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 Sec. 240.14a-11(c) or Sec. 240.14a-12
BUCKEYE CELLULOSE CORPATION
(Name of Registrant as Specified in Its Charter)
_______________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) or Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
____________________________________________________________________
(2) Aggregate number of securities to which transactions applies:
____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
____________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
(5) Total fee paid:
____________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
____________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
____________________________________________________________________
(3) Filing party:
____________________________________________________________________
(4) Date filed:
____________________________________________________________________
<PAGE>
[LOGO]
October 2, 1996
TO THE STOCKHOLDERS OF BUCKEYE CELLULOSE CORPORATION
In connection with the Annual Meeting of Stockholders of your
Corporation to be held on November 1, 1996, we enclose a Notice of Annual
Meeting of Stockholders, a proxy statement, and a form of proxy.
The shareholders are being asked to elect two Class I directors to serve
until the Annual Meeting of Stockholders in 1999 or until their successors are
duly elected and qualified and to ratify the appointment of Ernst & Young LLP as
the Corporation's independent accountants and auditors for fiscal 1997.
Information about these matters is contained in the attached proxy statement.
Detailed information relating to the Corporation's activities and
operating performance during fiscal 1996 is contained in the Annual Report to
Stockholders of the Corporation, which is being mailed to you with this proxy
statement, but is not a part of the proxy soliciting material. If you do not
receive or have access to the form of proxy or the 1996 Annual Report, please
notify Mimi Hall, Buckeye Cellulose Corporation, 5395 Estate Office Drive, Suite
1, Memphis, Tennessee 38119-3636, (901) 682-1360.
You are cordially invited to attend the Annual Meeting of Stockholders
in person. We would appreciate your completing the enclosed form of proxy so
that your shares can be voted in the event you are unable to attend the meeting.
If you are present at the meeting and desire to vote your shares personally,
your form of proxy will be withheld from voting upon your request prior to
balloting. We urge you to return your proxy card in the enclosed envelope as
soon as possible.
Sincerely yours,
Robert E. Cannon
Chairman and Chief Executive Offficer
<PAGE>
BUCKEYE CELLULOSE CORPORATION
1001 Tillman Street
Memphis, TN 38108
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 1, 1996
Notice is hereby given that the Annual Meeting of Stockholders of
Buckeye Cellulose Corporation (the "Company"), will be held on November 1, 1996,
at 4:00 P.M., local time, at the Dixon Gallery & Gardens, 4339 Park Avenue,
Memphis, Tennessee 38117, for the following purposes:
1. To elect two Class I directors to serve a three-year term, or
until their successors have been duly elected and qualified.
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent accountants and auditors for fiscal 1997.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on September 5, 1996 are
entitled to notice of and to vote at the Annual Stockholders' Meeting.
By Order of the Board of Directors
Henry P. Doggrell
Secretary
IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE MARK, SIGN, DATE
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE.
<PAGE>
BUCKEYE CELLULOSE CORPORATION
1001 TILLMAN STREET
MEMPHIS, TN 38108
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 1, 1996
INFORMATION CONCERNING THE SOLICITATION
This statement is furnished in connection with the solicitation of
proxies to be used at the Annual Meeting of Stockholders (the "Annual Meeting")
of Buckeye Cellulose Corporation (the "Company") to be held on November 1, 1996
at 4:00 P.M., local time, at Dixon Gallery & Gardens, 4339 Park Avenue, Memphis,
Tennessee 38117 and at any adjournment or adjournments thereof.
At the Annual Meeting, the stockholders will vote to elect two Class I
directors and to ratify the appointment of Ernst & Young LLP as the Company's
independent accountants and auditors for fiscal 1997. The affirmative vote of a
plurality of the shares present or represented at the meeting, if a quorum
exists, is required to elect the directors and to ratify the appointment of
Ernst & Young LLP as the Company's independent accountants and auditors for
fiscal 1997. Except with respect to cumulative voting for directors, the holder
of each share of the Company's common stock (the "Common Stock") is entitled to
one vote on all matters submitted before the Annual Meeting or any adjournments
of the Annual Meeting. The Company's Amended and Restated Charter provides for
cumulative voting in the election of directors. Each holder of the Common Stock
(i) is entitled to the number of votes equal to the product of the number of
shares of Common Stock held by such holder multiplied by the number of directors
to be elected and (ii) may cast all of such votes for a single director or may
distribute them among any number of the directors to be voted for as such holder
may see fit. The presence in person or by proxy of the holders of a majority of
the issued and outstanding shares of the Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum.
Stockholders are urged to sign the enclosed form of proxy and return it
promptly in the envelope enclosed for that purpose. Proxies will be voted in
accordance with the stockholders' directions. If no directions are given,
proxies will be voted FOR the election of the nominees named herein as directors
and FOR the ratification of the appointment of Ernst & Young LLP as the
Company's independent accountants and auditors for fiscal 1997.
The Board of Directors knows of no other business to be presented at the
Annual Meeting. If any other business is properly presented, the persons named
in the enclosed proxy will use their discretion in voting the shares. The proxy
may be revoked at any time prior to the voting thereof by written request to the
Company at 1001 Tillman Street, Memphis, Tennessee 38108, Attention: Henry P.
Doggrell, Secretary. The proxy may also be revoked by submission to the Company
of a more recently dated proxy. The giving of the proxy will not affect the
right of a stockholder to attend the Annual Meeting and vote in person.
The solicitation of proxies in the enclosed form is made on behalf of
the Board of Directors of the Company. The entire cost of soliciting these
proxies will be borne by the Company. In addition to being solicited through the
mails, proxies may be solicited personally or by telephone, facsimile or
telegraph by officers, directors and employees of the Company who will receive
no additional compensation for such activities. Arrangements will also be made
with brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation materials to the beneficial owners of shares held of record by such
persons, who will be reimbursed for their reasonable expenses incurred in such
connection. It is expected that this proxy statement will first be sent to
stockholders on October 2, 1996.
<PAGE>
STOCKHOLDERS' PROPOSALS FOR 1997 ANNUAL MEETING
Stockholders' proposals intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company no later than July 1,
1997 for inclusion in the Company's proxy statement and form of proxy relating
to that meeting.
OUTSTANDING VOTING SECURITIES
Only stockholders of record on September 5, 1996, are entitled to notice
of and to vote at the Annual Meeting. On that date there were 19,311,498 shares
of Common Stock issued and outstanding. Except with respect to cumulative voting
for directors, the holder of each share of Common Stock is entitled to one vote
on all matters submitted before the Annual Meeting or any adjournments of the
Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of September 5, 1996, the Company's records indicated that the
following number of shares were beneficially owned by (i) each person known by
the Company to beneficially own more than 5% of the Company's shares; (ii)
directors and persons nominated to become directors of the Company and executive
officers; and (iii) directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS(1)
<S> <C> <C> <C>
(i) Robert E. Cannon(2)..................... 5,059,816 26.2%
1001 Tillman Street
Memphis, TN 38108
R. Howard Cannon, Trustee(3)........... 4,627,349 24.0
432 East Racquet Club Place
Memphis, TN 38117
David B. Ferraro(4)..................... 1,246,474 6.5
1001 Tillman Street
Memphis, TN 38108
(ii) Robert E. Cannon(2)..................... 5,059,816 26.2
David B. Ferraro(4)..................... 1,246,474 6.5
Herman P. van Eck(5).................... 271,364 1.4
George B. Ellis(6) ..................... 376,678 2.0
R. Howard Cannon(3).................... 4,627,349 24.0
Red Cavaney(7).......................... 5,600 *
Henry F. Frigon(7)...................... 7,000 *
Samuel M. Mencoff(7)(8)................. 762,222 3.9
Harry J. Phillips, Sr.(7)............... 19,500 *
(iii) Directors and Executive Officers as a group 7,748,654 40.0
(9 persons)(9) .........................
</TABLE>
* Less than 1%.
(1) Unless otherwise indicated, beneficial ownership consists of sole voting and
investing power based on 19,311,498 shares issued and outstanding. Options to
purchase an aggregate of 80,000 shares are exercisable or become exercisable
within 60 days. Such shares are deemed to be outstanding for purpose of
computing the percentage of outstanding shares owned by such person but are not
deemed to be outstanding for the purpose of computing the percentage owned by
any other person.
- 2 -
<PAGE>
(2) Includes 2,313,559 shares held by the Robert E. Cannon Grantor Retained
Annuity Trust, R. Howard Cannon, Trustee; 2,313,790 shares held by the Kathryn
Gracey Cannon Grantor Retained Annuity Trust, R. Howard Cannon, Trustee; 37,508
shares held by Kathryn Gracey Cannon, as to which Mr. Cannon disclaims voting
and investing power; 4,117 shares held in the Company's 401(k) and retirement
plans and 32,500 shares issuable upon the exercise of options, which options
become exercisable within 60 days. Kathryn Gracey Cannon is the wife of, and R.
Howard Cannon is the son of, Robert E. Cannon. The address of each such trust is
432 East Racquet Club Place, Memphis, Tennessee 38117.
(3) Includes 2,313,559 shares held by the Robert E. Cannon Grantor Retained
Annuity Trust, R. Howard Cannon, Trustee, and 2,313,790 shares held by the
Kathryn Gracey Cannon Grantor Retained Annuity Trust, R. Howard Cannon, Trustee
(4) Incudes 509,882 shares held by the David B. Ferraro Grantor Retained Annuity
Trust, Barbara A. Ferraro, Trustee; 3,565 shares held in the Company's 401(k)
and retirement plans and 10,000 shares issuable upon the exercise of options,
which options become exercisable within 60 days. Barbara A. Ferraro is the wife
of David B. Ferraro.
(5) Includes 12,500 shares issuable upon the exercise of options, which options
become exercisable within 60 days.
(6) Includes 1,220 shares held in the Company's 401(k) and retirement plans and
5,000 shares issuable upon the exercise of options, which options become
exercisable within 60 days.
(7) Includes 5,000 shares issuable upon exercise of options granted under the
Company's Stock Option Plan for Non-Employee Directors (the "Formula Plan").
(8) 200,000 shares are held of record by Madison Dearborn Capital Partners, a
limited partnership ("MDCP"). Madison Dearborn Partners, L.P. ("MDP"), the
general partner of MDCP is the holder of record of 557,222 shares. Investment
and voting control over securities owned by MDCP is shared by a committee of the
limited partners of MDP (the "L.P. Committee"). Madison Dearborn Partners, Inc.
is the general partner of MDP and exercises voting control over securities owned
directly or indirectly by MDP. Mr. Mencoff is a member of the L.P. Committee and
expressly disclaims beneficial ownership of such shares of Common Stock. The
address of MDCP is Three First National Plaza, Suite 1330, Chicago, Illinois
60602.
(9) Includes an aggregate of 80,000 shares issuable upon exercise of options
granted under the Formula Plan and the Amended and Restated 1995 Management
Incentive and Nonqualified Stock Option Plan (the "1995 Option Plan").
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, each class to be
elected for three-year terms. At the Annual Meeting, two directors in Class I
are nominees for election to hold office for a three-year term or until their
successors are elected and qualified. If any nominee should be unable to accept
nomination or election as a director, which is not expected, the proxies may be
voted with discretionary authority for a substitute designated by the Board of
Directors. The election of a director requires the affirmative vote of a
plurality of shares present or represented at the meeting. The Company's Amended
and Restated Charter provides for cumulative voting. Each holder of Common Stock
(i) is entitled to the number of votes equal to the product of the number of
shares of Common Stock held by such holder multiplied by the number of directors
to be elected and (ii) may cast all of such votes for a single director or may
distribute them among any number of the directors to be voted for as such holder
may see fit.
The Board of Directors of the Company recommends the election of the
following nominees:
CLASS I (TERM EXPIRING 1999)
R. Howard Cannon
Harry J. Phillips, Sr.
- 3 -
<PAGE>
The following table sets forth certain information regarding each of the
Company's directors and executive officers:
NAME AGE POSITION
Robert E. Cannon............. 66 Chairman of the Board, Chief Executive
Officer and Director
David B. Ferraro............. 58 President, Chief Operating Officer
and Director
Herman P. van Eck............ 65 Vice President, Sales
George B. Ellis.............. 56 Vice President, Manufacturing
R. Howard Cannon............. 34 Director
Red Cavaney.................. 53 Director
Henry F. Frigon.............. 61 Director
Samuel M. Mencoff ........... 40 Director
Harry J. Phillips, Sr........ 66 Director
The Board currently consists of seven directors, who are divided into
three classes, as nearly equal in number as possible. At each annual meeting of
stockholders, successors to the class of directors whose term expires at such
meeting will be elected to serve for three-year terms or until their successors
are duly elected and qualified. Currently serving as Class I directors are
Messrs. Phillips and R. Howard Cannon, as Class II directors are Messrs. Cavaney
and Ferraro and as Class III directors are Messrs. Frigon, Mencoff and Robert E.
Cannon. The terms of Class I, Class II and Class III are scheduled to expire in
1996, 1997 and 1998, respectively. The Board has the power to appoint the
officers of the Company. Each officer will hold office for such term as may be
prescribed by the Board and until such person's successor is chosen and
qualified or until such person's death, resignation or removal. There are two
committees of the Board: the Compensation Committee and the Audit Committee.
Currently, Messrs. Phillips (Chairman), Mencoff and Frigon serve on the
Compensation Committee and Messrs. Mencoff (Chairman), Cavaney and Phillips are
members of the Audit Committee.
ROBERT E. CANNON has served as Chairman and Chief Executive Officer of
the Company since March 1993. Prior to March 1993, Mr. Cannon served as Dean of
the College of Management, Policy and International Affairs at Georgia Tech from
1991 through 1992. Mr. Cannon retired from The Procter & Gamble Company,
("Procter & Gamble") in 1991 as a Senior Vice President, a position he had
occupied since 1989. From 1981 through 1989, Mr. Cannon served as Group Vice
President of Procter & Gamble Industrial Products, a division which included the
operations of the Cellulose & Specialties Division of Procter & Gamble ("C&S
Division"). Mr. Cannon also served as President of the C&S Division from 1971
through 1981 and joined Procter & Gamble in 1954.
DAVID B. FERRARO has served as President and Chief Operating Officer of
the Company since March 1993. Prior to March 1993, Mr. Ferraro served as Manager
of Strategic Planning of Procter & Gamble from 1991 through 1992. Mr. Ferraro
served as the C&S Division's President from 1989 through 1991, as its Executive
Vice President and Manager of Commercial Operations from 1987 through 1989 and
as its Comptroller from 1973 through 1986. Mr. Ferraro joined Procter & Gamble
in 1964 and has held various management positions in that company.
HERMAN P. VAN ECK has served as Vice President, Sales of the Company
since March 1993. Mr. van Eck served as Manager of European Sales of the C&S
Division from 1988 until March 1993. Mr. van Eck joined Procter & Gamble in 1957
and has held various sales management positions.
- 4 -
<PAGE>
GEORGE B. ELLIS has served as Vice President, Manufacturing of the
Company since March 1993. Previously, Mr. Ellis had served as Vice President,
Product Supply of the C&S Division since 1988. Mr. Ellis joined Procter & Gamble
in 1962 and has held various engineering, operations and manufacturing
management positions in the C&S Division.
R. HOWARD CANNON has served as a Director of the Company since September
1996. Mr. Cannon serves as President of Dryve, Inc. which operates 24 dry
cleaning operations. Mr. Cannon received a degree in Industrial Management from
Georgia Institute of Technology in 1984. He serves as the sole trustee of the
Robert E. Cannon and Kathryn G. Cannon Grantor Retained Annuity Trusts. R.
Howard Cannon is the son of Robert E. Cannon.
RED CAVANEY has served as a Director of the Company since May 1996. Mr.
Cavaney currently acts as President, Chief Executive Officer and a director of
the American Plastics Council, positions he has held since October 1994. Prior
to that time, he served as President of the American Forest & Paper Association
("AF&PA") since its formation in January 1993 and in a variety of positions,
including as President, of the AF&PA's predecessor, the American Paper
Institute, since March 1983. Mr. Cavaney is also a member of the board of
directors of The National Plastics Center & Museum, the American Society of
Association Executives and the Institute for Research on the Economics of
Taxation.
HARRY F. FRIGON has served as a Director of the Company since May 1996.
He currently serves as Interim Chairman of CompuServe, Inc. Mr. Frigon served as
Executive Vice President-Corporate Development and Strategy and as Chief
Financial Officer of Hallmark Cards, Inc. from 1991 to 1995. Prior to that time,
he served as President and Chief Executive Officer of BATUS Inc. beginning in
1983. Mr. Frigon is also a member of the board of directors of H&R Block Inc.,
CompuServe, Inc., Dimon International Inc., and Group Technologies Corp.
SAMUEL M. MENCOFF has served as a Director of the Company since March
1993, having been reelected to the Board in September 1996 as an independent
Class III director following a secondary offering of Company Common Stock by
MDCP in July 1996. Mr. Mencoff has been principally employed as a Vice President
of Madison Dearborn Partners, Inc., the general partner of Madison Dearborn
Partners, L.P. ("MDP"), the general partner of MDCP, since January 1993. From
November 1987 until January 1993, Mr. Mencoff served as Vice President of First
Chicago Venture Capital. Mr. Mencoff is a member of the operating committees of
the general partners of Huntway Partners, L.P. and Golden Oak Mining Company,
L.P., respectively, and a member of the board of directors of Bay State Paper
Holding Company, Riverwood International Corporation, A.J. Land Company and
Harvard Gold Mining Company.
HARRY J. PHILLIPS, SR. has served as a Director of the Company since May
1996. Mr. Phillips currently acts as Chairman of the Executive Committee of the
board of directors of Browning-Ferris Industries, Inc., a position he has held
since 1988. Prior to that time, he served as Chairman and Chief Executive
Officer of Browning-Ferris Industries, Inc. Mr. Phillips is also a member of the
board of directors of National Commerce Bancorporation, National Bank of
Commerce and RFS Hotel Investors, Inc.
- 5 -
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is comprised of
three Directors who are not employees of the Company. The Committee is
responsible for establishing and administering the Company's executive
compensation plan.
COMPENSATION PHILOSOPHY AND STRUCTURE
The Compensation Committee believes that executive compensation should
be heavily influenced by the Company's financial performance. Total compensation
levels are designed to attract, retain and reward executives who contribute to
the long-term success of the Company. Compensation for Company executives is
comprised of three principal components: salary and benefits, annual incentive
bonus compensation and long-term, equity-based incentive compensation.
The Company seeks to provide salary and benefit levels that are
comparable to companies that perform similarly. Salary targets are established
for various officer positions based on surveys of relevant industries conducted
by outside compensation consultants. Utilizing these targets, individual
salaries are established based on individual performance in meeting Company
objectives.
During 1996, the Company paid bonuses averaging 7.5% of base salary to
all employees, including officers, under a broad-based profit sharing plan for
all employees. This profit sharing plan provides for bonuses of up to 15% of
base salary contingent upon the Company's business performance as defined by
meeting specific annual financial targets.
The Company also made payments under an annual incentive bonus plan for
officers and certain management employees during 1996. This plan allows
participants to be awarded additional bonuses related to the compensation
surveys referred to above, individual performance and the Company's business
performance.
In addition, during 1996, the Company made long-term incentive awards in
the form of stock options to officers and certain managers. The purpose of these
awards is to focus the attention of its officers on the long-term performance of
the business and to strengthen the alignment of stockholder and management
interests in share price appreciation.
CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING OFFICER
Policies with respect to the compensation of the Chief Executive Officer
and Chief Operating Officer are essentially the same as those for other
officers, except that their compensation is directly established by the
Compensation Committee. The annual compensation and incentive bonuses of the
Chief Executive Officer and the Chief Operating Officer for 1996 reflect the
Company's overall excellent performance during 1996.
COMPENSATION COMMITTEE:
HARRY J. PHILLIPS, SR., CHAIRMAN
HENRY F. FRIGON
SAMUEL M. MENCOFF
INFORMATION REGARDING MEETINGS OF DIRECTORS AND COMPENSATION OF DIRECTORS
During the last fiscal year, the Board of Directors held five meetings.
No director attended less than 75% of the meetings held during his term in
fiscal 1996. Directors who are employees of the Company are not entitled to
receive any fees for serving as directors. Non-employee directors are not
entitled to receive fees for serving as
- 6 -
<PAGE>
directors; however, pursuant to the Company's Stock Option Plan for Non-Employee
Directors, Messrs. Cavaney, Frigon, Mencoff and Phillips, as independent
directors, received a grant of options to acquire 25,000 shares of Common Stock
at the prevailing market price at the time of the grant, with options to acquire
5,000 shares having vested on the date of the grant and the remainder vesting
equally over the next four anniversary dates of the grant. All directors are
reimbursed for out-of-pocket expenses related to their services as directors.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the annual and
long-term compensation paid or deferred by the Company to or for the account of
the Chief Executive Officer of the Company and the three other most highly
compensated executive officers for each of fiscal years 1996, 1995 and 1994 (the
"named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------- -------------------
Awards
--------------------
Fiscal Securities underlying All other compensation
Name and Position Year Salary ($) Bonus ($) Options/SARS (#)(1) ($)(2)
- -------------------------- ------ ----------- ------------ ------------------- -------------
<S> <C> <C> <C> <C> <C>
Robert E. Cannon ............... 1996 $475,000 $320,625 65,000 $78,322
Chairman and Chief Executive . 1995 428,625 275,149 -- 67,681
Officer ...................... 1994 356,708 243,003 22,500 53,506
David B. Ferraro ............... 1996 $389,423 $253,125 50,000 $63,972
President and Chief Operating 1995 355,451 215,057 -- 57,086
Officer ...................... 1994 257,958 172,927 9,100 38,694
Herman P. van Eck(3) ........... 1996 $410,522 $ 80,115 25,000 $71,733
Vice President, Sales ........ 1995 385,986 82,985 -- 75,927
1994 277,435 102,707 2,500 50,046
George B. Ellis ................ 1996 $237,821 $ 67,188 25,000 $38,989
Vice President, .............. 1995 222,275 70,106 -- 35,366
Manufacturing ................ 1994 183,077 91,880 2,500 27,461
</TABLE>
(1) The options granted in 1996 were pursuant to the 1995 Stock Option Plan.
The options granted in 1994 were granted under the 1994 Incentive Stock
Option Plan for Management Employees of Buckeye Cellulose Corporation
(the "1994 Option Plan") and the 1994 Incentive Stock Option Plan for
Management Employees of Buckeye Florida Corporation (the "Florida Option
Plan"). All options granted under the 1994 Option Plan and the Florida
Option Plan have been exercised. Subsequently, the 1994 Option Plan and
the Florida Plan were terminated.
(2) Amounts consist of accruals under the Buckeye Retirement Plan (the
"Retirement Plan") and the Buckeye Retirement Plus Savings Plan (the
"Retirement Plus Plan"), both of which are defined contribution
retirement plans covering substantially all employees. The Company
contributed 1% of the employee's base compensation plus 1/2% for each
year of service up to a maximum of 11% of the employee's base
compensation under the Retirement Plan. The Retirement Plus Plan
provides for additional contributions by the Company of 4% during years
when the Board, at its sole discretion, decides the Company has been
financially successful. For fiscal years 1996, 1995 and 1994,
contributions under the Retirement Plus Plan equalled; (i) in the case
of Mr. Cannon, $20,886, $18,048 and $14,268, respectively; (ii) in the
case of Mr. Ferraro, $17,059, $15,223 and $10,319, respectively; and
(iii) in the case of Mr. Ellis, $10,397, $9,431 and $7,323,
respectively. Amounts received by Mr. van Eck consist of accruals under
the Company's retirement plan in effect pursuant to Swiss statutory
requirements.
(3) Mr. van Eck's compensation (other than that granted in options) is paid
in Swiss francs. Amounts have been translated to U.S. dollars at the
rate of $1.00 to SF 0.8411 for 1996, $1.00 to SF 1.2489 for 1995 and
$1.00 to SF 1.433 for 1994.
- 7 -
<PAGE>
The following table discloses the grant of stock options in fiscal 1996
to the named executive officers.
OPTION GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------------
Percent of total Potential realizable value at
options granted to Exercise or b assumed annual rate of stock price
Options employees in fisal price ($/sh) appreciation for 10-yr option term
NAME granted (#) year Expiration date 5% ($) 10% ($)
- ------------------ ----------- ------------------ ------------ --------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Cannon.. 65,000 6.5% $18.50 11/22/05 $756,210 $1,916,395
David B. Ferraro.. 50,000 5.0 18.50 11/22/05 581,700 1,474,150
Herman P. van Eck. 25,000 2.5 18.50 11/22/05 290,850 737,075
George B. Ellis... 25,000 2.5 18.50 11/22/05 290,850 737,075
</TABLE>
The following table discloses, for the named executive officers,
information regarding stock options held at the end of or exercised in fiscal
1996 pursuant to the 1994 Option Plan, the Florida Option Plan and the 1995
Option Plan.
Aggregated Option/SAR Exercises in Last Fiscal Year
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Securities underlying Value of unexercised in-
Shares acquired Value unexercised options the-money options at
Name on Exercise (#)(1) Realized($)(2) at June 30, 1996 (3) June 30, 1996 ($)(3)(4)
- ------------------- ----------------- -------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
Robert E. Cannon... 271,146 $923,531 65,000 $536,250
David B. Ferraro... 242,348 841,650 50,000 412,500
Herman P. van Eck.. 60,234 205,156 25,000 206,250
George B. Ellis.... 64,283 218,950 25,000 206,250
</TABLE>
(1) Options were exercised in October 1995.
(2) The fair market value of $3.77 for the underlying shares of Common Stock
was determined by the Company based on an economic model established by
an independent appraiser.
(3) No options were exercisable at June 30, 1996.
(4) Based on $26.75 per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Phillips, Mencoff and Frigon served as members of the
Compensation Committee of the Board of Directors during fiscal 1996. No members
of the Committee are employees of the Company.
- 8 -
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder returns
since the Company's initial public offering in November 1995 with returns based
on the New York Stock Exchange (SIC 2600-2699 U.S. companies) index and the
index of S&P 500. The graph assumes $100 invested on November 22, 1995.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
CRSP Total Returns Index for: 11/22/95 12/29/95 03/29/96 06/28/96
- ----------------------------- -------- -------- -------- --------
Buckeye Cellulose Corporation 100.0 113.5 118.1 141.9
S&P 500 Stocks 100.0 103.1 108.8 113.7
NYSE Stocks (SIC 2600-2699 100.0 102.9 103.7 105.4
US Companies) Paper and
allied products
- 9 -
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company was party to a Corporate Services Agreement with Buckeye
Florida Limited Partnership, an affiliated company ("Buckeye Florida Partners"),
from March 1993 until November 1995 pursuant to which the Company provided
Buckeye Florida Partners with certain sales and administrative services. Under
this agreement, the Company performed all of the sales functions for Buckeye
Florida Partners' products and received a sales commission on certain of such
products. During fiscal 1996, prior to November 22, 1995, commission income
recorded by the Company on Buckeye Florida Partners' sales was approximately
$3.9 million. The Company also provided to Buckeye Florida Partners corporate
management, research, administrative and other services substantially similar to
those historically provided to Buckeye Florida Partners' plant in Perry, Florida
(the "Foley Plant"), by the C&S Division. Buckeye Florida Partners paid to the
Company an allocated cost of such services based upon the tonnage of pulp
shipped by the Foley Plant. During fiscal 1996, prior to November 22, 1995,
costs allocated to Buckeye Florida Partners for such services were approximately
$5.1 million. In November 1995, pursuant to the Company's initial public
offering of common stock, the Company was reorganized and Buckeye Florida
Partners became a wholly owned subsidiary of the Company (the "1995 Business
Combination Transactions"). All intercompany transactions have been eliminated
from the Company's financial statements.
Messrs. Cannon and Ferraro have each been issued Master Promissory Notes
by Union Planters National Bank (the "Bank"), both dated March 21, 1994, in the
amounts of approximately $2.3 million and $600,000, respectively, or such lesser
amounts as may be periodically requested by each of the respective noteholders.
Each of the notes is secured, pursuant to two security agreements between the
Bank and Buckeye Florida Partners dated the same date as the notes, by Bank
certificates of deposit in the name of Buckeye Florida Partners in the amounts
of approximately $2.3 million and $600,000, respectively. Both of the notes,
which mature on July 1, 1998, bear interest at a per annum rate equal to 200
basis points in excess of the respective amounts paid by the Bank on the
certificates of deposit used as collateral for the notes. Such rates are
automatically adjusted every six months to correspond with the adjustments made
at such time to the rates payable on the certificates of deposit. As security
for Buckeye Florida Partners' having provided these certificates of deposit as
collateral for the notes issued to Messrs. Cannon and Ferraro, Buckeye Florida
Partners has entered into Pledge and Security Agreements with each of Messrs.
Cannon and Ferraro, both dated March 22, 1994, pursuant to which such
individuals have pledged specified numbers of shares of Common Stock, together
with subsequently acquired shares, dividend and other rights with respect
thereto, to Buckeye Florida Partners. Subsequent to the 1995 Business
Combination Transactions, Messrs. Cannon and Ferraro have been required to
maintain only such shares of Common Stock as are necessary to provide a
collateral amount of at least 115% of the amount of the certificates of deposit
securing their respective note obligations. The pledge and security agreements
will terminate upon payment in full of all amounts payable in connection with
the notes.
In connection with the formation of Buckeye Florida Corporation, a
subsidiary of the Company, MDCP purchased a $4.0 million promissory note dated
March 16, 1993. On March 22, 1994, Buckeye Florida Corporation repaid to MDCP
approximately $4.0 million of principal and accrued interest on such note and
issued to MDCP a replacement promissory note of approximately $482,000. This
note, together with accrued interest thereon, was repaid in November 1995.
On July 2, 1996, BKI Investment Corp., a wholly owned subsidiary of the
Company, purchased 2,259,887 shares of Common Stock held by MDCP for $22.125 per
share.
- 10 -
<PAGE>
PROPOSAL 2. RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
COMPANY'S INDEPENDENT ACCOUNTANTS AND AUDITORS FOR FISCAL 1997
The Board of Directors has confirmed the appointment by the Audit
Committee of Ernst & Young LLP as the Company's independent accountants and
auditors for fiscal 1997. Ernst & Young LLP served as independent accountants
and auditors of the Company for the year ended June 30, 1996. Representatives of
the firm will be present at the Annual Meeting, have an opportunity to make a
statement if they so desire and are expected to be available to respond to
appropriate questions.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting is required to
ratify the appointment of Ernst & Young LLP as the Company's independent
accountants and auditors for fiscal 1997.
The Board of Directors recommends voting FOR ratification of the
appointment of Ernst & Young LLP as the Company's independent accountants and
auditors for fiscal 1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The federal securities laws require the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of any
securities of the Company. To the Company's knowledge, based solely on review of
the copies of such reports furnished to the Company and representations that no
other reports were required, during the year ended June 30, 1996, all of the
Company's officers and directors made all required filings.
OTHER MATTERS
The Board of Directors, at the time of the preparation of this Proxy
Statement, knows of no business to come before the meeting other than that
referred to herein. If any other business should come before the meeting, the
persons named in the enclosed Proxy will have discretionary authority to vote
all proxies in accordance with their best judgment.
UPON THE WRITTEN REQUEST OF ANY RECORD HOLDER OR BENEFICIAL OWNER OF
COMMON STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING, THE COMPANY, WITHOUT
CHARGE, WILL PROVIDE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
JUNE 30, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS
SHOULD BE DIRECTED TO MIMI HALL, BUCKEYE CELLULOSE CORPORATION, 5395 ESTATE
OFFICE DRIVE, SUITE 1, MEMPHIS, TENNESSEE 38119-3636, (901) 682-1360.
BY ORDER OF THE BOARD OF DIRECTORS
Memphis, Tennessee Henry P. Doggrell
October 2, 1996 Secretary
- 11 -
<PAGE>
PROXY
BUCKEYE CELLULOSE CORPORATION
1001 TILLMAN STREET, MEMPHIS, TN 38108
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Henry P. Doggrell, R. Neil O'Brien and David H.
Whitcomb, or any of them, with full power of substitution and revocation as
Proxy to vote all shares of stock standing in my name on the books of Buckeye
Cellulose Corporation (the "Company") at the close of business on September 5,
1996, which I would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held at the Dixon Gallery &
Gardens, 4339 Park Avenue, Memphis, TN 38117 on November 1, 1996, at 4:00 P.M.,
local time, and at any and all adjournments, upon the matters set forth in the
notice of said meeting. The Proxy is further authorized to vote in his
discretion as to any other matters which may come before the meeting. The Board
of Directors at the time of preparation of the Proxy Statement knows of no
business to come before the meeting other than that referred to in the Proxy
Statement.
THE SHARES COVERED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN BELOW AND WHEN NO INSTRUCTIONS ARE GIVEN WILL BE VOTED FOR
THE PROPOSALS DESCRIBED IN THE ACCOMPANYING NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT AND ON THIS PROXY.
(1) Election of two (2) Class I Directors. The Board of Directors
recommends a vote FOR the election of the nominees.
|_| FOR all nominees listed below:
Class I R. Howard Cannon
Harry J. Phillips, Sr.
|_| WITHHOLD AUTHORITY to vote for all nominees.
INSTRUCTION: To withhold authority to vote for any individual
nominee, write such nominee's name in the space provided below.
---------------------------------------------------------------
(2) To ratify the selection of Ernst & Young LLP as the Company's
independent accountants and auditors for the fiscal year 1997.
The Board of Directors recommends a vote FOR the proposal.
|_| For
|_| Against
|_| Abstain
The undersigned hereby acknowledges receipt of notice of said meeting and the
related Proxy Statement.
Dated: _______ __, 1996 Signed
[Label to be placed here] Signed
Stockholder signs here exactly as shown on the
label affixed hereto. Administrator, Trustee, or
Guardian, please give full title. If more than
one Trustee, all should sign. All Joint Owners
should sign.
Please indicate if you plan to attend the Stockholders' Meeting. ___Yes ___No
PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
