<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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 Section240.14a-11(c) or
Section240.14a-12
US OFFICE PRODUCTS COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(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 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
1025 Thomas Jefferson Street, NW
Suite 600 East
Washington, DC 20007
(202) 339-6700
July 30, 1999
Dear Stockholder:
We will be holding the 1999 Annual Meeting of US Office Products'
stockholders on Tuesday, August 31, 1999, at 10:00 a.m. Eastern Time at the
Latham Hotel, 3000 M Street, NW, Washington, DC 20007.
Enclosed with this letter is a Notice of the Annual Meeting, a Proxy
Statement, a proxy card, and a return envelope. Both the Notice of Annual
Meeting and the Proxy Statement provide details of the business that we will
conduct at the Annual Meeting and other information about US Office Products.
Whether or not you plan to attend the Annual Meeting, please sign, date and
promptly return the proxy card in the enclosed prepaid return envelope. Your
shares will be voted at the Annual Meeting in accordance with your proxy
instructions. Of course, if you attend the Annual Meeting you may vote in
person.
On behalf of the Board of Directors and the employees of the Company, I
cordially invite you to attend the Annual Meeting. If you plan to attend the
meeting, please mark the appropriate box on the enclosed proxy card.
Sincerely,
[SIGNATURE]
Charles P. Pieper
Chairman of the Board of Directors and
Chief Executive Officer
YOUR VOTE IS IMPORTANT
Please Sign, Date and Return Your Proxy Card Before the Annual Meeting
If you have any questions about voting your shares, please contact our proxy
solicitor,
D.F. King & Co., Inc., toll-free at (800) 431-9463.
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<S> <C>
DATE: TUESDAY, AUGUST 31, 1999
TIME: 10:00 AM EASTERN TIME
PLACE: THE LATHAM HOTEL
3000 M STREET, NW
WASHINGTON, DC 20007
</TABLE>
Dear Stockholders:
At the 1999 Annual Meeting, we will ask you to:
- Elect eight directors;
- Approve the 1999 Employee Stock Purchase Plan;
- Ratify the selection of PricewaterhouseCoopers LLP as independent
accountants for the fiscal year ending April 29, 2000; and
- Transact any other business that is properly presented at the Annual
Meeting.
You will be able to vote your shares at the Annual Meeting if you were a
stockholder of record at the close of business on July 15, 1999.
By order of the Board of Directors:
[SIGNATURE]
Mark D. Director
Secretary
July 30, 1999
YOUR VOTE AT THE ANNUAL MEETING IS IMPORTANT.
PLEASE INDICATE YOUR VOTE ON THE ENCLOSED PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE AS SOON AS POSSIBLE, EVEN IF YOU PLAN TO ATTEND THE MEETING.
IF YOU HAVE QUESTIONS ABOUT VOTING YOUR SHARES, PLEASE CONTACT OUR PROXY
SOLICITOR, D.F. KING & CO., INC., TOLL-FREE AT (800) 431-9463.
IF YOU ATTEND THE MEETING, YOU WILL BE ABLE TO REVOKE YOUR PROXY AND VOTE IN
PERSON.
<PAGE>
[LOGO]
1025 Thomas Jefferson Street, NW
Suite 600 East
Washington, DC 20007
July 30, 1999
PROXY STATEMENT FOR ANNUAL MEETING
This Proxy Statement provides information that you should read before you
vote on the proposals that will be presented to you at the 1999 Annual Meeting
of US Office Products' stockholders. The 1999 Annual Meeting will be held on
Tuesday, August 31, 1999 at 10:00 a.m. Eastern Time at The Latham Hotel, 3000 M
Street, NW, Washington, DC 20007.
This Proxy Statement provides detailed information about the Annual Meeting,
the proposals on which you will be asked to vote at the Annual Meeting, and
other relevant information.
On July 30, 1999, we began mailing information to people who, according to
our records, owned shares of US Office Products' common stock at the close of
business on July 15, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
INFORMATION ABOUT THE 1999 ANNUAL MEETING AND VOTING.................................. 1
PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING....................................... 3
1. ELECTION OF DIRECTORS.......................................................... 3
2. APPROVAL OF 1999 EMPLOYEE STOCK PURCHASE PLAN.................................. 3
3. RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS.......... 6
STOCK OWNERSHIP....................................................................... 7
THE BOARD OF DIRECTORS................................................................ 9
EXECUTIVE OFFICERS AND COMPENSATION................................................... 13
OTHER INFORMATION..................................................................... 24
EXHIBIT A. THE US OFFICE PRODUCTS COMPANY 1999 EMPLOYEE STOCK PURCHASE PLAN........... A-1
</TABLE>
i
<PAGE>
INFORMATION ABOUT THE 1999 ANNUAL MEETING AND VOTING
THE ANNUAL MEETING
The Annual Meeting will be held on Tuesday, August 31, 1999 at 10:00 a.m.
Eastern Time at The Latham Hotel located at 3000 M Street, NW, Washington, DC
20007.
THIS PROXY SOLICITATION
We are sending you this Proxy Statement because US Office Products' Board of
Directors is seeking a proxy to vote your shares at the Annual Meeting. This
Proxy Statement is intended to assist you in deciding how to vote your shares.
On July 30, 1999, we began mailing this Proxy Statement to all people who,
according to our stockholder records, owned shares of US Office Products' common
stock at the close of business on July 15, 1999.
US Office Products is paying the cost of requesting these proxies. US Office
Products' directors, officers and employees may request proxies in person or by
telephone, mail, telecopy or letter. US Office Products also has retained D.F.
King & Co., Inc. to assist in distributing proxy solicitation materials and
seeking proxies. US Office Products will pay D.F. King & Co., Inc. a fee of
approximately $5,500 plus reasonable out-of-pocket expenses for this assistance.
US Office Products will reimburse brokers and other nominees for their
reasonable out-of-pocket expenses for forwarding proxy materials to beneficial
owners of stock.
VOTING YOUR SHARES
You have one vote for each share of US Office Products' common stock that
you owned of record at the close of business on July 15, 1999. The number of
shares you own (and may vote at the Annual Meeting) is listed on the enclosed
proxy card.
You may vote your shares at the Annual Meeting either in person or by proxy.
To vote in person, you must attend the Annual Meeting and obtain and submit a
ballot. Ballots for voting in person will be available at the Annual Meeting. To
vote by proxy, you must complete and return the enclosed proxy card. By
completing and returning the proxy card, you will be directing the persons
designated on the proxy card to vote your shares at the Annual Meeting in
accordance with the instructions you give on the proxy card.
If you decide to vote by proxy, your proxy card will be valid only if you
sign, date and return it before the Annual Meeting. IF YOU COMPLETE THE PROXY
CARD EXCEPT FOR THE VOTING INSTRUCTIONS, THEN YOUR SHARES WILL BE VOTED FOR THE
PROPOSED ELECTION OF DIRECTORS, FOR THE 1999 EMPLOYEE STOCK PURCHASE PLAN, AND
FOR RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE
INDEPENDENT ACCOUNTANTS OF US OFFICE PRODUCTS FOR THE 2000 FISCAL YEAR.
REVOKING YOUR PROXY
If you decide to change your vote, you may revoke your proxy at any time
before it is voted. You may revoke your proxy in any one of three ways:
- You may notify the Secretary of US Office Products in writing that you
wish to revoke your proxy.
- You may submit a proxy dated later than your original proxy.
- You may attend the Annual Meeting and vote. Merely attending the Annual
Meeting will not by itself revoke a proxy; you must obtain a ballot and
vote your shares to revoke the proxy.
1
<PAGE>
VOTE REQUIRED FOR APPROVAL
<TABLE>
<S> <C>
PROPOSAL 1: ELECTION OF EIGHT The eight nominees for director who receive the most votes
DIRECTORS will be elected. So, if you do not vote for a particular
nominee, or you indicate "withhold authority to vote" for
a particular nominee on your proxy card, your vote will
not count either for or against the nominee.
PROPOSAL 2: APPROVAL OF 1999 The affirmative vote of a majority of the votes cast at
EMPLOYEE STOCK PURCHASE PLAN the Annual Meeting is required to approve the 1999
Employee Stock Purchase Plan (the "1999 ESPP"). So, if you
abstain from voting, it has the same effect as if you
voted against the plan.
PROPOSAL 3: RATIFICATION OF The affirmative vote of a majority of the votes cast at
SELECTION OF INDEPENDENT the Annual Meeting is required to ratify the selection of
ACCOUNTANTS independent accountants. So, if you abstain from voting,
it has the same effect as if you voted against this
proposal.
</TABLE>
If you hold your shares with a broker and you do not tell your broker how to
vote, your broker has the authority to vote on all of the proposals scheduled to
be presented at this year's meeting.
QUORUM. On the record date for the Annual Meeting, July 15, 1999,
36,790,874 shares were outstanding. A "quorum" must be present at the Annual
Meeting in order to transact business. A quorum will be present if 18,395,438
shares are represented at the Annual Meeting, either in person (by the
stockholders) or by proxy. If a quorum is not present, a vote cannot occur. In
deciding whether a quorum is present, abstentions will be counted as shares that
are represented at the Annual Meeting.
ADDITIONAL INFORMATION ABOUT US OFFICE PRODUCTS
The US Office Products Annual Report to Stockholders for the fiscal year
ended April 24, 1999, including consolidated financial statements, is being
mailed to all stockholders entitled to vote at the Annual Meeting together with
this Proxy Statement. The Annual Report does not constitute a part of the proxy
solicitation material. The Annual Report tells you how to get additional
information about US Office Products.
2
<PAGE>
PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING
We will present the following three proposals at the Annual Meeting. We have
described in this proxy statement all the proposals that we expect will be made
at the Annual Meeting. If we or a stockholder properly present any other
proposal to the meeting, we will use your proxy to vote your shares on the
proposal as we believe is appropriate.
1. ELECTION OF DIRECTORS
Nominees for election to the Board of Directors are:
Charles P. Pieper
Kevin J. Conway
Frank P. Doyle
Brian D. Finn
L. Dennis Kozlowski
Milton H. Kuyers
Allon H. Lefever
Edward J. Mathias
Each director will be elected to serve for a one-year term, or thereafter
until his replacement is elected and qualified or until his earlier resignation
or removal. Each of the eight nominees is presently a member of the Board of
Directors and has consented to serve as a director if re-elected. More detailed
information about each of the nominees is available in the section of this
booklet titled "The Board of Directors," which begins on page 9.
CDR-PC Acquisition L.L.C., an affiliate of an investment fund managed by
Clayton, Dubilier & Rice, Inc., nominated Messrs. Pieper, Conway and Finn.
CDR-PC Acquisition has the right to nominate three directors under the agreement
with US Office Products pursuant to which CDR-PC Acquisition acquired its
ownership interest in US Office Products. For more information about the
relationship between CDR-PC Acquisition and US Office Products, see the section
of this booklet titled "Certain Relationships and Related Transactions," which
begins on page 23.
If any of the nominees cannot serve for any reason (which is not
anticipated), the Board of Directors may designate a substitute nominee or
nominees. CDR-PC Acquisition has the right to nominate any substitute for
Messrs. Pieper, Conway or Finn. If a substitute is nominated, we will vote all
valid proxies for the election of the substitute nominee or nominees. The Board
of Directors may also decide to leave the Board seat or seats open until a
suitable candidate or candidates are located, or it may decide to reduce the
size of the Board. Proxies at the Annual Meeting may not be voted for more than
eight directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THESE DIRECTORS.
2. APPROVAL OF 1999 EMPLOYEE STOCK PURCHASE PLAN
The 1999 ESPP replaces the 1996 employee stock purchase plan, which
terminated earlier this year when all the shares authorized by the 1996 plan
were issued. The 1999 ESPP provides employees of US Office Products with an
opportunity to become owners of US Office Products through a convenient
arrangement for purchasing shares of common stock. If approved by our
stockholders, the 1999 ESPP will become effective October 1, 1999. The following
is a summary of the 1999 ESPP. For more detailed information, you should read
the full text of the 1999 ESPP, which is included as Exhibit A at the end of
this booklet.
3
<PAGE>
GENERAL
PURPOSE. The 1999 ESPP offers eligible employees the opportunity to
purchase shares of our common stock through after-tax payroll withholding. The
1999 ESPP is intended to permit employees to acquire an equity interest in US
Office Products, thereby providing them with an incentive to work for the growth
and success of US Office Products. We may use the funds we receive under the
1999 ESPP for any general corporate purpose.
ELIGIBILITY. All employees of US Office Products and its Eligible
Subsidiaries are eligible to participate in the 1999 ESPP, except (1) employees
we have employed for less than 90 days at the beginning of the payroll deduction
period and (2) employees who hold more than 5% of our common stock. (The term
"Eligible Subsidiaries" means corporations owned at least 50% by US Office
Products, directly or indirectly, and single-member LLCs where US Office
Products is the member, directly or indirectly. The Board can choose to exclude
subsidiaries but has not done so.) Benefits to be awarded under the 1999 ESPP to
employees vary depending upon the elections of the participants as to their
level of participation. No non-employee directors are eligible to participate in
the 1999 ESPP. As of July 1999, there were approximately 15,000 employees who
would be eligible to participate in the 1999 ESPP.
SHARES AVAILABLE UNDER THE 1999 ESPP. If approved, the 1999 ESPP would
authorize US Office Products to issue up to 1,000,000 shares of common stock
from authorized but unissued shares or from stock owned by US Office Products,
including stock purchased on the market. The number of shares we may issue under
the 1999 ESPP automatically adjusts for stock dividends, stock splits,
reclassifications and other changes affecting the common stock.
ADMINISTRATION. The Compensation Committee of our Board of Directors
administers the 1999 ESPP. The Compensation Committee may delegate this
authority. The Compensation Committee has the authority and discretion to
specify the terms and conditions of stock purchases by employees under the 1999
ESPP (within the limitations of the 1999 ESPP) and to otherwise interpret and
construe the terms of the 1999 ESPP and any related agreements. Under the 1999
ESPP, the Compensation Committee (or the Board of Directors) can lengthen or
shorten the payroll deduction periods, increase the purchase price for shares,
or make other administrative adjustments. The 1999 ESPP also specifically
provides for indemnification of the Compensation Committee, other directors, and
agents for actions taken with respect to the 1999 ESPP.
OPTIONS GRANTED UNDER THE 1999 ESPP
HOW OPTIONS ARE GRANTED. On the first day of each payroll deduction period,
a participating employee will receive options to purchase a number of shares of
US Office Products common stock with money that is withheld from his or her
paycheck. The number of shares available to the participating employee will be
determined at the end of the payroll deduction period by dividing (1) the total
amount of money withheld during the payroll deduction period by (2) the exercise
price of the options (as described below). Options granted under the 1999 ESPP
to employees will be automatically exercised to purchase whole and fractional
shares on the last day of the payroll deduction period, unless the participating
employee has, at least thirty days earlier, requested that his or her payroll
contributions stop. Any cash accumulated in an employee's account for a period
in which an employee elects not to participate will be distributed to the
employee.
EXERCISE PRICE. The initial exercise price for options under the 1999 ESPP
will be 85% of the lesser of the fair market value of the common stock as of the
first day of the payroll deduction period (January 1, April 1, July 1, and
October 1) and the last day of that period. The Committee may increase the
exercise price before a payroll deduction period begins. No participant can
purchase more than $25,000 worth of US Office Products common stock in all
payroll deduction periods ending during the same calendar year. The closing
price of a share of US Office Products common stock, as reported on July 15,
1999 was $5.125.
4
<PAGE>
ELECTION TO PARTICIPATE. Participating employees must elect before the
beginning of a given payroll deduction period to participate, although a prior
election will carry over until revoked. Payroll deduction periods will begin on
January 1, April 1, July 1, and October 1.
TERMINATION OF SERVICE. If an employee's employment ends for any reason,
including death, any cash accumulated in the employee's account will be
distributed, and the employee will immediately cease to participate in the 1999
ESPP.
OTHER INFORMATION. All options granted under the 1999 ESPP will be
evidenced by participation agreements. The Committee has broad discretion to
determine the timing, amount, exercisability, and other terms and conditions of
options granted to employees. No options granted or funds accumulated under the
1999 ESPP are assignable or transferable, other than by will or in accordance
with the laws of descent and distribution.
AMENDMENT OR TERMINATION OF THE 1999 ESPP
The Board of Directors may amend or terminate the 1999 ESPP at any time and
from time to time. Stockholder approval is required for any changes if such
approval is required to preserve the 1999 ESPP's status as a plan under Section
423 of the Internal Revenue Code. Absent extension by the Board with stockholder
approval, no payroll deduction period will begin after April 1, 2009.
TAX CONSEQUENCES
The following summarizes the material federal income tax consequences of
participation in the 1999 ESPP. It does not cover employment taxes except as
specified, nor does it cover other federal, state, local, or foreign tax
consequences, if any.
We designed the 1999 ESPP to qualify for the favorable federal income tax
treatment provided under Section 423 of the Internal Revenue Code.
A participant's withheld compensation will be post-tax. In other words, the
participant will be taxed on amounts withheld for the purchase of shares of US
Office Products common stock as if he or she had instead received his or her
full salary or wages. Other than this, no income will be taxable to a
participant until disposition of the shares acquired, and the method of taxation
will depend upon how long the shares were held before disposition.
If the purchased shares of common stock are disposed of more than two years
after the beginning of the applicable payroll deduction period and more than one
year after the exercise date, or if the participant dies at any time while
holding the stock, then the lesser of (a) the excess of the fair market value of
the stock at the time of such disposition or death over the purchase price or
(b) the discount element (up to 15% of fair market value) of the stock as of the
beginning of the applicable offering period will be treated as ordinary income.
Any further gain or any loss will be taxed as a long-term capital gain or loss.
Net long-term capital gains for individuals are currently subject to a maximum
marginal federal income tax rate that is less than the maximum marginal rate for
ordinary income.
If the participant sells or disposes of the stock before the expiration of
either of the holding periods described above (a "disqualifying disposition"),
then the excess of the fair market value of the stock on the exercise date over
the exercise price will be treated as ordinary income at the time of such
disposition. US Office Products may, in the future, be required to withhold
income taxes relating to such ordinary income from other payments made to the
participant. The balance of any gain on a sale will be treated as capital gain.
Even if the stock is sold for less than its fair market value on the exercise
date, the same amount of ordinary income is attributed to the participant, and a
capital loss is recognized equal to the difference between the sales price and
the fair market value of the stock on the exercise date. Any capital gain or
loss will be long- or short-term depending on whether the stock has been held
for more than one year.
5
<PAGE>
There are no federal income tax consequences to US Office Products by reason
of the grant or exercise of rights under the 1999 ESPP. US Office Products will,
in general, be entitled to a deduction to the extent amounts are taxed as
ordinary income to a participant by reason of a disqualifying disposition of the
purchased shares of stock, but will not be entitled to a deduction in respect of
the ordinary income realized by a participant upon a later disposition, or
realized upon death. US Office Products' deduction may be limited under Internal
Revenue Code Section 162(m) and may be subject to disallowance for failure to
report the optionee's income (which could arise if an optionee does not notify
US Office Products of the sale of stock in a disqualifying disposition).
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
3. RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers has served as our independent accountants since US
Office Products' inception in 1994. The Audit Committee and the Board believe
that PricewaterhouseCoopers' long-term knowledge of US Office Products is
invaluable. We would like to continue this successful relationship.
Representatives from PricewaterhouseCoopers will be available at the Annual
Meeting to answer your questions and make a statement if they desire.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
6
<PAGE>
STOCK OWNERSHIP
There were 36,790,874 shares of common stock of US Office Products
outstanding on July 15, 1999. The following table shows how many shares were
owned by each person who owned more than 5% of the issued and outstanding shares
on that date.
NAME AND ADDRESS OF BENEFICIAL OWNER
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES SHARES
---------- ---------------
<S> <C> <C>
CDR-PC Acquisition, L.L.C. (1)..................................................... 9,210,457 25.0%
c/o Clayton, Dubilier & Rice Fund V Limited Partnership
1403 Foulk Road
Suite 106
Wilmington, DE 19803
</TABLE>
- ------------------------
(1) Includes warrants to purchase 109,328 shares of common stock, which are
currently exercisable. Excludes 73,261.79 shares of preferred stock. If
CDR-PC Acquisition transfers the preferred stock to an unaffiliated third
party, each share of preferred stock automatically converts into 100 shares
of common stock. Except for matters that directly affect the rights of
holders of the preferred stock, the preferred stock has voting rights only
with respect to any merger, consolidation, sale or lease of all or
substantially all of US Office Products' assets, or any agreement to do any
of the foregoing. Also excludes warrants to purchase approximately 9.2
million shares of common stock, which are not exercisable prior to June
2000.
The following table shows how many shares were owned on July 15, 1999 by
each of (1) the directors of US Office Products, (2) the current Chief Executive
Officer of US Office Products, and (3) the other persons named in the Summary
Compensation Table on page 15 who were executive officers on July 15, 1999. (In
the remainder of this Proxy Statement, we will refer collectively to the Chief
Executive Officer and the other persons listed in the Summary Compensation Table
as the "named executive officers.") This table also shows how many shares all of
the directors and executive officers of US Office Products owned together. The
number of shares set forth in this table includes shares subject to options that
are exercisable currently or exercisable within 60 days after July 15, 1999. The
number of shares subject to options set forth in the table on page 18 includes
only options that were exercisable as of April 24, 1999 (the end of the 1999
fiscal year).
NAME OF BENEFICIAL OWNER
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES SHARES
----------- -----------------
<S> <C> <C>
Charles P. Pieper.................................................................... -- --
Michael J. Barnell................................................................... 160,051(1) *
Donald H. Platt...................................................................... 74,938(2) *
Mark D. Director..................................................................... 57,825(3) *
Anne T. Smyth........................................................................ 25,153(4) *
Joseph T. Doyle...................................................................... 20,000 *
Kevin J. Conway...................................................................... -- --
Frank P. Doyle....................................................................... 3,312(5) *
Brian D. Finn........................................................................ -- --
L. Dennis Kozlowski.................................................................. 33,312(5) *
Milton H. Kuyers..................................................................... 6,672(6) *
Allon H. Lefever..................................................................... 6,672(6) *
Edward J. Mathias.................................................................... 106,847(6) *
All current executive officers and directors as a group.............................. 494,782(7) 1.3%
</TABLE>
- ------------------------
* Less than 1%.
[FOOTNOTES ON FOLLOWING PAGE]
7
<PAGE>
(1) Includes 106,560 shares owned indirectly through the Michael J. Barnell
Revocable Trust, of which Mr. Barnell is the trustee; 29,423 shares owned
indirectly through MVB Investments, L.P.; and 14,978 shares owned indirectly
by his spouse. Also includes 7,243 shares subject to options that are
exercisable currently or exercisable within 60 days.
(2) Includes 72,718 shares subject to options that are exercisable currently or
exercisable within 60 days.
(3) Includes 1,000 shares owned indirectly by Mr. Director's daughters and
43,082 shares subject to options that are exercisable currently or
exercisable within 60 days.
(4) Includes 3,171 shares subject to options that are exercisable currently or
exercisable within 60 days.
(5) Includes 3,312 shares subject to options that are exercisable currently or
exercisable within 60 days.
(6) Includes 6,672 shares subject to options that are exercisable currently or
exercisable within 60 days.
(7) Includes 152,854 shares subject to options that are exercisable currently or
exercisable within 60 days.
8
<PAGE>
THE BOARD OF DIRECTORS
MEMBERSHIP
We have set forth below certain information regarding the members of US
Office Products' Board of Directors. Each of the directors has been nominated
for re-election at the Annual Meeting.
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
CHARLES P. PIEPER
AGE: 52
DIRECTOR SINCE: June 1998
PRINCIPAL OCCUPATION: Principal and Director of Clayton, Dubilier & Rice, Inc.
RECENT BUSINESS EXPERIENCE: Mr. Pieper has been the Chairman of the Board of US Office
Products since June 1998. He has been Chief Executive
Officer since February 26, 1999. Mr. Pieper has been a
principal and a director of Clayton, Dubilier & Rice since
March 1997 and March 1998, respectively. Previously, Mr.
Pieper was President and Chief Executive Officer of GE
Lighting Europe and GE Japan, GE Korea, GE Taiwan, GE
Medical Systems Asia, Yokogawa Medical Systems and GE
Trading Co.
OTHER DIRECTORSHIPS: Chairman: North American Van Lines. Director: Dynatech
Corporation.
- --------------------------------------------------------------------------------------------
KEVIN J. CONWAY
AGE: 40
DIRECTOR SINCE: June 1998
PRINCIPAL OCCUPATION: Principal and Director of Clayton, Dubilier & Rice, Inc.
RECENT BUSINESS EXPERIENCE: Mr. Conway has been a principal of Clayton, Dubilier &
Rice, Inc. since 1994 and a director since March 1998.
Prior to joining Clayton, Dubilier & Rice, Inc., Mr.
Conway worked for 10 years at Goldman, Sachs & Co., an
investment banking firm.
OTHER DIRECTORSHIPS: Riverwood International Corporation
- --------------------------------------------------------------------------------------------
FRANK P. DOYLE
AGE: 68
DIRECTOR SINCE: June 1998
PRINCIPAL OCCUPATION: Private Consultant
RECENT BUSINESS EXPERIENCE: Mr. Doyle became a private consultant after retiring as
Executive Vice President of General Electric Company in
1996. As Executive Vice President, he was one of a three
member Corporate Executive Office to which all of GE's
operating businesses and staff reported. Mr. Doyle served
as Executive Vice President of GE from 1991, and prior to
that time he was Senior Vice President at GE with
responsibility for Corporate Marketing and Advertising,
Employee, Government and Public Relations from 1981.
OTHER DIRECTORSHIPS: Compaq Computer Corporation; Paine Webber Group, Inc.;
Roadway Express, Inc.
- --------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
BRIAN D. FINN
AGE: 38
DIRECTOR SINCE: June 1998
PRINCIPAL OCCUPATION: Principal and Director of Clayton, Dubilier & Rice, Inc.
RECENT BUSINESS EXPERIENCE: Mr. Finn has been a principal and a director of Clayton,
Dubilier & Rice, Inc. since June 1997 and March 1998,
respectively. Prior to joining Clayton, Dubilier & Rice,
Inc. in 1997, Mr. Finn worked for 15 years at Credit
Suisse First Boston, an investment banking firm, most
recently as co-head of the Mergers and Acquisitions
division.
OTHER DIRECTORSHIPS: Dynatech Corporation
- --------------------------------------------------------------------------------------------
L. DENNIS KOZLOWSKI
AGE: 52
DIRECTOR SINCE: June 1998
PRINCIPAL OCCUPATION: Chairman and Chief Executive Officer of Tyco International
Ltd.
RECENT BUSINESS EXPERIENCE: Mr. Kozlowski has served as Chairman and Chief Executive
Officer of Tyco International Ltd., a multinational
company involved in manufacturing, distribution, and
servicing fire protection and security systems, disposable
medical products, flow control and electronic products
worldwide, since 1993 and 1992, respectively. Prior to
that, he was President and Chief Operating Officer. He has
been with Tyco since 1989 and has been a director of Tyco
since 1987.
OTHER DIRECTORSHIPS: Applied Power Inc.; Raytheon Company; Starwood Resort &
Hotel.
- --------------------------------------------------------------------------------------------
MILTON H. KUYERS
AGE: 62
DIRECTOR SINCE: April 1995
PRINCIPAL OCCUPATION: Chairman and Chief Executive Officer of GMK Companies
RECENT BUSINESS EXPERIENCE: Mr. Kuyers is a part owner and executive officer of a
number of privately held companies, including: Zero Zone,
Inc., a manufacturer of commercial refrigeration units;
Desert Aire Corp., a manufacturer of commercial
dehumidification equipment; Northwest Coatings, Inc., a
manufacturer of coating products; Grayline, Inc., a
manufacturer of tubing used in the appliance and
electrical industries; Faustel, Inc., a manufacturer of
custom coating equipment; and Digicorp Inc., a distributor
of business telephone systems and cellular telephones.
Prior to 1993, Mr. Kuyers served as the President of Star
Sprinkler Corp., a manufacturer of sprinkler heads for
fire protection systems. Before its acquisition by US
Office Products, Mr. Kuyers was a director of H.H. West
Company, a wholly owned subsidiary of US Office Products.
Mr. Kuyers previously served on the board of Medical
Advances, Inc., a manufacturer of parts for medical
diagnostic applications, until its sale in March 1997.
- --------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
ALLON H. LEFEVER
AGE: 52
DIRECTOR SINCE: February 1995
PRINCIPAL OCCUPATION: President of the Northeast and Plains Regions of
OneMain.com, Inc.
RECENT BUSINESS EXPERIENCE: Mr. Lefever is the President of the Northeast and Plains
regions of OneMain.com, Inc., a national Internet access
provider. Previously Mr. Lefever was Vice President of the
Affiliated Companies for High Industries, Inc., from April
1988. From 1988 until its acquisition by US Office
Products, Mr. Lefever served as the Chairman of the Board
and Chief Executive Officer of The Office Works, Inc., and
he currently serves on the boards of several private
companies.
- --------------------------------------------------------------------------------------------
EDWARD J. MATHIAS
AGE: 57
DIRECTOR SINCE: February 1995
PRINCIPAL OCCUPATION: Managing Director of The Carlyle Group
RECENT BUSINESS EXPERIENCE: Mr. Mathias has been a Managing Director of the Carlyle
Group, a merchant bank based in Washington DC, since 1994.
From 1971 to 1993, Mr. Mathias was employed at T. Rowe
Price Associates, most recently as a Managing Director.
OTHER DIRECTORSHIPS: USA Floral, Inc.; Condor Technology Solutions, Inc.
- --------------------------------------------------------------------------------------------
</TABLE>
BOARD ORGANIZATION AND MEETINGS
During the fiscal year that ended April 24, 1999, US Office Products' Board
of Directors met 13 times, and took action by unanimous written consent five
times. Every member of the Board attended at least 75% of the total Board
meetings and at least 75% of the meetings of committees on which the member
served.
The Board of Directors has the following committees:
EXECUTIVE COMMITTEE. The Executive Committee has the authority to exercise
the powers of the Board between meetings of the Board, except that the Executive
Committee cannot: amend the certificate of incorporation or bylaws; approve or
recommend a merger, consolidation or disposition of all or substantially all of
US Office Products' assets; recommend or revoke a dissolution of US Office
Products; or take any other action that requires not less than a three-quarter
affirmative vote of the directors. In addition, the Executive Committee cannot
declare a dividend or authorize the issuance of stock unless specifically
authorized by the Board of Directors. The members of the Executive Committee
are:
Charles P. Pieper
L. Dennis Kozlowski
The Executive Committee did not meet and acted once by unanimous consent in
US Office Products' 1999 fiscal year.
AUDIT COMMITTEE. The Audit Committee (i) makes recommendations to the Board
of Directors with respect to the independent accountants who conduct the annual
examination of US Office Products'
11
<PAGE>
accounts; (ii) reviews the scope of the annual audit and meets periodically with
US Office Products' independent accountants to review their findings and
recommendations; (iii) approves major accounting policies or changes thereto;
and (iv) periodically reviews principal internal controls to assure that US
Office Products is maintaining a sound and modern system of financial controls.
The members of the Audit Committee are:
Milton H. Kuyers (Chairman)
Kevin J. Conway
Allon H. Lefever
The Audit Committee met three times and acted once by unanimous written
consent in US Office Products' 1999 fiscal year.
COMPENSATION COMMITTEE. The Compensation Committee periodically determines
the amount and form of compensation and benefits payable to all executive
officers and certain other management personnel. A subcommittee of this
committee also administers the US Office Products Company Amended and Restated
1994 Long-Term Incentive Plan (the "Incentive Plan"), and the US Office Products
Company Executive Deferred Compensation Plan (the "Executive Deferred
Compensation Plan"). The Board of Directors has also authorized Messrs. Doyle
and Mathias, acting as a subcommittee of the Compensation Committee whose
members qualify as outside non-employee directors under the applicable tax and
securities laws, to approve any awards of stock or options to US Office
Products' directors (other than non-employee directors) and officers under the
Incentive Plan and to administer elements of the Section 162(m) Bonus Plan (the
"Bonus Plan"). The members of the Compensation Committee are:
Frank P. Doyle (Chairman)
Edward J. Mathias
Brian D. Finn
The Compensation Committee met five times and acted twelve times by
unanimous written consent in US Office Products' 1999 fiscal year.
COMPENSATION OF DIRECTORS
FEES AND EXPENSES. US Office Products pays each director who is not a US
Office Products employee an annual fee of $35,000 and $50,000 for members of the
Executive Committee. In fiscal 1999, US Office Products paid a total of $183,818
in directors' fees. Under the terms of a consulting agreement described on page
23 of this Proxy Statement, Messrs. Pieper, Conway and Finn have agreed to waive
these fees. All directors are reimbursed for out-of-pocket expenses related to
attending Board meetings. The total amount paid for expenses to directors in
fiscal 1999 was $7,223 excluding reimbursements to Messrs. Pieper, Conway and
Finn under the consulting agreement.
1996 NON-EMPLOYEE DIRECTORS' STOCK PLAN. In connection with this plan, US
Office Products awards non-employee directors options to acquire 7,875 shares of
common stock upon their initial election as a member of the Board of Directors.
US Office Products also awards each director options to acquire 2,250 shares in
each year they are re-elected. Options awarded to directors under the 1996
Non-employee Directors' Stock Plan become exercisable in two equal installments
at the six-month and one-year anniversaries of the date the options are awarded.
US Office Products will also pay directors' fees in the form of shares of common
stock or "deferred" shares of common stock for each director who elects to
receive fees this way. Four directors elected to defer their compensation under
this plan during US Office Products' 1999 fiscal year. Messrs. Conway and Finn
will not receive compensation under the 1996 Non-employee Directors' Stock Plan
while they are members of the US Office Products' Board. For more information
about agreements between US Office Products and Messrs. Conway and Finn, please
see the section of this booklet titled "Certain Relationships and Related
Transactions," which begins on page 23.
DIRECTORS WHO ARE ALSO EMPLOYEES. Directors who are also employees of US
Office Products are not compensated for serving on the Board.
12
<PAGE>
EXECUTIVE OFFICERS AND COMPENSATION
We set forth below certain information regarding the executive officers of
US Office Products, except Mr. Pieper, whose information we set forth on page 9.
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
MICHAEL J. BARNELL PRESIDENT, NORTH AMERICAN OFFICE PRODUCTS GROUP
AGE: 43
OFFICER SINCE: 1997
POSITION(S) HELD AT COMPANY: Mr. Barnell has served as President of the North American
Office Products Group since September 1, 1997. From March
1, 1997 until September 1997, he was Executive Vice
President of the North American Office Products Group. He
joined US Office Products in August 1996 as President of
St. Louis-based American Loose Leaf/ Business Products,
Inc. when US Office Products purchased that company.
PREVIOUS BUSINESS EXPERIENCE: From 1984 until joining US Office Products, Mr. Barnell
served as Vice President and President of American Loose
Leaf/Business Products, Inc.
- --------------------------------------------------------------------------------------------
MARK D. DIRECTOR EXECUTIVE VICE PRESIDENT--ADMINISTRATION, GENERAL COUNSEL
AND SECRETARY
AGE: 41
OFFICER SINCE: 1996
POSITION(S) HELD AT COMPANY: Mr. Director has served as Executive Vice President-
Administration since February 1998 and as General Counsel
and Secretary since February 1996 and August 1996,
respectively. From June 1997 until February 1998, he
served as Chief Administrative Officer. From February 1996
until June 1997, Mr. Director served as Executive Vice
President.
PREVIOUS BUSINESS EXPERIENCE: Before coming to US Office Products, Mr. Director served
as Executive Vice President, General Counsel and Secretary
of Radio Movil Digital Americas from February 1995 until
February 1996. Prior to that, Mr. Director was a principal
of Fields & Director, a law firm located in Washington, DC
from 1990 until 1995.
- --------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
JOSEPH T. DOYLE EXECUTIVE VICE PRESIDENT--FINANCE AND CHIEF FINANCIAL
OFFICER
AGE: 52
OFFICER SINCE: 1998
POSITION(S) HELD AT COMPANY: Mr. Doyle has served as Executive Vice President-Finance
and Chief Financial Officer since August 12, 1998, when he
joined US Office Products. He also served as Treasurer
from August 12, 1998 until February 28, 1999.
PREVIOUS BUSINESS EXPERIENCE: From April 1996 to June 1998 Mr. Doyle was Senior Vice
President-Finance, Westinghouse Electric Corporation. From
January 1994 to March 1996 he was Executive Vice
President-Finance, Chief Financial Officer, Secretary and
Director of Allison Engine Company. Prior to that, Mr.
Doyle held various positions in General Dynamics
Corporation from 1986 to 1993.
OTHER DIRECTORSHIPS: MVE, Inc.
- --------------------------------------------------------------------------------------------
DONALD H. PLATT EXECUTIVE VICE PRESIDENT--STRATEGIC PLANNING
AGE: 52
OFFICER SINCE: 1995
POSITION(S) HELD AT COMPANY: Mr. Platt has served as Executive Vice President-Strategic
Planning of the Company since August 1998. Prior to that
time, he served as Executive Vice President-Finance of the
Company from February 1998 to August 1998, as Chief
Financial Officer from August 1995 to August 1998, and as
Treasurer from August 1996 to August 1998. From August
1995 until February 1998, he served as Senior Vice
President. From April 1995 until August 1995, Mr. Platt
served as the Company's Senior Vice President--Corporate
Development.
PREVIOUS BUSINESS EXPERIENCE: From 1990 through 1993, Mr. Platt served as Dealer
Business Consultant and, from January 1994 through April
1995, as Vice President of Dealer Financing for Steelecase
Financial Services, Inc. a finance subsidiary of
Steelecase, Inc.
- --------------------------------------------------------------------------------------------
ANNE T. SMYTH EXECUTIVE VICE PRESIDENT--E-COMMERCE AND CHIEF INFORMATION
OFFICER
AGE: 48
OFFICER SINCE: 1996
POSITION(S) HELD AT COMPANY: Ms. Smyth has served as Executive Vice President
-E-Commerce and Chief Information Officer of the Company
since February 1999. Prior to that time, she served as
Senior Vice President and Chief Information Officer of the
Company from April 1997 to February 1999, and as Senior
Vice President-Merchandising from October 1998 to February
1999. She joined US Office Products in December 1996 as
Chief Information Officer, when US Office Products
acquired the Des Plaines, Illinois-based company of which
she was President and Founder, The Systems House, Inc.
OTHER DIRECTORSHIPS: Distribution Management Systems, Inc.
- --------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
SUMMARY COMPENSATION TABLE
We have set forth below, for the periods indicated, certain summary
information concerning the cash and non-cash compensation earned by or awarded
to (i) the US Office Products' Chief Executive Officer, (ii) each of the four
most highly compensated persons who were serving as executive officers of US
Office Products at the end of our fiscal year, and (iii) our Chief Financial
Officer, who would have been one of the four most highly compensated executive
officers had he been with US Office Products for the entire fiscal year.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION --------------------
------------------------------------- SECURITIES
OTHER UNDERLYING
FISCAL ANNUAL OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION SARS(#)(2) COMPENSATION
- ------------------------------------- ----------- ---------- ---------- ------------- -------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles P. Pieper(1)................. 1999 $ -- $ -- $ -- -- $ --
Chairman of the Board & Chief
Executive Officer
Michael J. Barnell(3)................ 1999 350,000 30,000 13,283 150,000 2,443
President, North American Office 1998 295,000 150,000 -- 163,499 2,851
Products Group 1997 250,000 20,000 -- -- 1,298
Mark D. Director(4).................. 1999 350,000 130,000 -- 50,000 5,034
Executive Vice President-- 1998 300,000 150,000 -- 143,062 5,092
Administration, General Counsel and 1997 200,000 100,000 -- 61,312 1,650
Secretary
Joseph T. Doyle(5)................... 1999 229,000 130,000 -- 150,000 404
Executive Vice President-- Finance
and Chief Financial Officer
Donald H. Platt(6)................... 1999 350,000 25,000 -- 30,000 6,539
Executive Vice President-- 1998 300,000 175,000 -- 143,062 5,047
Strategic Planning 1997 200,000 100,000 -- 61,312 3,394
Anne T. Smyth(7)..................... 1999 290,000 130,000 -- 100,000 1,684
Executive Vice President-- 1998 224,000 75,000 -- 40,875 1,151
E-Commerce and Chief Information 1997 61,000 25,000 -- -- 173
Officer
Thomas Morgan(8)..................... 1999 550,000 125,000 -- 250,000 3,940
1998 519,000 252,500 57,527 143,062 6,524
1997 101,000 37,500 36,500 204,375 --
</TABLE>
- ------------------------
(1) On February 26, 1999, Mr. Pieper became Chief Executive Officer. Mr. Pieper,
who is a principal and director of Clayton, Dubilier & Rice, Inc., has
waived his right to directors' fees pursuant to US Office Products'
agreement with Clayton, Dubilier & Rice, Inc. In addition, by agreement with
Clayton, Dubilier & Rice, Inc., Mr. Pieper will not receive a salary from US
Office Products for serving as the Chief Executive Officer. See "Certain
Relationships and Related Transactions" on page 23.
(2) Represents options granted during fiscal years 1999, 1998, and 1997 with
respect to the stated number of shares of common stock. The number and
exercise price of options granted during fiscal years 1998 and 1997 have
been adjusted to reflect the impact of the spin-off to stockholders of four
of US Office Products' operating divisions in June 1998, as part of US
Office Products' strategic restructuring plan.
15
<PAGE>
These adjustments were made to all outstanding options in accordance with
the anti-dilution provisions of US Office Products' Amended and Restated
1994 Long-Term Incentive Plan. All share amounts also have been adjusted to
reflect the October 1997 three-for-two stock split and the June 1998
one-for-four reverse stock split.
(3) Mr. Barnell's other annual compensation includes $13,283 of moving and
relocation related expenses in fiscal 1999. Mr. Barnell's other compensation
amounts represent matching contributions under US Office Products' 401(k)
Retirement Plan in the amounts of $2,443, $2,851 and $1,298 in fiscal 1999,
1998 and 1997, respectively.
(4) Mr. Director's other compensation amount represents matching contributions
under US Office Products' 401(k) Retirement Plan in the amounts of $2,837
and $3,012 in fiscal 1999 and 1998, respectively, and the payment of
executive disability insurance premiums in the amounts of $2,197, $2,080 and
$1,650 in fiscal 1999, 1998 and 1997, respectively.
(5) The salary for Mr. Doyle for fiscal 1999 represents less than one full
year's compensation, as he commenced employment with US Office Products
during fiscal 1999. As of April 24, 1999, Mr. Doyle's annual base salary was
$350,000. Mr. Doyle's other compensation amount represents matching
contributions under US Office Products' 401(k) Retirement Plan in the amount
of $404.
(6) Mr. Platt's other compensation amounts represent matching contributions
under US Office Products' 401(k) Retirement Plan in the amounts of $2,404,
$3,203 and $1,740 in fiscal 1999, 1998 and 1997, respectively, and the
payment of executive disability insurance premiums in the amounts of $4,135,
$1,844 and $1,654 in fiscal 1999, 1998 and 1997, respectively.
(7) Ms. Smyth's other compensation amounts represent matching contributions
under US Office Products' 401(k) Retirement Plan in the amounts of $1,684,
$1,151 and $173 in fiscal 1999, 1998 and 1997, respectively. Ms. Smyth's
compensation for fiscal 1997 represents less than a full year's compensation
as she was employed by a company acquired by US Office Products in fiscal
1997. As of April 24, 1999, Ms. Smyth's annual base salary was $340,000.
(8) On February 26, 1999, Mr. Morgan stepped down as Chief Executive Officer and
he is no longer employed with US Office Products. His salary for fiscal 1999
represents less than one full year's compensation, as he ended employment
with US Office Products during the fiscal year. The bonus paid to Mr. Morgan
in fiscal 1999 represents the pro-rated portion of the bonus guaranteed in
his employment agreement for the portion of fiscal 1999 that he served as
Chief Executive Officer. Mr. Morgan's other annual compensation amounts
include $57,527 and $36,500 of moving related expenses in fiscal 1998 and
1997, respectively. Mr. Morgan's other compensation amounts represent
matching contributions under US Office Products' 401(k) Retirement Plan in
the amounts of $3,940 and $2,284 in fiscal 1999 and 1998, respectively, and
the payment of executive disability insurance premiums in the amount of
$4,240 in fiscal 1998.
16
<PAGE>
INFORMATION REGARDING OPTIONS GRANTED TO AND HELD BY THE NAMED EXECUTIVE
OFFICERS
We have set forth below certain information concerning the grant and
exercise of options to purchase US Office Products' common stock during fiscal
year 1999 to each of the named executive officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL RATES
NUMBER OF PERCENT OF OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION -------------------------
NAME GRANTED(1) FISCAL YEAR PRICE(1) DATE 5% 10%
- ---------------------------------- ----------- --------------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles P. Pieper................. -- -- $ -- -- $ -- $ --
Michael J. Barnell................ 150,000 4.5% 6.00 2/5/2009 556,005 1,434,368
Mark D. Director.................. 50,000 1.5% 6.00 2/5/2009 188,668 478,123
Joseph T. Doyle................... 150,000 4.5% 6.00 2/5/2009 566,005 1,434,368
Donald H. Platt................... 30,000 0.9% 6.00 2/5/2009 113,201 286,874
Anne T. Smyth..................... 100,000 3.0% 6.00 2/5/2009 377,337 956,245
Thomas Morgan..................... 250,000 7.6% 6.00 2/5/2009(3) 943,342(3) 2,390,614(3)
</TABLE>
- ------------------------
(1) The options granted are non-qualified stock options. Except as noted below,
they are exercisable at or above the market price on the date of grant
beginning one year from the date of grant in cumulative yearly amounts of
25% of the shares and expire ten years from the date of grant. The options
become fully exercisable upon a change in control, as defined in the Amended
and Restated 1994 Long-Term Incentive Plan (except as modified by the terms
of any individual option agreement). The options granted to Mr. Barnell will
become exercisable 100% on April 23, 2000 if he remains employed by US
Office Products as of that date; they will become exercisable 100% as of an
earlier date under certain circumstances, as described in his option
agreement and his employment agreement.
(2) The dollar amounts under these columns are the results of calculations at
assumed annual rates of stock appreciation of five percent (5%) and ten
percent (10%). These assumed rates of growth were selected by the SEC for
illustration purposes only. They are not intended to forecast possible
future appreciation, if any, of US Office Products' stock price. No gain to
the optionees is possible without an increase in stock prices, which will
benefit all stockholders. A zero percent (0%) gain in stock price will
result in a zero percent (0%) benefit to optionees.
(3) Mr. Morgan forfeited these options when he left US Office Products in
February 1999.
17
<PAGE>
OPTION EXERCISES IN FISCAL 1999 AND VALUE OF OPTIONS AT APRIL 24, 1999
We set forth below information about options exercised during fiscal 1999
for the named executive officers and about options they held at the end of
fiscal 1999. All option exercises listed in the following table occurred in
connection with the June 1998 self-tender offer by US Office Products, which was
an element of our strategic restructuring plan.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY(3) OPTIONS
OPTIONS HELD AT FISCAL YEAR-
SHARES AT FISCAL YEAR-END(#) END($)(4)(5)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE(#)(1) REALIZED($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------ ------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles P. Pieper................... -- $ -- -- -- -- --
Michael J. Barnell.................. 37,993 824,828 3,175 172,291 -- --
Mark D. Director.................... 55,203 1,520,143 30,806 105,585 -- --
Joseph T. Doyle..................... -- -- -- 150,000 -- --
Donald H. Platt..................... 98,778 3,177,261 39,826 105,198 -- --
Anne T. Smyth....................... 9,498 206,202 183 108,967 -- --
Thomas Morgan....................... -- -- 27,157(6) 48,016(6) -- --
</TABLE>
- ------------------------
(1) Represents the number of shares with respect to which options were
exercised. The number of shares has not been adjusted to reflect the impact
of the spin-off to stockholders of four of US Office Products' operating
divisions in June 1998, as part of US Office Products' strategic
restructuring plan, or the June 1998 one-for-four reverse stock split, as
the self-tender was completed (and the options were exercised) before these
events.
(2) The value realized in the self-tender offer is equal to the difference
between the tender offer price and the exercise price of the option for
those options that were exercised in the self-tender offer. The maximum
portion of an optionholder's options that could have been exercised in the
self-tender offer was 23.237%, which is the pro-ration percentage of
tendered shares that US Office Products accepted from all tendering
stockholders and optionholders in the self-tender offer.
(3) The number of shares has been adjusted to reflect (i) the impact of the
spin-off to stockholders of four of US Office Products' operating divisions
in June 1998, as part of US Office Products' strategic restructuring plan;
(ii) the October 1997 three-for-two stock split; and (iii) the June 1998
one-for-four reverse stock split. These adjustments were made to all
outstanding options in accordance with the anti-dilution provisions of US
Office Products' Amended and Restated 1994 Long-Term Incentive Plan.
(4) Options are "in-the-money" if the closing market price of the US Office
Products' common stock on April 24, 1999 exceeded the exercise price of the
options.
(5) The value of unexercised options represents the difference between the
exercise price of such options and $4.438, which was the last reported sale
price of US Office Products' common stock on April 24, 1999.
(6) By their terms, Mr. Morgan's unexercisable options expired on the date he
left US Office Products, and his exercisable options expired in May 1999 (90
days after his departure from US Office Products). He did not exercise any
of these options before they expired.
18
<PAGE>
TEN-YEAR OPTION REPRICINGS
In December 1998 we offered option holders the opportunity to replace their
then-existing options with a smaller number of options with a lower exercise
price. The following table sets forth information regarding replacement of
options by all named executive officers in the December 1998 program. US Office
Products has not changed the exercise price on options for any of its named
executive officers during the last ten fiscal years, except in the option
replacement program and (in accordance with the anti-dilution provisions of the
Amended and Restated 1994 Long-Term Incentive Plan) to adjust for stock splits,
reverse stock splits, and the spin-off of four of our divisions in June 1998.
<TABLE>
<CAPTION>
LENGTH OF
MARKET PRICE OF EXERCISE ORIGINAL OPTION
# OF SECURITIES STOCK AT TIME PRICE TERM REMAINING
UNDERLYING OF AT TIME OF NEW AT DATE OF
OPTIONS REPRICED REPRICING OR REPRICING OR EXERCISE REPRICING AND
NAME DATE OR AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
- --------------------------------- --------- ----------------- --------------- ------------- ----------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Charles P. Pieper................ -- -- -- -- -- --
Michael J. Barnell............... 12/11/98 12,760 $ 5.375 $ 27.83 $ 5.375 8.4
12/11/98 2,471 5.375 38.39 5.375 8.6
12/11/98 2,976 5.375 43.27 5.375 8.6
12/11/98 7,259 5.375 48.17 5.375 8.6
Mark D. Director................. 12/11/98 37,539 5.375 46.48 5.375 7.5
12/11/98 7,977 5.375 27.83 5.375 8.4
Joseph T. Doyle.................. -- -- -- -- -- --
Donald H. Platt.................. 12/11/98 39,731 5.375 27.83 5.375 8.4
12/11/98 16,223 5.375 29.05 5.375 7.2
12/11/98 7,977 5.375 46.48 5.375 7.5
Anne T. Smyth.................... 12/11/98 9,150 5.375 27.83 5.375 8.4
Thomas Morgan.................... 12/11/98 33,456 5.375 40.51 5.375 8.1
12/11/98 41,717 5.375 27.83 5.375 8.4
</TABLE>
(1) The following table sets out the number of options that each of the named
executive officers who participated in the US Office Products Option
Replacement Program in December 1998 gave up to receive the number of
replacement options listed in the table:
<TABLE>
<S> <C>
Michael J. Barnell................................................. 125,506
Mark D. Director................................................... 190,046
Donald H. Platt.................................................... 258,877
Anne T. Smyth...................................................... 31,377
Thomas Morgan...................................................... 347,437
</TABLE>
The Option Replacement Program is described below in the Compensation
Committee Report on Executive Compensation, which begins on page 20.
EMPLOYMENT ARRANGEMENTS
Messrs. Barnell, Platt, and Director each have employment agreements with US
Office Products. Pursuant to these agreements, each is paid an annual base
salary that is reviewed and can be increased by the Compensation Committee of
the Board of Directors every year. The base salaries of Messrs. Barnell, Platt,
and Director for the last three fiscal years are set forth under the heading
"Summary Compensation Table." As of July 31, 1999, the base salary of each of
Messrs. Barnell, Platt, and Director was $350,000. Mr. Barnell's employment
agreement has been amended twice in connection with job changes within US Office
Products.
19
<PAGE>
Messrs. Barnell, Platt, and Director are eligible to receive a year-end
bonus of up to 100% of their base salary. These bonuses are paid out of a bonus
pool determined by the Compensation Committee. The Compensation Committee
determines the size of an officer's bonus by measuring the officer's performance
and US Office Products' overall performance against target performance levels.
Mr. Platt's and Mr. Director's employment agreements are each for an initial
term of four years and are automatically renewable at the end of the second year
and every year afterwards for an additional year unless terminated or not
renewed by US Office Products or the employee. Each of their employment
agreements has been in effect for more than two years. Mr. Barnell's employment
agreement is for a term of five years that ends August 9, 2001.
If US Office Products were to terminate them without cause, Messrs. Barnell,
Platt, and Director would be entitled to receive their current salary for
whatever period is remaining under the term of their respective employment
agreements (and, in the case of Mr. Barnell, six months if that is longer than
the portion of the term remaining). If a change in control of US Office Products
were to occur (involving a change in the ownership of a majority of the voting
stock of US Office Products; a change in the majority of the Board of Directors
without approval of the current Board; a merger, consolidation,
recapitalization, reorganization or reverse stock split in which the
stockholders of US Office Products prior to such transaction do not continue to
own at least 75% of the stock of US Office Products following such transaction;
or the approval by the stockholders of a plan of complete liquidation or
disposition of more than 50% of US Office Products' assets), Messrs. Barnell,
Platt, and Director would be able to elect to terminate their employment and
receive their base salary at the rate then in effect for the remaining term of
their respective agreements or two years, whichever is greater.
Each employment agreement contains a covenant not to compete with US Office
Products for a period equal to the longer of: (i) two years immediately
following the termination of employment; or (ii) in the case of a termination
pursuant to which such employee is entitled to continue to receive his base
salary, for so long as US Office Products continues to pay such salary.
Applicable law may reduce the scope of the covenant not to compete. If
applicable law requires US Office Products to reduce the term of any such
covenant, US Office Products will be required to pay the employee only for the
reduced period of time that the employee is prohibited from competing.
Mr. Doyle does not have an employment agreement with US Office Products. Ms.
Smyth entered into a two-year employment agreement in December 1996, when she
joined the US Office Products. In late fiscal 1999, she and US Office Products
entered into a letter agreement which provided for an increase in her base
salary to $340,000, an increase in her responsibilities, and certain other terms
of her continued employment, effective February 1, 1999. The terms of the letter
agreement are expected to be embodied in a new employment agreement. Other terms
have not yet been agreed upon and the final agreement has not yet been signed.
For a discussion of an agreement between US Office Products and Clayton,
Dubilier & Rice, Inc. regarding Mr. Pieper's service as Chief Executive Officer,
see "Certain Relationships and Related Transactions" on page 23.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL. The Compensation Committee of US Office Products' Board of
Directors (the "Committee") is responsible for approving and reviewing with the
Board of Directors the compensation of US Office Products' executive officers.
It also consults with the chief executive officer and members of senior
management regarding the compensation of certain other key management personnel.
A subcommittee of the Committee (the "Subcommittee," which excludes Mr. Finn)
administers US Office Products' stock benefit plans, including the Incentive
Plan and the Executive Deferred Compensation Plan. The Subcommittee also
administers US Office Products' Section 162(m) Bonus Plan.
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The Committee believes that compensation must be competitive, as well as
directly and materially linked to US Office Products' performance. In
administering US Office Products' compensation program, the Committee's
objectives include the following: attracting and retaining executive talent,
motivating executives to maximize operating performance, measuring performance
on both an individual and a company-wide basis, reflecting US Office Products'
success in meeting growth and profitability targets, and linking executive and
stockholder interests through the grant of stock options and other equity-based
compensation.
The key components of US Office Products' executive compensation program
have historically consisted of salary, annual incentive bonuses, and stock
options. The long-term compensation of US Office Products' executive officers
has consisted primarily of stock options. The short-term compensation has
consisted principally of base salary and a cash bonus. The Committee's policy
with respect to each of these elements is discussed below.
Since US Office Products' inception, the Committee has striven to balance
the cash compensation needed to attract, motivate and retain executive talent
with long-term incentives through the grant of stock options with multi-year
vesting schedules. In the Committee's judgment, this approach tends to align the
interests of management most closely with those of US Office Products'
stockholders.
BASE SALARY. Except as described below, the Committee did not make any
material adjustments to the base salary levels of executives in the 1999 fiscal
year. The Committee believes, based upon survey data provided by a national
compensation consulting firm, that the base salaries of US Office Products'
executives generally are modestly above market median base salary levels for
executives at comparable businesses. The Committee believes that such a base
salary level is necessary and appropriate to attract and retain executives with
the desired levels of skills and experience. The salary of one senior executive
was adjusted upward to be comparable to the salaries of US Office Products'
other senior executives. In addition, an upward adjustment was made in the case
of another executive's salary in light of an increase in responsibilities and
the need to respond to competitive market conditions.
ANNUAL INCENTIVE BONUS. At the end of each fiscal year, the Committee
decides whether to award incentive bonuses to executive officers, based on US
Office Products' success in achieving its growth and profitability targets, the
individual's level of performance, and recommendations made by US Office
Products' CEO. In making decisions about incentive bonuses for other senior
management personnel, the Committee considers the recommendations of the
executive officers. Bonuses are intended to reflect how an officer's performance
and US Office Products' overall performance compares to target performance
levels. These targets typically include the executive's overall performance and
contribution to US Office Products' growth and profitability, US Office
Products' overall profit, and (where appropriate) US Office Products' internal
revenue growth.
In light of the disappointing financial performance of US Office Products in
fiscal 1999, the maximum bonus award payable to each executive officer was
capped at a level below each individual's target bonus (expressed as a
percentage of base salary). Bonuses in excess of the reduced target level were
not paid. Bonus awards were based solely upon the individual's level of
performance, as no credit was given for the performance of US Office Products.
As a result, awards were substantially less than they would have been if the
financial performance of US Office Products had been at or above targeted levels
for the fiscal year. In deciding to award bonuses in fiscal 1999, the Committee
considered the recommendations of the CEO and the need to retain and motivate
talented key senior personnel as US Office Products implements its accelerated
change initiatives.
LONG-TERM INCENTIVE PLAN. Under the Incentive Plan, the Subcommittee can
award (i) stock options, including incentive stock options, non-qualified stock
options or both, which options may contain automatic reload features; (ii) stock
appreciation rights ("SARs"), whether in conjunction with the grant of stock
options or independent of such grants, or SARs that are only exercisable in the
event of a change in
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control of US Office Products or upon other events; (iii) performance awards,
consisting of a right to receive cash in an amount determined with reference to
the value of the common stock, a fixed dollar amount payable in cash, or a
combination of both; (iv) dividend equivalents, consisting of a right to receive
cash, other awards, or other property equal in value to dividends paid with
respect to a specified number of shares of common stock, or other periodic
payments; or (v) other awards not otherwise provided for, the value of which are
based in whole or in part upon the value of the common stock. Through the end of
fiscal 1999, only non-qualified stock options have been granted under the
Incentive Plan.
The Committee believes that aligning management's interests with those of US
Office Products' stockholders is an important element of US Office Products'
approach to executive compensation. Stock options align the interests of
employees and stockholders by providing value to the executive through stock
price appreciation. Except for options granted to Mr. Barnell, the stock options
granted during the 1999 fiscal year have ten-year terms and are exercisable at
the fair market value of US Office Products' stock on the date of grant
beginning one year from the date of grant in cumulative yearly amounts of 25% of
the shares granted. The terms of Mr. Barnell's options are described under the
heading "Information Regarding Options Granted to and Held by the Named
Executive Officers" on page 17. The Subcommittee granted options to purchase
480,000 shares of common stock to the named executive officers for the 1999
fiscal year (excluding a grant of an option to purchase 250,000 shares granted
to Thomas Morgan, which he forfeited when he left US Office Products in February
1999).
Stock options have been awarded periodically at the discretion of the
Subcommittee, based upon recommendations of US Office Products' CEO. The size of
such grants, in general, have been evaluated by regularly assessing competitive
market practices, the recipient's position and level of responsibility within US
Office Products and US Office Products' overall performance. Grants have also
taken into account the differential between the levels of cash compensation paid
by US Office Products as compared to those of US Office Products' competitors.
The Subcommittee intends, to the extent possible, that options and other
equity-based awards granted to executive officers under the Incentive Plan be
deductible for federal tax purposes. Stock option awards granted under the
Incentive Plan are intended to be deductible in accordance with Section 162(m)
of the Internal Revenue Code.
OPTION REPLACEMENT PROGRAM. On November 5, 1988, the Board approved an
"Option Replacement Program" for holders of options issued pursuant to US Office
Products' stock option plans. Under that program, at each optionee's request US
Office Products replaced options that generally had exercise prices well above
the then-current market price of US Office Products common stock, with a
significantly smaller number of new options with an exercise price equal to the
then-current market price. This program commenced on November 19, 1998 and ended
on December 11, 1998.
The program was adopted for three primary reasons: to ensure that US Office
Products' option programs provide meaningful incentives to employees; to reduce
the overall dilution caused by outstanding stock options (thereby benefiting all
stockholders); and to enable the Board to issue a meaningful amount of options
in the future. As a result of the program, the number of outstanding options was
reduced from 7,546,722 to 2,618,413.
The Subcommittee intends to manage additional option grants in a way that
keeps total outstanding options, as a percentage of total outstanding shares, in
the range of 10-15%. To the extent that this limits the Subcommittee's ability
to grant option awards in amounts that it believes are appropriate to accomplish
overall compensation objectives, it will consider the use of other long-term
incentives, including long-term, performance-based cash and/or stock award
plans, to achieve the desired compensation objectives.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. During fiscal 1999, the
Committee did not make any changes to the compensation of US Office Products'
chief executive officer and did not award any
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discretionary incentive payments. Thomas Morgan, who assumed the position of
chief executive officer in November 1997, left US Office Products in February
1999. At the time of his departure he received a pro rated portion of the annual
$150,000 bonus that was guaranteed to him under his employment contract. Under
the terms of the Incentive Plan, he forfeited all of his stock options,
including a grant of 250,000 options that was made to him shortly before he
announced his departure. Mr. Pieper assumed the position of chief executive
officer upon Mr. Morgan's departure. By agreement with Clayton, Dubilier & Rice,
Inc. ("CD&R"), US Office Products does not pay Mr. Pieper a salary or any other
form of compensation. See "Certain Relationships and Related Transactions" on
page 23. In June 1998, in connection with the equity investment in US Office
Products by a CD&R-led fund, US Office Products agreed to pay CD&R an annual
management fee of $500,000 for providing services to US Office Products. The
amount of this management fee has not been changed. US Office Products also
reimburses CD&R principals and employees for out-of-pocket expenses that they
incur in providing services to US Office Products. These reimbursements include
Mr. Pieper's out-of-pocket expenses.
Brian D. Finn
Frank P. Doyle (Chairman)
Edward J. Mathias
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In fiscal year 1999, pursuant to an investment agreement, US Office Products
issued common stock and warrants to purchase common stock to an affiliate of an
investment fund managed by Clayton, Dubilier & Rice, Inc. representing 24.9% of
the outstanding US Office Products' common stock after giving effect to the
issuance of such shares. At the same time, US Office Products issued warrants to
the investment fund to purchase additional shares of US Office Products' common
stock. The warrants are exercisable for approximately 9.2 million shares of
common stock. The investment fund paid US Office Products a total of $270.0
million for the shares and warrants. In fiscal year 1999, US Office Products
issued 73,262 shares of preferred stock to the investment fund. Each share of
the preferred stock automatically converts into 100 shares of US Office Products
common stock if the investment fund transfers the share to a third party. US
Office Products and the investment fund also agreed to amend the warrants to
reduce their exercise price to $5.625 per share. The investment fund paid US
Office Products $51 million for the preferred stock and the amendment of the
warrants.
In accordance with the fiscal 1999 investment agreement, Messrs. Conway,
Finn, and Pieper, principals and directors of Clayton, Dubilier & Rice, Inc.,
were appointed to the Board of Directors of US Office Products. Additionally, in
connection with the investment agreement, US Office Products entered into a
consulting agreement with Clayton, Dubilier & Rice, Inc. Under the consulting
agreement, Clayton, Dubilier & Rice receives an annual fee of $500,000 for
providing management and financial consulting services to US Office Products. In
fiscal year 1999, US Office Products paid Clayton, Dubilier & Rice $416,667
pursuant to this consulting agreement. We also reimbursed Clayton, Dubilier &
Rice for $56,908 of out-of-pocket and other reimbursable expenses, excluding
legal fees paid to their counsel in connection with the June 1998 strategic
restructuring. Messrs. Conway, Finn, and Pieper have waived their right to
receive Directors' fees or to participate in the 1996 Non-employee Director
Stock Plan. See "The Board of Directors--Compensation of Directors" on page 12.
By agreement dated February 23, 1999 with Clayton, Dubilier & Rice, Inc., US
Office Products does not pay any salary or other compensation to Mr. Pieper for
his service as Chief Executive Officer. US Office Products reimburses
out-of-pocket expenses that he incurs in carrying out his responsibilities,
consistent with the terms of the consulting agreement described above.
US Office Products leases office, warehouse and retail store space from two
partnerships, a principal partner of which is Mr. Kuyers, a director of US
Office Products. Based on our experience in such transactions, we believe that
such leases are on terms not less favorable than would be obtainable in an
arm's-length transaction from an unaffiliated third party. The amounts paid to
these partnerships by The H. H. West Company, a wholly owned subsidiary of US
Office Products, for fiscal year 1999 was approximately $488,560.
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OTHER INFORMATION
STOCK PERFORMANCE
We set forth below a comparison of changes in the price of US Office
Products' common stock with changes in the cumulative total returns of the
NASDAQ Market Index and the Industry Comparables Index. The Industry Comparables
Index is an index derived from the trading price of the following office
products companies: Boise Cascade Office Products Corp., Corporate Express Inc.,
Office Depot Inc., and Staples Inc. We have not included BT Office Products in
this year's graph because this company's shares are no longer publicly traded.
The graph plots the growth in value of an initial $100 investment over the
indicated time period, assuming the reinvestment of dividends. The graph covers
a period from February 15, 1995, the date that US Office Products' common stock
began trading on the Nasdaq National Stock Market following its initial public
offering, through the end of US Office Products' 1999 fiscal year.
On June 10, 1998, US Office Products completed its strategic restructuring
plan and a series of related financing transactions. These are described in Note
3 of the Notes to US Office Products' audited consolidated financial statements,
which are included in the Annual Report mailed to stockholders together with
this Proxy Statement. At that time, US Office Products distributed approximately
$934.6 million of cash to its stockholders and optionholders in a self-tender
and distributed the stock of four of its operating divisions to its stockholders
in four tax-free spin-offs. US Office Products also substantially increased its
indebtedness. As a result of these actions, the trading price of US Office
Products common stock after June 10, 1998 is not comparable to the trading price
in earlier periods.
The following graph accounts for the self-tender and the four spin-off
distributions as follows:
- Cash received in the self-tender is treated as if it were reinvested in
common stock of US Office Products at the last reported sale price on June
10, 1998.
- Shares of the four spin-off companies received by a stockholder are
converted to cash, and that cash is treated as if it were reinvested in
common stock of US Office Products at the last reported sale price on June
10, 1998. The shares of the four spin-off companies have been converted to
cash at the last reported sale price on June 10, 1998 of the spin-off
companies' common stock.
- Cash in lieu of fractional shares of the spin-off companies is treated as
if it were reinvested in common stock of US Office Products at the last
reported sale price on June 10, 1998. The amount of cash paid in lieu of
such fractional shares was determined based upon the last reported sale
price on June 10, 1998 of the spin-off companies' common stock.
Stockholders who participated in the strategic restructuring transactions
and received a combination of cash and securities did not necessarily reinvest
completely in the common stock of US Office Products. Consequently, the
following graph is not necessarily indicative of the actual returns to a
stockholder who participated in these transactions. An individual stockholder's
actual returns may be higher or lower, depending upon that stockholder's
investment decisions.
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
U.S. OFFICE PRODUCTS PEER GROUP INDEX NASDAQ MARKET INDEX
<S> <C> <C> <C>
2/15/95 100.00 100.00 100.00
4/30/95 120.24 94.06 108.61
4/30/96 342.86 145.74 151.60
4/26/97 215.48 94.23 161.60
4/25/98 240.95 171.71 240.01
4/24/99 36.82 225.95 316.95
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on our review of forms provided to US Office Products and
representations from our directors, executive officers, and 10% stockholders, we
are not aware of any failure to timely file reports required by Section 16 of
the Securities Act of 1934, as amended.
PROPOSALS FOR THE 1999 ANNUAL MEETING
If you want to include a proposal in the proxy statement for US Office
Products' 2000 Annual Meeting, send the proposal to US Office Products Company,
Attn.: Mark D. Director, Executive Vice President-Administration, General
Counsel and Secretary, at 1025 Thomas Jefferson Street, NW, Suite 600 East,
Washington, DC 20007. Proposals must be received on or before April 1, 2000 to
be included in next year's proxy statement. Please note that proposals must
comply with all of the requirements of Rule 14a-8 under the Securities Exchange
Act of 1934, as well as the requirements of US Office Products' certificate of
incorporation and bylaws. US Office Products will be able to use proxies given
to it for next year's meeting to vote for or against any shareholder proposal
that is not included in the proxy statement at US Office Products' discretion
unless the proposal is submitted to US Office Products on or before June 15,
2000.
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EXHIBIT A
THE U.S. OFFICE PRODUCTS COMPANY
1999 EMPLOYEE STOCK PURCHASE PLAN
<TABLE>
<S> <C>
PURPOSE The U.S. Office Products Company 1999 Employee Stock
Purchase Plan (the "1999 ESPP" or the "PLAN") provides
employees of U.S. Office Products Company (the "COMPANY")
and selected Company Subsidiaries with an opportunity to
become owners of the Company through purchasing shares of
the Company's common stock (the "COMMON STOCK"). This Plan
supersedes the prior U.S. Office Products Company Employee
Stock Purchase Plan originally effective as of November 1,
1995. The Company intends this Plan to qualify as an
employee stock purchase plan under Section 423 of the
Internal Revenue Code of 1986, as amended (the "CODE"),
and its terms should be construed accordingly. The Plan is
effective as of October 1, 1999.
ELIGIBILITY An Employee whom the Company or an Eligible Subsidiary has
employed for at least 90 days as of the first day of a
Payroll Deduction Period is eligible to participate in the
1999 ESPP for that Payroll Deduction Period; PROVIDED,
HOWEVER, that an Employee may not make a purchase under
the 1999 ESPP if such purchase would result in the
Employee's owning Common Stock possessing 5% or more of
the total combined voting power or value of the Company's
outstanding stock. In determining an individual's amount
of stock ownership, any options to acquire shares of
Company Common Stock are counted as shares of stock, and
the attribution rules of Section 424(d) of the Code apply.
EMPLOYEE means any person employed as a common law
employee of the Company or an Eligible Subsidiary.
EMPLOYEE excludes anyone who, with respect to any
particular period of time, was not treated initially on
the payroll records as a common law employee, unless the
Committee determines that including the person is
necessary to preserve tax treatment.
ADMINISTRATOR The Compensation Committee of the Board of Directors (the
"BOARD") of the Company, or such other committee as the
Board designates (the "COMMITTEE"), will administer the
1999 ESPP. The Committee is vested with full authority and
discretion to make, administer, and interpret such rules
and regulations as it deems necessary to administer the
1999 ESPP (including rules and regulations deemed
necessary in order to comply with the requirements of
Section 423 of the Code). Any determination or action of
the Committee in connection with administering or
interpreting of the 1999 ESPP will be final and binding
upon each Employee, Participant and all persons claiming
under or through any Employee or Participant.
</TABLE>
A-1
<PAGE>
<TABLE>
<S> <C>
Without shareholder consent and without regard to whether
the actions might adversely affect Participants, the
Committee (or the Board) may
change the Payroll Deduction Periods,
limit or increase the frequency and/or number of
changes in the amounts withheld during a Payroll
Deduction Period,
establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars,
permit payroll withholding in excess of the amount the
Participant designated to adjust for delays or
mistakes in the Company's processing of properly
completed withholding elections,
establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure
that amounts applied toward the purchase of Common
Stock for each Participant properly correspond with
amounts withheld from the Participant's Compensation,
delegate its functions (other than those with respect
to setting Payroll Deduction Periods or determining
the price of stock and the number of shares to be
offered under the Plan) to officers or employees of
the Company; and
establish such other limitations or procedures as it
determines in its sole discretion advisable and
consistent with the Plan.
The Committee may also increase the price provided in Step
2 under GRANTING OF OPTIONS (by decreasing the discount
and/or by designating that the price is determined as of
either the beginning or the ending date of a Payroll
Deduction Period or the higher of both rather than as of
the lower) for Payroll Deduction Periods beginning after
Committee action.
PAYROLL DEDUCTION PERIOD PAYROLL DEDUCTION PERIODS are successive calendar quarters
beginning January 1, April 1, July 1, and October 1, and
the first such period under the Plan will begin on October
1, 1999.
PARTICIPATION An eligible Employee may become a "PARTICIPANT" for a
Payroll Deduction Period by completing an authorization
notice and delivering it to the Committee through the
Company's Human Resources professionals within a
reasonable period of time before the first day of such
Payroll Deduction Period. All Participants receiving
options under the 1999 ESPP will have the same rights and
privileges.
</TABLE>
A-2
<PAGE>
<TABLE>
<S> <C>
METHOD OF PAYMENT A Participant may contribute to the 1999 ESPP solely
through payroll deductions as follows:
The Participant must elect on an authorization notice to
have deductions made from his Compensation for each
payroll period during the Payroll Deduction Period at or
above a minimum rate and under terms the Committee
determines. COMPENSATION under the Plan means an
Employee's regular compensation, including overtime,
bonuses, and commissions (but expressly excluding income
from stock options or other noncash compensation), from
the Company or an Eligible Subsidiary paid during a
Payroll Deduction Period.
All payroll deductions will be credited to the
Participant's account under the 1999 ESPP. No interest
will accrue on the account.
Payroll deductions will begin on the first payday
coinciding with or following the first day of each
Payroll Deduction Period and will end with the last
payday preceding or coinciding with the end of that
Payroll Deduction Period, unless the Participant
sooner withdraws as authorized under WITHDRAWALS
below.
A Participant may not alter the rate of payroll
deductions during the Payroll Deduction Period.
The Company may use the consideration it receives for
general corporate purposes.
GRANTING OF OPTIONS On the first day of each Payroll Deduction Period, a
Participant will receive options to purchase a number of
shares of Common Stock with funds withheld from his or her
Compensation. Such number of shares will be determined at
the end of the Payroll Deduction Period according to the
following procedure:
Step 1--Determine the amount the Company withheld from
Compensation since the beginning of the Payroll
Deduction Period;
Step 2--Determine the "Purchase Price" to be the
amount that represents 85% of the lower of the Fair
Market Value of a share of Common Stock on the first
day of the Payroll Deduction Period and the last day
of the Payroll Deduction Period (provided that the
Committee can increase the price before a Payroll
Deduction Period begins); and
Step 3--Divide the amount determined in Step 1 by the
amount determined in Step 2.
</TABLE>
A-3
<PAGE>
<TABLE>
<S> <C>
FAIR MARKET VALUE The FAIR MARKET VALUE of a share of Common Stock for
purposes of the Plan as of each date described in Step 2
will be determined as follows:
if the Common Stock is traded on a national securities
exchange, the closing sale price on that date;
if the Common Stock is not traded on any such
exchange, the closing sale price as reported by the
National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") for such date;
if no such closing sale price information is
available, the average of the closing bid and asked
prices as reported by Nasdaq for such date;
if there are no such closing bid and asked prices, the
average of the closing bid and asked prices as
reported by any other commercial service for such
date; or
if there is no established market for the Common
Stock, the value as determined in good faith by the
Committee.
For January 1 and any other date described in Step 2 that
is not a trading day, the Fair Market Value of a share of
Common Stock for such date shall be determined by using
the closing sale price or the average of the closing bid
and asked prices, as appropriate, for the immediately
following trading day when determining the price for the
first day of the Payroll Deduction Period and the
immediately preceding trading day when determining the
price on the last day.
No Participant shall receive options:
if, immediately after the grant, that Participant
would own shares, or hold outstanding options to
purchase shares, or both, possessing 5% or more of the
total combined voting power or value of all classes of
shares of the Company or any Subsidiaries (as defined
below); or
that permit the Participant to purchase shares under
all employee stock purchase plans of the Company and
any Subsidiary with a Fair Market Value (determined at
the time the options are granted) that exceeds $25,000
in any calendar year.
EXERCISE OF OPTION Unless a Participant effects a timely withdrawal pursuant
to the WITHDRAWAL paragraph below, his option for the
purchase of shares of Common Stock during a Payroll
Deduction Period will be automatically exercised as of the
last day of the Payroll Deduction Period for the purchase
of the maximum number of shares (including fractional
shares) that the sum of the payroll deductions credited to
the Participant's account during such Payroll Deduction
Period can purchase pursuant to the formula specified in
GRANTING OF OPTIONS.
</TABLE>
A-4
<PAGE>
<TABLE>
<S> <C>
DELIVERY OF COMMON STOCK As soon as administratively feasible after the options are
used to purchase Common Stock, the Company will credit to
each Participant or, in the alternative, to an agent or
custodian that the Committee designates, the shares of
Common Stock the Participant purchased upon the exercise
of the option. If delivered to an agent or custodian, the
agent or custodian may hold the shares in nominee name and
may commingle shares held in its custody in a single
account or stock certificate without identification as to
individual Participants. Unless the Committee determines
otherwise, Participants who are holding shares and any
persons to whom they transfer part or all of their shares
other than by sale must retain those shares with a Company
specified broker or agent until the second anniversary of
the first day of the Payroll Deduction Period in which
they bought the shares. A Participant may sell the shares
despite the foregoing restriction but may not transfer
them to another broker until the foregoing two year period
(the "ACCOUNT RESTRICTION PERIOD") ends. The Committee may
require that the specified agent or custodian hold the
shares of Common Stock for a minimum period of time after
receipt (including through and beyond the Participant's
active employment) and reinvest any dividends received in
additional shares of Common Stock. The Committee may, in
its discretion, establish a program for cashless sales of
Common Stock received under the 1999 ESPP.
SUBSEQUENT OFFERINGS A Participant will be deemed to have elected to
participate in each subsequent Payroll Deduction Period
following his initial election to participate in the 1999
ESPP, unless the Participant files a written withdrawal
notice with the Human Resources Department at corporate
headquarters (or such other recipient as the Department
designates) at least 10 days before the beginning of the
Payroll Deduction Period as of which the Participant
desires to withdraw from the 1999 ESPP.
WITHDRAWAL FROM THE PLAN A Participant may withdraw all, but not less than all,
payroll deductions credited to his account for a Payroll
Deduction Period before the end of such Payroll Deduction
Period by delivering a written notice to the Human
Resources Department or its designee on behalf of the
Committee at least 30 days before the end of such Payroll
Deduction Period. A Participant who for any reason,
including retirement, termination of employment, or death,
ceases to be an Employee before the last day of any
Payroll Deduction Period will be deemed to have withdrawn
from the 1999 ESPP as of the date of such cessation.
When a Participant withdraws from the 1999 ESPP, his or
her outstanding options under the 1999 ESPP will
immediately terminate.
If a Participant withdraws from the 1999 ESPP for any
reason, the Company will pay to the Participant all
payroll deductions credited to his account or, in the
event of death, to the persons designated as provided in
DESIGNATION OF BENEFICIARY, as soon as administratively
feasible after the date of such withdrawal and no
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further deductions will be made from the Participant's
Compensation.
A Participant who has elected to withdraw from the 1999
ESPP may resume participation in the same manner and under
the same rules as any Employee making an initial election
to participate in the 1999 ESPP (i.e., he may elect to
participate in the next following Payroll Deduction Period
so long as he or she files the authorization form by the
deadline for that Payroll Deduction Period). Any
Participant who is subject to Section 16 of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
who withdraws from the 1999 ESPP for any reason will only
be permitted to resume participation in a manner that will
permit transactions under the 1999 ESPP to continue to be
exempt within the meaning of Rule 16b-3, as issued under
the Exchange Act.
STOCK SUBJECT TO PLAN The shares of Common Stock that the Company will sell to
Participants under the 1999 ESPP will be shares of
authorized but unissued Common Stock, shares held as
treasury stock, and shares purchased on the market. The
maximum number of shares made available for sale under the
1999 ESPP will be 1,000,000 (subject to the provisions in
ADJUSTMENTS UPON CHANGES IN CAPITAL STOCK below). If the
total number of shares for which options are to be
exercised in a Payroll Deduction Period exceeds the number
of shares then available under the 1999 ESPP, the Company
will make, so far as is practicable, a pro rata allocation
of the shares available.
A Participant will have no interest in shares covered by
his participation until the last day of the applicable
Payroll Deduction Period.
After the end of the Account Restriction Period, shares
that a Participant purchases under the ESPP will be
registered in the name of the Participant or, at the
Participant's election, in street name.
ADJUSTMENTS UPON CHANGES IN
CAPITAL STOCK Subject to any required action by the Company (which it
will promptly take) or its stockholders, and subject to
the provisions of applicable corporate law, if, during a
Payroll Deduction Period,
the outstanding shares of Common Stock increase or
decrease or change into or are exchanged for a
different number or kind of security by reason of any
recapitalization, reclassification, stock split,
reverse stock split, combination of shares, exchange
of shares, stock dividend, or other distribution
payable in capital stock, or
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some other increase or decrease in such Common Stock
occurs without the Company's receiving consideration
(other than in self-tenders or stock repurchase
programs unless the Committee determines otherwise),
the Committee will make a proportionate and appropriate
adjustment in the number of shares of Common Stock
underlying the options, so that the proportionate interest
of the Participant immediately following such event will,
to the extent practicable, be the same as immediately
before such event. Any such adjustment to the options will
not change the total price with respect to shares of
Common Stock underlying the Participant's election but
will include a corresponding proportionate adjustment in
the price of the Common Stock, to the extent consistent
with Section 424 of the Code.
The Committee will make a commensurate change to the
maximum number and kind of shares provided in the STOCK
SUBJECT TO PLAN section.
Any issue by the Company of any class of preferred stock,
or securities convertible into shares of common or
preferred stock of any class, will not affect, and no
adjustment by reason thereof will be made with respect to,
the number of shares of Common Stock subject to any
options or the price to be paid for stock except as this
ADJUSTMENTS section specifically provides. The grant of an
option under the Plan will not affect in any way the right
or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its
capital or business structure, or to merge or to
consolidate, or to dissolve, liquidate, sell, or transfer
all or any part of its business or assets.
SUBSTANTIAL CORPORATE CHANGE Upon a SUBSTANTIAL CORPORATE CHANGE, the Plan and the
offering will terminate and all accumulated funds will be
distributed as though the Participants had elected to
withdraw, unless provision is made in writing in
connection with such transaction for
the assumption or continuation of outstanding
elections, or
the substitution for such options or grants of any
options covering the stock or securities of a
successor employer corporation, or a parent or
subsidiary of such successor, with appropriate
adjustments as to the number and kind of shares of
stock and prices, in which event the options will
continue in the manner and under the terms so
provided.
A SUBSTANTIAL CORPORATE CHANGE means the
dissolution or liquidation of the Company,
merger, consolidation, or reorganization of the
Company with one or more corporations in which the
Company is not the surviving corporation,
the sale of substantially all of the assets of the
Company to another corporation, or
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any transaction (including a merger or reorganization
in which the Company survives) approved by the Board
that results in any person or entity (other than any
affiliate of the Company as defined in Rule 144(a)(1)
under the Securities Act) owning 100% of the combined
voting power of all classes of stock of the Company.
DESIGNATION OF BENEFICIARY A Participant may file with the Committee a written
designation of a beneficiary who is to receive any payroll
deductions credited to the Participant's account under the
1999 ESPP or any shares of Common Stock owed to the
Participant under the 1999 ESPP if the Participant dies. A
Participant may change a beneficiary at any time by filing
a notice in writing with the Human Resources professionals
on behalf of the Committee.
Upon the death of a Participant and upon receipt by the
Committee of proof of the identity and existence of the
Participant's designated beneficiary, the Company will
deliver such cash or shares, or both, to the beneficiary.
If a Participant dies and is not survived by a beneficiary
that the Participant designated in accordance with the
immediate preceding paragraph, the Company will deliver
such cash or shares, or both, to the personal
representative of the estate of the deceased Participant.
If, to the knowledge of the Committee, no personal
representative has been appointed within 90 days following
the date of the Participant's death, the Committee, in its
discretion, may direct the Company to deliver such cash or
shares, or both, to the surviving spouse of the deceased
Participant, or to any one or more dependents or relatives
of the deceased Participant, or if no spouse, dependent,
or relative is known to the Committee, then to such other
person as the Committee may designate.
No designated beneficiary may acquire any interest in such
cash or shares before the death of the Participant.
SUBSIDIARY EMPLOYEES Employees of Eligible Subsidiaries will be entitled to
participate in the 1999 ESPP, except as the Committee
otherwise designates.
Eligible Subsidiary means each of the Company's
Subsidiaries, except as the Board or Committee otherwise
specifies. SUBSIDIARY means any corporation (other than
the Company) in an unbroken chain of corporations
beginning with the Company if, at the time an option is
granted to a Participant under the 1999 ESPP, each of the
corporations (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one
of the other corporations in such chain. Subsidiary
includes any single member limited liability company with
its corporate member in the foregoing chain.
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TRANSFERS, ASSIGNMENTS, AND
PLEDGES A Participant may not assign, pledge, or otherwise dispose
of payroll deductions credited to the Participant's
account or any rights to exercise an option or to receive
shares of Common Stock under the 1999 ESPP other than by
will or the laws of descent and distribution or pursuant
to a qualified domestic relations order, as defined in the
Employee Retirement Income Security Act. Any other
attempted assignment, pledge or other disposition will be
without effect, except that the Company may treat such act
as an election to withdraw under the WITHDRAWAL section.
AMENDMENT OR TERMINATION OF PLAN The Board of Directors of the Company or the Committee may
at any time terminate or amend the 1999 ESPP. Any
amendment of the 1999 ESPP that (i) materially increases
the benefits to Participants, (ii) materially increases
the number of securities that may be issued under the 1999
ESPP, or (iii) materially modifies the eligibility
requirements for participation in the 1999 ESPP must be
approved by the shareholders of the Company to take
effect. The Company will refund to each Participant the
amount of payroll deductions credited to his account as of
the date of termination as soon as administratively
feasible following the effective date of the termination.
EFFECT ON OTHER PLANS Whether exercising or receiving an option causes the
participant to accrue or receive additional benefits under
any pension or other plan is governed solely by the terms
of such other plan.
NOTICES All notices or other communications by a Participant to
the Committee or the Company shall be deemed to have been
duly given when the Human Resources Department or local
Human Resources professionals of the Company receive them
or when any other person or entity the Company designates
receives the notice or other communication in the form the
Company specifies.
GENERAL ASSETS Any amounts the Company invests or otherwise sets aside or
segregates to satisfy its obligations under this 1999 ESPP
will be solely the Company's property (except as otherwise
required by Federal or state wage laws), and the
optionee's claim against the Company under the 1999 ESPP,
if any, will be only as a general creditor. The optionee
will have no right, title, or interest whatever in or to
any investments that the Company may make to aid it in
meeting its obligations under the 1999 ESPP. Nothing
contained in the 1999 ESPP, and no action taken pursuant
to its provisions, will create or be construed to create
an implied or constructive trust of any kind or a
fiduciary relationship between the Company and any
Employee, Participant, former Employee, former
Participant, or any beneficiary.
PRIVILEGES OF STOCK OWNERSHIP No Participant and no beneficiary or other person claiming
under or through such Participant will have any right,
title, or interest in or to any shares of Common Stock
allocated or reserved under the Plan except as to such
shares of Common Stock, if any, that have been issued to
such Participant.
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TAX WITHHOLDING To the extent that a Participant realizes ordinary income
in connection with a sale or other transfer of any shares
of Common Stock purchased under the Plan or the crediting
of interest to an account, the Company may withhold
amounts needed to cover such taxes from any payments
otherwise due to the Participant. Any Participant who
sells or otherwise transfers shares purchased under the
Plan within two years after the beginning of the Payroll
Deduction Period in which he purchased the shares must,
within 30 days of such transfer, notify the Company's
Payroll Department in writing of such transfer. Each
Participant, as a condition of participation, agrees that
the Company may treat the purchase of shares and/or their
disposition as taxable events requiring the withholding or
other collection of income and employment taxes and
further agrees to pay any such taxes for which the Company
cannot reasonably withhold.
LIMITATIONS ON LIABILITY Notwithstanding any other provisions of the 1999 ESPP, no
individual acting as a director, employee, or agent of the
Company shall be liable to any Employee, Participant,
former Employee, former Participant, or any spouse or
beneficiary for any claim, loss, liability, or expense
incurred in connection with the 1999 ESPP, nor shall such
individual be personally liable because of any contract or
other instrument he executes in such other capacity. The
Company will indemnify and hold harmless each director,
employee, or agent of the Company to whom any duty or
power relating to the administration or interpretation of
the 1999 ESPP has been or will be delegated, against any
cost or expense (including attorneys' fees) or liability
(including any sum paid in settlement of a claim with the
Board's approval) arising out of any act or omission to
act concerning this 1999 ESPP unless arising out of such
person's own fraud or bad faith.
NO EMPLOYMENT CONTRACT Nothing contained in this Plan constitutes an employment
contract between the Company or an Eligible Subsidiary and
any Employee. The 1999 ESPP does not give an Employee any
right to be retained in the Company's employ, nor does it
enlarge or diminish the Company's right to terminate the
Employee's employment.
DURATION OF ESPP Unless the Company's Board extends the Plan's term, no
Payroll Deduction Period will begin after April 1, 2009.
APPLICABLE LAW The laws of the State of Delaware (other than its choice
of law provisions) govern the 1999 ESPP and its
interpretation.
LEGAL COMPLIANCE The Company will not issue any shares of Common Stock
under the Plan until the issuance satisfies all applicable
requirements imposed by Federal and state securities and
other laws, rules, and regulations, and by any applicable
regulatory agencies or stock exchanges. To that end, the
Company may require the optionee to take any reasonable
action to comply with such requirements before issuing
such shares. No provision in the Plan or action taken
under it authorizes any action that Federal or state laws
otherwise prohibit.
The Plan is intended to conform to the extent necessary
with all
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provisions of the Securities Act of 1933, as amended,
("SECURITIES ACT") and the Exchange Act, and all
regulations and rules the Securities and Exchange
Commission issues under those laws, including specifically
Rule 16b-3. Notwithstanding anything in the Plan to the
contrary, the Committee and the Board must administer the
Plan, and Participants may purchase Common Stock, only in
a way that conforms to such laws, rules, and regulations.
To the extent applicable law permits, the Plan and any
offers will be deemed amended to the extent necessary to
conform to such laws, rules, and regulations.
APPROVAL OF STOCKHOLDERS The ESPP must be submitted to the shareholders of the
Company for their approval within 12 months after the
Board adopts the ESPP. The adoption of the ESPP is
conditioned upon the approval of the shareholders of the
Company, and failure to receive their approval will render
the ESPP and any outstanding options thereunder void and
of no effect.
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PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
US OFFICE PRODUCTS COMPANY
The undersigned hereby appoints Charles P. Pieper and Mark D. Director as
attorneys and proxies, each with the power to act without the other and with
power of substitution, and hereby authorizes them to represent and vote, as
designated on the other side, all the shares of common stock of US Office
Products Company standing in the name of the undersigned with all powers the
undersigned would possess if present at the 1999 Annual Meeting of US Office
Products' stockholders to be held August 31, 1999 and at any and all
continuations and adjournments thereof.
(continued, and to be marked, dated and signed, on the other side)
<PAGE>
/X/ Please mark your
votes as in this
example
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FOR all nominees WITHHOLD
Listed at right AUTHORITY to vote
(except as marked for all nominees NOMINEES:
to the contrary) listed at right Kevin J. Conway
1. ELECTION / / / / Frank P. Doyle
OF Brian D. Finn
DIRECTORS L. Dennis Kozlowski
Milton H. Kuyers
Allon H. Lefever
Edward J. Mathias
Charles P. Pieper
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(INSTRUCTION: To withhold authority to vote
for any individual nominee, write each such
nominee's name in the space provided below.)
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FOR AGAINST ABSTAIN
2. Approval of adoption of US Office / / / / / /
Products Company 1999 Employee
Stock Purchase Plan
3. Ratification of PricewaterhouseCoopers / / / / / /
LLP as the independent accountants for
US Office Products Company
THIS PROXY, WHEN PROPERLY EXECUTED, WILL
BE VOTED AS DIRECTED HERIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2, AND 3.
PLEASE VOTE, SIGN, DATE AND PROMPTLY
RETURN THE PROXY CARD USING THE ENCLOSED
ENVELOPE.
PLEASE MARK THIS BOX IF YOU PLAN / /
TO ATTEND THE ANNUAL MEETING
- ---------------------------------- --------------------------------------
Signature Signature if held jointly Date ,1999
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NOTE: Please sign exactly as name appears hereon. When shares are held by joint
tenants both should sign. When signing as attorney executor administrator,
trustee or guardian, please give full title as such.
