<PAGE> 1
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 ss. 240-14a-11(c) or ss. 240.14a-12
BUCKEYE TECHNOLOGIES INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the Appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:[1]
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No:
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3) Filing Party:
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4) Date Filed:
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BUCKEYE TECHNOLOGIES INC.
P.O. Box 80407
1001 Tillman Street
Memphis, Tennessee 38108-0407
September 24, 1999
TO THE STOCKHOLDERS OF BUCKEYE TECHNOLOGIES INC.
You are cordially invited to attend the Annual Meeting of Stockholders
of Buckeye Technologies Inc. to be held on Thursday, November 4, 1999 at 5:00
p.m. Central Time, at the Memphis Brooks Museum of Art, Overton Park, 1924
Poplar Avenue, Memphis, Tennessee. At the meeting, you will be asked to consider
the matters described in the enclosed proxy statement.
In connection with the meeting, we are enclosing a notice of annual
meeting of stockholders, a proxy statement, and a form of proxy. 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 want 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 to us in the enclosed, postage-prepaid envelope as soon as
possible, even if you plan to attend the meeting. Your vote is very important.
Detailed information relating to Buckeye's activities and operating
performance during fiscal 1999 is contained in our Annual Report to
Stockholders, 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 1999 Annual Report, you may request a copy from Sondra A. Dowdell, Buckeye
Technologies Inc., P.O. Box 80407, 1001 Tillman Street, Memphis, Tennessee
38108-0407, (901) 320-8244.
Very truly yours,
/s/ Robert E. Cannon
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 NOVEMBER 4, 1999
The regular annual meeting of stockholders of Buckeye Technologies Inc.
will be held on Thursday, November 4, 1999 at 5:00 p.m., Central Time, at the
Memphis Brooks Museum of Art, Overton Park, 1924 Poplar Avenue, Memphis,
Tennessee, for the following purposes:
1. ELECTION OF DIRECTORS. To elect two Class I directors to serve until
the 2002 Annual Meeting of Stockholders;
2. AMENDMENT OF STOCK OPTION PLAN. To approve an amendment to the Amended
and Restated 1995 Incentive and Non-Qualified Stock Option Plan for
Management Employees to increase the number of shares of common stock
available for options under the Plan;
3. RATIFICATION OF AUDITORS. To ratify the selection of Ernst & Young LLP
as Buckeye's independent auditors for fiscal 2000; and
4. OTHER BUSINESS. To transact such other business as may properly come
before the meeting or any adjournment of the meeting.
Only those stockholders of record at the close of business on September 22,
1999 are entitled to notice of, and to vote at, the annual meeting and any
adjournment thereof. On that day, 35,342,464 shares of common stock were
outstanding. Each share entitles the holder to one vote.
We have enclosed with this proxy statement a copy of our Annual Report to
Stockholders.
By Order of the Board of Directors
/s/ Shelia Jordan Cunningham
Sheila Jordan Cunningham
Vice President, General Counsel and Corporate Secretary
September 24, 1999
================================================================================
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, AND DATE YOUR PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
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BUCKEYE TECHNOLOGIES INC.
P.O. Box 80407
1001 Tillman Street
Memphis, Tennessee 38108-0407
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PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
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Your vote is very important. Whether or not you plan to attend the annual
meeting, the Board of Directors requests that you sign, date and return the
enclosed proxy card at your earliest convenience. This proxy statement, the form
of proxy and the Annual Report to Stockholders are being sent to you in
connection with this request and are being mailed to all stockholders beginning
on or about September 24, 1999.
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INFORMATION ABOUT THE ANNUAL MEETING
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DATE AND TIME OF THE MEETING
Thursday, November 4, 1999, 5:00 p.m. Central Time.
LOCATION OF THE MEETING
The Memphis Brooks Museum of Art, Overton Park, 1924 Poplar Avenue,
Memphis, Tennessee.
ITEMS TO BE VOTED UPON BY STOCKHOLDERS
You will be voting on the following matters:
1. ELECTION OF DIRECTORS. To elect two Class I directors to serve until
the 2002 Annual Meeting of Stockholders;
2. AMENDMENT OF STOCK OPTION PLAN. To approve an amendment to the Amended
and Restated 1995 Incentive and Non-Qualified Stock Option Plan for
Management Employees (generally referred to in this document as the
1995 Stock Option Plan or simply as the Plan) to increase the number
of shares of common stock available for options under the Plan;
3. RATIFICATION OF AUDITORS. To ratify the selection of Ernst & Young LLP
as Buckeye's independent auditors for fiscal 2000; and
4. OTHER BUSINESS. To transact such other business as may properly come
before the meeting or any adjournment of the meeting.
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SHAREHOLDERS ENTITLED TO VOTE
You are entitled to vote your common stock if our records show that you
held your shares as of the close of business on the record date, September 22,
1999. Each stockholder is entitled to one vote for each share of common stock
held on that date. On September 22, 1999, there were 35,342,464 shares of common
stock outstanding and entitled to vote. A list of stockholders entitled to vote
on matters at the annual meeting will be available at Buckeye's headquarters
beginning on or about September 24, 1999.
VOTING BY PROXY
If you sign, date and return your signed proxy card before the annual
meeting, we will vote your shares as you direct. For the election of directors,
you may vote for (1) both of the nominees, (2) neither of the nominees, or (3)
one nominee but not the other. For each other item of business, you may vote
"FOR" or "AGAINST" or you may "ABSTAIN" from voting.
If you return your signed proxy card but do not specify how you want to
vote your shares, we will vote them
- "FOR" the election of both of our nominees for director;
- "FOR" the amendment of the 1995 Stock Option Plan;
- "FOR" the ratification of Ernst & Young LLP as our independent auditors.
If any matters other than those set forth above are properly brought before
the annual meeting, the individuals named in your proxy card may vote your
shares in accordance with their best judgment.
CHANGING OR REVOKING A PROXY
You can change or revoke your proxy at any time before it is voted at the
annual meeting by:
(1) submitting another proxy with a date more recent than the date of the
proxy first given;
(2) attending the annual meeting and voting in person; or
(3) sending written notice of revocation to our corporate secretary, Sheila
Jordan Cunningham.
VOTES REQUIRED
If a quorum is present at the annual meeting,
- the director nominees will be elected by a plurality of the votes cast
in person or by proxy at the meeting; and
- the amendment of the 1995 Stock Option Plan, the approval of
independent auditors, and all other matters submitted to the
stockholders will require the affirmative vote of a majority of the
shares of common stock present or represented by proxy at the meeting.
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QUORUM
A majority of the outstanding shares, present or represented by proxy,
constitutes a quorum. A quorum is necessary to conduct business at the annual
meeting. 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.
THE COST OF SOLICITING PROXIES
We will pay the cost of preparing, printing and mailing material in
connection with this solicitation of proxies. In addition to solicitation by
mail, regular employees of Buckeye and paid solicitors may make solicitations
personally and by telephone or otherwise. We will, upon request, reimburse
brokerage firms, banks and others for their reasonable out-of-pocket expenses in
forwarding proxy material to beneficial owners of stock or otherwise in
connection with this solicitation of proxies. We have retained Corporate
Investor Communications, Inc., to assist in the solicitation for a fee of $4,000
plus reasonable out-of-pocket expenses.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS
In accordance with Buckeye's By-laws, stockholders' proposals intended to
be presented at the 2000 Annual Meeting of Stockholders must be received in
writing by the Secretary of Buckeye not less than 60 days nor more than 90 days
prior to the 2000 Annual Meeting (which is expected to be held in November
2000), in the form set forth in the By-laws, for inclusion in the proxy
statement and form of proxy relating to that meeting.
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THE PROPOSALS
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PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, with each class
elected for a three-year term. The Board has nominated the following two persons
to serve as Class I Directors: R. Howard Cannon and Harry J. Phillips, Sr. We do
not anticipate that either nominee will be unavailable for election but, if such
a situation arises, the proxy will be voted in accordance with the best judgment
of the named proxies unless you have directed otherwise. The election of a
director requires the affirmative vote of a plurality of shares present or
represented at the meeting by proxy. The remaining members of the Board listed
below will continue as members of the Board until their respective terms expire,
as indicated below.
INFORMATION ABOUT THE TWO INDIVIDUALS NOMINATED AS DIRECTORS AND THE
REMAINING MEMBERS OF THE BOARD IS PROVIDED BELOW. SHARES OF COMMON STOCK
REPRESENTED BY PROXY CARDS RETURNED TO US WILL BE VOTED FOR THE NOMINEES LISTED
BELOW UNLESS YOU SPECIFY OTHERWISE.
NOMINEES FOR ELECTION AS CLASS I DIRECTORS
(TERMS EXPIRING 2002)
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R. Howard Cannon, age 37, has served as a director of Buckeye since 1996.
He is President of Dryve, Inc., a company consisting of 33 dry cleaning
operations, a position he has held since 1987. He is co-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.
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Harry J. Phillips, Sr., age 69 and a Buckeye director since 1996, is the
former Chairman and Chief Executive Officer of Browning-Ferris Industries, Inc.
He is a director of National Commerce Bancorporation, RFS Hotel Investors, Inc.
and Morgan Keegan & Company, Inc.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES LISTED
ABOVE.
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INCUMBENT DIRECTORS -- CLASS II
(TERMS EXPIRING 2000)
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Red Cavaney, age 56, has served as a director of Buckeye since 1996 and as
President, Chief Executive Officer and Director of the American Petroleum
Institute since October 1997. He was President, Chief Executive Officer and a
director of the American Plastics Council from 1994 to 1997 and, prior to 1994,
President of the American Forest & Paper Association and President of its
predecessor, the American Paper Institute.
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David B. Ferraro, age 61, has served as President and Chief Operating
Officer of Buckeye since March 1993, the same year in which he first became a
director. He was Manager of Strategic Planning of The Procter & Gamble Company
from 1991 through 1992. He served as President of Buckeye Cellulose Corporation,
then a subsidiary of Proctor & Gamble, 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. He joined Procter & Gamble in 1964.
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INCUMBENT DIRECTORS -- CLASS III
(TERMS EXPIRING 2001)
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Robert E. Cannon, age 69, has served as Chairman and Chief Executive
Officer of Buckeye since March 1993, the same year in which he became a
director. Before assuming his current position, he served as Dean of the College
of Management, Policy and International Affairs at the Georgia Institute of
Technology from 1991 through 1992, and Senior Vice President of Procter & Gamble
from 1989 to 1991. He was Group Vice President Industrial Products of Procter &
Gamble, which included the operations of Buckeye Cellulose Corporation, then a
subsidiary of Procter & Gamble, from 1981 to 1989. He was President of the
subsidiary from 1971 through 1981.
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Henry F. Frigon, age 64, has been a director of Buckeye since 1996 and a
private investor and consultant since 1995. Since 1998 he has served as Chairman
and Chief Executive Officer of CARSTAR, Inc. He previously served as Executive
Vice President - Corporate Development and Strategy and Chief Financial Officer
of Hallmark Cards, Inc. from 1991 to 1995 and as President and Chief Executive
Officer of BATUS Inc. from 1983 to 1991. Mr. Frigon is a director of H&R Block
Inc., Dimon International Inc., Sypris Solutions Inc. and Corporate Wings, Inc.
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Samuel M. Mencoff, age 43, was elected a director in 1993. He is currently
a Managing Director of Madison Dearborn Partners, Inc. where he had served as
Vice President since January 1993. He previously served as Vice President of
First Chicago Venture Capital from 1987 to 1993. Mr. Mencoff is a member of the
operating committee of the general partner of Golden Oak Mining Company, L.P.
and is a director of Packaging Corporation of America, Bay State Paper Holding
Company and Riverwood International Corporation.
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INFORMATION ABOUT THE BOARD OF DIRECTORS
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ROLE OF THE BOARD
Pursuant to Delaware law, our business, property and affairs are managed
under the direction of our Board of Directors. The Board has responsibility for
establishing broad corporate policies and for the overall performance and
direction of Buckeye Technologies Inc., but is not involved in day-to-day
operations. Members of the Board keep informed of our business by participating
in Board and committee meetings, by reviewing reports sent to them regularly,
and through discussions with our executive officers.
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BOARD STRUCTURE
We currently have seven directors. Our Board is divided into three groups,
Class I Directors, Class II Directors, and Class III Directors. Each class of
directors is elected to serve a three year term. This means that the Class I
directors who are elected at the 1999 meeting will serve until the 2002 annual
meeting of stockholders unless they resign or are removed.
1999 BOARD MEETINGS
Buckeye's Board of Directors conducted six meetings (exclusive of committee
meetings) during fiscal 1999, and no director attended less than 75% of the
meetings held during the period. The Board also took action by unanimous written
consent on ____ occasions.
BOARD COMMITTEES
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 Henry F. Frigon, all of whom are non-employee
directors of Buckeye. The Audit Committee met three times during fiscal year
1999 with representatives of Ernst & Young LLP, Buckeye's independent auditors,
and with the persons within Buckeye responsible for reviewing accounting,
control, auditing and financial reporting matters. The Audit Committee is
responsible, among other things, for
- recommending to the Board the firm of independent accountants and
auditors to be retained by Buckeye,
- 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 Buckeye. The Compensation Committee met three times
during fiscal year 1999. The Compensation Committee is responsible for
establishing and administering Buckeye's executive compensation plan and
developing policies and guidelines for administering the plan.
DIRECTOR COMPENSATION
Directors who are employees of Buckeye are not entitled to receive any fees
for serving as directors. However, non-employee directors receive directors'
fees in the amount of $20,000 per annum payable quarterly, in cash or an
equivalent amount of Buckeye'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.
Also, pursuant to Buckeye's Stock Option Plan for Non-Employee Directors,
each of Messrs. R. Howard Cannon, Cavaney, Frigon, Mencoff and Phillips, as
non-employee directors, has received a grant of options to acquire 50,000 shares
of common stock at the prevailing market price at the time of the grant. Messrs.
Cavaney, Frigon and Phillips received their stock option grants on May 20, 1996,
Mr. Mencoff received his stock option grant on September 4, 1996, and Mr. R.
Howard Cannon received 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 Buckeye during such period.
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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 Buckeye. All directors are reimbursed for out-of-pocket expenses related to
their services as directors.
PROPOSAL 2 -- AMENDMENT OF THE AMENDED AND RESTATED 1995 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN FOR MANAGEMENT EMPLOYEES
On October 27, 1995, the Board of Directors adopted the 1995 Incentive and
Non-Qualified Stock Option Plan for Management Employees. The Board approved the
Plan's amendment and restatement on August 12, 1997. As of the date of this
Proxy Statement, Buckeye has granted options to purchase 2,686,400 shares, or
81.4%, of the 3.3 million shares of common stock currently reserved for issuance
under the Plan.
The Board of Directors has now adopted, subject to stockholder approval at
the annual meeting, an amendment to the Plan which increases the total number of
shares of common stock authorized for issuance under the Plan from 3.3 million
to 4.9 million. This amendment thus increases from 613,600 to 2,213,600 the
number of shares currently available for issuance under the Plan.
The Board believes that Buckeye's growth and long-term success depend in
large part upon attracting, retaining and motivating key personnel, and that
such retention and motivation can be achieved in part through the grant of stock
options. The Board also believes that stock options can play an important role
in Buckeye's success by encouraging and enabling the officers and other
employees of Buckeye -- upon whose judgment, initiative and efforts Buckeye
depends for sustained growth and profitability -- to acquire a proprietary
interest in Buckeye's long-term performance. The Board anticipates that
providing such persons with a direct stake in Buckeye will ensure a closer
identification of the interests of the participants in the Plan with those of
Buckeye, thereby stimulating the efforts of such participants to promote
Buckeye's future success and strengthen their desire to remain with Buckeye. The
Board believes that the proposed increase in the number of shares issuable under
the Plan will help Buckeye accomplish these goals and will keep Buckeye's equity
incentive compensation in line with that of other companies comparable to
Buckeye.
The following is a summary of the Plan. For a copy the Plan, please contact
Sondra A. Dowdell, Buckeye Technologies Inc., P.O. Box 80407, 1001 Tillman
Street, Memphis, Tennessee 38108-0407, (901) 320-8244.
ADMINISTRATION
The Plan is administered by the Compensation Committee of the Board of
Directors.
ELIGIBILITY
Any management employee of Buckeye is eligible to be granted options under
the Plan. The Compensation Committee has the sole authority to determine whether
an employee is a management employee.
OPTION GRANTS
The Compensation Committee may determine which employees are to receive
options, the size of grants, the terms and conditions of options, and any
conditions upon the exercise of options.
TERM OF OPTIONS
The term of each option may not be for a period of more than 10 years.
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OPTION PRICE
The purchase price for each share of common stock, on exercise of an
option, is determined by the Compensation Committee but cannot be less than the
fair market value of Buckeye's common stock on the date the option is granted.
On June 30, 1999, the closing price of our common stock was $15.19.
EXERCISE OF OPTIONS
An option may be exercised at any time before its expiration under the Plan
or until it is no longer exercisable under the terms of the stock option
subscription agreement. During the life of an optionee, only the optionee or the
optionee's conservator or guardian may exercise an option granted to the
optionee. After the death of an optionee, any exercisable portion of an option
may be exercised by the optionee's personal representative, or by any person
empowered to do so under the optionee's will or under the laws of descent and
distribution. The purchase price of the shares purchased pursuant to an option
must be paid in full upon delivery of the share certificates. Payment for the
shares may be made in cash, by check, or by tendering shares of Buckeye's common
stock. The Compensation Committee may establish conditions as to the manner of
exercise of options granted under the Plan.
ADJUSTMENT IN SHARES COVERED BY OPTIONS
The number of shares covered by each outstanding option will be adjusted to
account for changes in the number or kind of issued and outstanding shares of
Buckeye, such as through a stock split, merger, or payment of a dividend. Such
adjustments must be made without changing the total price applicable to any
option and with any necessary corresponding adjustment in the exercise price per
share.
TRANSFERABILITY
All options will be nontransferable, except that the Compensation Committee
may grant nonqualified stock options which are transferable to the extent
expressly provided in the related stock option subscription agreement.
AMENDMENT OR TERMINATION OF THE PLAN
The Committee may amend, suspend, or terminate the Plan at any time. The
consent of Buckeye's stockholders is required, within 12 months of any action by
the Compensation Committee, to increase the number of shares available for
issuance under the Plan, to reduce the minimum option price requirements, or to
lengthen the period during which options may be granted.
APPROVAL OF THE AMENDMENT TO THE 1995 STOCK OPTION PLAN REQUIRES THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED AT THE ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT OF THE 1995
STOCK OPTION PLAN.
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PROPOSAL 3 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
accountants, to audit our financial statements for fiscal year 2000. We are
presenting this nomination to the stockholders for ratification at the annual
meeting. A representative of Ernst & Young LLP is expected to be present at the
meeting, will have the opportunity to make a statement, and is expected to be
available to respond to appropriate questions.
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS BUCKEYE'S INDEPENDENT
AUDITORS REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
SHARES OF COMMON STOCK REPRESENTED AT THE ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS BUCKEYE'S INDEPENDENT AUDITORS FOR FISCAL
YEAR 2000.
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OTHER INFORMATION
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BUCKEYE STOCK OWNERSHIP
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As of September 1, 1999, our records indicated that the following
number of shares were beneficially owned by (i) each person known by Buckeye to
beneficially own more than 5% of Buckeye's shares; (ii) each director of Buckeye
and each of the five most highly compensated executive officers; and (iii) all
directors and executive officers of Buckeye 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 PERCENT OF
NAME BENEFICIAL OWNERSHIP(1) CLASS(1)
- -------------------------------------------------------------------------- ----------------------- --------
<S> <C> <C>
(i) R. Howard Cannon, Co-Trustee(2).................................... 7,819,147 22.1%
432 East Racquet Club Place
Memphis, Tennessee 38117
NewSouth Capital Management, Inc.(3)............................... 4,060,259 11.5%
1000 Ridgeway Loop Road, Suite 233
Memphis, Tennessee 38120-4023
Gilchrist Berg (4)................................................. 2,601,156 7.4%
Robin Bradbury
Water Street Capital, Inc.
225 West Water Street, Suite 1987
Jacksonville, Florida 32202
(ii) Robert E. Cannon(5)................................................ 1,504,967 4.3%
R. Howard Cannon(2)(6)............................................. 7,849,147 22.2%
Red Cavaney(7)..................................................... 50,000 *
David B. Ferraro(8)................................................ 1,624,883 4.6%
Henry F. Frigon(7)................................................. 44,000 *
Samuel M. Mencoff(7)............................................... 171,364 *
Harry J. Phillips, Sr.(7).......................................... 69,000 *
Henry P. Doggrell(9)............................................... 467,596 1.3%
George B. Ellis(10)................................................ 787,340 2.2%
E. Allen Eppinger(11).............................................. 266,130 *
(iii) All Directors and Executive Officers as a group(12) (14 persons)... 14,123,402 39.9%
</TABLE>
- ------------------
* Less than 1% of the issued and outstanding shares of common stock of
Buckeye.
(1) Unless otherwise indicated, beneficial ownership consists of sole voting
and investing power based on 35,389,764 shares issued and outstanding as of
September 1, 1999. Options to purchase an aggregate of 1,579,334 shares are
exercisable or become exercisable within 60 days of September 1, 1999. 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 3,874,486 shares held by the Robert E. Cannon Grantor Retained
Annuity Trust, R. Howard Cannon and Richard Prosser Guenther, Co-Trustees,
and 3,944,661 shares held by the Kathryn Gracey Cannon Grantor Retained
Annuity Trust, R. Howard Cannon and Richard Prosser Guenther, Co-Trustees.
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(3) New South Capital Management, Inc. filed a Schedule 13F with the Securities
and Exchange Commission as of June 30, 1999, stating that as an investment
advisor, it had sole dispositive power over 3,765,570 shares of Buckeye's
common stock and other dispositive power over 294,689 shares, which
constitute more than 5% of Buckeye's common stock.
(4) Gilchrist Berg and Robin Bradbury, affiliates of Water Street Capital,
Inc., filed a Schedule 13G/A with the Securities and Exchange Commission as
of December 31, 1998, stating they have sole or shared dispositive power of
the shares set forth herein, which constitute more than 5% of Buckeye's
common stock.
(5) Includes 234,952 shares held by Kathryn Gracey Cannon, wife of Robert E.
Cannon, as to which Mr. Cannon disclaims beneficial ownership; 13,010
shares held in Buckeye's 401(k) and retirement plans; 13,367 shares of
restricted stock issued pursuant to Buckeye's Restricted Stock Plan; and
330,000 shares issuable upon the exercise of options.
(6) Includes 30,000 shares issuable upon the exercise of options granted under
Buckeye's stock option plan for non-employee directors.
(7) Includes 40,000 shares issuable upon the exercise of options granted under
Buckeye's stock option plan for non-employee directors.
(8) Includes 11,213 shares held in Buckeye's 401(k) and retirement plans; 9,788
shares of restricted stock issued pursuant to Buckeye's Restricted Stock
Plan; and 153,334 shares issuable upon the exercise of options.
(9) Includes 1,847 shares of restricted stock issued pursuant to Buckeye's
Restricted Stock Plan; 1,953 shares held in Buckeye's 401(k) and retirement
plans; and 368,000 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; 4,848 shares held in
Buckeye's 401(k) and retirement plans; 4,139 shares of restricted stock
issued pursuant to Buckeye's Restricted Stock Plan; and 54,000 shares
issuable upon the exercise of options.
(11) Includes 1,394 shares of restricted stock issued pursuant to Buckeye's
Restricted Stock Plan; 6,394 shares held in Buckeye's 401(k) and retirement
plans; and 58,000 shares issuable upon the exercise of options.
(12) Includes an aggregate of 1,579,334 shares issuable upon exercise of options
granted under the stock option plan for non-employee directors and
Buckeye's other stock option plans.
11
<PAGE> 15
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The following summary compensation table sets forth the annual salary,
bonus compensation and long-term incentive awards paid or accrued by Buckeye for
each of fiscal years 1999, 1998, and 1997 to or for the account of the Chief
Executive Officer and the four other highest compensated executive officers of
Buckeye (the "executive officers") for the fiscal year 1999.
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............ 1999 550,000 218,350 63,290 -- 24,000
Chairman and Chief 1998 550,000 414,700 65,265 200,000 24,000
Executive Officer 1997 512,000 457,600 59,745 -- 22,500
David B. Ferraro............ 1999 433,173 168,725 45,903 -- 24,000
President and Chief 1998 441,346 320,450 47,482 140,000 24,000
Operating Officer 1997 414,423 353,950 43,899 -- 22,500
Henry P. Doggrell........... 1999 275,000 70,675 13,687 -- 16,800
Senior Vice President, 1998 262,500 108,038 12,274 60,000 16,000
Business Development 1997 230,000 80,240 7,737 -- 14,250
George B. Ellis............. 1999 280,289 70,675 20,341 -- 24,000
Senior Vice President, 1998 267,308 131,250 19,396 60,000 24,000
Manufacturing-Specialty 1997 259,615 82,000 19,023 -- 22,500
Cellulose Division
E. Allen Eppinger........... 1999 205,000 74,620 8,389 -- 51,262
Senior Vice President, 1998 190,865 76,313 6,940 60,000 49,560
Manufacturing - 1997 175,000 65,400 5,531 -- 32,959
Absorbent Products
</TABLE>
-----------------
(1) Pursuant to Buckeye's Restricted Stock Plan, restricted shares of stock
were awarded for the executive officers for fiscal years 1999, 1998 and
1997 in the following amounts: (i) in the case of Mr. Cannon, 4,157 shares,
2,734 shares, and 3,347 shares, respectively; (ii) in the case of Mr.
Ferraro, 3,015 shares, 1,989 shares, and 2,460 shares, respectively; (iii)
in the case of Mr. Doggrell, 899 shares, 514 shares and 434 shares,
respectively; (iv) in the case of Mr. Ellis, 1,336 shares, 813 shares, and
1,066 shares, respectively, and (v) in the case of Mr. Eppinger, 551
shares, 291 shares and 310 shares, respectively. The price per share of
$15.23 for fiscal year 1999 and 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
year 1997 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
12
<PAGE> 16
shares may not be sold, pledged or otherwise transferred before the
recipient's approved retirement from Buckeye, and if the recipient should
violate the restrictions or otherwise leave Buckeye 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 1999 for Messrs.
Cannon, Ferraro, Doggrell, Ellis and Eppinger was $203,011, $148,655,
$28,051, $62,861 and $25,353, respectively. If dividends are paid to
holders of common stock, holders of restricted stock similarly will be
eligible to receive dividends.
(2) None of the executive officers received options during fiscal year 1999.
Options granted in fiscal year 1998 were granted pursuant to the 1995 Stock
Option Plan. The exercise price of options granted to Messrs. Cannon,
Ferraro, Doggrell, Ellis and Eppinger during fiscal year 1998 is $17.84,
except that 11,208 of the options granted to Mr. Cannon were issued at the
exercise price 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. 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. Options that have vested may be
exercised within a period of ten years from the date the options were
granted or such shorter periods as are defined in the subscription
agreements executed between Buckeye and the optionees.
(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. Buckeye 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 Buckeye of
shares of common stock equal to an additional 4% of the employee's gross
compensation during years when Buckeye has been financially successful
based on a predetermined financial threshold approved by the Board. Mr.
Eppinger also received taxable living expenses while on assignment away
from home.
13
<PAGE> 17
The following table discloses information regarding stock options held
at the end of or exercised in fiscal year 1999 for each of the executive
officers as of June 30, 1999. No options were awarded to any of these executive
officers during fiscal year 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Securities underlying Value of unexercised
acquired on Value unexercised options in-the-money options
Name exercise(1) realized(1) at June 30, 1999 at June 30, 1999 (2)
--------------------- ----------- ----------- ---------------- --------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Cannon...... -- -- 230,000 100,000 $ 751,877 $ 0
David B. Ferraro...... -- -- 106,667 133,333 $ 356,250 $ 237,500
Henry P. Doggrell..... -- -- 276,000 224,000 $1,880,700 $1,253,800
George B. Ellis....... -- -- 42,000 68,000 $ 178,125 $ 118,750
E. Allen Eppinger..... -- -- 38,000 52,000 $ 106,875 $ 71,250
</TABLE>
-----------------
(1) As of June 30, 1999, no options have been exercised by the executive
officers.
(2) Based on $15.19 per share, the closing price on the New York Stock Exchange
as of June 30, 1999.
- --------------------------------------------------------------------------------
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The Compensation Committee of the Board of Directors is comprised of
three directors who are not employees of Buckeye. The Committee is responsible
for establishing and administering Buckeye'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
Buckeye's executive officer compensation programs and describes the basis upon
which compensation is awarded to the executive officers of Buckeye.
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 Buckeye 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 Buckeye. Compensation for
Buckeye executives is comprised of three principal components: salary and
benefits, annual at risk compensation, and long-term, equity-based incentive
compensation. The Compensation Committee believes that executive compensation
should be materially influenced by Buckeye'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.
14
<PAGE> 18
Buckeye 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 the company's
objectives.
During 1999, Buckeye paid bonuses averaging 5.7% 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 depending upon Buckeye's business performance measured against
specific annual financial targets.
Buckeye also made payments under its At Risk Compensation ("ARC")
program to officers and certain other employees for fiscal year 1999 based on
Buckeye's business performance and the individual's role in contributing to the
success of Buckeye. 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 Buckeye during the fiscal year.
In addition, from time-to-time, Buckeye makes long-term incentive
awards to officers and certain other employees of (1) incentive and
non-qualified stock options from stock option plans previously approved by the
stockholders and (2) restricted stock from treasury shares of common stock set
aside by Buckeye pursuant to the Restricted Stock Plan approved by the Board of
Directors. 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 Buckeye 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 for the 20 business days prior to the date of grant,
as a supplemental retirement benefit to partially offset the loss of benefits
under Buckeye'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 1999 reflect Buckeye'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 Buckeye'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
Buckeye'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
15
<PAGE> 19
- --------------------------------------------------------------------------------
PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The following graph compares the cumulative total stockholder returns
through June 30, 1999, since Buckeye's common stock began trading on November
22, 1995, pursuant to Buckeye's initial public offering, with returns based on
an index of the S&P 500 Composite Stock Price Index, the S&P 600 Small Cap Index
and the New York Stock Exchange (NYSE) listed Paper and Allied Products
companies (SIC 2600-2699 U.S. and foreign companies). The graph assumes $100
invested on November 22, 1995, and the reinvestment of any dividends paid on
account of the investments.
<TABLE>
<CAPTION>
TOTAL RETURNS INDEX (1) 11/22/95 6/28/96 6/30/97 6/30/98 6/30/99
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Buckeye Technologies Inc.................. 100 141.9 174.2 243.2 156.8
S&P 500 Stocks............................ 100 133.0 179.1 233.2 286.2
S&P 600 Stocks............................ 100 136.4 166.0 198.3 193.7
NYSE Stocks............................... 100 104.4 139.2 128.1 145.6
</TABLE>
(1) Buckeye has this year added the S&P 600 Small Cap Index for comparison
purposes. This addition necessitated a change of data providers from the
Center for Research in Security Prices, University of Chicago, to Standard
and Poor's compustat (SPC). All numbers have been restated to reflect SPC's
data and return calculation methodology. The change to SPC yields results
that differ slightly from those shown in Buckeye's prior proxy statements.
16
<PAGE> 20
- --------------------------------------------------------------------------------
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
The federal securities laws require Buckeye's directors and executive
officers, and persons who beneficially own more than 10% of a registered class
of Buckeye's equity securities, to file with the SEC initial reports of
ownership and reports of changes in ownership of any securities of Buckeye. To
Buckeye's knowledge, based solely on review of the copies of such reports
furnished to Buckeye and representations by certain reporting persons, all of
Buckeye's officers, directors and greater than 10% beneficial owners made all
filings required in a timely manner.
- --------------------------------------------------------------------------------
CERTAIN TRANSACTIONS
- --------------------------------------------------------------------------------
Mr. Cannon is the sole owner of a limited liability company that owns
an aircraft that is leased to Buckeye 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 Buckeye are no less favorable to Buckeye than
those that would be paid in a comparable transaction in arm's-length dealings
with an unrelated party.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors knows of no matters other than those discussed
in this proxy statement which will be presented at the 1999 Annual Meeting of
Stockholders. However, if any other matters are properly brought before the
meeting, any proxy given pursuant to this solicitation will be voted in
accordance with the recommendations of management.
Upon the written request of any record holder or beneficial owner of
common stock entitled to vote at the annual meeting, we, without charge, will
provide a copy of our Annual Report on Form 10-K for the year ended June 30,
1999. Requests should be directed to Sondra A. Dowdell, Buckeye Technologies
Inc., P.O. Box 80407, 1001 Tillman Street, Memphis, Tennessee 38108-0407, (901)
320-8244.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Sheila Jordan Cunningham
Sheila Jordan Cunningham
Vice President, General Counsel and Corporate
Secretary
Memphis, Tennessee
September 24, 1999
17
<PAGE> 21
Appendix A
AMENDED AND RESTATED
1995 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN FOR
MANAGEMENT EMPLOYEES OF BUCKEYE CELLULOSE CORPORATION
BUCKEYE CELLULOSE CORPORATION, a Delaware corporation (the "Company"),
hereby adopts this Incentive and Nonqualified Stock Option Plan for management
employees of Buckeye Cellulose Corporation and Subsidiaries. The purposes of
this Plan are as follows:
(1) To further the growth, development and financial success of the
Company by providing additional incentives to certain key management employees
of the Company and its Subsidiaries who have been or will be given
responsibility for the management or administration of the Company's business
affairs, by assisting them to become owners of capital stock of the Company and
thus to benefit directly from its growth, development and financial success.
(2) To enable the Company to obtain and retain the services of the type
of managerial employees considered essential to the long range success of the
Company by providing and offering them an opportunity to become owners of
capital stock of the Company under Options.
ARTICLE I.
DEFINITIONS
1.1 General. Whenever the following terms are used in this Plan they
shall have the meaning specified below unless the context clearly indicates to
the contrary.
1.2 Board. "Board" shall mean the Board of Directors of the Company.
1.3 Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.4 Committee. "Committee" shall mean the Compensation Committee of
the Board, appointed as provided in Section 6.1.
1.5 Common Stock. "Common Stock" shall mean the common stock, par
value $.01 per share, of the Company.
1.6 Company. "Company" shall mean Buckeye Cellulose Corporation and
those corporations, if any, which are from time to time, its Subsidiaries.
1.7 Director. "Director" shall mean a member of the Board.
<PAGE> 22
1.8 Employee. "Employee" shall mean any employee (as defined in
accordance with the regulations and revenue rulings then applicable under
Section 3401(c) of the Code) of the Company or any of its Subsidiaries whether
such employee is so employed at the time this Plan is adopted or becomes so
employed subsequent to the adoption of this Plan.
1.9 Exercise Price. "Exercise Price" shall have the meaning given
in Section 4.2.
1.10 Fair Market Value. "Fair market value" of any shares of Common
Stock of the Company for purposes of the Plan shall be (a) the last price at
which shares of the Company were traded on the New York Stock Exchange on the
specified date or, if there were no trades on that day, then on the last day
prior to such date during which there were trades, or (b) solely in the case of
any Options granted on the date of the initial public offering of the Common
Stock of the Company, the price at which the Common Stock is sold to the public.
1.11 Incentive Stock Option. "Incentive Stock Option" shall mean any
portion of an Option which (i) is not specifically designated by the Committee
at the time of the grant as a Nonqualified Stock Option, (ii) can be expected at
the time of grant to satisfy the requirements for treatment as an incentive
stock option under Section 422 of the Code, (iii) continues at all times
thereafter to satisfy the requirements for treatment as an incentive stock
option under Section 422 of the Code, and (iv) is exercised by either a citizen
or resident alien of the United States (as defined in the Code and the
regulations thereunder).
1.12 Nonqualified Stock Option. "Nonqualified Stock Option" shall
mean any portion of the Option which is not an Incentive Stock Option.
1.13 Option. "Option" shall mean an option granted under the Plan to
purchase Common Stock.
1.14 Optionee. "Optionee" shall mean an Employee to whom an Option is
granted under the Plan.
1.15 Plan. "Plan" shall mean the 1995 Incentive and Nonqualified Stock
Option Plan for Management Employees of the Company and Subsidiaries, as amended
or restated from time to time.
1.16 Pronouns. The masculine pronoun shall include the feminine and
neuter and the singular shall include the plural, where the context so
indicates.
1.17 Stock Option Agreement. "Stock Option Agreement" shall mean a
Stock Option Subscription Agreement between the Optionee and the Company.
- 2 -
<PAGE> 23
1.18 Subsidiary. "Subsidiary" shall mean any corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company if
each of the corporations, or if each group of commonly controlled corporations,
other than the last corporation in an unbroken chain then owns stock possessing
fifty percent (50%) or more of the total combined voted power of all classes of
stock in one of the other corporations in such chain.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1 Shares Subject to Plan. The shares of stock subject to Options
shall be shares of Common Stock of the Company. The aggregate number of shares
of Common Stock which may be issued upon exercise of Options under the Plan
shall not exceed one million six hundred fifty thousand (1,650,000) shares,
subject to adjustment as provided in Section 4.6 hereof.
2.2 Unexercised Options. If any Option expires or is canceled without
having been fully exercised, the number of shares subject to such Option but as
to which such Option was not exercised prior to its expiration or cancellation
may again be optioned hereunder, subject to the limitations of Section 2.1.
ARTICLE III.
GRANTING OF OPTIONS
3.1 Eligibility. Any management Employee of the Company shall be
eligible to be granted Options. The determination by the Committee of the status
of an employee as a member of management shall be conclusive.
3.2 Granting of Options. The Committee shall from time to time, in its
absolute discretion:
(i) determine which Employees are key management Employees and
select from such Employees (including those to whom Options have been
previously granted under the Plan) such of them as in its opinion shall
be granted Options; and
(ii) determine the number of shares to be subject to such
Options granted to such selected management Employees; and
(iii) determine the terms and conditions of such Options,
consistent with the Plan; and
(iv) establish such conditions as to the manner of exercise of
such Options as it may deem necessary, including but not limited to
requiring Optionees to enter into
- 3 -
<PAGE> 24
agreements regarding transferability and other restrictions with
respect to shares issuable upon exercise of such Options.
3.3 Expiration of Time to Make Grants. No Option may be granted under
this Plan after the expiration of ten (10) years from the date the Plan is
adopted by the Board or the date the stockholders of the Company approve this
Plan, if earlier.
ARTICLE IV.
TERMS OF OPTIONS
4.1 Option Agreement. Each Option shall be evidenced by a written Stock
Option Agreement, which shall be executed by the Optionee and an authorized
officer of the Company, and which shall contain such terms and conditions as the
Committee shall determine, consistent with the Plan.
4.2 Exercise Price. The purchase price under each Option shall be
determined by the Committee at the time the Option is granted, but in no event
shall such purchase price be less than one hundred percent (100%) of the Fair
Market Value of the shares of Common Stock of the Company on the date of grant.
4.3 Commencement of Exercisability. Subject to the provisions of
Section 7.2, Options shall become exercisable at such times and in such
installments (which may be cumulative) as the Committee shall provide in the
terms of each individual Stock Option Agreement; provided, however, that by a
resolution adopted after an Option is granted the Committee may, on such terms
and conditions as it may determine to be appropriate and subject to Section 7.2,
accelerate the time at which such Option or any portion thereof may be
exercised.
4.4 Expiration of Options. No Option may be exercised to any extent by
anyone after, and every Option shall expire no later than, the expiration of ten
(10) years from the date the Option was granted. Subject to the provisions of
this Section 4.4, the Committee shall provide, in the terms of each individual
Stock Option Agreement, when the Option expires and becomes unexercisable.
4.5 No Right to Continue in Employment. Nothing in this Plan or in any
Stock Option Agreement hereunder shall confer upon any Optionee any right to
continue in the employ or service of the Company or shall interfere with or
restrict in any way the rights of the Company, which are hereby expressly
reserved, to discharge any Optionee at any time for any reason whatsoever, with
or without good cause.
4.6 Adjustments in Outstanding Options. If the outstanding shares of
Common Stock subject to Options are, from time to time, changed into or
exchanged for a different number or
- 4 -
<PAGE> 25
kind of shares of capital stock or other securities of the Company, or of
another corporation, by reason of a reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend, combination
of shares or otherwise, the Committee shall make an appropriate adjustment in
the aggregate number and kind of shares which may be issued pursuant to Section
2.1 hereof and the number and kind of shares as to which all outstanding
Options, or portions thereof then unexercised, shall be exercisable. Such
adjustment in an outstanding Option shall be made without change in the total
price applicable to the Option or the unexercised portion of the Option (except
for any change in the aggregate price resulting from rounding-off of share
quantities or prices) and with any necessary corresponding adjustment in
Exercise Price per share. No fractional shares shall be issued, and any
fractional shares resulting from computations pursuant to this Section 4.6 shall
be eliminated from the respective Options. Any such adjustment made by the
Committee shall be final and binding upon all Optionees, the Company and all
other interested persons.
ARTICLE V.
EXERCISE OF OPTIONS
5.1 Persons Eligible to Exercise. Except with respect to an Option
which is specifically made transferable pursuant to Section 7.1, (i) during the
lifetime of the Optionee, only the Optionee or the Optionee's guardian or
conservator may exercise an Option granted to such Optionee, or any portion
thereof, and (ii) after the death of the Optionee, any exercisable portion of an
Option may, prior to the time when such portion becomes unexercisable under the
terms of Section 4.4 or the Optionee's Stock Option Agreement, be exercised by
the Optionee's personal representative or by any person empowered to do so under
the deceased Optionee's will or under the then applicable laws of descent and
distribution.
5.2 Partial Exercise. At any time prior to the time when any
exercisable Option or exercisable portion thereof expires or becomes
unexercisable under the terms of Section 4.4 or the Optionee's Stock Option
Agreement, such Option or portion thereof may be exercised in whole or in part;
provided, however, that the Company shall not be required to issue fractional
shares.
5.3 Manner of Exercise. An exercisable Option, or any exercisable
portion thereof, may be exercised solely by delivery to the Secretary of the
Company or his or her office of all of the following prior to the time when such
Option or such portion becomes unexercisable under the terms of Section 4.4 or
the Optionee's Stock Option Agreement:
(i) Notice in writing signed by the Optionee or other person
then entitled to exercise such Option or portion thereof, stating that
such Option or portion thereof is exercised; and
- 5 -
<PAGE> 26
(ii) Full payment of the Exercise Price (as hereinafter
provided) for the shares with respect to which such Option or portion
thereof is thereby exercised, together with payment or arrangement for
payment of federal income or other tax, if any, required to be withheld
by the Company with respect to such shares; and
(iii) In the event that the Option or portion thereof shall be
exercised pursuant to Section 5.1 by any person or persons other than
the Optionee, appropriate proof of the right of such person or persons
to exercise the Option or portion thereof; and
(iv) Such representations and documents as the Committee deems
reasonably necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and
any other federal, state or foreign securities laws or regulations. The
Committee may, in its absolute discretion, also take whatever
additional actions it deems appropriate to effect such compliance,
including, without limitation, placing legends on share certificates
and issuing stock-transfer orders to transfer agents and registrars.
The Exercise Price shall be payable in cash, by check, by tendering
shares of Common Stock of the Company, or by any combination thereof, as time to
time determined by the Committee. Any shares of Common Stock acceptable to the
Committee in payment of the Exercise Price may be tendered by either actual
delivery of the certificates or by such other procedures as the Committee may
establish from time to time and shall be valued at Fair Market Value as of the
date of exercise.
5.4 Rights as Stockholders. The holders of Options shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option, unless and
until certificates representing such shares have been issued by the Company to
such holders. No adjustment shall be made for cash dividends for which the
record date is prior to the date such stock certificate is issued.
ARTICLE VI.
ADMINISTRATION
6.1 Stock Option Committee. The Committee shall consist of at least
three (3) Directors. Appointment of Committee members by the Board shall be
effective upon acceptance of appointment, and Committee members may resign at
any time by delivering written notice to the Board. Vacancies in the Committee
shall be filled by the Board. Committee members shall be appointed by and shall
serve at the pleasure of the Board, and the Board may from time to time remove
members from, or add members to, the Committee and shall fill any vacancy on the
Committee. No person shall be eligible to serve on the Committee unless such
person is then a "non-employee director" within the meaning of paragraph (b) of
- 6 -
<PAGE> 27
Rule 16b-3 which has been adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as such Rule or its equivalent is
then in effect.
6.2 Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and the
Options and to adopt such rules for the administration, interpretation, and
application of the Plan as are consistent herewith and to interpret, amend or
revoke any such rules. Any such interpretation and rules shall be consistent
with the basic purpose of the Plan to grant Options. The Board may, in its
absolute discretion, at any time and from time to time, exercise any and all
rights and duties of the Committee under the Plan.
6.3 Majority Rule. The Committee shall act by a majority of its members
in office and the Committee may act either by vote at a telephonic or other
meeting or by a memorandum or other written instrument signed by a majority of
the Committee. The Secretary of the Company shall keep minutes of all meetings
of the Committee. The Committee shall make such rules of procedure for the
conduct of its business as it shall deem advisable.
6.4 Compensation; Professional Assistance; Good Faith Actions. Members
of the Committee shall not receive compensation for their services as members in
addition to the compensation otherwise payable to them as members of the Board,
but all expenses and liabilities they incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Committee, the Company and the officers and Directors of the
Company shall be entitled to rely upon the advice, opinions or valuations of any
such persons. No member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan or the Options, and all members of the Committee shall be fully protected
by the Company in respect to any such action, determination or interpretation.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
7.1 Transferability of Options. The Committee may grant Nonqualified
Stock Options which are transferable to the extent expressly provided in the
Stock Option Agreement. Except as expressly provided therein, no Option or
interest or right therein shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means,
whether such disposition be voluntary or involuntary or by operation of law or
by judgment, levy, attachment, garnishment or any other legal or equitable
proceeding (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that nothing in this
Section 7.1 shall prevent transfers by will or by the applicable laws of descent
and distribution to the extent contemplated hereby.
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<PAGE> 28
7.2 Amendment, Suspension or Termination of the Plan. The Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Committee. Notwithstanding the foregoing,
without approval of the Company's stockholders given within twelve (12) months
before or after the action by the Committee, no action of the Committee or the
Board may increase any limit imposed in Section 2.1 on the maximum number of
shares which may be issued upon exercise of Options, reduce the minimum option
price requirements in Section 4.2 or extend the limit imposed in Section 3.3 on
the period during which Options may be granted. Neither the amendment,
suspension nor termination of the Plan shall, without the consent of the holder
of the Option, alter or impair any rights or obligations under any Option
theretofore granted. No Option may be granted during any period of suspension
nor after termination of the Plan.
7.3 Effect of Plan Upon Other Options and Compensation Plans. The
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company. Nothing in this Plan shall be construed to limit the
right of the Company (a) to establish any other forms of incentives or
compensation for Employees of the Company; or (b) to grant or assume options
otherwise than under the Plan in connection with any proper corporate purpose,
including, but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, firm or
association.
7.4 Application of Proceeds. The proceeds received by the Company from
the sale of its shares of Common Stock under the Plan will be used for general
corporate purposes.
7.5 Titles. Titles are provided for convenience only and are not to
serve as a basis for interpretation or construction of the Plan.
7.6 Interpretation. Any Options granted under this Plan as Incentive
Stock Options are intended to satisfy all requirements of Section 422 of the
Code insofar as possible, and the provisions of this Plan and all Stock Option
Agreements shall be construed in accordance with that intention. If any
provision of this Plan or any Stock Option Agreement shall be inconsistent or in
conflict with any applicable requirement for an Incentive Stock Option, then
such requirement shall be deemed to override and supersede the inconsistent or
conflicting provision; provided, however, the foregoing provision shall not
limit the Company from granting to any Optionee Options which are in excess of
the amount which may be treated as Incentive Stock Options, and any Options so
granted in excess of the limitations in Section 422(d) of the Code shall be
treated as Nonqualified Stock Options; provided further, however, if the normal
date of exercise of the Option is accelerated because of a sale of the Company
or other similar event as provided in any Stock Option Agreement or because of
the exercise of the Committee's discretion under Section 4.3, such acceleration
shall nevertheless occur even if it shall cause all or a part of the Option to
no longer be an Incentive Stock Option. Any required provision for an Incentive
Stock Option that is omitted from this Plan
- 8 -
<PAGE> 29
or the Stock Option Agreement shall be incorporated herein by reference and
shall apply retroactively, if necessary, and shall be deemed a part of this Plan
and any Stock Option Agreement entered into under this Plan to the same extent
as though expressly set forth herein. The Committee may amend this Plan or amend
the terms of any Stock Option Agreement in any manner that may be required in
order for the Options granted under this Plan to comply with the applicable
requirements for Incentive Stock Options, and, if necessary, any such amendments
shall apply retroactively to the adoption of this Plan.
7.7 Effective Date. This Plan first became effective on October 27,
1995, the date of its adoption by the Board, and was approved on November 17,
1995 by the vote of the holders of a majority of the outstanding shares of the
Company's Common Stock . This Plan as amended and restated shall become
effective with respect to Options granted on or after the date of its adoption
by the Board. Pursuant to Section 7.2, the amendment and restatement does not
require approval by the shareholders of the Company.
- 9 -
<PAGE> 30
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 22, 1999, 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 4, 1999, 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 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.
<PAGE> 31
[X] Please mark votes as in this example.
- ---------------------------------------------------------
ELECTION OF DIRECTORS (terms expiring in 2002)
Nominees: R. Howard Cannon, Harry J. Phillips, Sr.
FOR WITHHELD
[ ] [ ]
Exceptions:
- ---------------------------------------------------------
For all nominees except as noted above.
- ---------------------------------------------------------
Dated: , 1999
------------------------
- ---------------------------------------------------------
INCREASE SHARES AVAILABLE FOR
OPTIONS UNDER STOCK OPTION PLAN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- ---------------------------------------------------------
- ---------------------------------------------------------
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- ---------------------------------------------------------
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.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE TO: Proxy Department, First Union National Bank, 1525 W. T. Harris
Boulevard, Building 3C3, Charlotte, North Carolina 28288-1153
