeting is communicated to stockholders. The other procedural requirements
applicable to such notice are set forth in the Company's Bylaws, a copy of which
may be obtained from the Secretary of the Company at the Company's principal
executive offices in Walnut Creek, California.
The deadline for stockholder proposals intended to be considered for
inclusion in the Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders is December , 1996. Such proposals may be included in next year's
proxy materials if they comply with certain rules and regulations promulgated by
the SEC.
SOLICITATION OF PROXIES
The Company has engaged the firm[s] of D. F. King & Co., Inc. [and The
Financial Relations Board, Inc. ("FRB")] to assist the Board in connection with
its solicitation of proxies. The agreement[s] entered into with D. F. King [and
FRB] provide[s] for routine advice and services in coordinating the solicitation
of proxies, for which the Company will pay [an] estimated fee[s] of [$7,500 and
$ , respectively], plus reimbursement of expenses. Although it has entered
into no formal agreements to do so, the Company will also reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding proxy-soliciting materials to their
principals.
The cost of soliciting proxies on behalf of the Board of Directors will be
borne by the Company. Such proxies will be solicited principally through the use
of the mails but, if deemed desirable, may also be solicited personally or by
telephone, telegraph or other means of communication by officers and regular
employees of the Company without additional compensation.
OTHER BUSINESS
The Board of Directors is not aware of any other matter which may be
presented for action at the Annual Meeting. Should any other matter requiring a
vote of the stockholders arise, the enclosed proxy card gives authority to the
persons listed on the card to vote at their discretion in the best interest of
the Company.
BY ORDER OF THE BOARD OF DIRECTORS
DATED: APRIL , 1996
IF YOU HAVE ANY QUESTIONS ABOUT VOTING YOUR SHARES, PLEASE TELEPHONE THE
COMPANY'S PROXY SOLICITOR[S], D. F. KING & CO., INC., TOLL FREE AT
1-800-669-5550 [OR THE FINANCIAL RELATIONS BOARD, INC., TOLL FREE at
.]
18
<PAGE>
APPENDIX A
The Corporation is authorized to issue two classes of capital stock,
designated Common Stock and Preferred Stock. The amount of total authorized
capital stock of the Corporation is 53,000,000 shares, divided into 50,000,000
shares of Common Stock, $.01 par value per share, and 3,000,000 shares of
Preferred Stock, $.01 par value per share.
The Preferred Stock may be issued in one or more series. The Board of
Directors is hereby authorized to issue the shares of Preferred Stock in such
series and to fix from time to time before issuance the number of shares to be
included in any series and the designation, relative powers, preferences and
rights and qualifications, limitations or restrictions of all shares of such
series. The authority of the Board of Directors with respect to each series
shall include, without limiting the generality of the foregoing, the
determination of any or all of the following:
(a) The number of shares of any series and the designation to distinguish
the shares of such series from the shares of all other series;
(b) The voting powers, if any, and whether such voting powers are full or
limited in such series;
(c) The redemption provisions, if any, applicable to such series, including
the redemption price or prices to be paid;
(d) Whether dividends, if any, shall be cumulative or noncumulative, the
dividend rate or rates of such series and the manner of determining the
same, and the dates and preferences of dividends on such series;
(e) The rights of such series upon the voluntary or involuntary dissolution
of, or upon any distribution of the assets of, the Corporation;
(f) The provisions, if any, pursuant to which the shares of such series are
convertible into, or exchangeable for, shares of any other class or
classes or of any other series of the same or any other class or classes
of stock, or any other security, of the Corporation or any other
corporation, and price or prices or the rates of exchange applicable
thereto;
(g) The right if any, to subscribe for or to purchase any securities of the
Corporation or any other corporation;
(h) The provisions, if any, of a sinking fund applicable to such series; and
(i) Any other relative, participating, optional or other special powers,
preferences, rights, qualifications, limitations or restrictions hereof;
all as shall be determined from time to time by the Board of Directors and shall
be stated in said resolution or resolutions providing for the issuance of such
Preferred Stock (a "Preferred Stock Designation").
Each holder of Common Stock of the Corporation entitled to vote shall have
one vote for each share held thereof.
Except as may be provided in this Restated Certificate of Incorporation or
by the Board of Directors in a Preferred Stock Designation or by law, the Common
Stock shall have the exclusive right to vote for the election of Directors and
for all other purposes, and holders of Preferred Stock shall not be entitled to
receive notice of any meeting of stockholders at which they are not entitled to
vote or consent.
The Corporation shall be entitled to treat the person in whose name any
share of its stock is registered as the owner thereof for all purposes, and
shall not be bound to recognize any equitable or other claim to, or interest in,
such share on the part of any other person, whether or not the Corporation shall
have notice thereof, except as expressly provided by applicable law.
19
<PAGE>
APPENDIX B
FIBREBOARD CORPORATION
1995 STOCK INCENTIVE PLAN
(ADOPTED EFFECTIVE NOVEMBER 28, 1995)
<PAGE>
FIBREBOARD CORPORATION
1995 STOCK INCENTIVE PLAN
(ADOPTED EFFECTIVE NOVEMBER 28, 1995)
<PAGE>
TABLE OF CONTENTS
ARTICLE 1. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Committee Composition . . . . . . . . . . . . . . . . . . . . 1
2.2 Committee Responsibilities. . . . . . . . . . . . . . . . . . 2
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.. . . . . . . . . . . . . . . . . 2
3.1 Basic Limitation. . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Unused Shares Under This Plan . . . . . . . . . . . . . . . . 2
3.3 Unused Shares Under Prior Plan. . . . . . . . . . . . . . . . 2
3.4 Dividend Equivalents. . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 4. ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.1 General Rules . . . . . . . . . . . . . . . . . . . . . . . . 3
4.2 Outside Directors . . . . . . . . . . . . . . . . . . . . . . 3
4.3 Incentive Stock Options . . . . . . . . . . . . . . . . . . . 4
ARTICLE 5. OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 Stock Option Agreement. . . . . . . . . . . . . . . . . . . . 5
5.2 Number of Shares. . . . . . . . . . . . . . . . . . . . . . . 5
5.3 Exercise Price. . . . . . . . . . . . . . . . . . . . . . . . 5
5.4 Exercisability and Term . . . . . . . . . . . . . . . . . . . 5
5.5 Effect of Change in Control . . . . . . . . . . . . . . . . . 5
5.6 Modification or Assumption of Options.. . . . . . . . . . . . 5
<PAGE>
ARTICLE 6. PAYMENT FOR OPTION SHARES . . . . . . . . . . . . . . . . . . 6
6.1 General Rule. . . . . . . . . . . . . . . . . . . . . . . . . 6
6.2 Surrender of Stock. . . . . . . . . . . . . . . . . . . . . . 6
6.3 Exercise/Sale . . . . . . . . . . . . . . . . . . . . . . . . 6
6.4 Exercise/Pledge . . . . . . . . . . . . . . . . . . . . . . . 6
6.5 Promissory Note . . . . . . . . . . . . . . . . . . . . . . . 6
6.6 Other Forms of Payment. . . . . . . . . . . . . . . . . . . . 6
ARTICLE 7. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . 7
7.1 SAR Agreement . . . . . . . . . . . . . . . . . . . . . . . . 7
7.2 Number of Shares. . . . . . . . . . . . . . . . . . . . . . . 7
7.3 Exercise Price. . . . . . . . . . . . . . . . . . . . . . . . 7
7.4 Exercisability and Term . . . . . . . . . . . . . . . . . . . 7
7.5 Effect of Change in Control . . . . . . . . . . . . . . . . . 7
7.6 Exercise of SARs. . . . . . . . . . . . . . . . . . . . . . . 7
7.7 Modification or Assumption of SARs. . . . . . . . . . . . . . 8
ARTICLE 8. RESTRICTED SHARES AND STOCK UNITS . . . . . . . . . . . . . . 8
8.1 Time, Amount and Form of Awards . . . . . . . . . . . . . . . 8
8.2 Payment for Awards. . . . . . . . . . . . . . . . . . . . . . 8
8.3 Vesting Conditions. . . . . . . . . . . . . . . . . . . . . . 8
8.4 Form and Time of Settlement of Stock Units. . . . . . . . . . 8
8.5 Death of Recipient. . . . . . . . . . . . . . . . . . . . . . 9
8.6 Creditors' Rights . . . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
ARTICLE 9. VOTING AND DIVIDEND RIGHTS. . . . . . . . . . . . . . . . . . 9
9.1 Restricted Shares . . . . . . . . . . . . . . . . . . . . . . 9
9.2 Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 10. PROTECTION AGAINST DILUTION . . . . . . . . . . . . . . . . . 9
10.1 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . 9
10.2 Reorganizations . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 11. AWARDS UNDER OTHER PLANS. . . . . . . . . . . . . . . . . . . 10
ARTICLE 12. PAYMENT OF DIRECTOR'S FEES IN SECURITIES. . . . . . . . . . . 10
12.1 Effective Date . . . . . . . . . . . . . . . . . . . . . . . 10
12.2 Elections to Receive NSOs, Restricted Shares or
Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . 10
12.3 Number and Terms of NSOs, Restricted Shares or
Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 13. LIMITATION ON RIGHTS. . . . . . . . . . . . . . . . . . . . . 11
13.1 Retention Rights . . . . . . . . . . . . . . . . . . . . . . 11
13.2 Stockholders' Rights. . . . . . . . . . . . . . . . . . . . . 11
13.3 Regulatory Requirements . . . . . . . . . . . . . . . . . . . 11
ARTICLE 14 WITHHOLDING TAXES . . . . . . . . . . . . . . . . . . . . . . 11
14.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
14.2 Share Withholding . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 15 ASSIGNMENT OR TRANSFER OF AWARDS. . . . . . . . . . . . . . . 12
15.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
15.2 Trusts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE>
ARTICLE 16 FUTURE OF THE PLAN. . . . . . . . . . . . . . . . . . . . . . 12
16.1 Term of the Plan. . . . . . . . . . . . . . . . . . . . . . . 12
16.2 Amendment or Termination. . . . . . . . . . . . . . . . . . . 12
ARTICLE 17 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 18 EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
FIBREBOARD CORPORATION
1995 STOCK INCENTIVE PLAN
(Adopted Effective November 28, 1995)
ARTICLE 1. INTRODUCTION.
The Plan was adopted by the Board on November 28, 1995, subject to approval
by the Company's stockholders at the annual meeting scheduled to be held on
June 10, 1996.
The purpose of the Plan is to promote the long-term success of the Company
and the creation of stockholder value by (a) encouraging Key Employees to focus
on critical long-range objectives, (b) encouraging the attraction and retention
of Key Employees with exceptional qualifications, including key employees who
may join the Company in the future as a result of acquisitions, and (c) linking
Key Employees directly to stockholder interests through increased stock
ownership. The Plan seeks to achieve this purpose by providing for Awards in
the form of Restricted Shares, Stock Units, Options (which may constitute
incentive stock options or nonstatutory stock options) or stock appreciation
rights.
The Plan shall be governed by, and construed in accordance with, the laws
of the State of Delaware (except their choice-of-law provisions).
ARTICLE 2. ADMINISTRATION.
2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of directors of the Company,
who shall be appointed by the Board. In addition, the composition of the
Committee shall satisfy:
(a) Such requirements as the Securities and Exchange Commission may
establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and
(b) Such requirements as the Internal Revenue Service may establish
for outside directors acting under plans intended to qualify for exemption
under section 162(m)(4)(C) of the Code.
The Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not satisfy the
foregoing requirements, who may administer the Plan with respect to Key
Employees who are not considered officers or directors of the Company under
section 16 of the Exchange Act, may grant Awards under the Plan to such Key
Employees and may determine all terms of such Awards.
1
<PAGE>
2.2 COMMITTEE RESPONSIBILITIES. The Committee shall:
(a) Select the Key Employees who are to receive Awards under the
Plan;
(b) Determine the type, number, vesting requirements and other
features and conditions of such Awards;
(c) Interpret the Plan; and
(d) Make all other decisions relating to the operation of the Plan.
The Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be
final and binding on all persons.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.
3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Restricted Shares, Stock Units, Options and SARs awarded under the Plan shall
not exceed 500,000, plus the number of Common Shares that remained available for
issuance under the Prior Plan at the time of the adoption of this Plan. (No
additional awards shall be made under the Prior Plan after the approval of this
Plan by the Company's stockholders as provided in Section 16.1.) The limitation
of this Section 3.1 shall be subject to adjustment pursuant to Article 10.
3.2 UNUSED SHARES UNDER THIS PLAN. If Stock Units, Options or SARs are
forfeited or if Options or SARs terminate for any other reason before being
exercised, then the corresponding Common Shares shall again become available for
Awards under the Plan. If Restricted Shares are forfeited, then such Shares
shall again become available for Awards under the Plan to the extent permitted
by the rules of the Securities and Exchange Commission. If Stock Units are
settled, then only the number of Common Shares (if any) actually issued in
settlement of such Stock Units shall reduce the number available under
Section 3.1 and the balance shall again become available for Awards under the
Plan. If SARs are exercised, then only the number of Common Shares (if any)
actually issued in settlement of such SARs shall reduce the number available
under Section 3.1 and the balance shall again become available for Awards under
the Plan. Common Shares withheld under Section 14.2 shall again become
available for Awards under the Plan.
3.3 UNUSED SHARES UNDER PRIOR PLAN. If stock units, options or SARs
granted under the Prior Plan are forfeited after the adoption of this Plan or if
options or SARs granted under the Prior Plan terminate for any other reason
before being exercised but after the adoption of this Plan, then the
corresponding Common Shares shall become available for Awards under this Plan.
If restricted shares granted under the Prior Plan are forfeited after the
adoption of this Plan, then such shares shall become available for Awards under
this Plan.
2
<PAGE>
3.4 DIVIDEND EQUIVALENTS. Any dividend equivalents distributed under the
Plan shall not be applied against the number of Restricted Shares, Stock Units,
Options or SARs available for Awards, whether or not such dividend equivalents
are converted into Stock Units.
ARTICLE 4. ELIGIBILITY.
4.1 GENERAL RULES. Only Key Employees (including, without limitation,
independent contractors who are not members of the Board) shall be eligible for
designation as Participants by the Committee. Key Employees who are Outside
Directors shall only be eligible for the grants described in Section 4.2 and for
making an election described in Article 12.
4.2 OUTSIDE DIRECTORS. Any other provision of the Plan notwithstanding,
the participation of Outside Directors in the Plan shall be subject to the
following restrictions:
(a) Outside Directors shall receive no Awards except as described in
this Section 4.2 and Article 12.
(b) On the first business day in July of each year, each Outside
Director shall receive an NSO covering 4,000 Common Shares (subject to
adjustment under Article 10). Such NSO shall include an SAR exercisable
only during the 30-day period following a Change in Control with respect to
the Company. Such NSO shall be cancelled to the extent that such SAR is
exercised, and such SAR shall be cancelled to the extent that such NSO is
exercised. Such SAR shall be settled only in cash and shall be subject to
the same terms and conditions (including the Exercise Price and the
expiration date) as the related NSO.
(c) All NSOs granted to an Outside Director under this Section 4.2
shall become exercisable in full on the first anniversary of the date of
grant. Such NSOs shall also become exercisable in full in the event of a
Change in Control with respect to the Company.
(d) The Exercise Price under all NSOs granted to an Outside Director
under this Section 4.2 shall be equal to 100% of the Fair Market Value of a
Common Share on the date of grant, payable in one of the forms described in
Sections 6.1, 6.2, 6.3 and 6.4.
(e) All NSOs granted to an Outside Director under this Section 4.2
shall terminate on the earlier of:
(i) The 10th anniversary of the date of grant; or
(ii) The second anniversary of the termination of such Outside
Director's service for any reason.
3
<PAGE>
(f) Each Outside Director who first becomes a member of the Board
after the adoption of this Plan shall receive a one-time grant of 2,000
Stock Units (subject to adjustment under Article 10). Such Stock Units
shall be granted on the date when such Outside Director first joins the
Board.
(g) All Stock Units granted to an Outside Director under this
Section 4.2 shall be settled by issuing an equal number of Common Shares to
such Outside Director. The issuance shall occur on the earliest of:
(i) The third anniversary of the date of grant;
(ii) The date of a Change in Control with respect to the
Company; or
(iii) The date of the termination of such Outside Director's
service for any reason.
The foregoing notwithstanding, in the event of the termination of such
Outside Director's service, only the following percentage of such Stock
Units shall be settled (and the balance shall be forfeited):
Full Years of Service Com-
pleted by Outside Director Vested Percentage
-------------------------- -----------------
Less than 1 ......................... 0%
1 ......................... 40%
2 ......................... 70%
3 ......................... 100%
4.3 INCENTIVE STOCK OPTIONS. Only Key Employees who are common-law
employees of the Company, a Parent or a Subsidiary shall be eligible for the
grant of ISOs. In addition, a Key Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company or any
of its Parents or Subsidiaries shall not be eligible for the grant of an ISO
unless the requirements set forth in section 422(c)(6) of the Code are
satisfied.
4
<PAGE>
ARTICLE 5. OPTIONS
5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The Stock
Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a cash
payment or in consideration of a reduction in the Optionee's other compensation.
A Stock Option Agreement may provide that new Options will be granted
automatically to the Optionee when he or she exercises the prior Options.
5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 10. Options granted to any
Optionee in a single calendar year shall in no event cover more than 200,000
Common Shares, subject to adjustment in accordance with Article 10.
5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; which shall in no event be less than 100% of the Fair Market
Value of a Common Share on the date of grant. In the case of an NSO, a Stock
Option Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the NSO is outstanding.
5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become exercisable.
The Stock Option Agreement shall also specify the term of the Option; provided
that the term of an ISO shall in no event exceed 10 years from the date of
grant. A Stock Option Agreement may provide for accelerated exercisability in
the event of the Optionee's death, disability or retirement or other events and
may provide for expiration prior to the end of its term in the event of the
termination of the Optionee's service. Options may be awarded in combination
with SARs, and such an Award may provide that the Options will not be
exercisable unless the related SARs are forfeited. NSOs may also be awarded in
combination with Restricted Shares or Stock Units, and such an Award may provide
that the NSOs will not be exercisable unless the related Restricted Shares or
Stock Units are forfeited.
5.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the time
of granting an Option or thereafter, that such Option shall become fully
exercisable as to all Common Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company.
5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the
5
<PAGE>
grant of new options for the same or a different number of shares and at the
same or a different exercise price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter or
impair his or her rights or obligations under such Option.
ARTICLE 6. PAYMENT FOR OPTION SHARES.
6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in cash at the time when such Common Shares
are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment shall be
made only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be made
in any form(s) described in this Article 6.
(b) In the case of an NSO, the Committee may at any time accept
payment in any form(s) described in this Article 6.
6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, payment for all or any part of the Exercise Price may be made with
Common Shares which have already been owned by the Optionee for more than six
months. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan.
6.3 EXERCISE/SALE. To the extent that this Section 6.3 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Common Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Common Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
payment may be made with a full-recourse promissory note; provided that the par
value of the Common Shares shall be paid in cash.
6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
6
<PAGE>
ARTICLE 7. STOCK APPRECIATION RIGHTS.
7.1 SAR AGREEMENT. Each grant of an SAR under the Plan shall be evidenced
by an SAR Agreement between the Optionee and the Company. Such SAR shall be
subject to all applicable terms of the Plan and may be subject to any other
terms that are not inconsistent with the Plan. The provisions of the various
SAR Agreements entered into under the Plan need not be identical. SARs may be
granted in consideration of a reduction in the Optionee's other compensation.
7.2 NUMBER OF SHARES. Each SAR Agreement shall specify the number of
Common Shares to which the SAR pertains and shall provide for the adjustment of
such number in accordance with Article 10. SARs granted to any Optionee in a
single calendar year shall in no event pertain to more than 200,000 Common
Shares, subject to adjustment in accordance with Article 10.
7.3 EXERCISE PRICE. Each SAR Agreement shall specify the Exercise Price.
An SAR Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the SAR is outstanding.
7.4 EXERCISABILITY AND TERM. Each SAR Agreement shall specify the date
when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. An SAR Agreement may provide
for accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee's service. SARs may
also be awarded in combination with Options, Restricted Shares or Stock Units,
and such an Award may provide that the SARs will not be exercisable unless the
related Options, Restricted Shares or Stock Units are forfeited. An SAR may be
included in an ISO only at the time of grant but may be included in an NSO at
the time of grant or thereafter. An SAR granted under the Plan may provide that
it will be exercisable only in the event of a Change in Control.
7.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the time
of granting an SAR or thereafter, that such SAR shall become fully exercisable
as to all Common Shares subject to such SAR in the event that a Change in
Control occurs with respect to the Company.
7.6 EXERCISE OF SARS. The exercise of an SAR shall be subject to the
restrictions imposed by Rule 16b-3 (or its successor) under the Exchange Act, if
applicable. If, on the date when an SAR expires, the Exercise Price under such
SAR is less than the Fair Market Value on such date but any portion of such SAR
has not been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion. Upon
exercise of an SAR, the Optionee (or any person having the right to exercise the
SAR after his or her death) shall receive from the Company (a) Common Shares,
(b) cash or (c) a combination of Common Shares and cash, as the Committee shall
determine. The amount of cash and/or the Fair Market Value of Common Shares
received upon exercise of SARs shall, in the aggregate,
7
<PAGE>
be equal to the amount by which the Fair Market Value (on the date of surrender)
of the Common Shares subject to the SARs exceeds the Exercise Price.
7.7 MODIFICATION OR ASSUMPTION OF SARS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may accept
the cancellation of outstanding SARs (whether granted by the Company or by
another issuer) in return for the grant of new SARs for the same or a different
number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an SAR shall, without the consent of the
Optionee, alter or impair his or her rights or obligations under such SAR.
ARTICLE 8. RESTRICTED SHARES AND STOCK UNITS.
8.1 TIME, AMOUNT AND FORM OF AWARDS. Awards under the Plan may be granted
in the form of Restricted Shares, in the form of Stock Units, or in any
combination of both. Restricted Shares or Stock Units may also be awarded in
combination with NSOs or SARs, and such an Award may provide that the Restricted
Shares or Stock Units will be forfeited in the event that the related NSOs or
SARs are exercised.
8.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in the
form of newly issued Restricted Shares, the Award recipient, as a condition to
the grant of such Award, shall be required to pay the Company in cash an amount
equal to the par value of such Restricted Shares. To the extent that an Award
is granted in the form of Restricted Shares from the Company's treasury or in
the form of Stock Units, no cash consideration shall be required of the Award
recipients.
8.3 VESTING CONDITIONS. Each Award of Restricted Shares or Stock Units
shall become vested, in full or in installments, upon satisfaction of the
conditions specified in the Stock Award Agreement. A Stock Award Agreement may
provide for accelerated vesting in the event of the Participant's death,
disability or retirement or other events. The Committee may determine, at the
time of making an Award or thereafter, that such Award shall become fully vested
in the event that a Change in Control occurs with respect to the Company.
8.4 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of vested
Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any
combination of both, as determined by the Committee. The actual number of Stock
Units eligible for settlement may be larger or smaller than the number included
in the original Award, based on predetermined performance factors. Methods of
converting Stock Units into cash may include (without limitation) a method based
on the average Fair Market Value of Common Shares over a series of trading days.
Vested Stock Units may be settled in a lump sum or in installments. The
distribution may occur or commence when all vesting conditions applicable to the
Stock Units have been satisfied or have lapsed, or it may be deferred to any
later date. The amount of a deferred distribution may be increased by an
interest factor or by dividend equivalents. Until an Award of Stock Units is
settled, the number of such Stock Units shall be subject to adjustment pursuant
to Article 10.
8
<PAGE>
8.5 DEATH OF RECIPIENT. Any Stock Units Award that becomes payable after
the recipient's death shall be distributed to the recipient's beneficiary or
beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's death.
If no beneficiary was designated or if no designated beneficiary survives the
Award recipient, then any Stock Units Award that becomes payable after the
recipient's death shall be distributed to the recipient's estate.
8.6 CREDITORS' RIGHTS. A holder of Stock Units shall have no rights other
than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Award Agreement.
ARTICLE 9. VOTING AND DIVIDEND RIGHTS.
9.1 RESTRICTED SHARES. The holders of Restricted Shares awarded under the
Plan shall have the same voting, dividend and other rights as the Company's
other stockholders. A Stock Award Agreement, however, may require that the
holders of Restricted Shares invest any cash dividends received in additional
Restricted Shares. Such additional Restricted Shares shall be subject to the
same conditions and restrictions as the Award with respect to which the
dividends were paid. Such additional Restricted Shares shall not reduce the
number of Common Shares available under Article 3.
9.2 STOCK UNITS. The holders of Stock Units shall have no voting rights.
Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at
the Committee's discretion, carry with it a right to dividend equivalents. Such
right entitles the holder to be credited with an amount equal to all cash
dividends paid on one Common Share while the Stock Unit is outstanding. Dividend
equivalents may be converted into additional Stock Units. Settlement of dividend
equivalents may be made in the form of cash, in the form of Common Shares, or in
a combination of both. Prior to distribution, any dividend equivalents which are
not paid shall be subject to the same conditions and restrictions as the Stock
Units to which they attach.
ARTICLE 10. PROTECTION AGAINST DILUTION.
10.1 ADJUSTMENTS. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend payable in a form other than Common Shares in an amount that has a
material effect on the price of Common Shares, a combination or consolidation of
the outstanding Common Shares (by reclassification or otherwise) into a lesser
number of Common Shares, a recapitalization, a spinoff or a similar occurrence,
the Committee shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of:
9
<PAGE>
(a) The number of Options, SARs, Restricted Shares and Stock Units
available for future Awards under Article 3;
(b) The limitations set forth in Sections 5.2 and 7.2.
(c) The number of NSOs and Stock Units to be granted to Outside
Directors under Section 4.2;
(d) The number of Stock Units included in any prior Award which has
not yet been settled;
(e) The number of Common Shares covered by each outstanding Option
and SAR; or
(f) The Exercise Price under each outstanding Option and SAR.
Except as provided in this Article 10, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
10.2 REORGANIZATIONS. In the event that the Company is a party to a merger
or other reorganization, outstanding Options, SARs, Restricted Shares and Stock
Units shall be subject to the agreement of merger or reorganization. Such
agreement may provide, without limitation, for the assumption of outstanding
Awards by the surviving corporation or its parent, for their continuation by the
Company (if the Company is a surviving corporation), for accelerated vesting and
accelerated expiration, or for settlement in cash.
ARTICLE 11. AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such awards may
be settled in the form of Common Shares issued under this Plan. Such Common
Shares shall be treated for all purposes under the Plan like Common Shares
issued in settlement of Stock Units and shall, when issued, reduce the number of
Common Shares available under Article 3.
ARTICLE 12. PAYMENT OF DIRECTOR'S FEES IN SECURITIES.
12.1 EFFECTIVE DATE. No provision of this Article 12 shall be effective
unless and until the Committee has determined to implement such provision.
12.2 ELECTIONS TO RECEIVE NSOS OR STOCK UNITS. An Outside Director may
elect to receive his or her annual retainer payments and meeting fees from the
Company in the form of cash, NSOs, Restricted Shares, Stock Units, or a
combination thereof, as determined by the Committee. Such NSOs, Restricted
Shares and Stock Units shall be issued
10
<PAGE>
under the Plan. An election under this Article 12 shall be filed with the
Company on the prescribed form.
12.3 NUMBER AND TERMS OF NSOS, RESTRICTED SHARES OR STOCK UNITS. The
number of NSOs, Restricted Shares or Stock Units to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would otherwise
be paid in cash shall be calculated in a manner determined by the Committee.
The terms of such NSOs, Restricted Shares or Stock Units shall also be
determined by the Committee.
ARTICLE 13. LIMITATION ON RIGHTS.
13.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an employee,
consultant or director of the Company, a Parent or a Subsidiary. The Company
and its Parents and Subsidiaries reserve the right to terminate the service of
any employee, consultant or director at any time, with or without cause, subject
to applicable laws, the Company's certificate of incorporation and by-laws and a
written employment agreement (if any).
13.2 STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the issuance of a stock certificate for
such Common Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such certificate is
issued, except as expressly provided in Articles 8, 9 and 10.
13.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.
ARTICLE 14. WITHHOLDING TAXES.
14.1 GENERAL. To the extent required by applicable federal, state, local
or foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.
14.2 SHARE WITHHOLDING. The Committee may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Common Shares that otherwise would be
issued to him or her upon exercise or vesting of an Award under the Plan. Such
Common Shares shall be valued at their Fair Market
11
<PAGE>
Value on the date when taxes otherwise would be withheld in cash. Any payment
of taxes by having Common Shares withheld by the Company may be subject to
restrictions, including any restrictions required by rules of the Securities and
Exchange Commission.
ARTICLE 15. ASSIGNMENT OR TRANSFER OF AWARDS.
15.1 GENERAL. Except as provided in Article 14, an Award granted under the
Plan shall not be anticipated, assigned, attached, garnished, optioned,
transferred or made subject to any creditor's process, whether voluntarily,
involuntarily or by operation of law. An Option or SAR may be exercised during
the lifetime of the Optionee only by him or her or by his or her guardian or
legal representative. Any act in violation of this Article 15 shall be void.
However, this Article 15 shall not preclude a Participant from designating a
beneficiary who will receive any outstanding Awards in the event of the
Participant's death, nor shall it preclude a transfer of Awards by will or by
the laws of descent and distribution.
15.2 TRUSTS. Neither this Article 15 nor any other provision of the Plan
shall preclude a Participant from transferring or assigning Restricted Shares to
(a) the trustee of a trust that is revocable by such Participant alone, both at
the time of the transfer or assignment and at all times thereafter prior to such
Participant's death, or (b) the trustee of any other trust to the extent
approved in advance by the Committee in writing. A transfer or assignment of
Restricted Shares from such trustee to any person other than such Participant
shall be permitted only to the extent approved in advance by the Committee in
writing, and Restricted Shares held by such trustee shall be subject to all of
the conditions and restrictions set forth in the Plan and in the applicable
Stock Award Agreement, as if such trustee were a party to such Agreement.
ARTICLE 16. FUTURE OF THE PLAN.
16.1 TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on November 28, 1995, subject to approval by the Company's
stockholders at the annual meeting scheduled to be held on June 10, 1996. In
the event that the Company's stockholders fail to approve the Plan at such
meeting, the Plan and all Awards granted under the Plan shall be rescinded, but
the Prior Plan shall remain in effect and available for making grants. This
Plan shall remain in effect until it is terminated under Section 16.2, except
that no ISOs shall be granted after November 27, 2005.
16.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the
Plan after the termination thereof. The termination of the Plan, or any
amendment thereof, shall not affect any Award previously granted under the Plan.
12
<PAGE>
ARTICLE 17. DEFINITIONS.
17.1 "AWARD" means any award of an Option, an SAR, a Restricted Share or a
Stock Unit under the Plan.
17.2 "BOARD" means the Company's Board of Directors, as constituted from
time to time.
17.3 "CHANGE IN CONTROL" means:
(a) That the holders of the voting securities of the Company have approved
a merger or consolidation of the Company with any other entity, unless:
(i) The proposed merger or consolidation would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or
(ii) Prior to the effective date of such merger or consolidation, the
Board (as constituted immediately prior to such effective date) adopts a
resolution that for purposes of the Plan no Change in Control shall have
occurred; (which resolution may be revoked by the Board at any time in
which case a Change in Control shall be deemed to have occurred as of the
date such revocation becomes effective.
(b) That a plan of complete liquidation of the Company has been adopted or
the holders of voting securities of the Company have approved an agreement for
the sale or disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company's assets;
(c) That any "person" (as such term is used in sections 13(d) and 14(d) of
the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 15% or more of the combined voting
power of the Company's then outstanding shares, unless, within 30 business days
after notice to the Company of such event, the Board (as constituted immediately
prior to such event) adopts a resolution that for purposes of the Plan no Change
in Control shall have occurred (which resolution may be revoked by the Board at
any time, in which case a Change in Control shall be deemed to have occurred as
of the date such revocation becomes effective);
(d) That, during any period of two consecutive years, members who at the
beginning of such period constituted the Board have ceased for any reason to
constitute a majority thereof, unless the election, or nomination for election
by the Company's stockholders, of each director
13
<PAGE>
has been approved by the vote of at least two-thirds of the directors then still
in office who were directors at the beginning of such period; or
(e) The occurrence of any other change in control of a nature that would
be required to be reported in accordance with Item 1(a) of Form 8-K pursuant to
sections 13 or 15(d) of the Exchange Act or in the Company's proxy statement in
accordance with Schedule 14A of Regulation 14A promulgated under the Exchange
Act (or in any successor forms or regulations to the same effect), unless,
within 30 business days after notice to the Company of such events, the Board
(as constituted immediately prior to such event) adopts a resolution that for
purposes of the Plan no Change in Control shall have occurred (which resolution
may be revoked by the Board at any time, in which case a Change in Control shall
be deemed to have occurred as of the date such revocation becomes effective).
17.4 "CODE" means the Internal Revenue Code of 1986, as amended.
17.5 "COMMITTEE" means a committee of the Board, as described in
Article 2.
17.6 "COMMON SHARE" means one share of the common stock of the Company.
17.7 "COMPANY" means Fibreboard Corporation, a Delaware corporation.
17.8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
17.9 "EXERCISE PRICE," in the case of an Option, means the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement. "Exercise Price," in the
case of an SAR, means an amount, as specified in the applicable SAR Agreement,
which is subtracted from the Fair Market Value of one Common Share in
determining the amount payable upon exercise of such SAR.
17.10 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee as follows:
(a) If the Common Shares were traded over the counter on the date in
question but were not classified as a national market issue, then the Fair
Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the Nasdaq system for such
date;
(b) If the Common Shares were traded over-the-counter on the date in
question and were classified as a national market issue, then the Fair
Market Value shall be equal to the last-transaction price quoted by the
Nasdaq system for such date;
(c) If the Common Shares were traded on a stock exchange on the date
in question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date; and
14
<PAGE>
(d) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of THE WALL STREET
JOURNAL. Such determination shall be conclusive and binding on all persons.
17.11 "ISO" means an incentive stock option described in section 422(b) of
the Code.
17.12 "KEY EMPLOYEE" means (a) a common-law employee of the Company, a
Parent or a Subsidiary, (b) an Outside Director and (c) a consultant or adviser
who provides services to the Company, a Parent or a Subsidiary as an independent
contractor. Service as an Outside Director or as an independent contractor
shall be considered employment for all purposes of the Plan, except as provided
in Sections 4.2 and 4.3.
17.13 "NSO" means a stock option not described in sections 422 or 423 of
the Code.
17.14 "OPTION" means an ISO or NSO granted under the Plan and entitling the
holder to purchase one Common Share.
17.15 "OPTIONEE" means an individual or estate who holds an Option or SAR.
17.16 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not a
common-law employee of the Company, a Parent or a Subsidiary.
17.17 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent
on a date after the adoption of the Plan shall be considered a Parent commencing
as of such date.
17.18 "PARTICIPANT" means an individual or estate who holds an Award.
17.19 "PLAN" means this Fibreboard Corporation 1995 Stock Incentive Plan,
as amended from time to time.
17.20 "PRIOR PLAN" means the Fibreboard Corporation Restated 1988 Employee
Stock Option and Rights Plan.
17.21 "RESTRICTED SHARE" means a Common Share awarded under the Plan.
17.22 "SAR" means a stock appreciation right granted under the Plan.
15
<PAGE>
17.23 "SAR AGREEMENT" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her SAR.
17.24 "STOCK AWARD AGREEMENT" means the agreement between the Company and
the recipient of a Restricted Share or Stock Unit which contains the terms,
conditions and restrictions pertaining to such Restricted Share or Stock Unit.
17.25 "STOCK OPTION AGREEMENT" means the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.
17.26 "STOCK UNIT" means a bookkeeping entry representing the equivalent
of one Common Share, as awarded under the Plan.
17.27 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.
ARTICLE 18. EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to affix the corporate name and seal hereto.
FIBREBOARD CORPORATION
By :
--------------------------
16
<PAGE>
PRELIMINARY COPY
PROXY
FIBREBOARD CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, JUNE 10, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement, each dated April ___, 1996, and does hereby
appoint James P. Donohue and Garold E. Swan, or either of them, with full power
of substitution, as the proxies of the undersigned to represent the undersigned
and to vote as designated on the reverse side all shares of Common Stock of
Fibreboard Corporation which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of Fibreboard Corporation to be held at the Embassy
Suites Hotel, in Walnut Creek, California on June 10, 1996 at 11:00 a.m. and at
any adjournments or postponements thereof, with the same force and effect as the
undersigned might or could do if personally present thereat:
_____________
| |
CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SEE REVERSE |
| SIDE |
|_____________|
<PAGE>
/X/ Please mark votes as in this example.
The Board of Directors recommends a vote FOR each of the matters listed below.
This Proxy, when properly executed, will be voted as directed. If no direction
is indicated, this Proxy will be voted FOR proposals 1 through 4. This Proxy
may be revoked at any time before it is exercised at the Annual Meeting.
1. ELECTION OF [TWO] [ONE] DIRECTOR(S) TO CLASS II OF THE BOARD OF DIRECTORS
TO SERVE FOR A TERM OF THREE YEARS. Nominee(s): John W. Koeberer and
[____________] For [All] Nominee[s]/ /
Withheld from [All] Nominee[s]/ /
-------------------------------------------------------------------------
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided above.)
2. PROPOSAL TO APPROVE THE ADOPTION OF THE COMPANY'S 1995 STOCK INCENTIVE
PLAN. For/ /
Against/ /
Abstain/ /
3. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FROM 15,000,000 TO 50,000,000.
For/ /
Against/ /
Abstain/ /
4. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31,
1996. For/ /
Against/ /
Abstain/ /
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY BE PRESENTED AT THE MEETING OR ANY ADJOURNMENT OR
POSTPONEMENT THEREOF.
Mark here if you plan to attend the meeting / /
Mark here for address change and note / /
Please sign exactly as your name is printed on this Proxy. If the shares
represented by this Proxy are issued in the names of two or more persons, each
of them should sign the Proxy. If the Proxy is executed by a corporation, it
should be signed in the corporate name by an authorized officer. When signing
as an attorney, executor, administrator, trustee or guardian, or in any other
representative capacity, give full title as such. If stockholder is a
partnership, please sign in the partnership name by authorized person.
Signature: Date:
-------------------------------------------- ---------------------
Signature: Date:
-------------------------------------------- ---------------------
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED POSTAGE-PAID REPLY ENVELOPE.
