SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934)
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Filed by the Registrant / X /
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Filed by a Party other than the Registrant / /
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Check the appropriate box:
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/ / Preliminary Proxy Statement / / Confidential, For Use of the Com-
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Rule 14a-6(e)(2))
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/ / Definitive Proxy Statement
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/ X / Definitive Additional Materials
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/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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Tredegar Corporation
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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/ / Fee computed on the table below per Exchange Act Rule 14a-6(i)(1)
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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/ / Check box if any part of the fee is offset as provided by Exchange
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fee was paid previously. Identify the previous filing by
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Tredegar Corporation
1100 Boulders Parkway
Richmond, Virginia 23225
Annual Meeting of Shareholders
March 27, 2001
To Our Shareholders:
We invite you to attend the Annual Meeting of Shareholders to be held
in the Grand Ballroom of The Jefferson Hotel, Franklin & Adams Streets,
Richmond, Virginia, on Thursday, May 24, 2001, at 9:30 a.m., Eastern Daylight
Time. A formal notice of the meeting, a proxy statement and a proxy form are
enclosed. You are being asked to elect directors and to approve the designation
of auditors for the coming year.
There are four ways for you to exercise your vote. You may vote by
completing, signing, dating and returning the enclosed proxy in the
self-addressed, stamped envelope enclosed. Beginning this year, you also have
the option of voting your shares by telephone or via the Internet. Please see
pages 1 - 2 for instructions. Finally, you may vote in person at the meeting,
even if you return the proxy.
We are also pleased to offer you the option to receive future proxy
statements and annual reports electronically through the Internet. You can sign
up for this service by following the instructions on page 3. Receiving these
materials through the Internet is not only convenient, but also an
environmentally-conscious, cost-effective alternative to printing and mailing.
We hope you will take advantage of this service if you have a computer with
Internet access.
On behalf of myself and the Board of Directors, I would like to thank
you for your continued interest in and support of Tredegar.
Sincerely yours,
/s/ John D. Gottwald
John D. Gottwald
President and Chief Executive Officer
TREDEGAR CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TIME: Thursday, May 24, 2001, at 9:30 a.m.
PLACE: The Jefferson Hotel
Franklin & Adams Streets
101 West Franklin Street
Richmond, Virginia 23220
ITEMS OF BUSINESS: 1. To elect two directors to serve until the
2004 Annual Meeting and until their
successors are elected;
2. To approve the designation of
PricewaterhouseCoopers LLP as auditors
for the fiscal year ending December 31,
2001; and
3. To conduct any other business properly
raised at the meeting.
WHO MAY VOTE: You can vote if you were a shareholder of
record on March 16, 2001.
DATE OF MAILING: This notice and the proxy statement are first
being mailed to shareholders on or about March
27, 2001.
By Order of the Board of Directors
/s/ Nancy M. Taylor
Nancy M. Taylor, Secretary
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
TREDEGAR CORPORATION
To be held May 24, 2001
Approximate date of mailing--March 27, 2001
VOTING INFORMATION
The Board of Directors (the "Board") of Tredegar Corporation, a Virginia
corporation, is soliciting your proxy for the Annual Meeting of Shareholders to
be held on Thursday, May 24, 2001. This proxy statement and proxy card contain
information about the items you will be voting on at the Annual Meeting.
Who may vote?
You may vote if you owned Tredegar shares on March 16, 2001, the date for
determining shareholders entitled to vote at the meeting. On that date, there
were 38,108,027 outstanding shares of Common Stock. Each share of Common Stock
is entitled to one vote.
What are the proposals shareholders will be voting on at the meeting?
You will be voting on the following:
o The election of two directors;
o The approval of PricewaterhouseCoopers LLP as auditors for the fiscal
year ending December 31, 2001; and
o The conduct of any other business properly raised at the meeting.
How do I vote my shares?
You have four ways you may vote your shares:
1. You may vote in person at the meeting. Even if you plan to
attend the meeting, we encourage you to vote your shares by
proxy.
2. You may vote by mail by completing, signing, dating and
returning the enclosed proxy in the self-addressed, stamped
envelope provided.
3. You may vote by telephone (touch-tone phones only) by calling
toll-free 1-800-PROXIES (776-9437) and following the
instructions. Please have your control number located on the
enclosed proxy card available when you call.
1
4. You may vote via the Internet by accessing the web page
"www.voteproxy.com" and following the on-screen instructions.
Please have your control number located on the enclosed proxy
card available when you call.
Can I change or revoke my vote?
Anyone giving a proxy may revoke it at any time before it is voted. A proxy can
be changed or revoked by voting in person at the meeting, delivering another
proxy, or notifying Tredegar's Secretary in writing that you want to change or
revoke your proxy. All signed proxies that have not been revoked will be voted
at the Annual Meeting. If your proxy contains any specific instructions, they
will be followed.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, it means you have multiple accounts at
our transfer agent, American Stock Transfer & Trust Company. We encourage you to
consolidate your accounts in the same name and address whenever possible. Please
contact our transfer agent at 1-800-937-5449 for information.
What constitutes a quorum for the meeting?
A quorum is a majority of the outstanding shares, present in person or
represented by proxy. A quorum is necessary to conduct business at the Annual
Meeting.
How is a nominee for Director elected?
A nominee is elected to the Board if a plurality (majority) of votes cast in the
election of directors is cast "for" the nominee. Signing and returning your
proxy card will constitute a vote "for" all of the nominees unless your proxy
specifies that you are withholding authority to vote for any of the nominees.
Any votes withheld and any broker non-votes will not be counted in determining
the number of votes cast. In the event that any nominee for director is
unavailable for election, the Board may either reduce the number of directors or
choose a substitute nominee. If the Board selects a substitute nominee, the
shares represented by proxy will be voted for the substitute nominee, unless
other instructions are given in the proxy.
May I make a nomination for director?
Tredegar's By-laws allow any shareholder who is entitled to vote in the election
of directors to nominate a director. To do so, the shareholder must give written
notice to Tredegar's Secretary at least ninety days before the Annual Meeting of
Shareholders or, when an election is to be held at a special meeting of
shareholders, by the close of business on the seventh day following the day that
the notice of the special meeting is given to shareholders. The notice must
include the following information: (i) the name and address of the shareholder
and of each person nominated, (ii) the shareholder's representation that he or
she is a recordholder of Tredegar's Common Stock, that he or she is entitled to
vote at the meeting and will appear in person or by proxy at the meeting to
nominate the people named in the notice, (iii) a description of all arrangements
or understandings between the shareholder and each nominee and any other person
pursuant to which the nomination is being made, (iv) the information on each
nominee required under the applicable rules of the Securities and Exchange
Commission to be included in a proxy, and (v) a written consent from each
nominee for director saying that the nominee will serve as a director of
Tredegar if elected.
2
Who pays for the solicitation of proxies?
Tredegar will pay the cost of soliciting proxies and may use employees to
solicit proxies by mail, in person or by telephone. Corporate Investor
Communications, Inc. ("CIC") has been engaged to solicit proxies from brokers,
nominees, fiduciaries and other custodians. Tredegar will pay CIC $4,500 for its
services and will reimburse CIC for its out-of-pocket expenses.
May shareholders ask questions at the meeting?
Yes. At the end of the meeting, representatives of Tredegar will answer any
questions from shareholders.
Is it possible to receive future mailings electronically?
Yes. If you are interested in receiving future shareholder communications
electronically rather than receiving paper copies, you may sign up by accessing
the webpage "www.investpower.com". After you have accessed the webpage, click on
the "Enroll to receive mailings via E-Mail" link at the bottom of the page. Have
your proxy card available for your account number, which is required to sign up.
Tredegar's company number is 06367. You then enter your account number located
above your name on the proxy card and your E-Mail address in the spaces
provided. After all information has been provided, click on the "Go" icon. When
future shareholder communications become available, you will receive an E-Mail
letting you know that you may download documents from Tredegar's website.
3
ELECTION OF DIRECTORS
The Board is divided into three classes of directors. Each class of
directors serves for three years. The term for each class is staggered so that
one class is elected at each annual meeting.
The terms of Messrs. John D. Gottwald, Emmett J. Rice and Thomas G.
Slater, Jr. will expire at the 2001 Annual Meeting. Messrs. John Gottwald and
Slater have been nominated by the Board for election at the 2001 Annual Meeting
for the term expiring at the 2004 Annual Meeting of Shareholders. Mr. Rice will
retire from Tredegar's Board upon the expiration of his current term.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" ALL OF THE NOMINEES.
TREDEGAR'S BOARD OF DIRECTORS
Austin Brockenbrough, III, 64
[Picture] Managing Director and President of Lowe,
Brockenbrough & Company, Inc. (private
investment counseling firm) since 1970.
Other directorship: Trustee of The
Williamsburg Investment Trust. Director
since 1993. Term expires 2003.
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Phyllis Cothran, 54
[Picture] Retired, having served previously as
President and Chief Operating Officer of
Trigon Blue Cross Blue Shield, a health
insurance (and related services) company,
from November, 1990 until March 31, 1997.
Other directorship: Ethyl Corporation
("Ethyl"), a petroleum additives company.
Director since 1993. Term expires 2002.
4
Richard W. Goodrum, 73
{Picture] Retired, having served previously as
Executive Vice President and Chief
Operating Officer of Tredegar from July
10, 1989 until March 31, 1996. Director
since 1989. Term expires 2002.
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Floyd D. Gottwald, Jr., 78
[Picture] Chairman of the Board and Chief Executive
Officer of Albemarle Corporation, a
chemicals company ("Albemarle"), since
March 1, 1994. Other directorship:
Albemarle. Director since 1989. Term
expires 2002.
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John D. Gottwald, 46
[Picture] President and Chief Executive Officer of
Tredegar since July 10, 1989. Other
directorship: Albemarle. Director since
1989. Term expires 2001.
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William M. Gottwald, 53
[Picture] Vice President, Corporate Strategy, of
Albemarle since August, 1996; having
served previously as Senior Vice
President of Ethyl from September, 1994
until August, 1996. Other directorship:
Albemarle. Director since 1997. Term
expires 2003.
5
Richard L. Morrill, 61
[Picture] Chancellor and Distinguished University
Professor of Ethics and Democratic Values
University of Richmond since July 1,
1998; having served previously as
President of the University of Richmond
from 1988 until June 30, 1998. Other
directorship: Trustee of The Williamsburg
Investment Trust. Director since 1997.
Term expires 2003.
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Norman A. Scher, 63
[Picture] Executive Vice President and Chief
Financial Officer of Tredegar since July
10, 1989; having served previously as
Treasurer of Tredegar from July 10, 1989
until May 22, 1997. Other directorship:
DIMON, Incorporated. Director since 1989.
Term expires 2003.
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Thomas G. Slater, Jr., 57
[Picture] Partner of Hunton & Williams, a law firm,
since 1976. Director since 1998. Term
expires 2001.
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John D. Gottwald and William M. Gottwald are brothers and are sons of
Floyd D. Gottwald, Jr. The Gottwalds may be deemed to be "control persons" of
Tredegar. In addition, Thomas G. Slater, Jr., is married to John D. Gottwald's
sister-in-law.
COMPENSATION OF DIRECTORS
Each member of the Board who was not an employee of Tredegar or any of
its subsidiaries was paid $1,000 for attendance at each of the Board meetings
held in 2000. Each director was paid $1,000 for each Board committee meeting
attended during 2000, with the exception of the Investment Policy Committee.
Each chairperson of a Board committee received an additional $250 for attendance
at each meeting of his or her committee, with the exception of the Investment
Policy Committee. Each member of the Investment Policy Committee was paid $500
for each meeting attended during 2000. A director who participated in a Board or
committee meeting by telephone was paid $250 for that meeting. In addition, each
director was paid a quarterly fee of $4,400 during 2000. Employee members of the
Board are not paid separately for their service on the Board.
6
BOARD MEETINGS
There were six meetings of the Board held in 2000. All of the directors
attended at least 85% of the total number of Board meetings and Board committee
meetings (of which the director was a member) held in 2000.
BOARD COMMITTEES
Number of
Committee and Members Functions Meetings
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AUDIT: Reviews financial reporting, policies, 2
Austin Brockenbrough, III procedures and internal controls
Phyllis Cothran
Richard W. Goodrum* Recommends appointment of outside auditors
Oversees auditing procedures
Receives from and discusses with outside
auditors written disclosures as to outside
auditors' independence
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COMPENSATION: Approves the salaries and bonus awards of 4
Phyllis Cothran Executive Officers
Richard L. Morrill*
Emmett J. Rice Grants awards under Tredegar's stock
incentive plan (other than the Directors'
Stock Plan)
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EXECUTIVE: Acts on the Board's behalf pursuant to **
Richard W. Goodrum Tredegar's By-laws, except as limited by
John D. Gottwald* the Virginia Stock Corporation Act, and
Norman A. Scher except with respect to the compensation of
executive officers
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INVESTMENT POLICY: Administers Tredegar's Investment Conflict 5
Austin Brockenbrough, III* of Interest Policy
Richard L. Morrill
Norman A. Scher
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NOMINATING: Recommends nominees for election as 1
Austin Brockenbrough, III directors
John D. Gottwald*
Thomas G. Slater, Jr. May make recommendations regarding term of
office, classification and compensation of
directors
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*Committee Chairperson
**The Executive Committee did not meet formally during 2000, but did act by
unanimous written consent as necessary on various occasions.
7
STOCK OWNERSHIP
Below is information on the beneficial ownership of Tredegar's Common
Stock by the directors, nominees and the executive officers named in the Summary
Compensation Table as of February 1, 2001. The table also shows the beneficial
ownership of all directors and executive officers of Tredegar as a group as of
February 1, 2001.
Security Ownership of Management
Number of
Number of Shares Shares with Total
with Sole Voting Shared Voting Number
and Investment and Investment of Percent of
Power Power Shares Class(a)
---------------- -------------- ------ ----------
Outstanding Options
----------- -------
Directors, Nominees and
Certain Executive Officers(b)
Austin Brockenbrough, III 58,000 600 33,496 92,096 (c)
Phyllis Cothran 17,100 600 -- 17,700
D. Andrew Edwards 8,307 93,250 -- 101,557
Richard W. Goodrum 275,961 248,100 13,500 537,561 1.40%
Floyd D. Gottwald, Jr. 3,376,346 600 273,318 3,650,264 (d) 9.58%
John D. Gottwald 1,996,987 186,250 728,683 2,911,920 (e) 7.60%
William M. Gottwald 97,873 600 579,562 678,035 (f) 1.78%
Douglas R. Monk 46,098 196,750 5,400 248,248 (g)
Richard L. Morrill 4,000 600 -- 4,600
Emmett J. Rice 2,385 600 -- 2,985
Norman A. Scher 220,931 222,250 180 443,361 1.16%
Thomas G. Slater, Jr. -- 600 2,200 2,800 (h)
William J. Wetmore 19,874 53,000 -- 72,874
Management
All directors and executive 6,177,326 1,252,550 1,622,833 9,052,709 (k) 23.00%
officers as a group (16)(i)(j)
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(a) Unless a specific percentage is noted in this column, each person
owns less than 1% of Tredegar's outstanding Common Stock.
(b) Some of the shares may be considered to be beneficially owned by
more than one person or group listed and are included in the table for each.
(c) Austin Brockenbrough, III, disclaims beneficial ownership of 31,496
shares of Common Stock.
(d) Floyd D. Gottwald, Jr., disclaims beneficial ownership of 273,318
shares of Common Stock.
(e) John D. Gottwald disclaims beneficial ownership of 183,261 shares
of Common Stock.
(f) William M. Gottwald disclaims beneficial ownership of 114,898
shares of Common Stock.
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(g) Douglas R. Monk disclaims beneficial ownership of 5,400 shares of
Common Stock.
(h) Thomas G. Slater, Jr., disclaims beneficial ownership of 2,200
shares of Common Stock.
(i) The directors, nominees and executive officers have sole voting and
investment power over their shares, except for those listed in the third column,
which are held by or jointly with spouses, by children or in partnerships and
trusts. Any shares held under Albemarle's or Tredegar's benefit plans for any
director, nominee or executive officer are included in the number of shares over
which that person has sole voting or investment power. Shares held by the
trustees of those plans for other employees are not included. See Note (d) to
the table "Security Ownership of Certain Beneficial Owners" below.
(j) Two directors share voting and investment power for 13,506 shares.
This overlap in beneficial ownership has been eliminated in calculating the
number of shares and the percentage of class owned by Management.
(k) The above table does not include some of the shares owned by the
adult children of Floyd D. Gottwald, Jr. Nor does it include the shares owned by
Floyd D. Gottwald, Jr.'s brother, Bruce C. Gottwald, and his adult children.
Bruce C. Gottwald, Floyd D. Gottwald, Jr., John D. Gottwald and William M.
Gottwald may be considered a "group" under Section 13(d) of the Securities
Exchange Act of 1934, and the shares owned or attributed to them and their
children are reported in the table "Security Ownership of Certain Beneficial
Owners" below. If all of those shares were included in the table above, the
total number of shares held by Management would be 14,380,654 (and 36.54% of
total shares outstanding).
9
The table below lists any person (including any "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934) known to Tredegar that
beneficially owned more than 5% of Tredegar's Common Stock on February 1, 2001.
Security Ownership of Certain Beneficial Owners
Names and Addresses Number Percent
of Beneficial Owners of Shares Class
-------------------- --------- ------
Bruce C. Gottwald
Floyd D. Gottwald, Jr.,
John D. Gottwald, and
William M. Gottwald (a)
330 South Fourth Street 12,554,658(b)(c) 32.78%
Richmond, VA 23217
Shapiro Capital Management Company, Inc.
Samuel R. Shapiro,
The Kaleidoscope Fund, L.P.
3060 Peachtree Road, N.W. 2,370,800 6.22%
Atlanta, GA 30305
Frank Russell Trust Company,
as Trustee for the Tredegar Corporation
Retirement Savings Plan
909 A Street 3,617,570(c)(d) 9.49%
Tacoma, WA 98402
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(a) Bruce C. Gottwald, Floyd D. Gottwald, Jr., John D. Gottwald and
William M. Gottwald (the "Gottwalds"), together with members of their immediate
families, may be deemed to be a "group" for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, although there is no agreement among them with
respect to the acquisition, retention, disposition or voting of Common Stock.
(b) The Gottwalds, individually or together, have sole voting and
investment power over all of the shares disclosed except for 4,594,332 shares
held by their respective wives and children, and in trusts, some of which might
be deemed to be beneficially owned by the Gottwalds under the rules and
regulations of the Securities and Exchange Commission, but as to which the
Gottwalds disclaim beneficial ownership. Shares owned by the adult children of
Bruce C. Gottwald and Floyd D. Gottwald, Jr., are included in the group holdings
of the Gottwalds.
(c) This amount includes 225,639 shares owned of record by Frank
Russell Trust Company, Tacoma, Washington (the "Trustee"), as trustee of the
Tredegar Corporation Retirement Savings Plan (the "Tredegar Savings Plan") for
the benefit of John D. Gottwald.
(d) Shares held under the Tredegar Savings Plan are voted by the
Trustee according to instructions obtained from employees participating in the
plan. If a participating employee does not give the Trustee voting instructions,
his or her shares are voted by the Trustee according to the Board's
recommendations to the shareholders (as long as doing so is consistent with the
Trustee's fiduciary duties). Because members of the Gottwald family are
executive officers, directors and the largest shareholders of Tredegar, they may
be considered to be "control persons" of Tredegar and to have the ability to
control the recommendations of the Board.
10
COMPENSATION OF EXECUTIVE OFFICERS
Executive Compensation
This table shows information on compensation paid by Tredegar to the
Chief Executive Officer and the four other highest paid executive officers for
their services to Tredegar for the fiscal years ended December 31, 2000, 1999
and 1998, respectively.
Summary Compensation Table
Name and Annual Long-Term
Principal Position Compensation Compensation Awards
Securities All Other
Salary Bonus Underlying Compensation
Year ($) ($) Options/SARs (#) ($)
---- ----------- ----------- ----------------- ------------
John D. Gottwald 2000 379,762 -0- 44,000 20,295(1)
President and Chief 1999 365,208 100,000 88,000 19,481(1)
Executive Officer 1998 358,167 135,000 -0- 18,906(1)
Norman A. Scher 2000 327,500 -0- 32,000 17,426(2)
Executive Vice President 1999 327,500 75,000 64,000 17,357(2)
and Chief Financial Officer 1998 322,292 100,000 -0- 16,915(2)
Douglas R. Monk 2000 301,083 -0- 32,000 15,362(4)
Executive Vice President 1999 258,333 85,000 64,000 13,040(4)
and Chief Operating Officer 1998 195,631 85,000(3) -0- 10,105(4)
William J. Wetmore 2000 171,539 -0- 26,400 8,748(5)
Vice President and 1999 140,000 65,000 44,000 7,169(5)
President, Aluminum Division 1998 112,586 50,000 -0- 5,776(5)
D. Andrew Edwards 2000 170,000 -0- 18,000 8,682(6)
Vice President, Finance 1999 150,500 45,000 36,000 7,705(6)
and Treasurer 1998 132,533 60,000 -0- 6,783(6)
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(1)Matching contributions under the Tredegar Corporation Retirement
Savings Plan (the "Savings Plan") ($8,500 for 2000 and $8,000 for 1998 and 1999)
and credit under the Savings Plan Benefit Restoration Plan (the "SPBR Plan")
($11,795 for 2000, $11,481 for 1999 and $10,906 for 1998).
(2)Matching contributions under the Savings Plan ($8,500 for 2000, and
$8,000 for 1998 and 1999) and credit under the SPBR Plan ($8,926 for 2000,
$9,357 for 1999 and $8,915 for 1998).
(3)Mr. Monk's bonus for 1998 was determined under a formula-based
incentive plan adopted for Tredegar's Aluminum Extrusion division, but did
include a discretionary award, which was allowed under the plan.
11
(4)Matching contributions under the Savings Plan ($8,500 for 2000 and
$8,000 for 1998 and 1999) and credit under the SPBR Plan ($6,862 for 2000,
$5,040 for 1999 and $2,105 for 1998).
(5)Matching contributions under the Savings Plan ($8,231 for 2000,
$7,000 for 1999 and $5,629 for 1998) and credit under the SPBR Plan ($517 for
2000, $170 for 1999 and $147 for 1998).
(6)Matching contributions under the Savings P lan ($8,125 for 2000,
$7,525 for 1999 and $6,627 for 1998) and credit under the SPBR Plan ($557 for
2000, $180 for 1999 and $156 for 1998).
Stock Options and SARs
This table describes the stock options granted to each of the executive
officers named in the Summary Compensation Table during the fiscal year ended
December 31, 2000. There were no SARs granted during 2000.
Option/SAR Grants In Last Fiscal Year
Grant Date
Individual Grants Value(1)
- -------------------------------------------------------------------------------------------------------- ----------------------
Number of Percent of
Securities Total Options/
underlying SARs Granted Exercise or
option/SARs to Employees Base Price Expiration Grant Date
Name Granted (#) in Fiscal Year ($/Sh) Date Present Value $
- ---------------------------- ------------------- ------------------- ------------------ ---------------- ----------------------
John D. Gottwald 22,000 3.38% $19.75 1/5/2007 217,580
22,000 3.38% $22.72 1/5/2007 200,420
Norman A. Scher 16,000 2.46% $19.75 1/5/2007 158,240
16,000 2.46% $22.72 1/5/2007 145,760
Douglas R. Monk 16,000 2.46% $19.75 1/5/2007 158,240
16,000 2.46% $22.72 1/5/2007 145,760
William J. Wetmore 13,200 2.03% $19.75 1/5/2007 130,548
13,200 2.03% $22.72 1/5/2007 120,252
D. Andrew Edwards 9,000 1.38% $19.75 1/5/2007 89,010
9,000 1.38% $22.72 1/5/2007 81,990
(1)The grant date present value is an estimate based on the Black-Scholes option
pricing model. The actual value, if any, an executive may realize will depend on
the excess of the stock price over the exercise price on the date the option is
exercised. There is no assurance the value realized by an executive will be at
or near the value estimated by the Black-Scholes model. The assumptions used
under that model include a volatility estimate of 40%, a risk-free rate of
return of 6.86% based on the 7-year zero coupon U.S. Treasury bond yield at the
time of grant, a dividend yield of .81% based on the annual dividend rate at the
time of grant and an estimated option holding period of 7 years. The estimated
grant date present value does not reflect any discount for vesting, forfeiture
provisions or prohibitions on transfer.
12
The following describes the options exercised by the executive officers
named in the Summary Compensation Table during 2000 and the year-end value of
all unexercised stock options and SARs held by those executive officers.
Aggregated Option/SAR Exercises
In Last Fiscal Year And FY-End Option/SAR Values
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End (#) Fiscal Year-End ($)(1)
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise (#) Realized ($)(2) Unexercisable Unexercisable
---- --------------- ------------ ------------- -------------
John D. Gottwald -0- -0- 98,250/132,000 298,172/0
Norman A. Scher 15,750 233,573 158,250/ 96,000 1,264,351/0
Douglas R. Monk 2,000 28,100 99,079/ 96,000(3) 1,249,728/0
William J. Wetmore -0- -0- 9,000/ 70,400 7,988/0
D. Andrew Edwards -0- -0- 57,250/ 54,000 378,624/0
- -------------------
(1)Based on the closing price of $17.4375 on December 29, 2000.
(2)"Value Realized" should not be interpreted to mean that the shares
acquired upon exercise have been sold.
(3)Of the total options, 12,235 include a tandem SAR.
Retirement Benefits
All of the executive officers participate in the Tredegar Corporation
Retirement Income Plan (the "Pension Plan"). The Pension Plan's typical
retirement benefit equals 1.1% of the participant's final average earnings up to
his Social Security covered compensation, multiplied by his years of pension
benefit service, plus 1.5% of Final Average Earnings (as defined in footnote 3
to the table below) in excess of covered compensation, multiplied by his years
of pension benefit service. There is no deduction for Social Security benefits.
Estimated annual benefits under the Pension Plan upon retirement at age 65,
determined as of December 31, 2000, to persons with specified earnings and years
of pension benefit service are set forth in the table below.
The Internal Revenue Code limits (a) the annual retirement benefit that
may be paid under the Pension Plan and (b) the earnings that may be used in
computing a benefit. The maximum benefit and earnings limitations are adjusted
each year to reflect changes in the cost of living. For 2000, the maximum
benefit limitation was $131,195 (based on a five-year certain and life annuity)
and the earnings limitation was $170,000.
13
Messrs. Gottwald, Scher and Monk also participate in the Tredegar
Corporation Retirement Benefit Restoration Plan (the "Restoration Plan"). The
Restoration Plan restores benefits that cannot be paid under the Pension Plan
due to the Internal Revenue Code maximum benefit limitation, the earnings
limitation, or both. The benefit payable under the Restoration Plan is
calculated by subtracting the amount that would have been payable under the
Pension Plan if not for the Internal Revenue Code limitations and the amount
actually payable under the Pension Plan.
Pension Plan Table
(Estimated Annual Benefits Payable at Retirement(1)(2))
Remuneration
(Final-Average Earnings)(3) Years of Service (4)
- --------------------------- ------------------------------------------------------------------------------------------
10 15 20 25 30 35 40
-- -- -- -- -- -- --
$125,000......................... 17,346 26,019 34,692 43,365 52,038 60,711 69,384
150,000......................... 21,096 31,644 42,192 52,740 63,288 73,836 84,384
175,000......................... 24,846 37,269 49,692 62,115 74,538 86,961 99,384
200,000......................... 28,596 42,894 57,192 71,490 85,788 100,086 114,384
225,000......................... 32,346 48,519 64,692 80,865 97,038 113,211 129,384
250,000......................... 36,096 54,144 72,192 90,240 108,288 126,336 144,384
300,000......................... 43,596 65,394 87,192 108,990 130,788 152,586 174,384
350,000......................... 51,096 76,644 102,192 127,740 153,288 178,836 204,384
400,000......................... 58,596 87,894 117,192 146,490 175,788 205,086 234,384
450,000......................... 66,096 99,144 132,192 165,240 198,288 231,336 264,384
500,000......................... 73,596 110,394 147,192 183,990 220,788 257,586 294,384
- -------------------
(1) The estimated benefits assume retirement at age 65 and payment for
the lifetime of the participant, with five years of payments guaranteed (the
normal form of payment under the Pension Plan and the Restoration Plan). The
table assumes reaching age 65 in 2000 and covered compensation of $35,100.
(2) The estimated benefit set forth in the table was determined using
the Internal Revenue Code limitation on earnings that may be used in computing a
benefit. The earnings limitation is subject to a transition rule that preserves
benefits accrued as of December 31, 1993 based on higher compensation levels.
Messrs. Gottwald and Scher have annual accrued benefits of $49,718 and $13,571,
respectively, under that transition rule.
(3) Final-Average Earnings is the average of the highest three
consecutive calendar year's earnings (base earnings plus 50% of bonuses) during
the ten consecutive years immediately preceding the date of determination. As of
December 31, 2000, the final average earnings under the Pension Plan for each of
the executive officers named in the Summary Compensation Table is as follows:
John D. Gottwald, $163,333; Norman A. Scher, $163,333; Douglas R. Monk,
$163,333; William J. Wetmore, $155,744; and D. Andrew Edwards, $163,333. As of
December 31, 2000, the final average earnings considered under the Restoration
Plan for Messrs. Gottwald, Scher and Monk was $430,212, $381,597 and $293,349,
respectively.
(4) The years of pension benefit service for each of the executive
officers named in the Summary Compensation Table are: John D. Gottwald, 22;
Norman A. Scher, 11; Douglas R. Monk, 25; William J. Wetmore, 23; and D. Andrew
Edwards, 8.
14
Consulting Agreement with Richard W. Goodrum
Tredegar has a consulting agreement with Richard W. Goodrum, who
retired as Executive Vice President and Chief Operating Officer of Tredegar on
March 31, 1996. Under the terms of that agreement, Mr. Goodrum continues to
serve on Tredegar's Executive Committee and provides other services to Tredegar.
As compensation, Tredegar pays Mr. Goodrum $20,000 annually. The agreement
automatically renews for one-year periods on March 31st of each year, unless Mr.
Goodrum or Tredegar terminates the agreement at least 30 days before the
expiration of the then current-term of the agreement.
Compensation Committee Report on Executive Compensation
Tredegar's Executive Compensation Committee (the "Committee") is
comprised of three independent directors. No Committee member is a current or
former employee of Tredegar or any of its subsidiaries. The Committee's role is
to review and approve practices and policies related to compensation primarily
for executive officers, including those officers listed in this proxy statement
.
Compensation Philosophy
The Committee's philosophy is based on the principle that executive
compensation plans should be designed and administered to motivate and retain
highly qualified executives, with incentives linked closely to financial
performance and enhanced shareholder value. Control of all fixed costs is
critical to Tredegar's continued success. Controlling compensation costs
requires a significant portion of compensation increases to be closely linked to
performance and, therefore, variable in nature. However, Tredegar should remain
competitive with salaries.
Base Salaries
In determining base salaries, Tredegar identifies a reasonable range
around the average for comparable executive positions in a comparison group of
companies. Actual officer salaries are generally set within this range based on
individual performance and experience. Annual salary increases are considered.
The amount of such increases is based on a variety of factors including average
increases in comparison companies, individual performance (evaluated
subjectively), the officer's position in the pay range, Tredegar's financial
condition, and other variable components of compensation.
The comparison company group for compensation is generally not the same
as the published industry index that appears in the performance graph of this
proxy statement because index companies are not necessarily viewed as direct
competitors for executive talent. Comparison companies are chosen, and
information on pay evaluated, with the assistance of independent consultants.
The 2000 base salary for the Chief Executive Officer (CEO) was
$379,762. This salary is below the average for the comparison group.
Bonuses
Although bonus awards for corporate executives are generally
discretionary, the bonus portion of compensation is tied to an assessment of
performance. Division executives' bonuses are linked directly by formula to
specific division performance measures. In such cases, economic profit added is
the most widely used and most heavily weighted measure. In other cases, a broad
range of financial measures as well as progress on strategic issues are
reviewed.
15
In 2000, no bonuses were paid to executive officers due to performance
targets not being achieved during the year.
Stock Options
Stock options are considered an important part of compensation at
Tredegar. As of February 1, 2001, 1,356 employees had stock options. Over time,
the stock price reflects Management's performance. Through the options granted,
employees and shareholder interests are more closely tied.
Tredegar has one stock incentive plan (the "SIP") available for awards
to executive officers and other employees and individuals providing valuable
services to Tredegar or its subsidiaries. Each year the Committee considers
granting awards under the SIP. Consistent with the objective of closely aligning
executives' interests with those of Tredegar shareholders, the SIP enables the
Committee to grant stock options and shares of restricted stock. The Committee
determines the terms and conditions of any options or restricted stock granted.
Executive officers as a group were granted options for 170,000 shares
on a discretionary basis on January 5, 2000 with the CEO receiving options for
44,000 shares. Fifty percent of the granted options were at fair market value on
the grant date ($19.75 per share) and fifty percent of the granted options were
at 15% above fair market value on the grant date ($22.72 per share).
Corporate Tax Considerations
A law, effective in 1994, disallows corporate tax deductions for
executive compensation in excess of $1 million for "proxy table" executives.
This law, covered in Internal Revenue Code Section 162(m), allows certain
exemptions to the deduction cap, including pay programs that depend on formulas
and, therefore, are "performance-based" rather than discretionary.
While significant parts of Tredegar's compensation program are
discretionary, the Company is not currently in danger of losing deductions under
Code Section 162(m). The Committee will carefully review any compensation plan
or action that would result in the disallowance of compensation deductions. The
Committee will consider a variety of factors, including the amount of any
deductions that may be lost.
Executive Compensation Committee:
Richard L. Morrill, Chairman
Phyllis Cothran
Emmett J. Rice
February 26, 2001
Audit Committee Report
The Audit Committee oversees the quality and integrity of Tredegar's
financial reporting processes and its systems of internal accounting controls.
Management is responsible for preparing Tredegar's financial statements and the
independent accountants are responsible for performing an independent audit of
those financial statements. The Audit Committee operates under a written charter
that has been adopted by Tredegar's Board of Directors, a copy of which is
attached to this proxy statement as Appendix A.
16
The Audit Committee has met and held discussions with management and
PricewaterhouseCoopers LLP ("PwC"), Tredegar's independent accountants,
regarding Tredegar's audited 2000 consolidated financial statements. Management
represented to the Audit Committee that Tredegar's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the consolidated
financial statements with management and PwC.
The Audit Committee has discussed with PwC the matters required to be
discussed by Statement on Auditing Standards No. 61 (Codification of Statements
on Accounting Standards), as amended. In addition, the Audit Committee has
received the written disclosures and the letter from PwC relating to the
independence of that firm as required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees), and has discussed with
PwC that firm's independence from Tredegar.
In reliance upon the Audit Committee's discussions with management and
PwC and the Audit Committee's review of the representation of management and the
report of PwC to the Audit Committee, the Audit Committee recommended that the
Board of Directors include the audited consolidated financial statements in
Tredegar's Annual Report on Form 10-K for the year ended December 31, 2000 to be
filed with the Securities and Exchange Commission.
Audit Committee
Richard W. Goodrum, Chairman
Austin Brockenbrough, III
Phyllis Cothran
February 27, 2001
DESIGNATION OF AUDITORS
The Board has designated PricewaterhouseCoopers LLP ("PwC"), certified
public accountants, as Tredegar's independent auditors for the year 2001,
subject to shareholder approval. This firm has audited Tredegar's financial
statements since Tredegar became an independent company. A representative of PwC
is expected to be present at the meeting. This representative will have an
opportunity to make a statement to the shareholders and will be available to
answer questions.
PwC's main function is to audit the consolidated financial statements
of Tredegar and its subsidiaries and, in connection with the audit, to review
related filings with the Securities and Exchange Commission and to conduct
limited reviews of the unaudited financial statements included in each of
Tredegar's quarterly reports.
Audit Fees
The aggregate fees billed by PwC for the fiscal year ended December 31,
2000 to audit Tredegar's annual financial statements and to review its quarterly
financial statements were $401,000, of which $238,000 was billed in 2000.
17
Financial Information Systems Design and Implementation Fees
PwC did not bill Tredegar for any fees related to financial information
systems design and implementation.
All Other Fees
The aggregate fees billed by PwC for all non-audit services rendered
during the fiscal year ended December 31, 2000 were $400,268.
The Audit Committee concluded that the provision of non-audit services
is compatible with maintaining PwC's independence.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE DESIGNATION OF
PRICEWATERHOUSECOOPERS LLP AS AUDITORS.
COMPARATIVE COMPANY PERFORMANCE
The following graph compares cumulative total returns for Tredegar, the
S&P Small Cap 600(R) Stock Index, and the S&P Manufacturing (Diversified
Industries), a nationally recognized industry index, since December 31, 1995.
The comparison assumes $100 was invested on December 31, 1995, with dividends
reinvested.
Fiscal Year Ended December 31
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
TREDEGAR $100 188 311 321 297 252
S&P SMALL CAP 600(R) 100 121 152 157 176 197
S&P MFG. 100 138 164 190 234 278
18
PROPOSALS FOR 2002 ANNUAL MEETING
The regulations of the Securities and Exchange Commission require any
shareholder wishing to make a proposal to be acted upon at the 2002 annual
meeting of shareholders to present the proposal to Tredegar at its principal
office in Richmond, Virginia, no later than November 27, 2001. Written proposals
received by that date will be considered for inclusion in Tredegar's proxy
statement.
Tredegar's By-laws also require any shareholder wishing to make a
proposal to be acted on at an annual meeting to give written notice to the
Secretary of Tredegar no later than ninety days before the meeting. The notice
must contain (i) a brief description of the business to be brought before the
annual meeting (including the specific proposal to be presented) and the reasons
for addressing it at the annual meeting, (ii) the name, record address, and
class and number of shares beneficially owned by the shareholder proposing such
business, and (iii) any material interest of the shareholder in such business.
ANNUAL REPORT ON FORM 10-K
Tredegar will provide without charge to each person to whom this proxy
statement has been delivered, on the written request of any such person, a copy
of Tredegar's Annual Report on Form 10-K for the fiscal year ended December 31,
2000, including the financial statements and financial statement schedules.
Requests should be directed to Tredegar Corporation, 1100 Boulders Parkway,
Richmond, Virginia, 23225, Attention: Corporate Secretary. A list of exhibits to
the Form 10-K, showing the cost of each, will be delivered with the copy of the
Form 10-K. Any of the exhibits will be provided upon payment of the charge noted
on the list.
OTHER MATTERS
The Board is not aware of any matters to be presented for action at the
annual meeting of shareholders other than as described in this proxy statement.
However, if any other matters are properly raised at the meeting or in any
adjournment of the meeting, the person or persons voting the proxies will vote
them in accordance with their best judgment.
By Order of the Board of Directors
/s/ Nancy M. Taylor
Nancy M. Taylor, Secretary
Appendix A
TREDEGAR CORPORATION
Audit Committee Charter
The mission of the Audit Committee (the "Committee") of Tredegar
Corporation ("Tredegar") is to oversee the quality and integrity of the
financial reporting processes and the systems of internal accounting controls of
Tredegar and its subsidiaries. The Committee's responsibility is one of
oversight. Management is responsible for the preparation of Tredegar's financial
statements and the independent auditors are responsible for auditing those
financial statements.
The Committee shall keep management and the Board of Directors of
Tredegar informed of its activities and findings.
In order to carry out its mission, the Committee shall perform the
following functions:
o Review the adequacy of Tredegar's systems of internal accounting
controls.
o Review the activities, organizational structure and qualifications of
the internal audit function.
o Review the independent auditor's proposed audit scope and approach.
o Conduct a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements
provided to management by the independent auditors.
o Review, or cause the Chairman of the Committee to review, with a
representative of Tredegar's financial management and the independent
auditors, the quarterly financial statements before the public release
of earnings or the filing of the Quarterly Report on Form 10-Q with the
Securities and Exchange Commission (the "SEC").
o Review the annual audited financial statements and discuss them with
management and the independent auditors, including the matters required
to be discussed under Statement of Auditing Standards No. 61 and
consideration of the quality of Tredegar's accounting principles as
applied in its financial reporting. Based on this review and discussion,
the Committee will make its recommendation to Tredegar's Board of
Directors as to the inclusion of the audited financial statements in the
Annual Report on Form 10-K.
o Review with Tredegar's Board of Directors and management the performance
of the independent auditors and, together with the Board, evaluate such
performance and, when appropriate, replace the independent auditors.
o Review the independent auditors' fee arrangements.
o Review and discuss with the independent auditors their ultimate
accountability to the Committee and Tredegar's Board of Directors.
o Obtain annually from the independent auditors a formal written statement
describing all relationships between the auditors and Tredegar,
consistent with Independence Standards Board Standard Number 1. The
Committee will engage in an active dialogue with the independent
auditors with respect to any relationships that may impact the
objectivity and independence of the auditors and recommend that
Tredegar's Board of Directors take appropriate action in response to the
independent auditors' report to satisfy itself as to the independence of
the auditors.
o Issue an annual report to be included in Tredegar's proxy statement
as required by the regulations of the SEC.
o Review Tredegar's financial reporting processes, including computerized
financial systems.
o Review, with counsel, any legal matters that could have a significant
impact on Tredegar's financial statements.
o Review the findings of any examinations by regulatory agencies, such as
the SEC.
o Review the policies and procedures in effect or the review of officers'
expenses and prerequisites.
o Review management's monitoring of compliance with Tredegar's corporate
conduct policies and the Foreign Corrupt Practices Act.
o If necessary, institute special investigations and, if appropriate, hire
special counsel or experts to assist.
o Perform other duties and functions assigned by Tredegar's Board of
Directors.
The Committee shall meet at least once per year with Tredegar's outside
accountants to review their performance, fees and other matters relating to
Tredegar's financial reporting processes. The Committee shall meet at least once
per year with Tredegar's internal auditors to review Tredegar's systems for
internal accounting controls and the activities of such auditors. The Committee
shall report at least twice per year to the Board of Directors and management of
Tredegar.
The Committee shall be composed of at least three members. The Board of
Directors shall appoint the Chairman of the Committee. All Committee members
shall be independent of management and free of any relationship that, in the
opinion of the Board of Directors, would interfere with the exercise of
independent judgment. Each Committee member shall also meet the independence and
financial literacy requirements for serving on audit committees, and at least
one member shall have accounting or related financial management expertise, all
as set forth in the applicable rules of the New York Stock Exchange.
The Committee shall review and reassess this Charter at least annually
and recommend any proposed changes to Tredegar's Board of Directors for
approval.
TREDEGAR CORPORATION
Richmond, Virginia
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 2001
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONES ONLY)
Please call toll-free 1-800-PROXIES (1-800-776-9437) and follow the
instructions. Please have your control number and the proxy card available when
you call.
TO VOTE BY INTERNET
Please access the web page at "www.voteproxy.com" and follow the on-screen
instructions. Please have your control number available when you access the web
page.
YOUR CONTROL NUMBER IS
WITHHOLD
FOR AUTHORITY
Nominees To Vote for
Listed Nominees Listed
1. Election of [ ] [ ] Nominees: John D. Gottwald
Directors Thomas G. Slater, Jr.
INSTRUCTION: To withhold authority to vote for any of such nominees
write the nominee's name on the line provided below.
- --------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. The proposal to approve [ ] [ ] [ ]
PricewaterhouseCoopers
LLP as the auditors for
Tredegr for 2001
The undersigned hereby appoints D. Andrew Edwards, Norman A. Scher and Nancy M.
Taylor, or any of them, with full power of substitution in each, proxies (and if
the undersigned is a proxy, substitute proxies) to vote all shares of stock of
Tredegar Corporation that the undersigned is entitled to vote at the annual
meeting of shareholders to be held on May 24, 2001, and at any and all adjourn-
ments of the meeting.
In their discretion, the proxies are authorized to vote on such other business
and matters incident to the conduct of the meeting as may properly come before
the meeting.
This Proxy is solicited on behalf of the Board of Directors. This Proxy, when
properly executed, will be voted in the manner directed in this Proxy by the
undersigned shareholder. If no direction is made, this Proxy will be voted for
Proposals 1 and 2.
Dated: , 2001
- ------------------------------------ -------------------
SIGNATURE OF SHAREHOLDER
NOTE: Please sign name exactly as it appears on the stock certificate. Only one
of several joint owners need sign. Fiduciaries should give full title.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.