<PAGE>
[LOGO OF TREDEGAR CORPORATION]
1100 Boulders Parkway
Richmond, Virginia 23225
Annual Meeting of Shareholders
March 27, 2000
To the Shareholders:
We invite you to attend the Annual Meeting of Shareholders to be held in the
Grand Ballroom of The Jefferson Hotel, Franklin & Adams Streets, Richmond,
Virginia, on Wednesday, May 24, 2000, at 9:30 a.m., Eastern Daylight Time. A
formal notice of the meeting, a proxy statement and a proxy form are enclosed.
You are being asked to elect directors and to approve the designation of
auditors for the coming year.
Please complete, sign, date and return the enclosed proxy form promptly,
regardless of whether you plan to attend the meeting. You may still vote in
person at the meeting, even if you return the proxy. A self-addressed, stamped
envelope is enclosed.
On behalf of myself and the Board of Directors, I would like to thank you
for your continued interest in Tredegar.
Sincerely yours,
/S/ John D. Gottwald
John D. Gottwald
President and Chief Executive
Officer
<PAGE>
TREDEGAR CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TIME: Wednesday, May 24, 2000, at 9:30 a.m.
PLACE: The Jefferson Hotel
Franklin & Adams Streets
101 West Franklin Street
Richmond, Virginia 23220
ITEMS OF BUSINESS: 1. To elect four directors to serve until the
2000 Annual Meeting and until their successors
are elected;
2. To approve the designation of
PricewaterhouseCoopers LLP as auditors for the
fiscal year ending December 31, 2000; and
3. To conduct any other business properly raised
at the meeting.
WHO MAY VOTE: You can vote if you were a shareholder of record
on March 17, 2000.
DATE OF MAILING: This notice and Proxy Statement are first being
mailed to shareholders on or about March 27,
2000.
By Order of the Board of Directors
Nancy M. Taylor, Secretary
<PAGE>
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
TREDEGAR CORPORATION
To be held May 24, 2000
Approximate date of mailing--March 27, 2000
Tredegar's Board of Directors (the "Board") is soliciting your proxy for the
Annual Meeting of Shareholders to be held on Wednesday, May 24, 2000. Anyone
giving a proxy may revoke it any time before it is voted. A proxy can be
revoked by voting in person at the meeting, delivering another proxy, or
notifying Tredegar's Secretary in writing that you want to revoke your proxy.
All signed proxies that have not been revoked will be voted at the Annual
Meeting. If your proxy contains any specific instructions, they will be
followed.
On March 17, 2000, the date for determining shareholders entitled to vote at
the meeting, there were 37,855,811 outstanding shares of Common Stock. Each
share of Common Stock is entitled to one vote.
Tredegar will pay the cost of soliciting proxies and may use employees to
solicit proxies by mail, in person or by telephone. Corporate Investor
Communications, Inc. ("CIC") has been engaged to solicit proxies from brokers,
nominees, fiduciaries and other custodians. Tredegar will pay CIC $4,500 for
its services and will reimburse CIC for its out-of-pocket expenses.
Tredegar's address is 1100 Boulders Parkway, Richmond, Virginia 23225.
ELECTION OF DIRECTORS
The Board is divided into three classes of directors as nearly equal in
number as possible. Each class of directors serves for three years. The term
for each class is staggered so that one class is elected at each annual
meeting.
The terms of Austin Brockenbrough, III, William M. Gottwald, Richard L.
Morrill and Norman A. Scher will expire at the 2000 Annual Meeting. Messrs.
Brockenbrough, William M. Gottwald, Morrill and Scher have been nominated by
the Board for election at the 2000 Annual Meeting for the term expiring at the
2003 Annual Meeting of Shareholders.
A nominee is elected to the Board if a plurality of votes cast in the
election of directors is cast "for" the nominee. Signing and returning your
proxy will constitute a vote "for" all of the nominees unless your proxy
specifies that you are withholding authority to vote for any of the nominees.
Any votes withheld and any shares held in street name that are not voted in
the election of directors will not be counted in determining the number of
votes cast. In the event that any nominee for director is unavailable for
election, the Board may either reduce the number of directors or choose a
substitute nominee. If the Board selects a substitute nominee, the shares
represented by proxy will be voted for the substitute nominee, unless other
instructions are given in the proxy.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" ALL OF THE NOMINEES.
1
<PAGE>
Below is some information on the four nominees and the directors who will
continue on the Board after the meeting:
Austin Brockenbrough, III--age 63; director since 1993; Managing Director
and President of Lowe, Brockenbrough & Company, Inc. (private investment
counseling firm) since 1970. Other directorship: Trustee of The
Williamsburg Investment Trust. Term expires 2000.
Phyllis Cothran--age 53; director since 1993; retired, having served
previously as President and Chief Operating Officer of Trigon Blue Cross
Blue Shield, a health insurance (and related services) company, from
November, 1990 until March 31, 1997. Other directorship: Ethyl Corporation
("Ethyl"), a petroleum additives company. Term expires 2002.
Richard W. Goodrum--age 72; director since 1989; retired, having served
previously as Executive Vice President and Chief Operating Officer of
Tredegar from July 10, 1989 until March 31, 1996. Term expires 2002.
Floyd D. Gottwald, Jr.--age 77; director since 1989; Chairman of the
Board and Chief Executive Officer of Albemarle Corporation, a chemicals
company ("Albemarle"), since March 1, 1994. Other directorship: Albemarle.
Term expires 2002.
John D. Gottwald--age 45; director since 1989; President and Chief
Executive Officer of Tredegar since July 10, 1989. Other directorship:
Albemarle. Term expires 2001.
William M. Gottwald--age 52; director since 1997; Vice President,
Corporate Strategy, of Albemarle since August, 1996; having served
previously as Senior Vice President of Ethyl from September, 1994 until
August, 1996. Other directorship: Albemarle. Term expires 2000.
Richard L. Morrill--age 60; director since 1997; Chancellor and
Distinguished University Professor of Ethics and Democratic Values,
University of Richmond since July 1, 1998; having served previously as
President of the University of Richmond from 1988 until June 30, 1998.
Other directorship: Trustee of The Williamsburg Investment Trust. Term
expires 2000.
Emmett J. Rice--age 80; director since 1989; retired, former member of
the Board of Governors of the Federal Reserve System. Other directorships:
Albemarle, Jardine-Fleming China Region Fund, Inc. and Legg Mason
Institutional Advisors II. Term expires 2001.
Norman A. Scher--age 62; director since 1989; Executive Vice President
and Chief Financial Officer of Tredegar since July 10, 1989; having served
previously as Treasurer of Tredegar from July 10, 1989 until May 22, 1997.
Other directorship: DIMON, Incorporated. Term expires 2000.
Thomas G. Slater, Jr.--age 55; director since 1998; Partner of Hunton &
Williams, a law firm, since 1976. Term expires 2001.
There were seven meetings of the Board held in 1999. All of the directors
attended at least 75% of the total number of Board meetings and Board
Committees meetings (of which the director was a member) held in 1999. Mr.
Andre B. Lacy resigned from the Board and the Audit Committee on August 12,
1999.
John D. Gottwald, Richard W. Goodrum and Norman A. Scher serve on Tredegar's
Executive Committee. Tredegar's By-laws allow the Executive Committee to
exercise the authority of the Board, except as limited by the Virginia Stock
Corporation Act, and except with respect to the compensation of executive
officers (which is determined by the Executive Compensation Committee). During
1999, the Executive Committee met informally at least quarterly.
Austin Brockenbrough, III, Phyllis Cothran and Richard W. Goodrum serve on
Tredegar's Audit Committee, which met twice during 1999. This Committee
reviews Tredegar's internal audit and financial reporting functions and the
scope and results of the audit performed by Tredegar's independent
accountants. The Audit Committee reports to the Board on those matters and
recommends to the Board the engagement of the independent accountants.
2
<PAGE>
Phyllis Cothran, Richard L. Morrill and Emmett J. Rice serve on Tredegar's
Executive Compensation Committee, which met three times in 1999. This
Committee approves the salaries and bonus awards of executive officers, and
grants awards under Tredegar's stock incentive plan (other than the Directors'
Stock Plan). The Executive Compensation Committee is composed of individuals
who, either currently or in the prior year, are not and were not eligible to
participate in any stock incentive plan of Tredegar, other than the Directors'
Stock Plan. Grants under the Directors' Stock Plan are approved by Tredegar's
Board of Directors.
Austin Brockenbrough, III, John D. Gottwald and Thomas G. Slater, Jr., serve
on Tredegar's Nominating Committee, which met once in 1999. This Committee
recommends to the Board the nominees for election as directors and may make
other recommendations regarding the term of office, classification and
compensation of directors.
Austin Brockenbrough, III, Richard L. Morrill and Norman A. Scher serve on
Tredegar's Investment Policy Committee, which met four times in 1999. This
Committee administers Tredegar's Investment Conflict of Interest Policy.
Austin Brockenbrough, III, Phyllis Cothran, Richard W. Goodrum and Richard
L. Morrill serve on Tredegar's Evaluation Committee, which met three times
during 1999. This Committee has been established to review with Management and
evaluate the possible spin-off of the Corporation's Technology Group and to
report its recommendations to the Board.
Tredegar's By-laws allow any shareholder who is entitled to vote in the
election of directors to nominate a director. To do so, the shareholder must
give written notice to Tredegar's Secretary at least ninety days before the
Annual Meeting of Shareholders or, when an election is to be held at a special
meeting of shareholders, by the close of business on the seventh day following
the day that the notice of the special meeting is given to shareholders. The
notice must include the following information: (i) the name and address of the
shareholder and of each person nominated, (ii) the shareholder's
representation that he or she is a recordholder of Tredegar's Common Stock,
that he or she is entitled to vote at the meeting and will appear in person or
by proxy at the meeting to nominate the people named in the notice, (iii) a
description of all arrangements or understandings between the shareholder and
each nominee and any other person pursuant to which the nomination is being
made, (iv) the information on each nominee required under the applicable rules
of the Securities and Exchange Commission to be included in a proxy and (v) a
written consent from each nominee for director saying that the nominee will
serve as a director of Tredegar if elected.
John D. Gottwald and William M. Gottwald are brothers and are sons of Floyd
D. Gottwald, Jr. The Gottwalds may be deemed to be "control persons" of
Tredegar. In addition, Thomas G. Slater, Jr., is married to John D. Gottwald's
sister-in-law.
3
<PAGE>
STOCK OWNERSHIP
Below is information on the beneficial ownership of Tredegar's Common Stock
by the directors, nominees and the executive officers named in the Summary
Compensation Table as of February 1, 2000. The table also shows the beneficial
ownership of all directors and executive officers of Tredegar as a group as of
February 1, 2000.
Security Ownership of Management
<TABLE>
<CAPTION>
Number of
Number of Shares Shares with
with Sole Voting Shared
and Investment Power Voting and Total
---------------------- Investment Number of Percent of
Outstanding Options(b) Power Shares Class(a)
----------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
Directors, Nominees and
Certain Executive
Officers(c)
Austin Brockenbrough,
III.................... 58,000 300 24,010 82,310(d)
Phyllis Cothran......... 17,100 300 -- 17,400
Michael W. Giancaspro... 96,714 60,549 -- 157,263
Richard W. Goodrum...... 283,261 247,800 13,500 544,561 1.4%
Floyd D. Gottwald, Jr... 3,388,363 300 283,818 3,672,481(e) 9.7%
John D. Gottwald........ 1,994,273 98,250 727,976 2,820,499(f) 7.4%
William M. Gottwald..... 94,349 300 580,570 675,219(g) 1.8%
Douglas R. Monk......... 44,687 146,985 -- 191,672
Richard L. Morrill...... 4,000 300 -- 4,300
Emmett J. Rice.......... 2,385 300 -- 2,685
Anthony J. Rinaldi(h)... 170,524 81,000 4,431 255,955(i)
Norman A. Scher......... 219,540 158,250 180 377,970 1.0%
Thomas G. Slater, Jr.... -- 300 1,500 1,800(j)
Management
All directors and
executive officers as a
group (15)(k)(l)....... 6,394,842 941,434 1,622,479 8,958,755(m) 23.1%
</TABLE>
- --------
(a) Unless a specific percentage is noted in this column, each person owns
less than 1% of Tredegar's outstanding Common Stock.
(b) The number of options included for the following executive officers and
Management as a group consists of options with respect to which certain
executive officers have the right to acquire beneficial ownership within
60 days of February 1, 2000.
(c) Some of the shares may be considered to be beneficially owned by more than
one person or group listed and are included in the table for each.
(d) Austin Brockenbrough, III, disclaims beneficial ownership of 28,010 shares
of Common Stock.
(e) Floyd D. Gottwald, Jr., disclaims beneficial ownership of 283,818 shares
of Common Stock.
(f) John D. Gottwald disclaims beneficial ownership of 182,554 shares of
Common Stock.
(g) William M. Gottwald disclaims beneficial ownership of 112,382 shares of
Common Stock.
(h) Anthony J. Rinaldi retired from Tredegar effective as of January 1, 2000.
(i) Anthony J. Rinaldi disclaims beneficial ownership of 4,431 shares of
Common Stock.
(j) Thomas G. Slater, Jr., disclaims beneficial ownership of 1,500 shares of
Common Stock.
(k) The directors, nominees and executive officers have sole voting and
investment power over their shares, except for those listed in the third
column, which are held by or jointly with spouses, by children or in
partnerships and trusts. Any shares held under Albemarle's or Tredegar's
benefit plans for any director, nominee or executive officer are included
in the number of shares over which that person has sole
4
<PAGE>
voting or investment power. Shares held by the trustees of those plans for
other employees are not included. See Note (d) to the table "Security
Ownership of Certain Beneficial Owners" below.
(l) Two directors share voting and investment power for 13,506 shares. This
overlap in beneficial ownership has been eliminated in calculating the
number of shares and the percentage of class owned by Management.
(m) The above table does not include some of the shares owned by the adult
children of Floyd D. Gottwald, Jr. Nor does it include the shares owned by
Floyd D. Gottwald, Jr.'s brother, Bruce C. Gottwald, and his adult
children. Bruce C. Gottwald, Floyd D. Gottwald, Jr., John D. Gottwald and
William M. Gottwald may be considered a "group" under Section 13(d) of the
Securities Exchange Act of 1934, and the shares owned or attributed to
them and their children are reported in the table "Security Ownership of
Certain Beneficial Owners" below. If all of those shares were included in
the table above, the total number of shares held by Management would be
14,264,733 (and 37.6% of total shares outstanding).
The table below lists any person (including any "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934) known to Tredegar
that beneficially owned more than 5% of Tredegar's Common Stock on February 1,
2000.
Security Ownership of Certain Beneficial Owners
<TABLE>
<CAPTION>
Names and Addresses of Number Percent
Beneficial Owners of Shares Class
- ---------------------- ---------- -------
<S> <C> <C>
Bruce C. Gottwald,
Floyd D. Gottwald, Jr.,
John D. Gottwald,
and William M.
Gottwald(a)............ 12,510,489(b)(c) 33.0%
330 South Fourth Street
P.O. Box 2189
Richmond, VA 23217
Shapiro Capital
Management Company, Inc.,
Samuel R. Shapiro,..... 2,592,800 6.8%
The Kaleidoscope Fund, L.P.
3060 Peachtree Road, N.W.
Atlanta, GA 30305
Wachovia Bank of North
Carolina, N.A.,
as Trustee for the
Savings Plan for
the Employees of
Tredegar Industries, Inc.. 3,908,241(c)(d) 10.3%
301 North Main Street
Winston-Salem, NC 27150
</TABLE>
- --------
(a) Bruce C. Gottwald, Floyd D. Gottwald, Jr., John D. Gottwald and William M.
Gottwald (the "Gottwalds"), together with members of their immediate
families, may be deemed to be a "group" for purposes of Section 13(d)(3)
of the Securities Exchange Act of 1934, although there is no agreement
among them with respect to the acquisition, retention, disposition or
voting of Common Stock.
(b) The Gottwalds, individually or together, have sole voting and investment
power over all of the shares disclosed except for 4,501,193 shares held by
their respective wives and children, and in trusts, some of which might be
deemed to be beneficially owned by the Gottwalds under the rules and
regulations of the Securities and Exchange Commission, but as to which the
Gottwalds disclaim beneficial ownership. Shares owned by the adult
children of Bruce C. Gottwald and Floyd D. Gottwald, Jr., are included in
the group holdings of the Gottwalds.
(c) This amount includes 223,632 shares owned of record by Wachovia Bank of
North Carolina, N.A., Winston-Salem, North Carolina (the "Trustee"), as
trustee of the Savings Plan for the Employees of Tredegar Industries, Inc.
(the "Tredegar Savings Plan") for the benefit of John D. Gottwald.
5
<PAGE>
(d) Shares held under the Tredegar Savings Plan are voted by the Trustee
according to instructions obtained from employees participating in the
plan. If a participating employee does not give the Trustee voting
instructions, his or her shares are voted by the Trustee according to the
Board's recommendations to the shareholders (as long as doing so is
consistent with the Trustee's fiduciary duties). Because members of the
Gottwald family are executive officers, directors and the largest
shareholders of Tredegar, they may be considered to be "control persons"
of Tredegar and to have the ability to control the recommendations of the
Board.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
This table shows information on compensation paid by Tredegar to the Chief
Executive Officer and the four other highest paid executive officers for their
services to Tredegar for the fiscal years ended December 31, 1999, 1998 and
1997, respectively.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
--------------- ----------------
Securities All Other
Name and Principal Salary Bonus Underlying Compensation
Position Year ($) ($) Options/SARs (#) ($)
- ------------------ ---- ------- ------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
John D. Gottwald......... 1999 365,208 100,000 88,000 19,481(1)
President and Chief 1998 358,167 135,000 -0- 18,906(1)
Executive Officer 1997 350,000 140,000 66,000 18,230(1)
Norman A. Scher..........
Executive Vice President 1999 327,500 75,000 64,000 17,357(2)
and Chief Financial 1998 322,292 100,000 -0- 16,915(2)
Officer 1997 315,000 130,000 48,000 16,335(2)
Douglas R. Monk..........
Executive Vice President 1999 258,333 85,000 64,000 13,040(4)
and Chief Operating 1998 195,631 85,000(3) -0- 10,105(4)
Officer 1997 171,086 80,000(3) 36,000 8,763(4)
Anthony J. Rinaldi....... 1999 210,000 -0-(5) 56,000 10,786(6)
Senior Vice President 1998 191,258 43,544(5) -0- 9,802(6)
1997 181,750 80,416(5) 36,000 9,286(6)
Michael W. Giancaspro.... 1999 177,983 67,500 52,000 9,122(7)
Vice President-- 1998 171,133 90,000 -0- 8,747(7)
Corporate Development 1997 162,083 90,000 36,000 8,249(7)
</TABLE>
- --------
(1) Matching contributions under the Savings Plan for the Employees of
Tredegar Industries, Inc. (the "Savings Plan") ($8,000 for 1997, 1998 and
1999) and credit under the Savings Plan Benefit Restoration Plan (the
"SPBR Plan") ($11,481 for 1999, $10,906 for 1998 and $10,230 for 1997).
(2) Matching contributions under the Savings Plan ($8,000 for 1997, 1998 and
1999) and credit under the SPBR Plan ($9,357 for 1999, $8,915 for 1998 and
$8,335 for 1997).
(3) Mr. Monk's bonuses for 1997 and 1998 were determined under a formula-based
incentive plan adopted for Tredegar's Aluminum Extrusion division, but did
include a discretionary award, which was allowed under the plan.
(4) Matching contributions under the Savings Plan ($8,000 for 1998 and 1999
and $7,857 for 1997) and credit under the SPBR Plan ($5,040 for 1999,
$2,105 for 1998 and $906 for 1997).
6
<PAGE>
(5) Bonus award is determined under the Tredegar Film Products division's
incentive compensation plan. The bonus amounts for 1998 and 1997 have been
restated to reflect the actual cash payments received by Mr. Rinaldi.
Under the Film Products' plan as in effect through December 31, 1999, an
incentive award account is established for each plan participant. At the
end of each plan year, an individual award is allocated to a participant's
account. The individual award, which may be positive or negative, is
determined based on the change in the division's economic profit added.
Based on the 1999 performance of the Film Products division, all deferred
amounts in Mr. Rinaldi's account under the divison's plan have been
eliminated. Mr. Rinaldi retired from Tredegar effective as of January 1,
2000.
(6) Matching contributions under the Savings Plan ($8,000 for 1997, 1998 and
1999) and credit under the SPBR Plan ($2,786 for 1999, $1,802 for 1998 and
$1,268 for 1997).
(7) Matching contributions under the Savings Plan ($8,000 for 1998 and 1999
and $7,396 for 1997) and credit under the SPBR Plan ($1,122 for 1999, $747
for 1998 and $853 for 1997).
7
<PAGE>
Stock Options and SARs
This table describes the stock options granted to each of the executive
officers named in the Summary Compensation Table during the fiscal year ended
December 31, 1999. There were no SARs granted during 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Grant Date
Individual Grants Value(1)
-------------------------- ---------------
Number of Percent of
Securities Total Options/
underlying SARs Granted Exercise or
option/SARs to Employees Base Price Expiration Grant Date
Name Granted(#) in Fiscal Year ($/Sh) Date Present Value $
- ---- ----------- -------------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
John D. Gottwald........ 22,000 2.23% 29.15 1/4/2006 206,580
22,000 2.23 34.97 1/4/2006 180,180
22,000 2.23 40.80 1/4/2006 158,400
22,000 2.23 46.63 1/4/2006 140,360
----
8.92%
Norman A. Scher......... 16,000 1.62% 29.15 1/4/2006 150,240
16,000 1.62 34.97 1/4/2006 131,040
16,000 1.62 40.80 1/4/2006 115,200
16,000 1.62 46.63 1/4/2006 102,080
----
6.48%
Douglas R. Monk......... 16,000 1.62% 29.15 1/4/2006 150,240
16,000 1.62 34.97 1/4/2006 131,040
16,000 1.62 40.80 1/4/2006 115,200
16,000 1.62 46.63 1/4/2006 102,080
----
6.48%
Anthony J. Rinaldi...... 14,000 1.42% 29.15 1/4/2006 131,460
14,000 1.42 34.97 1/4/2006 114,660
14,000 1.42 40.80 1/4/2006 100,800
14,000 1.42 46.63 1/4/2006 89,320
----
5.68%
Michael W. Giancaspro... 13,000 1.32% 29.15 1/4/2006 122,070
13,000 1.32 34.97 1/4/2006 106,470
13,000 1.32 40.80 1/4/2006 93,600
13,000 1.32 46.63 1/4/2006 82,940
----
5.28%
</TABLE>
- --------
(1) The grant date present value is an estimate based on the Black-Scholes
option pricing model. The actual value, if any, an executive may realize
will depend on the excess of the stock price over the exercise price on
the date the option is exercised. There is no assurance the value realized
by an executive will be at or near the value estimated by the Black-
Scholes model. The assumptions used under that model include a volatility
estimate of 40%, a risk-free rate of return of 4.81% based on the 7-year
zero coupon U.S. Treasury bond yield at the time of grant, a dividend
yield of .69% based on the annual dividend rate at the time of grant and
an estimated option holding period of 7 years. The estimated grant date
present value does not reflect any discount for vesting, forfeiture
provisions or prohibitions on transfer.
8
<PAGE>
The following describes the options exercised by the executive officers
named in the Summary Compensation Table during 1999 and the year-end value of
all unexercised stock options and SARs held by those executive officers.
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of
Securities
Underlying Value of
Unexercised Unexercised
Options/SARs In-the-Money
at Options/SARs at
Fiscal Year- Fiscal Year-End
End (#) ($)(1)
-------------- ---------------
Value
Shares Acquired Realized Exercisable/ Exercisable/
Name On Exercise (#) ($)(2) Unexercisable Unexercisable
- ---- --------------- ---------- -------------- ---------------
<S> <C> <C> <C> <C>
John D. Gottwald........ 536,550 $8,387,782 98,250/88,000 1,349,859/0
Norman A. Scher......... 42,500 821,475 174,000/64,000 3,103,125/0
Douglas R. Monk......... -0- -0- 146,985/64,000(3) 2,668,377/0
Anthony J. Rinaldi...... 80,799 1,518,544 81,000/56,000(4) 1,303,313/0
Michael W. Giancaspro... 56,250 1,116,113 60,549/52,000 880,232/0
</TABLE>
- --------
(1) Based on the closing price of $20.6875 on December 31, 1999.
(2) "Value Realized" should not be interpreted to mean that the shares
acquired upon exercise have been sold.
(3) Of the total options, 14,235 include a tandem SAR.
(4) Of the total options, 45,000 include a tandem SAR.
Retirement Benefits
All of the executive officers participate in the Tredegar Industries, Inc.
Retirement Income Plan (the "Pension Plan"). The Pension Plan's typical
retirement benefit equals 1.1% of the participant's final average earnings up
to his Social Security covered compensation, multiplied by his years of
pension benefit service, plus 1.5% of Final Average Earnings (as defined in
footnote 3 to the table below) in excess of covered compensation, multiplied
by his years of pension benefit service. There is no deduction for Social
Security benefits. Estimated annual benefits under the Pension Plan upon
retirement at age 65, determined as of December 31, 1999, to persons with
specified earnings and years of pension benefit service are set forth in the
table below.
The Internal Revenue Code limits (a) the annual retirement benefit that may
be paid under the Pension Plan and (b) the earnings that may be used in
computing a benefit. The maximum benefit and earnings limitations are adjusted
each year to reflect changes in the cost of living. For 1999, the maximum
benefit limitation was $128,517 (based on a five-year certain and life
annuity) and the earnings limitation was $160,000.
All of the named executive officers also participate in the Tredegar
Industries, Inc. Retirement Benefit Restoration Plan (the "Restoration Plan").
The Restoration Plan restores benefits that cannot be paid under the Pension
Plan due to the Internal Revenue Code maximum benefit limitation, the earnings
limitation, or both. The benefit payable under the Restoration Plan is
calculated by subtracting the amount that would have been payable under the
Pension Plan if not for the Internal Revenue Code limitations and the amount
actually payable under the Pension Plan.
9
<PAGE>
PENSION PLAN TABLE
(Estimated Annual Benefits Payable at Retirement(1)(2))
<TABLE>
<CAPTION>
Remuneration
(Final-Average
Earnings)(3) Years of Service(4)
- -------------- ------------------------------------------------------
10 15 20 25 30 35 40
------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
$125,000................ 17,428 26,141 34,855 43,569 52,283 60,997 69,710
150,000................. 21,178 31,766 42,355 52,944 63,533 74,122 84,710
175,000................. 24,928 37,391 49,855 62,319 74,783 87,247 99,710
200,000................. 28,678 43,016 57,355 71,694 86,033 100,372 114,710
225,000................. 32,428 48,641 64,855 81,069 97,283 113,497 129,710
250,000................. 36,178 54,266 72,355 90,444 108,533 126,622 144,710
300,000................. 43,678 65,516 87,355 109,194 131,033 152,872 174,710
350,000................. 54,928 82,391 109,855 137,319 164,783 192,247 219,710
400,000................. 58,678 88,016 117,355 146,694 176,033 205,372 234,710
450,000................. 66,178 99,266 132,355 165,444 198,533 231,622 264,710
500,000................. 73,678 110,516 147,355 184,194 221,033 257,872 294,710
</TABLE>
- --------
(1) The estimated benefits assume retirement at age 65 and payment for the
lifetime of the participant, with five years of payments guaranteed (the
normal form of payment under the Pension Plan and the Restoration Plan).
The table assumes reaching age 65 in 1999 and covered compensation of
$33,060.
(2) The estimated benefit set forth in the table was determined using the
Internal Revenue Code limitation on earnings that may be used in computing
a benefit. The earnings limitation is subject to a transition rule that
preserves benefits accrued as of December 31, 1993 based on higher
compensation levels. Messrs. Gottwald and Scher have annual accrued
benefits of $49,718 and $13,571, respectively, under that transition rule.
(3) Final-Average Earnings is the average of the highest three consecutive
calendar year's earnings (base earnings plus 50% of bonuses) during the
ten consecutive years immediately preceding the date of determination. The
current compensation covered under the Pension Plan for each of the
executive officers named in the Summary Compensation Table is $160,000. As
of December 31, 1999, the compensation considered under the Restoration
Plan for each of the executive officers named in the Summary Compensation
Table is as follows: John D. Gottwald, $426,958; Norman A. Scher,
$381,597; Douglas R. Monk, $260,850; Anthony J. Rinaldi, $231,352; and
Michael W. Giancaspro, $212,900.
(4) The years of pension benefit service for each of the executive officers
named in the Summary Compensation Table are: John D. Gottwald, 21; Norman
A. Scher, 10; Douglas R. Monk, 23; Anthony J. Rinaldi, 23; and Michael W.
Giancaspro, 19.
Compensation of Directors
Each member of the Board who was not an employee of Tredegar or any of its
subsidiaries was paid $1,000 for attendance at each of the Board meetings held
in 1999. Each director was paid $750 for each Board committee meeting attended
prior to May 20, 1999. Effective May 20, 1999, the committee meeting fee was
increased to $1,000 per meeting. Each chairperson of a Board committee
received an additional $250 for attendance at each meeting of his or her
committee. A director who participated in a Board or committee meeting by
telephone was paid $250 for that meeting. In addition, each director was paid
a quarterly fee of $3,600 for the first two quarters and $4,400 for each
subsequent quarter during 1999. Employee members of the Board are not paid
separately for their service on the Board.
Consulting Agreement with Richard W. Goodrum
Tredegar has a consulting agreement with Richard W. Goodrum, who retired as
Executive Vice President and Chief Operating Officer of Tredegar on March 31,
1996. Under the terms of that agreement, Mr. Goodrum continues to serve on
Tredegar's Executive and Management Committees and provides other services to
Tredegar. As compensation, Tredegar pays Mr. Goodrum $30,000 annually. The
agreement automatically renews for one-year periods on March 31st of each
year, unless Mr. Goodrum or Tredegar terminates the agreement at least 30 days
before the expiration of the then-current term of the agreement.
10
<PAGE>
Compensation Committee Report on Executive Compensation
Tredegar's Executive Compensation Committee (the "Committee") is comprised
of three independent directors. No Committee member is a current or former
employee of Tredegar or any of its subsidiaries. The Committee's role is to
review and approve practices and policies related to compensation primarily
for executive officers, including those officers listed in this proxy
statement.
Compensation Philosophy
The Committee's philosophy is based on the principle that executive
compensation plans should be designed and administered to motivate and retain
highly qualified executives, with incentives linked closely to financial
performance and enhanced shareholder value. Control of all fixed costs is
critical to Tredegar's continued success. Controlling compensation costs
requires a significant portion of compensation increases to be closely linked
to performance and, therefore, variable in nature. However, Tredegar should
remain competitive with salaries.
Base Salaries
In determining base salaries, Tredegar identifies a reasonable range around
the average for comparable executive positions in a comparison group of
companies. Actual officer salaries are generally set within this range based
on individual performance and experience. Annual salary increases are
considered. The amount of such increases is based on a variety of factors
including average increases in comparison companies, individual performance
(evaluated subjectively), the officer's position in the pay range, Tredegar's
financial condition, and other variable components of compensation.
The comparison company group for compensation is generally not the same as
the published industry index that appears in the performance graph of this
proxy statement because index companies are not necessarily viewed as direct
competitors for executive talent. Comparison companies are chosen, and
information on pay evaluated, with the assistance of independent consultants.
The 1999 base salary for the Chief Executive Officer (CEO) was $365,208.
This salary is below the average for the comparison group.
Bonuses
Although bonus awards for corporate executives are generally discretionary,
the bonus portion of compensation is tied to an assessment of performance.
Division executives' bonuses are linked directly by formula to specific
division performance measures. In such cases, economic profit added is the
most widely used and most heavily weighted measure. In other cases, a broad
range of financial measures as well as progress on strategic issues are
reviewed.
In 1999, total bonuses paid to executive officers were approximately 27%
less than the 1998 amount.
The Committee awarded the CEO a bonus of $100,000, which was $35,000 less
than the amount awarded in 1998. In 1999, 21.5% of the CEO's total cash
compensation was comprised of incentive cash compensation, compared with 27.4%
in 1998. Both 1999 and 1998 incentive cash percentages were below market
averages.
Stock Options
Stock options are considered an important part of compensation at Tredegar.
As of February 1, 2000, 1,553 employees had stock options. Over time the stock
price reflects Management's performance. Through the options granted,
employees and shareholder interests are more closely tied.
11
<PAGE>
Tredegar has one stock incentive plan available for awards to executive
officers and other employees and individuals providing valuable services to
Tredegar or its subsidiaries (the "SIP"). Each year the Committee considers
granting awards under the SIP. Consistent with the objective of closely
aligning executives' interests with those of Tredegar shareholders, the SIP
enables the Committee to grant stock options and shares of restricted stock.
The Committee determines the terms and conditions of any options or restricted
stock granted.
Executive officers as a group were granted options for 170,000 shares on a
discretionary basis on January 5, 2000, 85,000 at fair market value on the
grant date ($19.75 per share) and 85,000 at 15% above fair market value on the
grant date ($22.72 per share). The CEO was granted options for 22,000 shares
at fair market value and 22,000 shares at 15% above fair market value.
Corporate Tax Considerations
A law, effective in 1994, disallows corporate tax deductions for executive
compensation in excess of $1 million for "proxy table" executives. This law,
covered in Internal Revenue Code Section 162(m), allows certain exemptions to
the deduction cap, including pay programs that depend on formulas and,
therefore, are "performance-based" rather than discretionary.
While significant parts of Tredegar's compensation program are
discretionary, the Company is not currently in danger of losing deductions
under Code Section 162(m). The Committee will carefully review any
compensation plan or action that would result in the disallowance of
compensation deductions. The Committee will consider a variety of factors,
including the amount of any deductions that may be lost.
Executive Compensation Committee:
Richard L. Morrill, Chairman
Phyllis Cothran
Emmett J. Rice
February 22, 2000
12
<PAGE>
Comparative Company Performance
The following graph compares cumulative total returns for Tredegar, the S&P
Small Cap 600(R) Stock Index, and the S&P Manufacturing (Diversified
Industries), a nationally recognized industry index, since December 31, 1994.
The comparison assumes $100 was invested on December 31, 1994, with dividends
reinvested.
[GRAPH]
<TABLE>
<CAPTION>
Fiscal Year Ended December 31
-----------------------------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
TREDEGAR.......................................... $100 $188 $353 $583 $602 $557
S&P SMALL CAP 600(R).............................. 100 130 158 198 195 220
S&P MFG........................................... 100 141 194 231 268 329
</TABLE>
DESIGNATION OF AUDITORS
The Board has designated PricewaterhouseCoopers LLP, certified public
accountants, as Tredegar's independent auditors for the year 2000, subject to
shareholder approval. This firm has audited Tredegar's financial statements
since Tredegar became an independent company. A representative of
PricewaterhouseCoopers LLP is expected to be present at the meeting. This
representative will have an opportunity to make a statement to the
shareholders and will be available to answer questions.
PricewaterhouseCoopers LLP's main function is to audit the consolidated
financial statements of Tredegar and its subsidiaries and, in connection with
the audit, to review related filings with the Securities and Exchange
Commission and to conduct limited reviews of the unaudited financial
statements included in each of Tredegar's quarterly reports.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE DESIGNATION OF
PRICEWATERHOUSECOOPERS LLP AS AUDITORS.
13
<PAGE>
PROPOSALS FOR 2001 ANNUAL MEETING
The regulations of the Securities and Exchange Commission require any
shareholder wishing to make a proposal to be acted upon at the 2001 annual
meeting of shareholders to present the proposal to Tredegar at its principal
office in Richmond, Virginia, no later than November 27, 2000. Written
proposals received by that date will be considered for inclusion in Tredegar's
proxy statement.
Tredegar's By-laws also require any shareholder wishing to make a proposal
to be acted on at an annual meeting to give written notice to the Secretary of
Tredegar no later than ninety days before the meeting. The notice must contain
(i) a brief description of the business to be brought before the annual
meeting (including the specific proposal to be presented) and the reasons for
addressing it at the annual meeting, (ii) the name, record address, and class
and number of shares beneficially owned by the shareholder proposing such
business, and (iii) any material interest of the shareholder in such business.
ANNUAL REPORT ON FORM 10-K
Tredegar will provide without charge to each person to whom this Proxy
Statement has been delivered, on the written request of any such person, a
copy of Tredegar's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, including the financial statements and financial statement
schedules. Requests should be directed to Tredegar Corporation, 1100 Boulders
Parkway, Richmond, Virginia, 23225, Attention: Corporate Secretary. A list of
exhibits to the Form 10-K, showing the cost of each, will be delivered with
the copy of the Form 10-K. Any of the exhibits will be provided upon payment
of the charge noted on the list.
OTHER MATTERS
The Board is not aware of any matters to be presented for action at the
annual meeting of shareholders other than as described in this Proxy
Statement. However, if any other matters are properly raised at the meeting or
in any adjournment of the meeting, the person or persons voting the proxies
will vote them in accordance with their best judgment.
By Order of the Board of Directors
Nancy M. Taylor, Secretary
14
<PAGE>
NOTICE
and
PROXY STATEMENT
for
ANNUAL MEETING
of
SHAREHOLDERS
May 24, 2000
[LOGO OF TREDEGAR CORPORATION]
1100 Boulders Parkway
Richmond, Virginia 23225
<PAGE>
TREDEGAR CORPORATION
Richmond, Virginia
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 2000
The undersigned hereby appoints D. Andrew Edwards, Norman A. Scher and
Nancy M. Taylor, or any of them, with full power of substitution in each,
proxies (and if the undersigned is a proxy, substitute proxies) to vote all
shares of stock of Tredegar Corporation that the undersigned is entitled to vote
at the annual meeting of shareholders to be held on May 24, 2000, and at any and
all adjournments of the meeting.
In their discretion, the Proxies are authorized to vote upon such other
business and matters incident to the conduct of the meeting as may properly come
before the meeting.
This Proxy is solicited on behalf of the Board of Directors. This Proxy,
when properly executed, will be voted in the manner directed in this Proxy by
the undersigned shareholder. If no direction is made, this Proxy will be voted
for Proposals 1 and 2.
Please sign and date on the reverse side
<PAGE>
[X] Please mark your
votes as in this
example using
dark ink only
FOR WITHHOLD
all nominees listed AUTHORITY
below (except as to vote for all of the
otherwise indicated) nominees listed below
1. ELECTION OF [_] [_]
DIRECTORS
FOR AGAINST ABSTAIN
2. The proposal to approve the designation [_] [_] [_]
of PricewaterhouseCoopers LLP as the
auditors for Tredegar for 2000
Austin Brockenbrough, III, William M. Gollwald, Richard L. Morrill and Norman A.
Scher
INSTRUCTION: To withhold authority to vote for any such nominees write the
nominee's name on the line provided below
- --------------------------------------------------------------------------------
Dated: , 2000 Dated: ,2000
- ------------------- ------------ --------------- -----------
SIGNATURE SIGNATURE
IF HELD
JOINTLY
Please sign name exactly as it appears on the stock certificate. Only one of
several joint owners need sign. Fiduciaries should give full title.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.
