<Page>
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
Georgia Gulf Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
<Page>
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<Page>
GEORGIA GULF CORPORATION
400 PERIMETER CENTER TERRACE
SUITE 595
ATLANTA, GEORGIA 30346
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 2002
To the Stockholders:
The Annual Meeting of Stockholders of Georgia Gulf Corporation will be
held in the Conference Center at the South Terraces, 115 Perimeter Center Place,
Atlanta, Georgia 30346, on May 21, 2002 at 1:30 p.m. local time for the
following purposes:
(1) to elect three directors to serve for a term of three years;
(2) to consider approval and adoption of the 2002 Equity and
Performance Incentive Plan; and
(3) to transact any other business as may properly come before the
meeting.
The board of directors has fixed the close of business on March 25,
2002, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting.
You are cordially invited to attend the meeting. However, whether or
not you plan to be personally present at the meeting, please complete, date and
sign the enclosed proxy and return it promptly in the enclosed postage prepaid
envelope.
By Order of the Board of Directors,
/s/ Joel I. Beerman
Vice President, General Counsel and Secretary
Dated: April 10, 2002
<Page>
GEORGIA GULF CORPORATION
400 PERIMETER CENTER TERRACE
SUITE 595
ATLANTA, GEORGIA 30346
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 21, 2002
GENERAL
This proxy statement and the accompanying form of proxy are being
furnished to the stockholders of Georgia Gulf Corporation on or about April 10,
2002 in connection with the solicitation of proxies by our board of directors
for use at the annual meeting of stockholders to be held on May 21, 2002 at 1:30
p.m. local time in the Conference Center at the South Terraces, 115 Perimeter
Center Place, Atlanta, Georgia 30346, and any adjournment of the meeting. Any
stockholder who executes and delivers a proxy may revoke it at any time before
its use by (i) giving written notice of revocation to our corporate secretary,
(ii) executing a proxy bearing a later date, or (iii) appearing at the meeting
and voting in person.
Unless otherwise specified, all shares represented by effective proxies
will be voted in favor of:
- election of the three nominees as directors; and
- approval and adoption of the 2002 Equity and Performance
Incentive Plan.
Our board of directors does not know of any other business to be brought before
the meeting, but if any other business is properly brought before the meeting,
proxies will be voted upon those matters in accordance with the judgment of the
person or persons acting under the proxies.
We will pay the cost of soliciting proxies. In addition to use of the
mails, proxies may be solicited in person or by telephone by our directors and
officers, who will not receive additional compensation for these services. We
have retained W.F. Doring & Co. to assist in the solicitation of proxies for a
fee not to exceed $5,000. Brokerage houses, nominees, custodians and fiduciaries
will be requested to forward soliciting material to beneficial owners of stock
held of record by them, and we will reimburse those persons for their reasonable
expenses in doing so.
Only holders of record of outstanding shares of common stock of Georgia
Gulf at the close of business on March 25, 2002, are entitled to notice of, and
to vote at the meeting. Each stockholder is entitled to one vote for each share
of common stock held on the record date. There were 32,001,049 shares of common
stock outstanding and entitled to vote on March 25, 2002.
<Page>
When the holders of at least 50% of the common stock, referred to as a
quorum, are represented at the meeting, either in person or by proxy, the vote
of the holders of a majority of the common stock represented at the meeting will
decide the action proposed in each matter identified in this proxy statement,
except the election of directors, who are elected by a plurality of all votes
cast. Abstentions and broker "non-votes" will be counted as present in
determining whether the quorum requirement is satisfied. A "non-vote" occurs
when a nominee holding shares for a beneficial owner votes on one proposal
pursuant to discretionary authority or instructions from the beneficial owner,
but does not vote on another proposal because the nominee has not received
instructions from the beneficial owner and does not have discretionary power.
The aggregate number of votes entitled to be cast by all stockholders
represented at the meeting, whether those stockholders vote for or against the
proposals or abstain from voting, will be counted for purposes of determining
the minimum number of affirmative votes required for approval of the proposals,
and the total number of votes cast for each of these proposals will be counted
for purposes of determining whether sufficient affirmative votes have been cast.
An abstention from voting by a stockholder on a proposal has the same effect as
a vote against the proposal. Broker "non-votes" are not counted for purposes of
determining whether a proposal has been approved.
2
<Page>
PRINCIPAL STOCKHOLDERS
The following table lists information based upon the number of shares
of our common stock outstanding as of March 25, 2002 regarding the ownership of
our common stock by each person known to us to be the beneficial owner of more
than 5% of our common stock:
<Table>
<Caption>
Amount and
Nature of
Name and Address of Beneficial Percent of
Beneficial Owner(1) Ownership Class
- -------------------- ----------- ------------
FMR Corp. 2,533,912(2) 7.92%
82 Devonshire St.
Boston, MA 02109
Cramer Rosenthal McGlynn, LLC 2,373,508(3) 7.42%
707 Westchester Avenue
White Plains, NY 10604
</Table>
(1) The information shown above is based upon information furnished to us
by the named persons. Beneficial ownership as reported in the table has
been determined in accordance with the rules of the Securities and
Exchange Commission. All persons shown in the table have sole voting
and investment power with regard to the shares shown, except as
otherwise indicated.
(2) According to the Schedule 13G of FMR Corp. filed on behalf of itself,
its funds, Edward C. Johnson 3d and Abigail P. Johnson, the reporting
persons have sole voting power with respect to 828,260 shares and sole
dispositive power with respect to 2,533,912 shares.
(3) According to the Schedule 13G of Cramer Rosenthal McGlynn, LLC, Cramer
Rosenthal has shared voting power and shared dispositive power with
respect to 2,373,508 shares.
3
<Page>
PROPOSAL I - ELECTION OF DIRECTORS
Our certificate of incorporation, as amended, provides that the board
of directors be divided into three classes, each consisting, as nearly as
possible, of one-third of the total number of directors constituting the board
of directors, with each class to serve for a term of three years. The following
nominees, each of whom is an incumbent class III director, are proposed for
election in class III, to serve until 2005:
- John E. Akitt
- Ruth I. Dreessen
- Charles T. Harris III
Unless instructed otherwise, the proxies will be voted for the election
of the three nominees named above. If any nominee is unable to serve, proxies
may be voted for a substitute nominee selected by the board of directors.
NOMINEES FOR ELECTION IN CLASS III ON MAY 21, 2002
John E. Akitt, age 69, has served as a director since February 2000.
Mr. Akitt has been a consultant since February 1998. He was executive vice
president of Exxon Chemical Company from January 1992 until January 1998. Mr.
Akitt is a director of Dofasco, Inc. and Cytec Industries, Inc.
Ruth I. Dreessen, age 46, has served as a director since September
2001. Ms. Dreessen was employed by JPMorgan Chase & Co. for more than five
years, serving as a managing director from 1995 until her retirement in November
2001. Ms. Dreessen is a director of Better Minerals & Aggregates Company.
Charles T. Harris III, age 50, has served as a director since February
1999. Mr. Harris has been a managing director of Goldman Sachs & Co. since April
1999. He has been a limited partner of Goldman Sachs Group, L.P. since December
1996 and was a general partner of Goldman Sachs Group, L.P. for more than five
years before December 1996. Mr. Harris is a director of Scholastic Corporation.
OTHER DIRECTORS
CLASS I DIRECTORS SERVING UNTIL 2003
John D. Bryan, age 68, served as our vice president - operations from
our inception in January 1985 until his retirement in December 1989. He
continues to serve as a director, a position he has also held since our
inception.
4
<Page>
Dennis M. Chorba, age 61, served as our vice president - administration
from February 1992 until his retirement in March 1994. Mr. Chorba has served as
a director since February 1994.
Patrick J. Fleming, age 58, has served as a director since February
2000. Mr. Fleming has been an energy consultant since January 2000. In 1998
and 1999, he was the managing director and chief executive officer of
Calortex Inc., a joint venture between Texaco, Calor Gas and Nuon
International and resided in the United Kingdom. From 1994 to December 1997,
Mr. Fleming was president of Texaco Natural Gas, Inc.
CLASS II DIRECTORS SERVING UNTIL 2004
Jerry R. Satrum, age 57, served as our chief executive officer from
February 1991 until his retirement in April 1998, and served as president from
May 1989 until December 1997. Mr. Satrum has been a director since our
inception. Mr. Satrum is also a director of Cytec Industries, Inc.
Edward A. Schmitt, age 55, has served as our chief executive officer
since April 1998 and as our president since December 1997. He also served as our
chief operating officer from February 1997 to April 1998, as our executive vice
president from February 1997 to December 1997, and as our vice president -
operations commodity chemicals group from August 1993 until January 1997. Mr.
Schmitt has been a director since February 1998 and chairman of the board since
September 2001.
Directors are elected annually to serve until the expiration of the
term of their class or until their successors are elected and qualified. The
chairman, provided he is not employed by us, is paid an annual fee of $42,000
and an attendance fee of $1,500 per meeting, as well as receiving reimbursements
for travel expenses. Directors who are not our executive officers are paid an
annual fee of $30,000 and an attendance fee of $1,500 per meeting, as well as
receiving reimbursements for travel expenses. Non-employee directors are
eligible to participate in our equity incentive plans.
In 2001, the audit committee of the board of directors was comprised of
Dennis M. Chorba, Charles T. Harris III, Jerry R. Satrum and Patrick J. Fleming.
All committee members are currently independent as defined by the Listed Company
Manual of the New York Stock Exchange. The primary functions of the audit
committee are to review the adequacy of the system of internal controls and
management information systems and to review the planning and results of the
audit examination with our independent public accountants. This committee held
three meetings in 2001 in conjunction with regular meetings of the board of
directors. The board of directors has adopted a written charter for the audit
committee.
In 2001, the equity compensation committee of the board of directors was
comprised of John E. Akitt, Patrick J. Fleming and Charles T. Harris III. This
committee was established in
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connection with the board's approval of the 1998 Equity and Performance
Incentive Plan, and its primary functions include overseeing our executive
compensation and equity and performance incentive compensation policies. This
committee held four meetings in 2001.
In March 2002, the board created an independent nominating committee,
comprised of Ruth I. Dreessen, Dennis M. Chorba and John E. Akitt. This
committee's primary function is to identify and recommend candidates to fill any
board vacancies. This committee will consider nominees recommended by
stockholders. Any recommendation should be addressed in writing to the
Nominating Committee, c/o the Corporate Secretary, 400 Perimeter Center Terrace,
Suite 595, Atlanta, Georgia 30346.
The board of directors held six meetings in 2001. During the last fiscal
year, no director attended fewer than 75% of the total number of meetings of the
board of directors and the committees on which he or she served. None of our
directors or executive officers are related to any of our other directors or
executive officers.
SECURITY OWNERSHIP OF MANAGEMENT
The following table lists information as of March 25, 2002 about the
number of shares owned by each director, each executive officer listed on the
summary compensation table included later in this proxy statement, and by all of
our directors and executive officers as a group:
<Table>
<Caption>
Name of Amount and Nature Percent of
Beneficial Owner of Beneficial Ownership(1) Class
- ------------------ -------------------------- ------------
John D. Bryan.......................................................1,330,370(2) 4.16%
Jerry R. Satrum.....................................................1,130,766(3) 3.53%
Dennis M. Chorba..................................................... 763,575(4) 2.39%
Edward A. Schmitt.....................................................438,400(5) 1.37%
Richard B. Marchese ..................................................190,408(6) *
Joel I. Beerman ......................................................184,344(7) *
Mark J. Seal .........................................................162,300(8) *
David L. Magee.........................................................81,356(9) *
Charles T. Harris III...................................................4,500(10) *
John E. Akitt.......................................................... 3,000(11) *
Patrick J. Fleming......................................................3,000(11) *
Ruth I. Dreessen........................................................1,500(12) *
All directors and officers as a group (14 persons)..................4,522,258(13) 14.13%
</Table>
- --------------------
* Represents less than 1%.
(1) Beneficial ownership as reported in the table has been determined in
accordance with the rules of the Securities and Exchange Commission.
Unless otherwise indicated, each
6
<Page>
person has sole voting and dispositive power with respect to all shares
listed opposite his name.
(2) Includes 507,444 shares held in trust for The Challenge Foundation and
50,000 shares held in trust for the Trust for School Reform, each of
which Mr. Bryan serves as trustee; and 6,000 shares that may be
acquired upon exercise of options.
(3) Includes 50,000 shares owned by Mr. Satrum's wife; 64,500 shares held
in trust for the Satrum Foundation, of which Mr. Satrum serves as
trustee; 61,612 shares held by Mr. Satrum as trustee for John Bryan's
children; and 6,000 shares that may be acquired upon exercise of
options.
(4) Includes 47,000 shares owned by Mr. Chorba's wife and 6,000 shares that
may be acquired upon exercise of options.
(5) Includes 336,000 shares that may be acquired upon exercise of options.
(6) Includes 20,000 shares owned by Mr. Marchese's wife and 125,000 shares
that may be acquired upon exercise of options.
(7) Includes 20,000 shares owned by Mr. Beerman's wife and 125,000 shares
that may be acquired upon exercise of options.
(8) Includes 125,000 shares that may be acquired upon exercise of options.
(9) Includes 4,247 shares owned by Mr. Magee's wife and 40,000 options that
may be acquired upon exercise of options.
(10) Represents 4,500 shares that may be acquired upon exercise of options.
(11) Represents 3,000 shares that may be acquired upon exercise of options.
(12) Represents 1,500 shares that may be acquired upon exercise of options.
(13) Includes 886,000 shares that may be acquired upon exercise of options.
7
<Page>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We believe all stock transaction reports required to be filed by
Section 16(a) of the Securities Exchange Act of 1934 with the Securities and
Exchange Commission were timely filed by all directors and officers, except for
one report relating to one transaction involving the quarterly acquisition of a
total of 27 shares of stock through dividend reinvestment by Mr. Doherty.
EXECUTIVE COMPENSATION
CASH COMPENSATION
The following table sets forth the cash compensation for the last three
years ended December 31 for our chief executive officer and four most highly
compensated executive officers other than the chief executive officer during
2001, who are collectively referred to as our named executive officers:
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
Long-Term
Compensation
------------
Annual Compensation Securities All Other
------------------- Underlying Compensation
Name and Principal Position Year Salary($) Bonus($) Options(#) ($)(1)
- --------------------------- ---- --------- -------- ------------ -------------
Edward A. Schmitt 2001 507,000 83,700 100,000 56,812(2)(3)
President and chief 2000 487,000 174,200 0 68,492
executive officer 1999 468,000 51,700 200,000 50,335
Richard B. Marchese 2001 322,000 48,300 30,000 71,851(2)(4)
Vice president - 2000 309,000 100,425 0 88,145
finance, chief financial 1999 297,000 33,000 60,000 63,043
officer and treasurer
Mark J. Seal 2001 271,008 40,650 30,000 33,833(2)(5)
Vice president - 2000 260,016 84,505 0 39,577
polymer group 1999 250,008 27,500 60,000 30,305
Joel I. Beerman 2001 265,008 39,750 30,000 36,389(2)(6)
Vice president - 2000 250,008 81,252 0 42,827
general counsel and 1999 240,000 26,400 60,000 32,567
secretary
8
<Page>
David L. Magee 2001 265,008 39,750 30,000 10,350(2)
Vice president - 2000 250,008 81,252 0 10,350
operations, chemicals and 1999 203,433 14,081 45,000 9,800
polymers groups
</Table>
- ---------------
(1) Consists of amounts paid under our savings and capital growth plan,
which is a defined contribution plan, amounts included as income under
our life insurance program and split dollar life insurance plan, as
well as the actuarial value of the split dollar life insurance plan's
benefits.
(2) For 2001, we contributed the amount of $10,350 for each named executive
officer under the savings and capital growth plan.
(3) Includes $7,040 for income under our split dollar life insurance plan
and $39,422 as the current actuarial value of the benefit for 2001.
(4) Includes $6,624 for income under our split dollar life insurance plan
and $54,877 as the current actuarial value of the benefit for 2001.
(5) Includes $4,050 for income under our split dollar life insurance plan
and $19,433 as the current actuarial value of the benefit for 2001.
(6) Includes $4,433 for income under our split dollar life insurance plan
and $21,606 as the current actuarial value of the benefit for 2001.
OPTION GRANTS IN THE LAST FISCAL YEAR
The table below sets forth information regarding options to purchase
shares of our common stock that were granted under the 1998 Equity and
Performance Incentive Plan on February 6, 2001 to the named executive officers.
The options become exercisable in three equal installments on the first, second
and third anniversaries of the date of grant. If we experience a change in
control, as defined in the plan, any options or portions of options that have
not yet expired become immediately exercisable. Generally, a change in control
will have occurred (i) if we are merged or consolidated with an entity or sell
substantially all of our assets to an entity and immediately after that merger,
consolidation or sale, our stockholders have less than a majority of the
combined voting power of the outstanding securities of the combined or acquiring
entity, (ii) in the case of an acquisition by a person of more than 33 1/3% of
our common stock, or (iii) if specified changes in our board of directors occur.
9
<Page>
INDIVIDUAL GRANTS
<Table>
<Caption>
% of Total Potential Realizable
Number of Options Value At Assumed
Securities Granted to Annual Rates of
Underlying Employees Exercise Stock Price Appreciation
Options in Fiscal Price Expiration For Option Term (1)
Name Granted (#) 2001 ($/Sh) Date 5%($) 10%($)
-------------- ----------- --------- -------- -------------- ------------ -----------
Edward A. Schmitt 100,000 20.39% $16.90 2/6/2011 1,062,832 2,693,425
Richard B. Marchese 30,000 6.12% $16.90 2/6/2011 318,850 808,027
Mark J. Seal 30,000 6.12% $16.90 2/6/2011 318,850 808,027
Joel I. Beerman 30,000 6.12% $16.90 2/6/2011 318,850 808,027
David L. Magee 30,000 6.12% $16.90 2/6/2011 318,850 808,027
</Table>
- --------------------
(1) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, of the price of our common stock. In order to realize the potential
values set forth in the 5% and 10% columns, the per share price of our
common stock would be $27.53 and $43.83, respectively.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
The table below lists information regarding unexercised options held at
the end of 2001 by the named executive officers, based on the value of options
held by those officers on December 31, 2001. This value is calculated as the
difference between the exercise price of the option and $18.50 per share, which
was the closing price of our common stock on that date as reported in the Record
of Composite Transactions for New York Stock Exchange listed securities and
printed in THE WALL STREET JOURNAL. None of the named executive officers
exercised options in 2001.
<Table>
<Caption>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options At Fiscal Year End(#) at Fiscal Year End($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
Edward A. Schmitt .............. 267,000/168,000 201,960/264,040
Richard B. Marchese.............. 105,000/ 50,000 61,200/ 78,600
Mark J. Seal..................... 105,000/ 50,000 61,200/ 78,600
Joel I. Beerman.................. 105,000/ 50,000 61,200/ 78,600
David L. Magee .................. 45,000/ 45,000 30,600/ 63,300
</Table>
10
<Page>
OFFICER RETIREMENT PLAN
Messrs. Marchese, Schmitt, and Magee participate in our officer
retirement plan, which is represented by separate agreements with each officer.
Subject to specified limitations, this plan provides that we will make annual
payments to Mr. Marchese after retirement, disability or other termination equal
to the greater of (1) 50% of his average annual salary during the last five
years of his employment offset by the amounts payable under our salaried
employees' retirement plan and the value of our contributions to the savings and
capital growth plan and (2) 30% of his final annual salary during the last year
of his employment with no offset. At Mr. Marchese's death, the officer
retirement plan will continue to pay 50% of this amount to his surviving spouse
for the remainder of the spouse's life. For Messrs. Schmitt and Magee, the
officer retirement plan provides that we will make annual payments equal to 30%
of the officer's final annual salary, and, at death, will continue to pay 50% of
this amount to the surviving spouse for the remainder of the spouse's life. For
Messrs. Marchese and Schmitt, full benefits are payable upon retirement at any
time after attaining age 62 and continue until age 65. For Mr. Magee, full
benefits are payable upon retirement and continue for his life. The estimated
annual benefit under the officer retirement plan payable to Mr. Marchese would
be $108,667, and the estimated annual benefit payable to Mr. Schmitt would be
$266,476, upon the retirement of each at age 62. The annual benefit for Mr.
Magee, who retired February 26, 2002, is $79,502. If an officer engages in
specified competitive activity after retirement, benefits under the officer
retirement plan terminate. The formula benefit under the officer retirement plan
should exceed any offsetting amounts provided through the salaried employees'
retirement plan and the savings and capital growth plan. Messrs. Seal and
Beerman do not participate in the officer retirement plan but are participants
in the split dollar life insurance plan.
SPLIT DOLLAR LIFE INSURANCE PLAN
In 1998, we implemented the split dollar life insurance plan for the
benefit of each of our officers. In accordance with the split dollar life
insurance plan, each officer has entered into an agreement that, subject to
specified limitations, provides the officer with pre-retirement and
post-retirement death benefits. We have agreed to provide the benefits through
the purchase of a life insurance policy by which we will be reimbursed for our
premium costs from each policy's cash value or death benefit. If an officer
engages in specified competitive activity after termination, benefits under the
split dollar life insurance plan are to be returned to us.
Messrs. Schmitt, Marchese, Seal and Beerman participate in the split
dollar life insurance plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In February 1998, we established the equity compensation committee, in
connection with the 1998 Equity and Performance Incentive Plan. This committee
has performed functions relating to all executive compensation, including those
required by our equity incentive plans, since
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<Page>
February 2000. In 2001, the equity compensation committee of the board of
directors was composed of Charles T. Harris III, John E. Akitt and Patrick J.
Fleming.
REPORT ON EXECUTIVE COMPENSATION
The compensation of our executive officers is based on a policy of
attracting, retaining and rewarding the executive officers by compensating them
at a level competitive with similarly situated employees within the industry.
Officer compensation consists of salary, bonus payments under our management
incentive bonus plan, and the award of stock options. Officers participate in
our savings and capital growth plan, salaried employees' retirement plan,
officer retirement plan, and life insurance program. Federal tax legislation
enacted in 1993 generally precludes public companies from taking a tax deduction
for specified compensation in excess of $1,000,000 paid to the corporation's
chief executive officer and the four other most highly compensated executive
officers. The directors making decisions regarding compensation monitor the
impact of this legislation to ensure that material tax deductions are not lost
due to its application.
To determine that the annual compensation of our chief executive
officer and our other officers is competitive with similarly situated employees
in the industry, the equity compensation committee reviewed an analysis of
executive officer compensation prepared by a compensation and benefits
consulting firm, comparing the compensation paid to our executives with
information obtained from the proxy statements of 13 companies considered to be
comparable to Georgia Gulf. Management and the equity compensation committee
believe the information obtained reasonably reflects the practices of comparable
companies. The information included both annual salary and total current
compensation, which is comprised of salary and bonus.
Salaries of our chief executive officer and our other named executive
officers are believed to be generally competitive based on a comparison of
salaries to the information. Our chief executive officer's 2001 salary falls
below the 25th percentile of the group. His total 2001 current compensation is
also below the 25% percentile of current compensation of other chief executive
officers reported in the analysis. Salaries and total 2001 compensation of our
other executives are within the median ranges reported in the analysis.
In 2001, our key employees, including the named executive officers,
participated in our management incentive bonus plan. The objective of this plan
is to motivate the performance of the participants by creating the potential for
increased compensation tied directly to company profit. At the beginning of each
year, participants are assigned bonus points, set primarily by reference to
their salary level. A corporate target for earnings before deductions of
interest, taxes and depreciation and any extraordinary items, is also
established. This target is based on a comparison of our earnings performance
with our cost of capital.
The target is the amount of earnings equal to double our cost of
capital. If the target is reached, participants receive a payment equal to 100%
of their points awarded. Payments are ratably reduced to a minimum, if earnings
equal our cost of capital, in
12
<Page>
which case participants receive a payment equal to 10% of their points awarded.
The maximum that can be awarded under the plan is a payment of double the
participants' points where earnings equal or exceed our historical maximum
return, which is about three times our cost of capital. The plan also provides
that payment adjustments will be made to reflect the performance of our peers in
the chemical industry.
For 2001, our earnings, calculated as required by the management
incentive bonus plan, did not reach the minimum threshold required for payments
to be made under the plan, and payments were not made to participants under the
plan. At the committee's meeting held December 5, 2001, Mr. Schmitt recommended
that the executive officers be awarded a one time special bonus payment, based
on their individual performance, equal to 30% of each executive's target bonus
points. After discussion and an evaluation of the performance of each of the
executive officers, the committee determined that the bonuses should be paid.
During its report to the full board, the committee advised the board of its
determination, which the full board accepted. The actual special bonuses paid to
our named executive officers are listed in the summary compensation table above.
Executive officers were awarded stock options in 2001. Option awards
are intended to encourage key executives and managerial employees to become
owners of our stock to increase their interest in our long-term success, to
align their interests with stockholders, to provide incentive equity
opportunities which are competitive with other similarly situated companies and
to stimulate the efforts of employees by giving suitable recognition for
services that contribute materially to our success.
Charles T. Harris III
John E. Akitt
Patrick J. Fleming
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AUDIT COMMITTEE REPORT
Four directors make up the audit committee of our board of directors:
Dennis M. Chorba, chairman, Charles T. Harris III, Patrick J. Fleming, and Jerry
R. Satrum.
During the course of performing its duties, the committee:
- - discussed with management our audited financial statements as of and
for the year ended December 31, 2001,
- - discussed with Arthur Andersen LLP, our independent public accountants
and auditors for 2001, the items regarding accounting principles set
out in Statement on Auditing Standards No. 61, COMMUNICATION WITH AUDIT
COMMITTEES, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants, and
- - received the written disclosures and the letter from Arthur Andersen
LLP required by Independence Standard No. 1, INDEPENDENCE DISCUSSIONS
WITH AUDIT COMMITTEES, as amended, by the Independence Standards Board,
and discussed the auditors' independence with the auditors.
Based on these reviews and discussions, the committee recommended to
the board of directors that our 2001 audited financial statements be included in
our Annual Report on Form 10-K for the year ended December 31, 2001.
Dennis M. Chorba, Chairman Charles T. Harris III
Patrick J. Fleming Jerry R. Satrum
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THE STOCK PERFORMANCE GRAPH
The graph below is a comparison of the five year cumulative total
return among us, Standard & Poor's Smallcap 600 Index and Standard & Poor's
Chemical Smallcap Index. Stock performances, including our stock performance,
were calculated using the assumption that all dividends, including distributions
of cash, were reinvested in common stock.
[GGC vs S&P SMALLCAP 600 GRAPH]
TOTAL SHAREHOLDER RETURNS (INDEXED) GGC vs S&P SMALLCAP 600
<Table>
<Caption>
Dec. 1996 Dec. 1997 Dec. 1998 Dec. 1999 Dec. 2000 Dec. 2001
--------- --------- --------- --------- --------- ---------
Georgia Gulf $100 $115.23 $61.44 $118.67 $67.76 $74.89
S&P Smallcap 600 Index $100 $125.58 $123.95 $139.32 $155.76 $187.51
Chemicals-Smallcap 600 $100 $104.09 $86.96 $92.88 $72.91 $79.38
</Table>
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PROPOSAL II - APPROVAL AND ADOPTION OF THE
2002 EQUITY AND PERFORMANCE INCENTIVE PLAN
GENERAL
The 2002 Equity and Performance Incentive Plan is intended to attract
and retain officers, full-time employees and directors for us and our
subsidiaries and to motivate these persons to achieve performance objectives
related to our overall goal of increasing stockholder value. The board of
directors unanimously adopted the plan on March 6, 2002.
The board of directors believes approval of the plan is in our best
interest. The principal reason for adopting the plan is to ensure that we have a
mechanism for equity-based incentive compensation. Certain awards under the plan
are designed to qualify as performance-based under Section 162(m) of the
Internal Revenue Code, which places a limit of $1,000,000 on the amount of
compensation that we may deduct for federal income tax purposes unless it is
performance-based. The plan is also designed to comply with Rule 16b-3 under the
Securities and Exchange Act of 1934, as amended.
A summary description of the plan is set forth below. The full text of
the plan is annexed to this proxy statement as APPENDIX A, and the following
summary is qualified in its entirety by reference to APPENDIX A.
SUMMARY OF THE PLAN
GENERAL. Under the plan, the board of directors is authorized to make
awards of options to purchase shares of common stock, tandem appreciation rights
and/or free-standing appreciation rights, restricted shares, deferred shares,
and performance shares and performance units. The terms applicable to awards of
the various types, including those terms that may be established by the board of
directors when making or administering particular awards, are set forth in
detail in the plan.
SHARES AVAILABLE UNDER THE PLAN. Subject to adjustment as provided in
the plan, the number of shares of common stock that may be issued or transferred
pursuant to awards, or in payment of divided equivalents paid with respect to
awards made under the plan, may not exceed 1,500,000 in the aggregate. These
shares of common stock may be shares of original issuance or treasury shares or
a combination of both. Upon the payment of any option price by the transfer to
us of shares of common stock or upon satisfaction of any withholding amount by
means of transfer or relinquishment of shares of common stock, only the net
number of shares of common stock we actually issued or transferred will be
deemed to have been issued or transferred under the plan. As of April 5, 2002,
the market value of our common stock was $25.40 per share.
ELIGIBILITY. Officers and full-time employees of Georgia Gulf and its
subsidiaries may be selected by the board of directors to receive benefits under
the plan. In addition, non-employee
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directors will be eligible for discretionary grants of option rights and
restricted shares. There were approximately 100 persons eligible to participate
in the plan as of March 25, 2002.
LIMITATIONS ON SPECIFIC KINDS OF AWARDS. In addition to the general
limitation on the number of shares of common stock available under the plan, the
plan specifically limits the number of shares issued as restricted shares or
deferred shares to 300,000 in the aggregate. Additionally, the plan provides for
specific limits and other requirements for certain awards to qualify as
performance-based compensation for the purpose of Section 162(m) of the Internal
Revenue Code. No participant may be granted (i) option rights and appreciation
rights, in the aggregate, for more than 750,000 shares of common stock during
any period of five years or (ii) an award of performance shares or performance
units, or restricted shares intended to qualify for exemption under Section
162(m) of the Internal Revenue Code, having an aggregate maximum value as of
their respective dates of a grant more than $1,500,000 in any calendar year. In
addition, the aggregate number of shares of common stock actually issued or
transferred upon the exercise of incentive stock options, within the meaning of
Section 422 of the Internal Revenue Code, may not exceed 1,500,000, and a
non-employee director may not be granted awards in the aggregate for more than
10,000 shares during any fiscal year.
OPTION RIGHTS. The board of directors may grant option rights, which
entitle the holder to purchase shares of common stock at a price equal to or
greater than market value at the date of grant. The option price is payable in
cash, by the transfer to us of shares of common stock then owned by the option
holder for at least six months, by a combination of these payment methods or by
other consideration authorized by the board of directors. Any grant may provide
for deferred payment of the option price from the proceeds of sale through a
broker on the date of exercise of some or all of the shares of common stock to
which the exercise relates. Option rights granted under the plan may be, option
rights that are not intended to qualify as incentive stock options, or
combinations of incentive stock options and non-qualified stock options. Each
grant specifies the period of employment required before the option or portions
of options will become exercisable.
APPRECIATION RIGHTS. A tandem appreciation right is a right to receive
up to 100% of the spread between the option price and the current value of the
shares of common stock underlying the option. A free-standing appreciation right
is the right to receive a percentage of the spread at the time of exercise. When
computing the spread for a free-standing appreciation right, the base price must
be equal to or greater than the market value of the underlying common stock on
the date of grant. Any grant may specify waiting periods before exercise and
permissible exercise dates or periods.
RESTRICTED SHARES. An award of restricted shares involves the immediate
transfer to a participant of ownership of a specific number of shares of common
stock in consideration of the performance of services, with the participant
entitled to voting, dividend and other ownership rights in the restricted
shares. The transfer made without additional consideration or in consideration
of a payment by the participant that is less than current market value. In
addition,
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the transfer may be conditioned on the achievement of performance objectives,
called "Management Objectives" as described below.
Restricted shares must be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Internal Revenue Code for a period to be
determined by the board of directors. In order to enforce these forfeiture
provisions, the transferability of restricted shares will be prohibited or
restricted in a manner and to the extent prescribed by the board of directors
for the period during which the forfeiture provisions are to continue.
DEFERRED SHARES. An award of deferred shares constitutes an agreement
to deliver shares of common stock to the participant in the future in
consideration of the performance of services, but subject to the fulfillment of
specified conditions. During the deferral period, the participant has no right
to transfer any rights under and has no rights of ownership in the deferred
shares. Awards of deferred shares may be made without additional consideration
or in consideration of a payment by the participant that is less than the market
value per share at the date of grant. Generally, deferred shares must be subject
to a deferral period of not less than 1 year, as determined by the board of
directors at the date of grant.
PERFORMANCE SHARES AND PERFORMANCE UNITS. A performance share is the
equivalent of one share of common stock, and a performance unit is the
equivalent of $1.00. A recipient must meet one or more Management Objectives
within a specified performance period to fully earn the award. Alternatively, if
a minimum level of acceptable achievement is established by the board of
directors, that minimum level must be exceeded in order to partly earn the
award; the amount earned in this case will be determined in accordance with a
formula.
MANAGEMENT OBJECTIVES. Management Objectives may be described either in
terms of companywide objectives or objectives that are related to performance of
the individual participant or the division, subsidiary, department, region,
function or other organizational unit in which the participant is employed. The
Management Objectives applicable to any award to a participant who is or is
likely to become a covered employee, within the meaning of Section 162(m) of the
Internal Revenue Code, will be based on specified levels of growth in one or
more of the following criteria: (i) increases in the price of our common stock;
(ii) market share; (iii) sales; (iv) return on equity, assets, capital or sales;
(v) economic profit; (vi) total stockholder return; (vii) costs; (viii) margins;
(ix) earnings or earnings per share; (x) cash flow; (xi) customer satisfaction;
(xii) pre-tax profit; (xiii) earnings before interest and taxes; (xiv) earnings
before interest, taxes, depreciation and amortization; (xv) debt to capital
ratio; and (xvi) any combination of the foregoing.
If the board of directors determines that a change in our business,
operations, corporate structure or capital structure, or the manner in which we
conduct our business, or other events or circumstances render the Management
Objectives unsuitable, the board of directors may modify the Management
Objectives or the related minimum acceptable level of achievement, in whole or
in part, as the board of directors deems appropriate and equitable, except in
the case of a covered
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employee where such an action would result in the loss of the otherwise
available exemption of the award under Section 162(m) of the Internal Revenue
Code.
AWARDS OF OPTION RIGHTS AND RESTRICTED SHARES TO NON-EMPLOYEE
DIRECTORS. The board of directors may, in its discretion, authorize the grant of
option rights or the grant or sale of restricted shares to non-employee
directors. Each option right will be upon terms and conditions consistent with
those described above for employees, but it will become exercisable on the first
anniversary of the date of grant or immediately in the event of a change in
control. In the event of (i) the termination of service on the board of
directors, the option rights may be exercised to the extent that they would be
exercisable for 60 days after the termination, and (ii) death or disability,
option rights may be exercised for one (1) year, provided in either case the
options are not exercisable after the stated expiration date of the option
rights. Each grant or sale of restricted shares to non-employee directors will
be upon terms and conditions consistent with those described above for
employees.
TRANSFERABILITY. Except as described below or otherwise determined by
the board of directors, no award under the plan is transferable by a participant
other than by will or the laws of descent and distribution. Only the
participant, or the participant's guardian or legal representative in the event
of the participant's legal incapacity, may exercise option rights or
appreciation rights during the participant's lifetime.
Subject to the prior approval of the board of directors, awards other
than incentive stock options, are transferable by a participant to members of
the participant's immediate family, or certain trusts or partnerships, without
payment by the transferee, if reasonable prior notice of the transfer is given
to us and the transfer is made according to the terms and conditions specified
by the board of directors or us. Any transferee will be subject to the same
terms and conditions under the plan as the participant.
ADJUSTMENTS. The number, kind, and price of shares covered by
outstanding awards are subject to adjustment by the board of directors in its
discretion in the event of stock dividends, splits and combinations, changes in
our capital structure, mergers, spin-offs, partial or complete liquidation, and
similar events. The board of directors may also make or provide for adjustments
in the numbers of shares available under the plan and available for specific
kinds of awards under the plans as the board of directors may determine
appropriate to reflect such a transaction or event.
CHANGE IN CONTROL. A definition of change in control is specifically
included in the plan, the full text of which is attached to this proxy statement
as APPENDIX A. Generally, a change in control includes the acquisition by a
person of 33 1/3% or more of our voting securities, specified changes in the
board of directors and specified business combination transactions and similar
events. Awards of option rights, appreciation rights, restricted shares, or
deferred shares may provide for acceleration of exercisability or early
termination of restrictions in the event of a change in control.
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WITHHOLDING TAXES. To the extent that we are required to withhold
federal, state, local or foreign taxes in connection with any payment made or
benefit realized by a participant or other person under the plan, and the
amounts available to us for such withholding are insufficient, it will be a
condition to the receipt of the payment or the realization of the benefit that
the participant or the other person make arrangements satisfactory to us for
payment of the balance of taxes required to be withheld. These arrangements, in
the discretion of the board of directors, may include relinquishment of a
portion of the benefit. Participants must also make such arrangements as we may
require for the payment of any withholding tax obligations that may arise in
connection with the disposition of shares acquired upon the exercise of option
rights. In no event, however, may we accept shares of common stock for the
payment of taxes in excess of required tax withholding rates. However, in the
discretion of the board of directors, a participant or other person may
surrender shares of common stock owned for more than six months to satisfy any
resulting tax obligations.
DETRIMENTAL ACTIVITY. Any evidence of an award under the plan may
provide that if a participant, either during employment or within a specified
period after termination of employment, engages in any detrimental activity, as
defined in the plan, and the board of directors so finds, forthwith upon notice
of the board's finding, the participant must:
- return to us, in exchange for payment by us of any amount
actually paid by the participant for the shares of common
stock, all shares of common stock that the participant has not
disposed of that were offered under the plan within a specified
period prior to the date of the commencement of the detrimental
activity; and
- with respect to any shares of common stock so acquired that the
participant has disposed of, pay to us in cash the difference
between:
- any amount actually paid for the shares of common
stock by the participant; and
- the market value per share of common stock on the
date of the acquisition.
To the extent that these amounts are not paid to us, we may set off
these amounts against any amounts that may be owing from time to time by us or
one of our subsidiaries to the participant, whether as wages, deferred
compensation or vacation pay or in the form of any other benefit or for any
other reason.
Generally, a detrimental activity includes competing with our business,
soliciting our employees, disclosing of confidential information and other
specified conduct detrimental to our business.
ADMINISTRATION AND AMENDMENTS. The plan is to be administered by the
board of directors, except that the board of directors has the authority under
the plan to delegate any or all of its
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powers under the plan to a committee consisting of not less than two
non-employee directors. The board has delegated its authority to its equity
compensation committee. The board of directors's interpretation of the plan and
related agreements and documents is final and conclusive. The plan may be
amended from time to time by the board of directors, provided stockholder
approval of any amendment will be obtained when required by applicable law or
the rules of any national securities exchange upon which the shares of common
stock are traded or quoted.
The board of directors may not, without the further approval of the
stockholders, authorize the amendment of any outstanding option right to reduce
the option price. Furthermore, no option right may be canceled and replaced with
awards having a lower option price without further approval of the stockholders.
TERMINATION. No grant under the plan may be made more than five years
after the plan is approved by the stockholders, but all grants made on or before
the fifth anniversary will continue in effect after that date subject the terms
of those grants and the plan.
PLAN BENEFITS
It is not possible to determine specific amounts that may be awarded in
the future under the plan. Unless the plan is approved by our stockholders by
March 6, 2003, at least a majority of the shares of common stock or shares of
common stock underlying options awarded under the plan during any three-year
period must be awarded to employees who are not our officers or directors.
However, if the plan is so approved, awards may be made under the plan in the
discretion of the board of directors. On March 6, 2002, the equity compensation
committee made awards of options covering 155,500 shares of common stock, at an
option price of $23.25 per share, and awards of 26,125 restricted shares solely
to certain non-executive officer employees. Approval of the plan will also
constitute approval of these option awards.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the federal income tax consequences
of certain transactions under the plan based on federal income tax laws in
effect on January 1, 2002. This summary is not intended to be complete and does
not describe state or local tax consequences.
TAX CONSEQUENCES TO PARTICIPANTS
NON-QUALIFIED STOCK OPTIONS. In general, (i) no income will be
recognized by an option holder at the time a non-qualified stock option is
granted; (ii) at the time of exercise of a non-qualified stock option, ordinary
income will be recognized by the option holder in an amount equal to the
difference between the option price paid for the shares and the fair market
value of the shares, if unrestricted; and (iii) at the time of sale of shares
acquired pursuant to the exercise of a non-qualified stock option, appreciation
(or depreciation) in value of the shares after the date of exercise will be
treated as a capital gain (or capital loss).
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INCENTIVE STOCK OPTIONS. No income generally will be recognized by an
option holder upon the grant or exercise of an incentive stock option. The
exercise of an incentive stock option, however, may result in alternative
minimum tax liability. If shares of common stock are issued to the option holder
pursuant to the exercise of an incentive stock option, and if no disqualifying
disposition of those shares is made by the option holder within two years after
the date of grant or within one year after the transfer of those shares to the
option holder, then upon sale of those shares, any amount realized in excess of
the option price will be taxed to the option holder as a capital gain and any
loss sustained will be a capital loss.
If shares of common stock acquired upon the exercise of an incentive
stock option are disposed of prior to the expiration of either holding period
described above, the option holder generally will recognize ordinary income in
the year of disposition in an amount equal to the excess, if any, of the fair
market value of those shares at the time of exercise, or, if less, the amount
realized on the disposition of those shares in a sale or exchange, over the
option price paid for those shares.
APPRECIATION RIGHTS. No income will be recognized by a participant in
connection with the grant of an appreciation right. When the appreciation right
is exercised, the participant normally will be required to include as taxable
ordinary income in the year of exercise an amount equal to the amount of cash
received and the fair market value of any nonrestricted shares of common stock
received upon exercise.
RESTRICTED SHARES. The recipient of restricted shares generally will be
subject to tax at ordinary income rates on the fair market value of the
restricted shares, reduced by any amount paid by the participant for those
restricted shares, at such time as the shares are no longer subject to
forfeiture or restrictions on transfer for purposes of Section 83 of the
Internal Revenue Code. However, a recipient who so elects under Section 83(b) of
the Internal Revenue Code within 30 days of the date of transfer of the shares
will have taxable ordinary income on the date of transfer of the shares equal to
the excess of the fair market value of those shares, determined without regard
to the forfeiture restrictions and restrictions on transfer, over the purchase
price, if any, of those restricted shares. If a Section 83(b) election has not
been made, any dividends received with respect to restricted shares that are
subject to the forfeiture restrictions and restrictions on transfer generally
will be treated as compensation that is taxable as ordinary income to the
participant.
DEFERRED SHARES. No income generally will be recognized upon the award
of deferred shares. The recipient of a deferred share award generally will be
subject to tax at ordinary income rates on the fair market value of
nonrestricted shares of common stock on the date that those shares are
transferred to the participant under the award, reduced by any amount paid by
the participant for the deferred shares.
PERFORMANCE SHARES AND PERFORMANCE UNITS. No income generally will be
recognized upon the grant of performance shares or performance units. Upon
payment in respect of the earn-out
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of performance shares or performance units, the recipient generally will be
required to include as taxable ordinary income in the year of receipt an amount
equal to the amount of cash received and the fair market value of any
nonrestricted shares of common stock received.
TAX CONSEQUENCES TO GEORGIA GULF OR ITS SUBSIDIARIES
To the extent that a participant recognizes ordinary income in the
circumstances described above, we or the subsidiary for which the participant
performs services will be entitled to a corresponding deduction provided that,
among other things, the income meets the test of reasonableness, is an ordinary
and necessary business expense, is not an "excess parachute payment" within the
meaning of Section 280G of the Internal Revenue Code and is not disallowed by
the $1,000,000 limitation on certain executive compensation under Section 162(m)
of the Internal Revenue Code.
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR APPROVAL OF THE 2002 EQUITY
AND PERFORMANCE INCENTIVE PLAN.
INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has not appointed independent public accountants
for the year ending December 31, 2002. Uncertainty about Arthur Andersen LLP's
ability to perform our 2002 auditing services, in light of the charges against
it relating to its services for Enron Corporation, has caused us to evaluate the
most effective and efficient method to obtain auditing services for 2002.
Accordingly, while we customarily seek stockholder ratification of the board's
selection of independent public accountants and auditors at our annual meeting,
we are not asking our stockholders to ratify our selection for 2002.
Representatives of Arthur Andersen LLP will be present at the meeting
and will have the opportunity to make a statement, if they desire to do so, and
to respond to appropriate questions.
FISCAL 2001 AUDIT FIRM FEE SUMMARY
During fiscal year 2001, we retained our principal auditor, Arthur
Andersen LLP, to provide services in the following categories and amounts:
AUDIT FEES. Arthur Andersen LLP has billed us $365,341, in the
aggregate, for professional services it rendered for the audit of our annual
financial statements for the fiscal year ended December 31, 2001 and the reviews
of the interim financial statements included in our Forms 10-Q filed during the
fiscal year ended December 31, 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Arthur
Andersen LLP has not billed us for financial information design and
implementation fees described in paragraph
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(c)(4)(ii) of Rule 2-01 of Regulation S-X, since it did not render any of those
services for us during the fiscal year ended December 31, 2001.
ALL OTHER FEES. Arthur Andersen LLP has billed us $120,500, in the
aggregate, for all other services it rendered during the fiscal year ended
December 31, 2001. These services include the audit of our employee benefit
plans, assistance with internal audits under the direction of our director of
internal audit and assistance with tax filings.
The audit committee has considered and concluded that the provision of
non-audit services by our principal auditor is compatible with maintaining
auditor independence.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
We do not know of any matters other than those stated above which are
to be brought before the meeting. However, if any other matters should be
properly presented for consideration and voting, it is the intention of the
persons named in the proxy to vote on those matters in accordance with their
judgment.
STOCKHOLDER PROPOSALS
Proposals by stockholders intended to be presented at the 2003 annual
meeting must be forwarded in writing and received at our principal executive
offices no later than December 11, 2002, directed to the attention of the
corporate secretary, for consideration for inclusion in our proxy statement for
the annual meeting of stockholders to be held in 2003. Moreover, with regard to
any proposal by a stockholder not seeking to have its proposal included in the
proxy statement but seeking to have its proposal considered at the 2003 annual
meeting, if that stockholder fails to notify us in the manner set forth above of
its proposal by February 24, 2003, then the persons appointed as proxies may
exercise their discretionary voting authority if the proposal is considered at
the 2003 annual meeting, notwithstanding that stockholders have not been advised
of the proposal in the proxy statement for the 2003 annual meeting. Any
stockholder proposals must comply in all respects with the rules and regulations
of the Securities and Exchange Commission.
Joel I. Beerman
VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
April 10, 2002
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APPENDIX A
GEORGIA GULF CORPORATION
2002 EQUITY AND PERFORMANCE INCENTIVE PLAN
1. PURPOSE. The purpose of the 2002 Equity and Performance Incentive Plan
is to attract and retain officers, employees, and directors for Georgia
Gulf Corporation, a Delaware corporation and its Subsidiaries and to
motivate such persons to achieve performance objectives related to the
Company's overall goal of increasing shareholder value.
2. DEFINITIONS. As used in this Plan:
"Appreciation Right" means a right granted pursuant to Section 5 of
this Plan, and shall include both Tandem Appreciation Rights and Free-Standing
Appreciation Rights.
"Base Price" means the price to be used as the basis for determining
the Spread upon the exercise of a Free-Standing Appreciation Right and a Tandem
Appreciation Right.
"Board" means the Board of Directors of the Company and, to the extent
of any delegation by the Board to a committee (or subcommittee thereof) pursuant
to Section 17 of this Plan, such committee (or subcommittee).
"Business Combination" means a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company.
"Change in Control" shall have the meaning provided in Section 12 of
this Plan.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company or any security into which such Common Stock may be changed by reason of
any transaction or event of the type referred to in Section 11 of this Plan.
"Company" means Georgia Gulf Corporation, a Delaware corporation.
"Covered Employee" means a Participant who is, or is determined by the
Board to be likely to become, a "covered employee" within the meaning of Section
162(m) of the Code (or any successor provision).
"Date of Grant" means the date specified by the Board on which a grant
of Option Rights, Appreciation Rights, Performance Shares or Performance Units
or a grant or sale of Restricted
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Shares or Deferred Shares shall become effective (which date shall not be
earlier than the date on which the Board takes action with respect thereto).
"Deferral Period" means the period of time during which Deferred Shares
are subject to deferral limitations under Section 7 of this Plan.
"Deferred Shares" means an award made pursuant to Section 7 of this
Plan of the right to receive shares of Common Stock at the end of a specified
Deferral Period.
"Designated Subsidiary" means a Subsidiary that is (i) not a
corporation or (ii) a corporation in which the Company owns or controls,
directly or indirectly, less than 80 percent of the total combined voting power
represented by all classes of stock issued by such corporation.
"Detrimental Activity" means any of the following:
(a) Any activity as an employee, principal, agent, or consultant
for another entity that competes, directly or indirectly, with
the Company in any actual, researched, or prospective product,
service, system, or business activity for which the
Participant has had any direct or indirect responsibility
during the last five years of his or her employment with the
Company or any Subsidiary (or such other period specified in
the Evidence of Award), in any territory in which the Company
or any Subsidiary manufactures, sells, markets, services, or
installs such product, service, system, or business activity
(or any portion of such territory or such other territory
specified in the Evidence of Award).
(b) The solicitation of any employee of the Company or any
Subsidiary to terminate his or her employment with the Company
or such Subsidiary.
(c) The disclosure to any person not employed by or serving as a
director of the Company or a Subsidiary, or the use in other
than the Company or a Subsidiarys business, in each case
without prior written authorization from the Company, of any
confidential, proprietary or trade secret information or
material relating to the business of the Company and/or its
Subsidiaries, acquired by the Participant either during
employment with the Company or any Subsidiary or while acting
as a consultant for the Company or any Subsidiary.
(d) The failure or refusal to disclose promptly and to assign to
the Company upon request all right, title and interest in any
invention or idea, patentable or not, made or conceived by the
Participant during employment by the Company or any
Subsidiary, relating in any manner to the actual or
anticipated business, research or development work of the
Company or any Subsidiary or the failure or refusal to do
anything reasonably necessary to enable the Company or any
Subsidiary to secure a patent where appropriate, whether in
the United States or in other countries.
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(e) Any other conduct or act determined to be injurious,
detrimental or prejudicial to any significant interest of the
Company or any Subsidiary unless the Participant acted in good
faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the Company.
"Director" means a member of the Board of Directors of the Company.
"Evidence of Award" means an agreement, certificate, resolution or
other type of writing or other evidence approved by the Board which sets forth
the terms and conditions of the Option Rights, Appreciation Rights, Performance
Units, Performance Shares, Restricted Shares, Deferred Shares or other awards
made hereunder. An Evidence of Award may be in an electronic medium, may be
limited to a notation on the books and records of the Company and need not be
signed by a representative of the Company or a Participant unless required by
the Board.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder, as such law, rules and regulations may
be amended from time to time.
"Free-Standing Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is not granted in tandem with an Option
Right.
"Immediate Family" has the meaning ascribed thereto in Rule 16a-1(e)
under the Exchange Act (or any successor rule to the same effect) as in effect
from time to time.
"Incentive Stock Options" means Option Rights that are intended to
qualify as "incentive stock options" under Section 422 of the Code or any
successor provision.
"Management Objectives" means the measurable performance objective or
objectives established pursuant to this Plan for Participants who have received
grants of Performance Shares or Performance Units or, when so determined by the
Board, Option Rights, Appreciation Rights, Restricted Shares and dividend
credits pursuant to this Plan. Management Objectives may be described in terms
of Company-wide objectives or objectives that are related to the performance of
the individual Participant or of the Subsidiary, division, department, region,
function, or other organizational unit within the Company or Subsidiary in which
the Participant is employed. The Management Objectives may be made relative to
the performance of other corporations or business units of other corporations.
The Management Objectives applicable to any award to a Covered Employee shall be
based on specified and pre-established levels of or growth in one or more of the
following criteria:
1.increases in the price of Common Stock;
2.market share;
3.sales;
4.return on equity, assets, capital or sales;
5.economic profit;
6.total shareholder return;
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7.costs;
8.margins;
9.earnings or earnings per share;
10.cash flow;
11.customer satisfaction;
12.pre-tax profit;
13.earnings before interest and taxes;
14.earnings before interest, taxes, depreciation and
amortization;
15.debt/capital ratio; and
16.any combination of the foregoing.
If the Board determines that a change in the business, operations,
corporate structure or capital structure of the Company, or the manner in which
it conducts its business, or other events or circumstances render the Management
Objectives unsuitable, the Board may in its discretion modify such Management
Objectives or the related minimum acceptable level of achievement, in whole or
in part, as the Board deems appropriate and equitable, except in the case of a
Covered Employee where such action would result in the loss of the otherwise
available exemption of the award under Section 162(m) of the Code. In such case,
the Board shall not make any modification of the Management Objectives or
minimum acceptable level of achievement.
"Market Value per Share" means, as of any particular date the closing
price of a share of Common Stock as reported, for the last preceding date for
which a price is quoted on the New York Stock Exchange, or, if the Common Stock
is not then listed on the New York Stock Exchange, on such other national
securities exchange on which the Common Stock is listed or, if not so listed,
then on the Nasdaq National Market. If, as of a particular date, the Common
Stock is not listed or quoted on any national securities exchange or on the
Nasdaq National Market, then the Market Value per Share of a share of Common
Stock as of such date shall be determined according to such criteria as the
Board in good faith shall deem appropriate.
"Non-Employee Director" means a Director who is not an employee of the
Company or any Subsidiary.
"Optionee" means the optionee named in an Evidence of Award relating to
an outstanding Option Right.
"Option Price" means the purchase price payable on exercise of an
Option Right.
"Option Right" means the right to purchase shares of Common Stock upon
exercise of an option granted pursuant to Section 4 or Section 9 of this Plan.
"Outside Director" means a person who is an "outside director" within
the meaning of Section 162(m) of the Code.
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"Participant" means any officer or other full-time employee of the
Company or any Subsidiary, or any person who has agreed to commence serving in
any of such capacities, and shall also include each Non-Employee Director who
receives an award of Option Rights or Restricted Shares.
"Performance Period" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management Objectives relating to such Performance Share
or Performance Unit are to be achieved.
"Performance Share" means a bookkeeping entry that records the
equivalent of one share of Common Stock awarded pursuant to Section 8 of this
Plan.
"Performance Unit" means a bookkeeping entry that records a unit
equivalent to $1.00 awarded pursuant to Section 8 of this Plan.
"Person" means any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act).
"Plan" means this Georgia Gulf Corporation 2002 Equity and Performance
Incentive Plan.
"Restricted Shares" means shares of Common Stock granted or sold
pursuant to Section 6 or Section 9 of this Plan as to which neither the
substantial risk of forfeiture nor the prohibition on transfers referred to in
such Section 6 has expired.
"Rule 16b-3" means Rule 16b-3 under the Exchange Act (or any successor
rule to the same effect) as in effect from time to time.
"Spread" means the excess of the Market Value per Share on the date
when an Appreciation Right is exercised, or on the date when Option Rights are
surrendered in payment of the Option Price of other Option Rights, over the
Option Price or Base Price provided for in the related Option Right or
Free-Standing Appreciation Right, respectively.
"Subsidiary" means a corporation, company or other entity (i) more than
50 percent of whose outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority) are, or (ii)
which does not have outstanding shares or securities (as may be the case in a
partnership, joint venture, limited liability company, or unincorporated
association), but more than 50 percent of whose ownership interest representing
the right generally to make decisions for such other entity is, now or
hereafter, owned or controlled, directly or indirectly, by the Company;
provided, however, that for purposes of determining whether any person may be a
Participant for purposes of any grant of Incentive Stock Options, "Subsidiary"
means any corporation in which at the time the Company owns or controls,
directly or indirectly, more than 50 percent of the total combined voting power
represented by all classes of stock issued by such corporation.
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"Tandem Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is granted in tandem with an Option
Right.
"Voting Power" means at any time, the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
Directors in the case of the Company, or members of the board of directors or
similar body in the case of another entity.
3. SHARES AVAILABLE UNDER THE PLAN. (a)Subject to adjustment as provided
in Section 11 of this Plan, the number of shares of Common Stock that
may be issued or transferred (i) upon the exercise of Option Rights or
Appreciation Rights, (ii) as Restricted Shares and released from
substantial risks of forfeiture thereof, (iii) as Deferred Shares, (iv)
in payment of Performance Shares or Performance Units that have been
earned, (v) as awards to Non-Employee Directors or (vi) in payment of
dividend equivalents paid with respect to awards made under the Plan
shall not exceed in the aggregate 1,500,000 shares of Common Stock,
plus any shares described in Section 3(b). Such shares may be shares of
original issuance or treasury shares or a combination of the foregoing.
(b) The number of shares available in Section 3(a) above shall be
adjusted to account for shares relating to awards that expire,
are forfeited or are transferred, surrendered or relinquished
upon the payment of any Option Price by the transfer to the
Company of shares of Common Stock or upon satisfaction of any
withholding amount. Upon payment in cash of the benefit
provided by any award granted under this Plan, any shares that
were covered by that award shall again be available for issue
or transfer hereunder.
(c) Notwithstanding anything in this Section 3, or elsewhere in
this Plan, to the contrary and subject to adjustment as
provided in Section 11 of this Plan, (i) the aggregate number
of shares of Common Stock actually issued or transferred by
the Company upon the exercise of Incentive Stock Options shall
not exceed 1,500,000 shares of Common Stock; (ii) no
Participant shall be granted Option Rights and Appreciation
Rights, in the aggregate, for more than 750,000 shares of
Common Stock during any period of five years; (iii) the number
of shares issued as Restricted Shares or Deferred Shares shall
not in the aggregate exceed 300,000 shares of Common Stock;
and (iv) no Non-Employee Director shall be granted Option
Rights, Appreciation Rights and Restricted Shares, in the
aggregate, for more than 10,000 shares of Common Stock during
any fiscal year of the Company. The method of counting shares
subject to the limits described in subsection (ii) of this
Section 3(c) shall conform to any requirements applicable to
performance-based compensation under Section 162(m) of the
Code.
(d) Notwithstanding any other provision of this Plan to the
contrary, in no event shall any Participant in any calendar
year receive an award of Performance Shares or Performance
Units or any amount of Restricted Shares intended to qualify
for
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exemption under Section 162(m) of the Code having an aggregate
maximum value as of their respective Dates of Grant in excess
of $1.5 million.
4. OPTIONRIGHTS. The Board may, from time to time and upon such terms and
conditions as it may determine, authorize the granting to Participants
of Option Rights. Each Option Right may utilize any or all of the
authorizations, and shall be subject to all of the requirements
contained in the following provisions:
(a) Each grant shall specify the number of shares of Common Stock
to which it pertains subject to the limitations set forth in
Section 3 of this Plan.
(b) Each grant shall specify an Option Price per share, which may
not be less than the Market Value per Share on the Date of
Grant.
(c) Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Company,
(ii) by the actual or constructive transfer to the Company of
shares of Common Stock owned by the Optionee for at least 6
months (or other consideration authorized pursuant to Section
4(d)) having a value at the time of exercise equal to the
total Option Price, or (iii) by a combination of such methods
of payment.
(d) The Board may determine, at or after the Date of Grant, that
payment of the Option Price of any Option Right (other than an
Incentive Stock Option) may also be made in whole or in part
in the form of Restricted Shares or other shares of Common
Stock that are forfeitable or subject to restrictions on
transfer, Deferred Shares, Performance Shares (based, in each
case, on the Market Value per Share on the date of exercise),
other Option Rights (based on the Spread on the date of
exercise) or Performance Units. Unless otherwise determined by
the Board at or after the Date of Grant, whenever any Option
Price is paid in whole or in part by means of any of the forms
of consideration specified in this Section 4(d), the shares of
Common Stock received upon the exercise of the Option Rights
shall be subject to comparable risks of forfeiture or
restrictions on transfer to those that apply to the
consideration surrendered, but only to the extent of (i) the
number of shares or Performance Shares, (ii) the Spread of any
unexercisable portion of Option Rights, or (iii) the stated
value of Performance Units representing the consideration
surrendered.
(e) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a broker on a date
satisfactory to the Company of some or all of the shares to
which such exercise relates.
(f) Successive grants may be made to the same Participant whether
or not any Option Rights previously granted to such
Participant remain unexercised.
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(g) Each grant shall specify the period or periods of continuous
service by the Optionee with the Company or any Subsidiary, if
any, or other contingencies (including the satisfaction of
Management Objectives), that may be necessary before the
Option Rights or installments thereof will become exercisable
and may provide for the earlier exercise of such Option Rights
in the event of a Change in Control or other circumstances.
(h) OptionRights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that
are intended to qualify under particular provisions of the
Code, (ii) options that are not intended so to qualify, or
(iii) combinations of the foregoing.
(i) The Board may, at or after the Date of Grant of any Option
Rights (other than Incentive Stock Options), provide for the
payment of dividend equivalents to the Optionee on either a
current or deferred or contingent basis or may provide that
such equivalents shall be credited against the Option Price.
(j) The exercise of an Option Right shall result in the
cancellation on a share-for-share basis of any Tandem
Appreciation Right authorized under Section 5 of this Plan.
(k) No Option Right shall be exercisable more than 10 years from
the Date of Grant.
(l) Any grant of Option Rights may specify Management Objectives
that must be achieved as a condition of the exercise of such
Rights.
(m) Each grant of Option Rights shall be evidenced by an Evidence
of Agreement containing such terms and provisions, consistent
with this Plan, as the Board may approve.
5. APPRECIATION RIGHTS. (a) The Board may authorize the granting (i) to
any Optionee, of Tandem Appreciation Rights in respect of Option Rights
granted hereunder, and (ii) to any Participant, of Free-Standing
Appreciation Rights. A Tandem Appreciation Right shall be a right of
the Optionee, exercisable by surrender of the related Option Right, to
receive from the Company an amount determined by the Board, which shall
be expressed as a percentage of the Spread (not exceeding 100 percent)
at the time of exercise. Tandem Appreciation Rights may be granted at
any time prior to the exercise or termination of the related Option
Rights; provided, however, that a Tandem Appreciation Right awarded in
relation to an Incentive Stock Option must be granted concurrently with
such Incentive Stock Option. A Free-Standing Appreciation Right shall
be a right of the Participant to receive from the Company an amount
determined by the Board, which shall be expressed as a percentage of
the Spread (not exceeding 100 percent) at the time of exercise.
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(b) Each grant of Appreciation Rights may utilize any or all of the
authorizations, and shall be subject to all of the requirements,
contained in the following provisions:
(i) Any grant may specify that the amount payable on exercise of
an Appreciation Right may be paid by the Company in cash, in
shares of Common Stock or in any combination thereof and may
either grant to the Participant or retain in the Board the
right to elect among those alternatives.
(ii) Any grant may specify that the amount payable on exercise of
an Appreciation Right may not exceed a maximum specified by
the Board at the Date of Grant.
(iii) Any grant may specify waiting periods before exercise and
permissible exercise dates or periods.
(iv) Any grant may specify that such Appreciation Right may be
exercised only in the event of, or earlier in the event of, a
Change in Control or other circumstances.
(v) Any grant may provide for the payment to the Participant of
dividend equivalents thereon in cash or shares of Common Stock
on a current, deferred or contingent basis.
(vi) Any grant of Appreciation Rights may specify Management
Objectives that must be achieved as a condition of the
exercise of such Rights.
(vii) Each grant of Appreciation Rights shall be evidenced by an
Evidence of Agreement that shall describe such Appreciation
Rights, identify the related Option Rights (if applicable),
state that such Appreciation Rights are subject to all the
terms and conditions of this Plan, and contain such other
terms and provisions, consistent with this Plan, as the Board
may approve.
(c) Any grant of Tandem Appreciation Rights shall provide that such Rights
may be exercised only at a time when the related Option Right is also
exercisable and at a time when the Spread is positive, and by surrender
of the related Option Right for cancellation.
(d) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each
Free-standing Appreciation Right a Base Price, which
shall be equal to or greater or less than the Market
Value per Share on the Date of Grant;
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(ii) Successive grants may be made to the same Participant
regardless of whether any Free-standing Appreciation
Rights previously granted to the Participant remain
unexercised; and
(iii) No Free-standing Appreciation Right granted under
this Plan may be exercised more than 10 years from
the Date of Grant.
6. RESTRICTED SHARES. The Board may also authorize the grant or sale of
Restricted Shares to Participants. Each such grant or sale may utilize
any or all of the authorizations, and shall be subject to all of the
requirements, contained in the following provisions:
(a) Each such grant or sale shall constitute an immediate transfer
of the ownership of shares of Common Stock to the Participant
in consideration of the performance of services, entitling such
Participant to voting, dividend and other ownership rights, but
subject to the substantial risk of forfeiture and restrictions
on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such
Participant that is less than Market Value per Share at the
Date of Grant.
(c) Each such grant or sale shall provide that the Restricted
Shares covered by such grant or sale shall be subject to a
"substantial risk of forfeiture" within the meaning of Section
83 of the Code except (if the Board shall so determine) in the
event of a Change in Control or other circumstances for a
period of not less than 6 months to be determined by the Board
at the Date of Grant.
(d) Each such grant or sale shall provide that during the period
for which such substantial risk of forfeiture is to continue,
the transferability of the Restricted Shares shall be
prohibited or restricted in the manner and to the extent
prescribed by the Board at the Date of Grant (which
restrictions may include, without limitation, rights of
repurchase or first refusal in the Company or provisions
subjecting the Restricted Shares to a continuing substantial
risk of forfeiture in the hands of any transferee).
(e) Any grant of Restricted Shares may specify Management
Objectives that, if achieved, will result in termination or
early termination of the restrictions applicable to such
shares. Each grant may specify in respect of such Management
Objectives a minimum acceptable level of achievement and may
set forth a formula for determining the number of Restricted
Shares on which restrictions will terminate if performance is
at or above the minimum level, but falls short of full
achievement of the specified Management Objectives.
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(f) Any such grant or sale of Restricted Shares may require that
any or all dividends or other distributions paid thereon during
the period of such restrictions be automatically deferred and
reinvested in additional Restricted Shares, which may be
subject to the same restrictions as the underlying award.
(g) Each grant or sale of Restricted Shares shall be evidenced by
an Evidence of Agreement that shall contain such terms and
provisions, consistent with this Plan, as the Board may
approve. Unless otherwise directed by the Board, all
certificates representing Restricted Shares shall be held in
custody by the Company until all restrictions thereon shall
have lapsed, together with a stock power or powers executed by
the Participant in whose name such certificates are registered,
endorsed in blank and covering such Shares.
7. DEFERRED SHARES. The Board may authorize the granting or sale of
Deferred Shares to Participants. Each such grant or sale may utilize
any or all of the authorizations, and shall be subject to all of the
requirements contained in the following provisions:
(a) Each such grant or sale shall constitute the agreement by the
Company to deliver shares of Common Stock to the Participant in
the future in consideration of the performance of services, but
subject to the fulfillment of such conditions during the
Deferral Period as the Board may specify.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such
Participant that is less than the Market Value per Share at the
Date of Grant.
(c) Each such grant or sale shall be subject to a Deferral Period
of not less than 1 year, as determined by the Board at the Date
of Grant except (if the Board shall so determine) in the event
of a Change in Control or other circumstances.
(d) During the Deferral Period, the Participant shall have no right
to transfer any rights under his or her award and shall have no
rights of ownership in the Deferred Shares and shall have no
right to vote them, but the Board may, at or after the Date of
Grant, authorize the payment of dividend equivalents on such
Shares on either a current or deferred or contingent basis,
either in cash or in additional shares of Common Stock.
(e) Each grant or sale of Deferred Shares shall be evidenced by an
Evidence of Agreement that shall contain such terms and
provisions, consistent with this Plan, as the Board may
approve.
8. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Board may also authorize
the granting of Performance Shares and Performance Units that will
become payable to a Participant upon achievement of specified Management
Objectives. Each such grant may
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utilize any or all of the authorizations, and shall be subject to all
of the requirements, contained in the following provisions:
(a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, which number may be
subject to adjustment to reflect changes in compensation or
other factors; provided, however, that no such adjustment shall
be made in the case of a Covered Employee where such action
would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code.
(b) The Performance Period with respect to each Performance Share
or Performance Unit shall be such period as shall be determined
by the Board at the time of grant, except (if the Board shall
so determine) in the event of a Change in Control or other
circumstances, if the Board shall so determine; provided,
however, that no acceleration determination shall be made in
the case of a Covered Employee where such action would result
in the loss of the otherwise available exemption of the award
under Section 162(m) of the Code.
(c) Any grant of Performance Shares or Performance Units shall
specify Management Objectives which, if achieved, will result
in payment or early payment of the award, and each grant may
specify in respect of such specified Management Objectives a
minimum acceptable level of achievement and shall set forth a
formula for determining the number of Performance Shares or
Performance Units that will be earned if performance is at or
above the minimum level, but falls short of full achievement
of the specified Management Objectives. The grant of
Performance Shares or Performance Units shall specify that,
before the Performance Shares or Performance Units shall be
earned and paid, the Board must certify that the Management
Objectives have been satisfied.
(d) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that have been earned.
Any grant may specify that the amount payable with respect
thereto may be paid by the Company in cash, in shares of Common
Stock or in any combination thereof and may either grant to the
Participant or retain in the Board the right to elect among
those alternatives.
(e) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified
by the Board at the Date of Grant. Any grant of Performance
Units may specify that the amount payable or the number of
shares of Common Stock issued with respect thereto may not
exceed maximums specified by the Board at the Date of Grant.
(f) The Board may provide for the payment of dividend equivalents
to the holder of Performance Shares on either a current or
deferred or contingent basis, either in cash or in additional
shares of Common Stock.
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(g) Each grant of Performance Shares or Performance Units shall be
evidenced by an Evidence of Agreement containing such other
terms and provisions, consistent with this Plan, as the Board
may approve.
9. AWARDS TO NON-EMPLOYEE DIRECTORS. The Board may, from time to time and
upon such terms and conditions as it may determine, authorize the
granting to Non-Employee Directors of Option Rights and may also
authorize the grant or sale of Restricted Shares to Non-Employee
Directors.
(a) Each grant of Option Rights awarded pursuant to this Section 9
shall be upon terms and conditions consistent with Section 4
of this Plan and shall be evidenced by an agreement in such
form as shall be approved by the Board. Each grant shall
specify an Option Price per share, which shall not be less
than the Market Value per Share on the Date of Grant. Each
such Option Right granted under the Plan shall expire not more
than 10 years from the Date of Grant and shall be subject to
earlier termination as hereinafter provided. Unless otherwise
determined by the Board, such Option Rights shall be subject
to the following additional terms and conditions:
(i) Each grant shall specify the number of shares of
Common Stock to which it pertains subject to the
limitations set forth in Section 3 of this plan.
(ii) Each such Option Right shall become exercisable on the
first anniversary of the Date of Grant. Such Option
Rights shall become exercisable in full immediately in
the event of a Change in Control.
(iii) In the event of the termination of service on the
Board by the holder of any such Option Rights, other
than by reason of disability or death, the then
outstanding Option Rights of such holder may be
exercised to the extent that they would be exercisable
on the date that is 60 days after the date of such
termination and shall expire 60 days after such
termination, or on their stated expiration date,
whichever occurs first.
(iv) In the event of the death or disability of the holder
of any such Option Rights, each of the then
outstanding Option Rights of such holder may be
exercised at any time within 1 year after such death
or disability, but in no event after the expiration
date of the term of such Option Rights.
(v) If a Non-Employee Director subsequently becomes an
employee of the Company or a Subsidiary while
remaining a member of the Board, any Option Rights
held under the Plan by such individual at the time of
such commencement of employment shall not be affected
thereby.
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(vi) Option Rights may be exercised by a Non-Employee
Director only upon payment to the Company in full of
the Option Price of the shares of Common Stock to be
delivered. Such payment shall be made in cash or in
shares of Common Stock then owned by the optionee for
at least six months, or in a combination of cash and
such shares of Common Stock.
(b) Each grant or sale of Restricted Shares pursuant to this
Section 9 shall be upon terms and conditions consistent with
Section 6 of this Plan.
10. TRANSFERABILITY. (a) Except as otherwise determined by the Board, no
Option Right, Appreciation Right or other derivative security granted
under the Plan shall be transferable by a Participant other than by will
or the laws of descent and distribution. Except as otherwise determined
by the Board, Option Rights and Appreciation Rights shall be exercisable
during the Optionee's lifetime only by him or her or by his or her
guardian or legal representative.
(b) The Board may specify at the Date of Grant that part or all of
the shares of Common Stock that are (i) to be issued or
transferred by the Company upon the exercise of Option Rights
or Appreciation Rights, upon the termination of the Deferral
Period applicable to Deferred Shares or upon payment under any
grant of Performance Shares or Performance Units or (ii) no
longer subject to the substantial risk of forfeiture and
restrictions on transfer referred to in Section 6 of this
Plan, shall be subject to further restrictions on transfer.
(c) Notwithstanding the provisions of Section 10(a), but subject
to the prior approval of the Board, Option Rights (other than
Incentive Stock Options), Appreciation Rights, Restricted
Shares, Deferred Shares, Performance Shares and Performance
Units shall be transferable by a Participant, without payment
of consideration therefor by the transferee, to any one or
more members of the Participant's Immediate Family (or to one
or more trusts established solely for the benefit of one or
more members of the Participant's Immediate Family or to one
or more partnerships in which the only partners are members of
the Participant's Immediate Family); provided, however, that
(i) no such transfer shall be effective unless reasonable
prior notice thereof is delivered to the Company and such
transfer is thereafter effected in accordance with any terms
and conditions that shall have been made applicable thereto by
the Company or the Board and (ii) any such transferee shall be
subject to the same terms and conditions hereunder as the
Participant.
11. ADJUSTMENTS. The Board may make or provide for such adjustments in the
numbers of shares of Common Stock covered by outstanding Option Rights,
Appreciation Rights, Deferred Shares, and Performance Shares granted
hereunder, in the Option Price and Base Price provided in outstanding
Appreciation Rights, and in the kind of shares covered thereby, as the
Board, in its sole discretion, exercised in good faith, may determine
is
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equitably required to prevent dilution or enlargement of the rights of
Participants or Optionees that otherwise would result from (a) any
stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Company, or (b) any
merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution
of assets, issuance of rights or warrants to purchase securities, or
(c) any other corporate transaction or event having an effect similar
to any of the foregoing. Moreover, in the event of any such transaction
or event, the Board, in its discretion, may provide in substitution for
any or all outstanding awards under this Plan such alternative
consideration as it, in good faith, may determine to be equitable in
the circumstances and may require in connection therewith the surrender
of all awards so replaced. The Board may also make or provide for such
adjustments in the numbers of shares specified in Section 3 of this
Plan as the Board in its sole discretion, exercised in good faith, may
determine is appropriate to reflect any transaction or event described
in this Section 11; provided, however, that any such adjustment to the
number specified in Section 3(c)(i) shall be made only if and to the
extent that such adjustment would not cause any Option Right intended
to qualify as an Incentive Stock Option to fail so to qualify.
12. CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control"
shall mean the occurrence of any of the following events:
(a) The acquisition by any Person of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 33% or more of the Voting Power of the Company; provided,
however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in
Control: (A) any acquisition directly from the Company, (B)
any acquisition by the Company or any Subsidiary, (C) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, or
(D) any acquisition by any Person pursuant to a transaction
which complies with clauses (i) and (ii) of subsection (c) of
this Section 12.
(b) A change in a majority of the members of the Board occurs: (i)
within one year following the public announcement of an actual
or threatened election contest (as described in Rule 14a-12(c)
promulgated under the Exchange Act) or the filing of a
Schedule 13D or other public announcement indicating that a
Person intends to effect a change in control of the Company,
(ii) as a result of the exercise of contractual rights, or
(iii) as a result of a majority of the members of the Board
having been proposed, designated or nominated by a Person
(other than the Company through the Board or a committee of
the Board).
(c) Consummation of a Business Combination unless, following such
Business Combination, (i) no Person (excluding any entity
resulting from such Business Combination or any employee
benefit plan (or related trust) sponsored or maintained by the
Company or such entity resulting from such Business
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Combination or any Subsidiary of either of them) beneficially
owns, directly or indirectly, 33% or more of the Voting Power
of the entity resulting from such Business Combination, and
(ii) at least half of the members of the board of directors of
the corporation resulting from such Business Combination were
members of the Board at the time of the execution of the
initial agreement, or of the action of the Board, providing
for such Business Combination.
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(e) Such other event as the Board may determine by express
resolution to constitute a Change in Control for purposes of
this Plan.
13. FRACTIONAL SHARES. The Company shall not be required to issue any
fractional shares of Common Stock pursuant to this Plan. The Board may
provide for the elimination of fractions or for the settlement of
fractions in cash.
14. WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any
payment made or benefit realized by a Participant or other person under
this Plan, and the amounts available to the Company for such
withholding are insufficient, it shall be a condition to the receipt of
such payment or the realization of such benefit that the Participant or
such other person make arrangements satisfactory to the Company for
payment of the balance of such taxes required to be withheld, which
arrangements (in the discretion of the Board) may include
relinquishment of a portion of such benefit. Participants shall also
make such arrangements as the Company may require for the payment of
any withholding tax obligations that may arise in connection with the
disposition of shares acquired upon the exercise of Option Rights. In
the discretion of the Committee, a Participant or such other person may
surrender Common Stock owned for more than 6 months to satisfy any tax
obligations resulting from any such transaction; provided, however,
that in no event shall the Company accept Common Stock for payment of
taxes in excess of required tax withholding rates.
15. PARTICIPATION BY EMPLOYEES OF DESIGNATED SUBSIDIARIES. As a condition
to the effectiveness of any grant or award to be made hereunder to a
Participant who is an employee of a Designated Subsidiary, whether or
not such Participant is also employed by the Company or another
Subsidiary, the Board may require such Designated Subsidiary to agree
to transfer to such employee (when, as and if provided for under this
Plan and any applicable Evidence of Award) the Common Stock that would
otherwise be delivered by the Company, upon receipt by such Designated
Subsidiary of any consideration then otherwise payable by such
Participant to the Company. Any such award shall be evidenced by an
agreement between the Participant and the Designated Subsidiary, in
lieu of the Company, on terms consistent with this Plan and approved by
the Board and such Designated Subsidiary. All such Common Stock so
delivered by or to a Designated
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Subsidiary shall be treated as if it had been delivered by or to the
Company for purposes of Section 3 of this Plan, and all references to
the Company in this Plan shall be deemed to refer to such Designated
Subsidiary, except for purposes of the definition of "Board" and except
in other cases where the context otherwise requires.
16. FOREIGN EMPLOYEES. In order to facilitate the making of any grant or
combination of grants under this Plan, the Board may provide for such
special terms for awards to Participants who are foreign nationals or
who are employed by the Company or any Subsidiary outside of the United
States of America as the Board may consider necessary or appropriate to
accommodate differences in local law, tax policy or custom. Moreover,
the Board may approve such supplements to or amendments, restatements
or alternative versions of this Plan as it may consider necessary or
appropriate for such purposes, without thereby affecting the terms of
this Plan as in effect for any other purpose, and the Secretary or
other appropriate officer of the Company may certify any such document
as having been approved and adopted in the same manner as this Plan. No
such special terms, supplements, amendments or restatements, however,
shall include any provisions that are inconsistent with the terms of
this Plan as then in effect unless this Plan could have been amended to
eliminate such inconsistency without further approval by the
stockholders of the Company.
17. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by the
Board, which may from time to time delegate all or any part of its
authority under this Plan to a committee of the Board (or subcommittee
thereof) consisting solely of not less than two Non-Employee Directors
appointed by the Board. A majority of the committee (or subcommittee)
shall constitute a quorum, and the action of the members of the
committee (or subcommittee) present at any meeting at which a quorum is
present, or acts unanimously approved in writing, shall be the acts of
the committee (or subcommittee). To the extent of any such delegation,
references in this Plan to the Board shall be deemed to be references
to any such committee or subcommittee. Awards of Option Rights and
Appreciation Rights are, and certain awards of Restricted Shares,
Performance Awards and Performance Units may be, intended to qualify as
performance-based compensation under Section 162(m) of the Code. The
grant of such awards, and the administration thereof and any
determinations to be made in connection therewith, shall be carried out
only by a committee of the Board (or subcommittee thereof) consisting
solely of not less than two Outside Directors appointed by the Board.
Such committee shall grant or award such options, rights or other
awards in a manner consistent with the rules governing
performance-based compensation under Section 162(m) of the Code.
(b) The interpretation and construction by the Board of any
provision of this Plan or of any agreement, notification or
document evidencing the grant of Option Rights, Appreciation
Rights, Restricted Shares, Deferred Shares, Performance Shares
or Performance Units and any determination by the Board
pursuant to any provision of this Plan or of any such
agreement, notification or document shall be
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final and conclusive. No member of the Board shall be liable
for any such action or determination made in good faith.
18. COMPANY'S RIGHTS UPON OCCURRENCE OF DETRIMENTAL ACTIVITY.
Any Evidence of Award may provide that if a Participant, either during
employment by the Company or a Subsidiary or within a specified period after
termination of such employment, shall engage in any Detrimental Activity, and
the Board shall so find, forthwith upon notice of such finding, the Participant
shall:
(a) Return to the Company, in exchange for payment by the Company
of any amount actually paid therefor by the Participant, all
shares of Common Stock that the Participant has not disposed of
that were offered pursuant to this Plan within a specified
period prior to the date of the commencement of such
Detrimental Activity; and
(b) With respect to any shares of Common Stock so acquired that the
Participant has disposed of, pay to the Company in cash the
difference between:
(i) Any amount actually paid therefor by the Participant
pursuant to this Plan, and
(ii) The Market Value per Share of the shares of Common
Stock on the date of such acquisition.
To the extent that such amounts are not paid to the Company, the Company may set
off the amounts so payable to it against any amounts that may be owing from time
to time by the Company or a Subsidiary to the Participant, whether as wages,
deferred compensation or vacation pay or in the form of any other benefit or for
any other reason.
19. GOVERNING LAW. This Plan and all awards granted and actions taken
hereunder shall be governed by and construed in accordance with the
internal substantive laws of the State of Georgia.
20. STOCKHOLDER APPROVAL. Unless the Plan is approved by stockholders of the
Company within one year of its adoption by the Board, at least a
majority of the shares of Common Stock or shares of Common Stock
underlying options awarded under the Plan during any three year period
must be awarded to employees who are not officers or directors of the
Company; provided, however, that in the event stockholder approval is
obtained within such period, awards shall be made hereunder in such
amounts and proportions as the Board shall determine.
21. AMENDMENTS, ETC. (a) The Board may at any time and from time to time
amend the Plan in whole or in part; provided, however, that any
amendment which must be approved by the stockholders of the Company in
order to comply with applicable law or
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the rules of the New York Stock Exchange or, if the shares of Common
Stock are not traded on the New York Stock Exchange, the principal
national securities exchange upon which the shares of Common Stock are
traded or quoted, shall not be effective unless and until such approval
has been obtained. Presentation of this Plan or any amendment hereof
for stockholder approval shall not be construed to limit the Company's
authority to offer similar or dissimilar benefits under other plans
without stockholder approval.
(b) The Board shall not, without the further approval of the
stockholders of the Company, authorize the amendment of any
outstanding Option Right to reduce the Option Price.
Furthermore, no Option Right shall be cancelled and replaced
with awards having a lower Option Price without further
approval of the shareholders of the Company. This Section 17(b)
is intended to prohibit the repricing of "underwater" Option
Rights and shall not be construed to prohibit the adjustments
provided for in Section 11 of this Plan.
(c) The Board also may permit Participants to elect to defer the
issuance of shares of Common Stock or the settlement of awards
in cash under the Plan pursuant to such rules, procedures or
programs as it may establish for purposes of this Plan. The
Board also may provide that deferred issuances and settlements
include the payment or crediting of dividend equivalents or
interest on the deferral amounts.
(d) The Board may condition the grant of any award or combination
of awards authorized under this Plan on the surrender or
deferral by the Participant of his or her right to receive a
cash bonus or other compensation otherwise payable by the
Company or a Subsidiary to the Participant.
(e) In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of
hardship or other special circumstances, of a Participant who
holds an Option Right or Appreciation Right not immediately
exercisable in full, or any Restricted Shares as to which the
substantial risk of forfeiture or the prohibition or
restriction on transfer has not lapsed, or any Deferred Shares
as to which the Deferral Period has not been completed, or any
Performance Shares or Performance Units which have not been
fully earned, or who holds shares of Common Stock subject to
any transfer restriction imposed pursuant to Section 10(b) of
this Plan, the Board may, in its sole discretion, accelerate
the time at which such Option Right or Appreciation Right may
be exercised or the time at which such substantial risk of
forfeiture or prohibition or restriction on transfer will
lapse or the time when such Deferral Period will end or the
time at which such Performance Shares or Performance Units
will be deemed to have been fully earned or the time when such
transfer restriction will terminate or may waive any other
limitation or requirement under any such award.
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(f) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the
Company or any Subsidiary, nor shall it interfere in any way
with any right the Company or any Subsidiary would otherwise
have to terminate such Participant's employment or other
service at any time. Prior to exercise of any Option Right,
and prior to exercise, payment or delivery pursuant to any
other award, the Participant may be required, at the Company's
request, to certify in a manner reasonably acceptable to the
Company that the Participant has not engaged in, and has no
present intention to engage in the future in, any Detrimental
Activity.
(g) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as an Incentive Stock
Option from qualifying as such, that provision shall be null
and void with respect to such Option Right. Such provision,
however, shall remain in effect for other Option Rights and
there shall be no further effect on any provision of this Plan.
22. TERMINATION. No grant shall be made under this Plan more than five
years after the date on which this Plan is first approved by the
stockholders of the Company, but all grants made on or prior to such
date shall continue in effect thereafter subject to the terms thereof
and of this Plan.
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GEORGIA GULF CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Edward A. Schmitt and Richard B. Marchese, or
either of them, with full power of substitution as proxyholders to represent and
to vote, as designated hereon, the common stock of the undersigned at the annual
meeting of stockholders of the Company to be held on May 21, 2002 and any
adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS DIRECTED ON THE
FRONT. IF NO DIRECTION IS GIVEN AND THE PROXY CARD IS VALIDLY EXECUTED, THE
SHARES WILL BE VOTED FOR ALL LISTED PROPOSALS. IN THEIR DISCRETION, THE
PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------- -------------------------
- ------------------------- -------------------------
- ------------------------- -------------------------
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GEORGIA GULF CORPORATION
C/O EQUISERVE P.O. BOX 43068
PROVIDENCE, RI 02940
DETACH HERE
/x/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
GEORGIA GULF CORPORATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL PROPOSALS.
1.To elect three directors to serve three years.
CLASS III:
(01) CHARLES T. HARRIS, III, (02) JOHN E. AKITT, (03) RUTH I. DREESSEN
FOR
ALL / / / / WITHHOLD
NOMINEES
FOR ALL
NOMINEES
EXCEPT / /
------------------------------------------
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED
ABOVE.)
FOR AGAINST ABSTAIN
2.To approve and adopt the 2002 Equity and / / / / / /
Performance Incentive Plan.
Mark box at right if an address change or comment has been noted on the reverse
side of this card. / /
Please be sure to sign and date this Proxy.
IMPORTANT: Sign exactly as your name appears at left. Give full
title of executor, administrator, trustee, guardian, etc. Joint
owners should each sign personally.
Stockholder Co-owner
sign here: _______________ Date: ______ sign here: ______________ Date: ________