<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BUCKEYE TECHNOLOGIES INC.
- --------------------------------------------------------------------------------
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
BUCKEYE TECHNOLOGIES INC.
P.O. BOX 80407
1001 TILLMAN STREET
MEMPHIS, TENNESSEE 38108-0407
September 25, 1998
TO THE STOCKHOLDERS OF BUCKEYE TECHNOLOGIES INC.
You are cordially invited to attend the Annual Meeting of Stockholders of
Buckeye Technologies Inc. (the "Company") which will be held at Memphis Brooks
Museum of Art, Overton Park, 1924 Poplar Avenue, Memphis, Tennessee, on
Thursday, November 5, 1998, at 5:00 p.m., Central Time.
We have enclosed a Notice of Annual Meeting of Stockholders, a Proxy
Statement, and a Proxy. The matters listed in the Notice of Annual Meeting are
more fully described in the Proxy Statement.
It is important that your shares are represented and voted at the meeting,
regardless of the size of your holdings. Accordingly, we would appreciate your
completing the enclosed 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 Proxy can be revoked upon your request
prior to balloting. If you wish to personally vote at the meeting, but your
shares are held in the name of a broker, trust, bank or other nominee, you
should bring with you a Proxy or letter from the broker, trustee, bank or
nominee confirming your beneficial ownership of the shares.
We urge you to return your Proxy by mailing it in the enclosed postage-paid
envelope to be received no later than November 5, 1998, or by sending it to the
Company through a courier or by personal delivery no later than 12:00 noon,
Thursday, November 5, 1998.
Sincerely yours,
ROBERT E. CANNON SIG
Robert E. Cannon
Chairman and Chief Executive Officer
<PAGE> 3
BUCKEYE TECHNOLOGIES INC.
P.O. BOX 80407
1001 TILLMAN STREET
MEMPHIS, TENNESSEE 38108-0407
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 5, 1998
Notice is hereby given that the Annual Meeting of Stockholders of Buckeye
Technologies Inc. (the "Company") will be held Thursday, November 5, 1998, at
5:00 p.m., Central Time, at Memphis Brooks Museum of Art, Overton Park, 1924
Poplar Avenue, Memphis, Tennessee, for the following purposes:
1. To elect three Class III 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 1999.
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 15, 1998, are
entitled to notice of and to vote on all matters presented at the Annual Meeting
of Stockholders.
By Order of the Board of Directors
SHEILA JORDAN CUNNINGHAM SIG
Sheila Jordan Cunningham
Vice President, General Counsel and
Corporate Secretary
Dated: September 25, 1998
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING AND REGARDLESS OF THE
NUMBER OF SHARES YOU OWN, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE. YOU MAY NEVERTHELESS VOTE IN
PERSON IF YOU ATTEND THE ANNUAL MEETING.
<PAGE> 4
PROXY STATEMENT
BUCKEYE TECHNOLOGIES INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON NOVEMBER 5, 1998
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 Technologies Inc. (the "Company") to be held on Thursday, November 5,
1998 at 5:00 p.m., Central Time, at Memphis Brooks Museum of Art, Overton Park,
1924 Poplar Avenue, Memphis, Tennessee, and at any adjournment thereof.
At the Annual Meeting, the Company's stockholders will vote to elect three
Class III directors and to ratify the appointment of Ernst & Young LLP as the
Company's independent accountants and auditors for fiscal 1999. 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. The affirmative vote of a
majority of the shares present or represented at the meeting, if a quorum
exists, is required to ratify the appointment of Ernst & Young LLP as the
Company's independent accountants and auditors for fiscal 1999.
Each holder of common stock of the Company (the "Common Stock") is entitled
to one vote for each share held on all matters submitted before the Annual
Meeting and at any adjournment thereof. 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. Under Delaware law, stockholders who abstain from voting on a proposal
are treated as present and entitled to vote at the Annual Meeting and therefore
have the effect of a vote against the proposal. If shares of Common Stock are
held in the name of a broker, the failure of the broker to vote the shares is
treated as if the beneficial owner of such shares failed to vote such shares.
Stockholders are urged to sign the enclosed Proxy and return it promptly in
the envelope enclosed for that purpose. Proxies will be voted in accordance with
each stockholder's 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 1999.
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 P.O. Box 80407, 1001 Tillman Street, Memphis, Tennessee 38108-0407,
Attention: Sheila Jordan Cunningham, Vice President, General Counsel and
Corporate Secretary. The Proxy also may be revoked by submission to the Company
of a subsequently dated Proxy. Giving 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
Company's Board of Directors. The Company will bear the entire cost of
soliciting these proxies. In addition to being solicited through the mails,
proxies may be solicited personally or by telephone or facsimile by officers,
directors and employees of the Company who will receive no additional
compensation for such activities. Arrangements also will be made with brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of record of shares held 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 or
about September 25, 1998.
<PAGE> 5
OUTSTANDING VOTING SECURITIES
Only stockholders of record on September 15, 1998, are entitled to notice
of and to vote at the Annual Meeting. On that date there were 35,900,436 shares
of Common Stock issued and outstanding. A list of stockholders entitled to vote
on matters at the Annual Meeting will be available at the Company's headquarters
beginning on or about September 29, 1998.
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 three directors in Class III
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 by proxy.
The Board of Directors of the Company recommends voting FOR the election of
the following nominees:
NOMINEES FOR ELECTION AS
CLASS III DIRECTORS FOR A THREE-YEAR
TERM EXPIRING AT THE ANNUAL MEETING IN 2001
<TABLE>
<CAPTION>
DIRECTOR, YEAR FIRST PRINCIPAL OCCUPATION,
ELECTED AS DIRECTOR AGE BUSINESS AND DIRECTORSHIPS
-------------------- --- -------------------------------------------
<S> <C> <C>
Robert E. Cannon........................... 68 Chairman and Chief Executive Officer of the
1993 Company since March 1993; Dean of the
College of Management, Policy and
International Affairs at Georgia Tech from
1991 through 1992; Senior Vice President,
The Procter & Gamble Company ("Procter &
Gamble") from 1989 to 1991; Group Vice
President -- Industrial Products of Procter
& Gamble, which included the operations of
Buckeye Cellulose Corporation, a subsidiary
of Procter & Gamble ("Buckeye") from 1981
to 1989; President of Buckeye from 1971
through 1981.
Henry F. Frigon............................ 63 Private investor and consultant since 1995;
1996 Executive Vice President -- Corporate
Development and Strategy and Chief
Financial Officer of Hallmark Cards, Inc.
from 1991 to 1995; President and Chief
Executive Officer of BATUS Inc. from 1983
to 1991; a director of H&R Block Inc.,
CompuServe, Inc., Dimon International Inc.,
Sypris Solutions Inc. and C2i Inc.
Samuel M. Mencoff.......................... 41 Vice President of Madison Dearborn
1993 Partners, Inc. since January 1993; Vice
President of First Chicago Venture Capital
from 1987 to 1993; member of the operating
committee of the general partner of Golden
Oak Mining Company, L.P.; a director of
Huntway Refining Company, Bay State Paper
Holding Company and Riverwood International
Corporation.
</TABLE>
2
<PAGE> 6
CLASS II DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 2000
<TABLE>
<CAPTION>
DIRECTOR, YEAR FIRST PRINCIPAL OCCUPATION,
ELECTED AS DIRECTOR AGE BUSINESS AND DIRECTORSHIPS
-------------------- --- --------------------------
<S> <C> <C>
Red Cavaney................................ 55 President, Chief Executive Officer and
1996 Director of the American Petroleum
Institute, since October 1997; President,
Chief Executive Officer and a director of
the American Plastics Council from 1994 to
1997; prior to 1994, President of the
American Forest & Paper Association
("AF&PA") and President of the AF&PA's
predecessor, the American Paper Institute.
David B. Ferraro........................... 60 President and Chief Operating Officer of
1993 the Company since March 1993; Manager of
Strategic Planning of Procter & Gamble from
1991 through 1992; President of Buckeye
from 1989 through 1991; Executive Vice
President and Manager of Commercial
Operations of Buckeye from 1987 through
1989; Comptroller of Buckeye from 1973
through 1986; joined Procter & Gamble in
1964.
</TABLE>
CLASS I DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 1999
<TABLE>
<CAPTION>
DIRECTOR, YEAR FIRST PRINCIPAL OCCUPATION,
ELECTED AS DIRECTOR AGE BUSINESS AND DIRECTORSHIPS
-------------------- --- -------------------------------------------
<S> <C> <C>
R. Howard Cannon........................... 36 President of Dryve, Inc., a company
1996 consisting of 33 dry cleaning operations,
since 1987; Trustee of both the Robert E.
Cannon and the Kathryn G. Cannon Grantor
Retained Annuity Trusts. R. Howard Cannon
is the son of Robert E. Cannon.
Harry J. Phillips, Sr...................... 68 Chairman of the Executive Committee of the
1996 Board of Directors of Browning-Ferris
Industries, Inc. since 1988; former
Chairman and Chief Executive Officer of
Browning-Ferris Industries, Inc; a director
of National Commerce Bancorporation, RFS
Hotel Investors, Inc., Buckman
Laboratories, Inc. and Morgan Keegan &
Company, Inc.
</TABLE>
MEETINGS AND COMMITTEES
The Board of Directors of the Company conducted eight meetings (exclusive
of committee meetings) during fiscal 1998, and no director attended less than
75% of the meetings held during the period. The Board of Directors has an Audit
Committee and a Compensation Committee.
The Audit Committee of the Board is composed of Messrs. Samuel M. Mencoff,
Chairman, Red Cavaney and R. Howard Cannon, all of whom are non-employee
directors of the Company. The Audit Committee met five times during fiscal year
1998 with representatives of Ernst & Young LLP, the Company's independent
auditors, as well as with the persons within the Company responsible for
reviewing accounting, control, auditing and financial reporting matters. The
Audit Committee is responsible, among other things, for
3
<PAGE> 7
recommending to the Board the firm of independent accountants and auditors to be
retained by the Company, approving the services rendered by the professional
accounting and auditing firm, and reviewing the scope of the annual audit and
the reports and recommendations submitted by the independent auditing firm.
The Compensation Committee of the Board is composed of Messrs. Harry J.
Phillips, Sr., Chairman, Samuel M. Mencoff and Henry F. Frigon, all of whom are
non-employee directors of the Company. The Compensation Committee met six times
during fiscal year 1998. The Compensation Committee is responsible for
establishing and administering the Company's executive compensation plan and
developing policies and guidelines for administering the plan.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company are not entitled to receive any
fees for serving as directors. However, non-employee directors receive
director's fees in the amount of $20,000 per annum payable quarterly, in cash or
an equivalent amount of the Company's Common Stock, with the option provided to
each director to defer receipt of his fees and receive in lieu thereof upon the
expiration of his tenure as a member of the Board, a cash payment equal to the
number of shares of Common Stock which could have been purchased on the open
market at the time of the deferral multiplied by the fair market value of the
Common Stock at the time of expiration of such director's tenure. Additionally,
pursuant to the Company's Stock Option Plan for Non-Employee Directors, each of
Messrs. R. H. Cannon, Cavaney, Frigon, Mencoff and Phillips, as non-employee
directors, received a grant of options to acquire 50,000 shares of Common Stock
at the prevailing market price at the time of the grant, with Messrs. Cavaney,
Frigon and Phillips receiving their stock option grants on May 20, 1996, Mr.
Mencoff receiving his stock option grant on September 4, 1996, and Mr. R.H.
Cannon receiving his stock option grant on July 1, 1997. Options to acquire
10,000 of the 50,000 shares vested on the date of the grant and the remaining
options vest equally over the next four anniversary dates of the grant, provided
the optionee remains a director of the Company during such period. Mr. Mencoff
has contractually agreed to assign to Madison Dearborn Partners, L.P., an entity
for which Mr. Mencoff's employer serves as general partner, all rights to
director's fees and options to which he may be entitled as a director of the
Company. All directors are reimbursed for out-of-pocket expenses related to
their services as directors.
REPORT ON EXECUTIVE COMPENSATION OF THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
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 programs, as
well as determining the salaries, compensation and benefits of the Chief
Executive Officer and the Chief Operating Officer. The Compensation Committee
has engaged the consulting firm of William M. Mercer, Inc., Atlanta, Georgia, to
conduct appropriate surveys of executive compensation plans and to compile data
for comparable companies for committee comparison and review.
This report of the Compensation Committee describes the components of the
Company's executive officer compensation programs and describes the basis upon
which compensation is awarded to the executive officers of the Company.
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
COMPENSATION PHILOSOPHY AND STRUCTURE
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 at risk compensation and long-term, equity-based incentive
compen-
4
<PAGE> 8
sation. The Compensation Committee believes that executive compensation should
be materially influenced by the Company's financial performance and, as such,
the Committee has approved an executive compensation program that places a
significant portion of executive compensation "at risk" dependent upon the
Company's and each individual's performance against clearly established
criteria.
The Company seeks to provide salary and benefit levels that are comparable
to those of companies that perform similarly. Salary targets are established for
various officer positions based on surveys of relevant industries conducted by
an outside compensation consultant. Utilizing these targets, individual salaries
are established to reflect the officer's performance in meeting Company
objectives.
During 1998, the Company paid bonuses averaging 5.8% of base salary to
eligible employees, including officers, under a broad-based profit sharing plan
for Company employees. Under this plan, bonuses of up to 15% of base salary are
achievable dependent upon the Company's business performance measured against
specific annual financial targets.
The Company also made payments under its At Risk Compensation ("ARC")
program to officers and certain other employees for fiscal year 1998 based on
the Company's business performance and the individual's role in contributing to
the success of the Company. Future annual ARC awards to officers and designated
employees will be determined within a percentage range of base salary, with the
payment of at least two-thirds of the award based on quantifiable performance
criteria established by the Chief Executive Officer and the Chief Operating
Officer, and the balance based on an assessment of the individual's overall
performance and his or her contribution to the Company during the fiscal year.
In addition, from time-to-time, the Company makes long-term incentive
awards to officers and certain other employees of (i) incentive and
non-qualified stock options from stock option plans previously approved by the
stockholders and (ii) restricted stock from treasury shares of Common Stock set
aside by the Company pursuant to a plan approved by the Board of Directors (the
"Restricted Stock Plan"). The purpose of these awards is to focus the
recipient's attention on the long-term performance of the business and to
strengthen the alignment of stockholder and employee interests in share price
appreciation. Restricted stock has been issued to certain Company officers under
the Restricted Stock Plan, at the fair market value of the Common Stock based on
the average closing price on the New York Stock Exchange ("NYSE") for the 20
business days prior to the date of grant, as a supplemental retirement benefit
to partially offset the loss of benefits under the Company's defined
contribution plans resulting from the cap on wages required by applicable rules
and regulations.
CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING OFFICER
Policies with respect to the compensation of the Chief Executive Officer
and the Chief Operating Officer are essentially the same as those for other
officers, except that their compensation, including the criteria used for
determining their ARC, is directly established by the Compensation Committee.
The annual compensation and ARC of the Chief Executive Officer and the Chief
Operating Officer for the fiscal year 1998 reflect the Company's overall
performance during the period.
The consulting firm engaged by the Committee has conducted compensation and
benefit surveys that include both an assessment of the Company's financial
performance compared to a group of comparable companies, as well as comparisons
with the compensation paid to the chief executive officers and the chief
operating officers of other companies.
The Compensation Committee believes that the compensation levels of the
Company's executive officers are competitive and reasonably comparable with the
compensation and benefits paid to executive officers of companies that generate
similar financial results.
Compensation Committee
Harry J. Phillips, Sr., Chairman
Henry F. Frigon
Samuel M. Mencoff
5
<PAGE> 9
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the annual salary,
bonus compensation and long-term incentive awards paid or accrued by the Company
for each of fiscal years 1998, 1997, and 1996 to or for the account of the Chief
Executive Officer and the four other highest compensated executive officers of
the Company (the "executive officers") for the fiscal year 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
-------------------- ----------------------------
SECURITIES
RESTRICTED UNDERLYING ALL OTHER
FISCAL STOCK AWARDS OPTIONS/ SARS COMPENSATION
NAME AND POSITION YEAR SALARY($) BONUS($) ($)(1) (#)(2) ($)(3)
----------------- ------ --------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Cannon............... 1998 550,000 414,700 65,265 200,000 24,000
Chairman and Chief 1997 512,500 457,600 59,745 -- 22,500
Executive Officer 1996 475,000 320,625 55,855 130,000 22,500
David B. Ferraro............... 1998 441,346 320,450 47,482 140,000 24,000
President and Chief 1997 414,423 353,950 43,899 -- 22,500
Operating Officer 1996 389,423 253,125 41,507 100,000 22,500
Henry P. Doggrell.............. 1998 262,500 108,038 12,274 60,000 16,000
Senior Vice President, 1997 230,000 80,240 7,737 -- 14,250
Corporate Affairs 1996 19,167 51,438 -- 440,000 1,725
George B. Ellis................ 1998 267,308 131,250 19,396 60,000 24,000
Senior Vice President, 1997 259,615 82,000 19,023 -- 22,500
Manufacturing-Specialty 1996 237,821 67,188 16,524 50,000 22,500
Cellulose Division
B. Jerry L. Huff............... 1998 199,423 81,813 8,289 60,000 24,000
Senior Vice President, 1997 186,923 65,840 7,329 -- 22,500
Research and 1996 165,129 51,938 4,430 40,000 22,500
Development
</TABLE>
- ---------------
(1) Pursuant to the Company's Restricted Stock Plan, restricted shares of stock
were awarded for the executive officers for fiscal years 1998, 1997 and 1996
in the following amounts: (i) in the case of Mr. Cannon, 2,734 shares, 3,347
shares and 3,129 shares, respectively; (ii) in the case of Mr. Ferraro,
1,989 shares, 2,460 shares and 2,324 shares, respectively; (iii) in the case
of Mr. Doggrell, 514 shares and 434 shares, respectively, for fiscal years
1998 and 1997 only; (iv) in the case of Mr. Ellis, 813 shares, 1,066 shares
and 924 shares, respectively, and (v) in the case of Mr. Huff, 348 shares,
411 shares and 249 shares, respectively. The price per share of $23.88 for
fiscal year 1998 was based on the average closing price of the Common Stock
on the NYSE for the 20 business days prior to the date of grant. The price
per share for fiscal years 1997 and 1996 of $17.85 was based on the price of
the Common Stock on the day that the plan was approved by the Board of
Directors. Although the shares may be voted by the recipient, the shares may
not be sold, pledged or otherwise transferred before the recipient's
approved retirement from the Company, and if the recipient should violate
the restrictions or otherwise leave the Company before an approved
retirement date, the shares are subject to forfeiture. The aggregate value
of all restricted stock holdings at the end of fiscal year 1998 for Messrs.
Cannon, Ferraro, Doggrell, Ellis and Huff was $217,011, $159,589, $22,337,
$66,046 and $23,751, respectively. If dividends are paid to holders of
Common Stock, holders of restricted stock similarly will be eligible to
receive dividends.
(2) Options granted in fiscal year 1998 were granted pursuant to the Amended and
Restated 1995 Incentive and Nonqualified Stock Option Plan for Management
Employees (the "1995 Option Plan"). The exercise price of options granted to
Messrs. Cannon, Ferraro, Doggrell, Ellis and Huff during fiscal year 1998 is
$17.84, except that 11,208 of the options granted to Mr. Cannon were issued
at the exercise price
6
<PAGE> 10
of $19.63 per share in order to qualify them as incentive stock options. No
options were granted during fiscal year 1997 to executive officers. Options
were granted in fiscal year 1996 pursuant to the 1995 Option Plan. The
exercise price of options granted to Messrs. Cannon, Ferraro, Ellis and Huff
during fiscal year 1996 is $9.25 per share, the fair market value of the
Common Stock on the date of the Company's initial public offering on
November 28, 1995, except that 21,620 of the options granted to Mr. Cannon
were issued at the exercise price of $10.18 per share in order to qualify
them as incentive stock options. An option for the purchase of 40,000 shares
of the Common Stock was granted to Mr. Doggrell under the 1995 Option Plan
at an exercise price of $12.75 per share, the fair market value of the
Common Stock on June 1, 1996, the date Mr. Doggrell joined the Company. Upon
joining the Company, Mr. Doggrell also received an option grant of 400,000
shares at an exercise price of $7.60 per share pursuant to the Company's
Amended and Restated 1995 Management Stock Option Plan (the "Management
Option Plan"), a limited stock option plan established by the Company to
attract and retain key managers of the Company. All outstanding options vest
periodically over a period of five years, except that optionees who were
over the age of 57 at the time of the option grant have shorter vesting
periods, and may be exercised within a period of ten years from the date of
grant or such shorter periods as are defined in the subscription agreements
executed between the Company and the optionees pursuant to the 1995 Option
Plan and the Management Option Plan (collectively, the "Option Plans").
(3) Amounts consist of accruals under the Buckeye Retirement Plan (the
"Retirement Plan") and the Buckeye Retirement Plus Savings Plan (the
"Retirement Plus Plan"), both of which are defined contribution retirement
plans covering substantially all employees. The Company contributed 1% of
the employee's gross compensation plus 1/2% for each year of service up to a
maximum of 11% of the employee's gross compensation under the Retirement
Plan. The Retirement Plus Plan provides for contributions by the Company of
shares of Common Stock equal to an additional 4% of the employee's gross
compensation during years when the Company has been financially successful
based on a predetermined financial threshold approved by the Board.
The following table discloses the grant of stock options in fiscal year
1998 to the executive officers.
OPTIONS/SARS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------------------------------------------- ---------------------------
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) 10% ($)
---- ---------- ------------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Cannon.............. 188,792 11.3% 17.84 8/12/07 2,118,593 5,368,931
11,208 0.7% 19.63 8/12/07 105,810 298,773
David B. Ferraro.............. 140,000 8.4% 17.84 8/12/07 1,571,057 3,981,368
Henry P. Doggrell............. 60,000 3.6% 17.84 8/12/07 673,310 1,706,301
George B. Ellis............... 60,000 3.6% 17.84 8/12/07 673,310 1,706,301
B. Jerry L. Huff.............. 60,000 3.6% 17.84 8/12/07 673,310 1,706,301
</TABLE>
7
<PAGE> 11
The following table discloses information regarding stock options held at
the end of or exercised in fiscal year 1998 for each of the executive officers
as of June 30, 1998, pursuant to the Option Plans.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
SECURITIES UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
SHARES AT JUNE 30, 1998 AT JUNE 30, 1998(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(1) REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Cannon............ -- -- 130,000 200,000 $1,840,627 $1,123,786
David B. Ferraro............ -- -- 40,000 200,000 $ 572,500 $1,659,375
Henry P. Doggrell........... -- -- 176,000 324,000 $2,727,800 $4,434,825
George B. Ellis............. -- -- 20,000 90,000 $ 286,250 $ 772,500
B. Jerry L. Huff............ -- -- 16,000 84,000 $ 229,000 $ 686,625
</TABLE>
- ---------------
(1) As of June 30, 1998, no options have been exercised by the executive
officers under the Option Plans.
(2) Based on $23.56 per share, the closing price on the NYSE as of June 30,
1998.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder returns
through June 30, 1998, since the Company's Common Stock began trading on
November 22, 1995, pursuant to the Company's initial public offering, with
returns based on an index of NYSE listed paper and allied products companies
(SIC 2600-2699 U.S. and foreign companies) and the S&P 500 Composite Stock Price
Index. The graph assumes $100 invested on November 22, 1995, and the
reinvestment of any dividends paid on account of the investments.
<TABLE>
<CAPTION>
11/22/95 6/28/96 6/30/97 6/30/98
-------- ------- ------- -------
<S> <C> <C> <C> <C>
TOTAL RETURNS INDEX FOR:
Buckeye Technologies Inc.................. 100 141.9 174.2 243.2
S&P 500 Stocks............................ 100 113.7 153.3 200.1
NYSE Stocks............................... 100 105.0 141.2 134.8
</TABLE>
Graph
8
<PAGE> 12
SECURITY OWNERSHIP OF COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN OTHER BENEFICIAL OWNERS
As of September 1, 1998, 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) each Director of
the Company and each of the five most highly compensated executive officers; and
(iii) all Directors and executive officers of the Company as a group. Unless
otherwise indicated, beneficial ownership is direct and the person indicated has
sole voting and investment power.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OWNERSHIP(1) CLASS(1)
---- ------------ ----------
<C> <S> <C> <C>
(i) R. Howard Cannon, Trustee(3)................................ 8,853,550 24.5%
432 East Racquet Club Place
Memphis, Tennessee 38117
NewSouth Capital Management, Inc.(5)........................ 2,940,228 8.1%
1000 Ridgeway Loop Road, Suite 233
Memphis, Tennessee 38120-4023
Gilchrist Berg (6).......................................... 2,572,556 7.1%
Robin Bradbury
Water Street Capital, Inc.
225 Water Street, Suite 1987
Jacksonville, Florida 32202
(ii) Robert E. Cannon(2)......................................... 1,441,379 4.0%
R. Howard Cannon(3)(7)...................................... 8,873,550 24.6%
Red Cavaney(8).............................................. 37,700 *
David B. Ferraro(4)......................................... 1,623,749 4.5%
Henry F. Frigon(8).......................................... 34,000 *
Samuel M. Mencoff(8)........................................ 161,364 *
Harry J. Phillips, Sr.(8)................................... 59,000 *
Henry P. Doggrell(9)........................................ 365,429 1.0%
George B. Ellis(10)......................................... 770,261 2.1%
B. Jerry L. Huff(11)........................................ 338,217 *
(iii) All Directors and Executive Officers as a group(12) (14
persons).................................................... 14,832,061 41.1%
</TABLE>
- ---------------
* Less than 1% of the issued and outstanding shares of Common Stock of the
Company.
(1) Share information described in these notes has been adjusted to reflect the
two-for-one stock split which occurred in February 1998. Unless otherwise
indicated, beneficial ownership consists of sole voting and investing power
based on 36,115,236 shares issued and outstanding as of September 1, 1998.
Options to purchase an aggregate of 1,075,667 shares are exercisable or
become exercisable within 60 days of September 1, 1998. Such shares are
deemed to be outstanding for the purpose of computing the percentage of
outstanding shares owned by each person to whom a portion of such options
relate but are not deemed to be outstanding for the purpose of computing
the percentage owned by any other person.
(2) Includes 274,952 shares held by Kathryn Gracey Cannon, wife of Robert E.
Cannon, as to which Mr. Cannon disclaims beneficial ownership; 11,843
shares held in the Company's 401(k) and retirement plans; 9,210 shares of
restricted stock issued pursuant to the Company's Restricted Stock Plan;
and 230,000 shares issuable upon the exercise of options.
(3) Includes 4,425,906 shares held by the Robert E. Cannon Grantor Retained
Annuity Trust, R. Howard Cannon, Trustee and 4,427,644 shares held by the
Kathryn Gracey Cannon Grantor Retained Annuity Trust, R. Howard Cannon,
Trustee.
9
<PAGE> 13
(4) Includes 9,991 shares held in the Company's 401(k) and retirement plans;
6,773 shares of restricted stock issued pursuant to the Company's
Restricted Stock Plan; and 86,667 shares issuable upon the exercise of
options.
(5) New South Capital Management, Inc. filed a Schedule 13F with the Securities
and Exchange Commission ("SEC") as of June 30, 1998, stating that as an
investment advisor, it had sole dispositive power of the shares set forth
herein, which constitute more than 5% of the Company's Common Stock.
(6) Gilchrist Berg and Robin Bradbury, affiliates of Water Street Capital,
Inc., filed a Schedule 13F with the SEC as of June 30, 1998, stating they
have sole dispositive power of the shares set forth herein, which
constitute more than 5% of the Company's Common Stock.
(7) Includes 20,000 shares issuable upon the exercise of options granted under
the Company's stock option plan for non-employee directors (the "Formula
Plan").
(8) Includes 30,000 shares issuable upon the exercise of options granted under
the Company's Formula Plan.
(9) Includes 948 shares of restricted stock issued pursuant to the Company's
Restricted Stock Plan; 685 shares held in the Company's 401(k) and
retirement plans; and 268,000 shares issuable upon the exercise of options.
(10) Includes 22,000 shares held by Julie Ellis, wife of George B. Ellis, as to
which Mr. Ellis disclaims beneficial ownership; 4,605 shares held in the
Company's 401(k) and retirement plans; 2,803 shares of restricted stock
issued pursuant to the Company's Restricted Stock Plan; and 32,000 shares
issuable upon the exercise of options.
(11) Includes 1,008 shares of restricted stock issued pursuant to the Company's
Restricted Stock Plan; 2,109 shares held in the Company's 401(k) and
retirement plans; and 31,000 shares issuable upon the exercise of options.
(12) Includes an aggregate of 1,075,667 shares issuable upon exercise of options
granted under the Formula Plan and the Company's stock option plans; 22,708
shares issued pursuant to the Company's Restricted Stock Plan; and 41,011
shares held in the Company's 401(k) and retirement plans.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The federal securities laws require the Company's directors and executive
officers, and persons who beneficially own more than 10% of a registered class
of the Company's equity securities, to file with the SEC 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 by certain reporting persons, all
of the Company's officers, directors and greater than 10% beneficial owners made
all filings required in a timely manner, except a Form 4, Statement of
Beneficial Ownership, reflecting one purchase of 850 shares of Common Stock, was
inadvertently filed late by Mr. Cavaney during fiscal year 1998.
TRANSACTIONS WITH EXECUTIVE OFFICERS, DIRECTORS AND OTHERS
Messrs. Cannon and Ferraro each executed Master Promissory Notes with Union
Planters Bank, N.A. as of March 21, 1994, in the amounts of approximately $2.3
million and $0.6 million, respectively, that were secured by the Company's
certificates of deposit in the same amounts. Messrs. Cannon and Ferraro repaid
the notes in full in July 1998.
Mr. Cannon is the sole owner of a limited liability company that owns an
aircraft that is leased to the Company from time to time for Company business.
The Audit Committee of the Board of Directors has determined that the charges
for the use of the aircraft by the Company are no less favorable to the Company
than those that would be paid in a comparable transaction in arm's-length
dealings with an unrelated party.
10
<PAGE> 14
PROPOSAL 2. RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
COMPANY'S INDEPENDENT ACCOUNTANTS AND AUDITORS FOR FISCAL 1999
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 1999. Ernst & Young LLP served as independent accountants and auditors of
the Company for the year ended June 30, 1998. Representatives of the firm will
be present at the Annual Meeting, will have an opportunity to make a statement
if they so desire, and are expected to be available to respond to appropriate
questions by stockholders.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock present or represented at the Annual Meeting, if a quorum
exists, 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 1999. If the stockholders do not ratify this appointment,
other independent auditors will be considered by the Board of Directors upon
recommendation by the Audit Committee.
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 1999.
STOCKHOLDERS' PROPOSALS FOR 1999 ANNUAL MEETING
In accordance with the Company's By-laws, stockholders' proposals intended
to be presented at the 1999 Annual Meeting of Stockholders must be received in
writing by the Secretary of the Company not less than 60 days nor more than 90
days prior to the 1999 Annual Meeting in the form set forth in the By-laws for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
OTHER MATTERS
The Board of Directors, at the time of the preparation of this Proxy
Statement, knows of no business to come before the Annual Meeting other than
that referred to herein. If any other business should come before the Annual
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,
1998 AS FILED WITH THE SEC. REQUESTS SHOULD BE DIRECTED TO SONDRA A. DOWDELL,
BUCKEYE TECHNOLOGIES INC., P. O. BOX 80407, 1001 TILLMAN STREET, MEMPHIS,
TENNESSEE 38108-0407, TELEPHONE (901) 320-8244.
BY ORDER OF THE BOARD OF DIRECTORS
SHEILA JORDAN CUNNINGHAM SIG
Sheila Jordan Cunningham
Vice President, General Counsel and
Corporate Secretary
Memphis, Tennessee
September 25, 1998
11
<PAGE> 15
APPENDIX A
PROXY
BUCKEYE TECHNOLOGIES INC.
P.O. BOX 80407
1001 TILLMAN STREET
MEMPHIS, TENNESSEE 38108-0407
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned appoints each of Henry P. Doggrell, David H. Whitcomb and
Sheila Jordan Cunningham, 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 Technologies Inc. (the "Company") at the close of business on
September 15, 1998, which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of the Company to be
held at Memphis Brooks Museum of Art, Overton, Park, 1924 Poplar Avenue,
Memphis, Tennessee, on November 5, 1998, at 5:00 p.m., Central Time, and at any
and all adjournments, upon the matters set forth in the Notice of the meeting.
The Proxy is further authorized to vote in his or her discretion as to any other
matters which may come before the meeting. At the time of preparation of the
Proxy Statement, the Board of Directors 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 ON THE REVERSE SIDE 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.
[X] Please mark votes as in this example.
<TABLE>
<CAPTION>
- ----------------------------------------------- ------------------------------
<S> <C>
ELECTION OF DIRECTORS (terms expiring in 2001) RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS.
Nominees: Robert E. Cannon, Henry F. Frigon,
Samuel M. Mencoff.
FOR WITHHELD FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ]
Exceptions:
- ----------------------------------------------
For all nominees except as noted above.
- ----------------------------------------------
Dated: ___________, 1998 Signed: ___________________________________________
Signed: ___________________________________________
Shareholder should sign 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.
[Label to be placed here]
</TABLE>
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE
TO: Corporate Trust Operations, Union Planters Bank, N.A., 6200 Poplar Avenue,
3rd Floor, Memphis, Tennessee 38119
