<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
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/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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.:
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(4) Date Filed:
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<PAGE>
NOTICE OF 1997 ANNUAL MEETING AND PROXY STATEMENT
April 15, 1997
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 3, 1997 at 11:00 a.m. at the Texas
Commerce Tower, 2200 Ross Avenue, 40th Floor - Sky Lobby, Dallas, Texas 75201.
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,
/s/ John D. Roach
John D. Roach
CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
<PAGE>
FIBREBOARD CORPORATION
2200 Ross Avenue, Suite 3600
Dallas, TX 75201
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 3, 1997
---------------------
The Annual Meeting of Stockholders of Fibreboard Corporation (the "Company")
will be held at the Texas Commerce Tower, 2200 Ross Avenue, 40th Floor--Sky
Lobby, Dallas, Texas on Tuesday, June 3, 1997 at 11:00 a.m. for the following
purposes:
1. To elect three directors to Class III of the Board of Directors to serve
for a period of three years or until their respective successors are
elected and qualified;
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the 1997 fiscal year; and
3. 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 4, 1997 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
/s/ Michael R. Douglas
Michael R. Douglas
SECRETARY
Dallas, Texas
April 15, 1997
<PAGE>
FIBREBOARD CORPORATION
2200 Ross Avenue, Suite 3600
Dallas, TX 75201
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 Tuesday, June 3,
1997 at 11:00 a.m. at the Texas Commerce Tower, 2200 Ross Avenue, 40th
Floor--Sky Lobby, Dallas, Texas and at any adjournments or postponements
thereof. These proxy materials were first mailed to stockholders on or about
April 15, 1997.
------------------------
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 4, 1997 (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 8,490,020 shares of Common Stock outstanding.
The holders of a majority of the shares of Common Stock outstanding as of
April 4, 1997, 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 Proposal 2. 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 each of the
nominees for director as described herein under Proposal 1 and FOR approval of
Proposal 2.
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 Dallas, Texas, 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 eight members. The
members of the Board of Directors are divided into three classes, each
consisting of 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 III directors expires on the date of this Annual Meeting. The
term of office of Class I and Class II directors will expire in 1998 and 1999,
respectively. At the Annual Meeting, the stockholders will elect three directors
to Class III to serve a three-year term expiring in 2000 or until their
successors are elected and qualified.
Set forth below are the names of the nominees of the Board of Directors for
election as Class III directors, together with certain information concerning
such nominees. 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.
NOMINEES FOR ELECTION TO CLASS III
<TABLE>
<CAPTION>
DIRECTOR
NAME/AGE OF NOMINEE PRINCIPAL OCCUPATION SINCE
- --------------------- -------------------------------------------------- --------
<S> <C> <C>
Philip R. Bogue (72) Retired Partner in the firm of Arthur Andersen LLP 1988
George B. James (59) Senior Vice President & Chief Financial Officer, 1993
Levi Strauss & Co.
John D. Roach (53) Chairman, President and Chief Executive Officer, 1991
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.
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
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 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 1990, 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 Morrison-Knudsen and Thompson
PBE, Inc.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF THE
BOARD'S NOMINEES TO CLASS III OF THE BOARD OF DIRECTORS.
2
<PAGE>
DIRECTORS NOT CURRENTLY STANDING FOR ELECTION
<TABLE>
<CAPTION>
CLASS AND YEAR
DIRECTOR TERM
NAME AND AGE PRINCIPAL OCCUPATION SINCE AS DIRECTOR ENDS
- -------------------------- -------------------------------------------------------- --------- ------------------
<S> <C> <C> <C>
William D. Eberle (73) Chairman, Manchester Associates, Ltd. 1991 Class I-1998
G. Robert Evans (65) Chairman, Material Sciences Corporation 1991 Class I-1998
John W. Koeberer (53) Chairman, Tehama Bank 1988 Class II-1999
Bill M. Lindig (60) President and Chief Executive Officer, SYSCO Corporation 1996 Class I-1998
Donald K. Miller (65) Chairman, Greylock Financial Inc. 1996 Class II-1999
</TABLE>
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 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, Showscan Entertainment, Inc., and Barry's Jewelers, Inc. and is
Co-Chairman of Mid-States Plc. He is also a director of Sirrom Capital
Corporation, Mitchell Energy and Development Corporation and Ampco-Pittsburgh
Corporation.
G. ROBERT EVANS has been a director of the Company since December 1991. From
February 1991 to January 1, 1997, Mr. Evans was Chairman and Chief Executive
Officer, and effective January 1, 1997, Chairman 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 Corporation.
JOHN W. KOEBERER has been a director of Fibreboard since June 1988. Mr.
Koeberer was a founder of Tehama Bank, which is located in Red Bluff,
California, and has been Chairman of its board of directors since 1984. For the
past seventeen 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 eleven
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 was President of the California Ski Industries Association from
1975 to 1976. He currently serves as a director of the California State Chamber
of Commerce, the Shasta Cascade Wonderland Association, the San Francisco
Visitor and Convention Bureau and the California Travel Industries Association.
BILL M. LINDIG has been a director of Fibreboard since December 1996. Mr.
Lindig has served as President and Chief Executive Officer of SYSCO Corporation
since January 1995. SYSCO is the largest marketer and distributor of foodservice
products in the U.S. Between 1970 and 1980 Mr. Lindig held a variety of
management positions with SYSCO's operating companies. In 1983, Mr. Lindig was
elected a director of SYSCO Corporation and in 1984 he became President of the
foodservice division. In 1985, Mr. Lindig was named Executive Vice President and
Chief Operating Officer of SYSCO Corporation, and was
3
<PAGE>
appointed President and COO later that year. Mr. Lindig holds board positions at
Burlington Northern Santa Fe Corporation, the Greater Houston Partnership,
Memorial Hospital Systems and Food Distributors International.
DONALD K. MILLER has been a director of Fibreboard since April 1996. Since
January 1987, Mr. Miller has been Chairman of Greylock Financial Inc., a firm
engaged in merchant banking. From 1987 to 1995 he was Chairman of Christensen
Boyles Corporation, a mining and service concern. He was also Chairman and CEO
of Thompson Advisory Group, L.P., a public asset management partnership, from
November 1990 to April 1993 and Vice Chairman from April 1993 to November 1994.
He currently serves as a director of Huffy Corporation, Layne Christensen
Company, PIMCO Advisors, L.P. and RPM Inc.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of six meetings during
the year ended December 31, 1996. 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, Miller and Lindig.
The Nominating Committee also includes Mr. Roach. During 1996 the Audit
Committee met twice, the Compensation Committee met four times and the
Nominating Committee met six times. Each director attended all of the meetings
held during 1996 of the Board and the committees on which such director served,
except Mr. James who attended more than 80% 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 1995 Stock Incentive
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 stock units, which vest over a
three-year period or immediately in full upon a change of control.
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.
4
<PAGE>
PROPOSAL 2
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, 1996. 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, 1997, 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 1997. 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 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 1996.
OVERVIEW OF COMPENSATION POLICY
The primary objective of Fibreboard's management team over the past five
years has been to improve the Company's profitability and increase stockholder
value. During 1992-1996 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 built substantial corporate value
through strategic acquisitions in the building products industry, as well as
through the sale of the Wood Products Group in 1995 and the Resort Group in
1996.
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
1996 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) included 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.
5
<PAGE>
1996 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
1996 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 approved 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.
For performance during 1996, the Company's executives earned an average of
96% of the maximum potential cash bonus awards available under the Annual Cash
Incentive Program based upon the achievement of 1996 earnings targets and the
accomplishment of individual business objectives.
STOCK UNIT AND OPTION GRANTS--In 1996 the Committee granted an aggregate of
117,500 stock units and 110,000 stock options, respectively, under the 1995
Stock Incentive Plan to the Company's executive officers. The Committee
determined the number of units and options granted to executive officers
primarily by reviewing the levels of executive 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 unit and 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. In 1996, the Committee did not grant any phantom stock units to the
Company's executive officers under this plan. The Committee has no present
intention of granting additional phantom stock units.
In order to encourage increased equity ownership by the Company's executive
officers, the Committee implemented a program during 1996 whereby officers could
elect to settle their vested phantom stock units in the form of shares of the
Company's common stock and stock units in lieu of cash. The stock units granted
will vest in three years only if the officer continues to hold an equivalent
number of shares of common stock issued in settlement of his phantom stock
units. In connection with this program, the Committee accelerated the payment
date of certain vested phantom stock units held by the Company's executive
officers to January 1997 and settled the after-tax payments on these units in
the form of shares of the Company's common stock and stock units in lieu of
cash.
- ------------------------
(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 11 hereof.
6
<PAGE>
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 page 10 of this Proxy Statement.
The Committee believes that Mr. Roach's base salary for 1996 was set at the
median salary level for his position at comparable companies surveyed by the
Committee.
Mr. Roach earned a cash bonus of $564,850 under the Annual Cash Incentive
Program for performance during 1996, representing 98.75% 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 1996, the Committee granted an aggregate of 40,000 stock options and
50,000 stock units to Mr. Roach under the 1995 Stock Incentive Plan. The
Committee determined the size of the awards by reviewing the amount of
equity-based compensation granted to CEOs 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 $1 million, unless certain exemption requirements are met. The 1995 Stock
Incentive Plan is designed to meet the exemption requirements of Section 162(m).
The Committee has determined at this time not to seek to qualify the Company's
remaining executive officer compensation programs under Section 162(m).
The Company's executive compensation program is subject to change at the
discretion of the Committee. The Committee will monitor the Company's executive
compensation program on an ongoing basis to ensure that it continues to support
a performance-oriented environment and remains properly integrated with
Fibreboard's annual and long-term strategic objectives.
MEMBERS OF COMPENSATION COMMITTEE
<TABLE>
<S> <C>
GEORGE B. JAMES, CHAIRMAN JOHN W. KOEBERER
G. ROBERT EVANS BILL M. LINDIG
WILLIAM D. EBERLE DONALD K. MILLER
PHILIP R. BOGUE
</TABLE>
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Set forth below is information concerning the annual and long-term
compensation for services rendered in all capacities to the Company for the
fiscal years ended December 31, 1996, 1995 and 1994, of those persons who were
at December 31, 1996, (i) the Chief Executive Officer of the Company, (ii) the
Chief Operating Officer of the Company, (iii) the other four most highly
compensated executive officers of the Company, and (iv) the Company's former
Senior Vice President and Chief Financial Officer (the "Named Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ----------------------- -----------
--------------------------------------- RESTRICTED SECURITIES LONG-TERM
OTHER ANNUAL STOCK UNDERLYING INCENTIVE
NAME AND COMPENSATION AWARD(S) OPTIONS PLAN
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) ($) (1) (#) PAYOUTS ($)
- ----------------------------- --------- ----------- ----------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
JOHN D. ROACH 1996 440,000 564,850 1,031,795(3) 1,312,500 40,000 1,631,166
Chairman, President & 1995 410,000 526,338 -- -- 40,000 255,600
CEO 1994 360,000 434,450 -- -- -- 200,000
RONALD W. MATHEWSON 1996 68,750(4) 50,000 -- 710,000 20,000 --
Executive VP & COO 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
MICHAEL R. DOUGLAS 1996 206,000 152,569 393,181(3) 262,500 15,000 652,466
Senior VP, General 1995 197,500 142,570 -- -- 15,000 102,240
Counsel & Secretary 1994 190,000 130,470 -- -- -- 55,000
ROBERT W. JOHNSTON 1996 206,000(5) 152,569 -- -- -- 811,866
Senior VP, Vinyl 1995 190,000 79,340 -- -- 10,000 --
Products 1994 63,000 47,500 -- 149,375 -- --
HERBERT M. ELLIOTT 1996 162,000 90,391 -- 262,500 15,000 489,350
VP, Industrial 1995 155,000 108,895 -- -- 15,000 76,680
Insulation 1994 150,000 109,690 -- -- -- 70,000
GAROLD E. SWAN 1996 158,500 75,287 173,683(3) 196,875 9,000 326,234
VP, Finance 1995 152,000 73,150 -- -- 7,500 51,120
1994 140,000 64,090 -- -- -- 32,500
JAMES P. DONOHUE 1996 209,359(6) 126,752 -- -- -- 654,134
Former Senior VP & 1995 217,500 161,086 -- -- 15,000 102,240
CFO 1994 210,000 196,175 -- -- -- 65,000
<CAPTION>
NAME AND ALL OTHER ($)
PRINCIPAL POSITION COMPENSATION (2)
- ----------------------------- ----------------
<S> <C>
JOHN D. ROACH 233,234
Chairman, President & 262,605
CEO 212,780
RONALD W. MATHEWSON 25,000
Executive VP & COO --
--
MICHAEL R. DOUGLAS 11,143
Senior VP, General 20,016
Counsel & Secretary 10,580
ROBERT W. JOHNSTON --
Senior VP, Vinyl 10,500
Products --
HERBERT M. ELLIOTT 61,669
VP, Industrial 63,897
Insulation 57,380
GAROLD E. SWAN 7,826
VP, Finance 11,190
9,326
JAMES P. DONOHUE --
Former Senior VP & 51,149
CFO 36,780
</TABLE>
- ------------------------
(1) Indicates value of stock units as of the date of grant. As of December 31,
1996, Messrs. Roach, Mathewson, Douglas, Elliott and Swan held 50,000,
20,000, 10,000, 10,000, and 7,500 stock units, respectively, valued at
$1,687,500, $675,000, $337,500, $337,500 and $253,125, respectively. Under
the terms of the stock units, shares of Common Stock are not issued or
delivered to holders until the rights vest. The rights vest five years from
the date of grant. No dividends are paid on stock units.
(2) Includes 401(k) Retirement Plan contributions to the accounts of the Named
Officers. Also includes the contributions allocated to the accounts of
Messrs. Roach, Mathewson and Elliott under the Company's supplemental
retirement plan for executive officers (i) for 1996, in the amounts of
$204,700, $25,000 and $53,030, respectively, and (ii) for 1995, in the
amounts of $214,200, $0 and $47,200, respectively.
(3) Includes (i) the cost to the company of benefits provided to Messrs. Roach,
Douglas and Swan during 1996 aggregating $595,088, $216,972, and $110,672,
including relocation and moving expenses incurred during the year in the
amounts of $576,471, $209,120 and $103,769, respectively, and (ii) tax
reimbursement payments during 1996 relating to relocation and moving
expenses paid by the Company on behalf of Messrs. Roach, Douglas and Swan in
the amounts of $436,707, $176,209 and $63,001, respectively. Such expenses
were incurred in connection with the relocation of the Company's corporate
offices from Walnut Creek, California to Dallas, Texas.
(4) Mr. Mathewson was elected Executive Vice President and Chief Operating
Officer of the Company on October 15, 1996.
(5) Mr. Johnston retired as an executive officer from the Company on December
31, 1996.
(6) Mr. Donohue resigned from the Company in November 1996.
8
<PAGE>
OPTION AND SAR GRANTS
Set forth below is information relating to grants of stock options to the
Named Officers during the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED
ANNUAL RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
--------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
% OF TOTAL
OPTIONS OPTIONS GRANTED EXERCISE OR
GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#) (1) FISCAL YEAR ($/SH) (2) DATE 5% ($) 10% ($)
- ----------------------------------- --------- --------------- ----------- ------------ ---------- ----------
JOHN D. ROACH 40,000 36.36% $ 32.00 12/09/2001 $ 353,640 $ 781,450
RONALD W. MATHEWSON 20,000 18.18% $ 32.00 12/09/2001 $ 176,820 $ 390,725
MICHAEL R. DOUGLAS 15,000 13.63% $ 32.00 12/09/2001 $ 132,600 $ 293,045
HERBERT M. ELLIOTT 15,000 13.63% $ 32.00 12/09/2001 $ 132,600 $ 293,045
GAROLD E. SWAN 9,000 8.18% $ 32.00 12/09/2001 $ 79,560 $ 175,825
ROBERT W. JOHNSTON -- -- -- -- -- --
JAMES P. DONOHUE -- -- -- -- -- --
</TABLE>
- ------------------------
(1) These options become exercisable in equal annual installments over a
three-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 1996 and the number and value of
unexercised options held by the Named Officers at December 31, 1996.
<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 0 0 363,333 66,667 11,102,429 399,870
RONALD W. MATHEWSON 0 0 0 20,000 0 35,000
MICHAEL R. DOUGLAS 20,000 $410,000 25,000 25,000 686,850 149,950
HERBERT M. ELLIOTT 0 0 35,000 25,000 999,350 149,950
GAROLD E. SWAN 0 0 32,500 14,000 968,425 77,600
ROBERT W. JOHNSTON 0 0 5,000 5,000 61,850 61,850
JAMES P. DONOHUE 0 0 135,000(3) 0 4,266,050 0
</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 12/31/96 ($33.75).
(3) Mr. Donohue exercised 130,000 options in January 1997.
9
<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. Under the Employment Agreement, as amended in January 1995, Mr.
Roach currently receives a minimum annual salary of $465,000, 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 its executive
officers as a means of enabling the Company to attract and retain key members of
management. 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.
10
<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.
COMPARISON OF CUMULATIVE TOTAL RETURN*
FIBREBOARD COMMON STOCK, RUSSELL 2000 INDEX AND
DOW JONES BUILDING MATERIALS INDEX (DJBMI)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOW JONES BUILDING
<S> <C> <C> <C>
FBD Common Russell 2000 Index Materials Index
1991 $100.00 $100.00 $100.00
1992 229.13 116.36 124.90
1993 1125.00 136.14 155.15
1994 912.47 131.81 124.68
1995 1491.67 166.35 169.96
1996 2250.00 190.91 202.69
</TABLE>
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
----- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
FBD Common..................... 100 229.13 1125.00 912.47 1491.67 2250.00
Russell 2000 Index............. 100 116.36 136.14 131.81 166.35 190.91
Dow Jones Building Materials
Index.......................... 100 124.90 155.15 124.68 169.96 202.69
</TABLE>
- ------------------------
*Total return assumes reinvestment of dividends.
11
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of April 4, 1997, 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 (excludes Messrs. Donohue and Johnston who were not
Named Officers as of April 4, 1997), 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 8,490,020 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) 7.66
Neuberger & Berman, L.P......................................................... 639,742(4) 7.54
Marvin C. Schwartz.............................................................. 504,200(5) 5.94
John D. Roach................................................................... 416,045 4.70
Garold E. Swan.................................................................. 51,624 *
Herbert M. Elliott.............................................................. 46,480 *
Philip R. Bogue................................................................. 45,000 *
Michael R. Douglas.............................................................. 43,932 *
John W. Koeberer................................................................ 40,000 *
George B. James................................................................. 36,000 *
G. Robert Evans................................................................. 26,000 *
William D. Eberle............................................................... 20,000 *
Donald K. Miller................................................................ 5,000 *
Bill M. Lindig.................................................................. 0 *
Ronald W. Mathewson............................................................. 0 *
All directors and executive officers as a group (14 persons).................... 772,442 8.50
</TABLE>
- ------------------------
(1) Includes shares issuable under the Company's 1988 Option Plan and 1995 Stock
Incentive Plan (i) upon the exercise of stock options which are currently
exercisable or exercisable within 60 days or (ii) upon the vesting of stock
units and restricted stock within 60 days in the following amounts: Mr.
Roach, 363,333 shares; Mr. Swan, 32,500 shares; Mr. Elliott, 35,000 shares;
Mr. Bogue, 32,000 shares; Mr. Douglas, 25,000 shares; Mr. Koeberer, 32,000
shares; Mr. James, 12,000 shares; Mr. Evans, 16,000 shares; Mr. Eberle,
16,000 shares; and all directors and executive officers as a group, 593,833
shares. In certain instances, the number of shares shown as being
beneficially owned may not be deemed to be beneficially owned for other
purposes.
(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,
12
<PAGE>
in which case such notice must be delivered not later than 10 days following the
day on which the date of 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 Dallas, Texas.
The deadline for stockholder proposals intended to be considered for
inclusion in the Company's Proxy Statement for the 1998 Annual Meeting of
Stockholders is December 16, 1997. 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 of D.F. King & Co., Inc. to assist the
Board in connection with its solicitation of proxies. The agreement entered into
with D.F. King provides for routine advice and services in coordinating the
solicitation of proxies, for which the Company will pay estimated fees of
$6,000, 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 15, 1997
IF YOU HAVE ANY QUESTIONS ABOUT VOTING YOUR SHARES, PLEASE TELEPHONE THE
COMPANY'S PROXY SOLICITOR, D. F. KING & CO., INC., TOLL FREE AT 1-800-669-5550.
13
<PAGE>
----------------------------------
[LOGO]
FIBREBOARD
----------------------------------
strong PLATFORMS
for GROWTH with
one clear FOCUS
----------------------------------
DETACH HERE FIB 2F
FIBREBOARD CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, JUNE 3, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Annual
P Meeting of Stockholders and Proxy Statement, each dated April 15, 1997,
and does hereby appoint Ronald W. Mathewson and Garold E. Swan, or either
R 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
O all shares of Common Stock of Fibreboard Corporation which the undersigned
is entitled to vote at the Annual Meeting of Stockholders of Fibreboard
X Corporation to be held at the Texas Commerce Tower, in Dallas, Texas on
June 3, 1997 at 11:00 a.m. and at any adjournments or postponements thereof,
Y 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>
DETACH HERE FIB F
/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 AND 2. THIS PROXY MAY
BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED AT THE ANNUAL MEETING.
1. Election of three Directors to Class III of the Board of Directors to serve
for a term of three years.
NOMINEES: Philip R. Bogue, George B. James and John D. Roach
/ / FOR ALL / / WITHHELD FROM
NOMINEES ALL NOMINEES
/ / _______________________________________
(Instruction: To withhold authority to vote
for any individual nominee, write that
nominee's name in the space provided above.
2. Proposal to ratify the selection of FOR AGAINST ABSTAIN
Arthur Andersen LLP as the Company's
independent public accountants for the / / / / / /
fiscal year ending December 31, 1997.
3. 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 FOR MARK HERE IF YOU
ADDRESS CHANGE AND / / PLAN TO ATTEND / /
NOTE AT LEFT THE MEETING
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED POSTAGE-PAID REPLY ENVELOPE.
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:
---------------- ---------- ------------- --------
