SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
Filed by a Party other than the Registrant ___
Check the appropriate box:
__ Preliminary Proxy Statement
__ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
X Definitive Proxy Statement
__ Definitive Additional Materials
__ Soliciting Material Pursuant to section 240.14a-11(c) or
section 240.14a-12
WAUSAU-MOSINEE PAPER 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)(1) and
0-11.
__ 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: ___________________________
WAUSAU-MOSINEE PAPER CORPORATION
1244 KRONENWETTER DRIVE
MOSINEE, WISCONSIN 54455-9099
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_____________________
The annual meeting of shareholders of Wausau-Mosinee Paper
Corporation will be held at The Wausau Club, 309 McClellan
Street, Wausau, Wisconsin, on Thursday, April 18, 2002, at 2:00
p.m., local time. The following proposals will be considered
by shareholders at the annual meeting:
1. The election of two Class III directors; and
2. Any other business that properly comes before the meeting.
The record date for determining the holders of common stock entitled
to notice of and to vote at the annual meeting or any adjournment thereof
is the close of business on February 21, 2002.
PLEASE PROMPTLY VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE.
March 18, 2002
By order of
the Board of Directors
SCOTT P. DOESCHER
Scott P. Doescher
Secretary
WAUSAU-MOSINEE PAPER CORPORATION MARCH 18, 2002
1244 KRONENWETTER DRIVE
MOSINEE, WISCONSIN 54455-9099
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 18, 2002
SOLICITATION OF PROXIES
We are providing these proxy materials in connection with the solicitation
of proxies by the Board of Directors of Wausau-Mosinee Paper Corporation for
use at the 2002 annual meeting of shareholders, including any adjournment
thereof. The annual meeting will be held at 2:00 p.m., at The Wausau
Club, 309 McClellan Street, Wausau, Wisconsin on April 18, 2002.
PROXIES AND VOTING PROCEDURES
YOUR VOTE
Your vote is important. Whether or not you plan to attend the annual
meeting, please sign, date and return the enclosed proxy promptly in order
to be sure that your shares are voted. You may revoke your proxy at any
time before it is voted by giving written notice to the Secretary of the
company at our principal office in Mosinee, Wisconsin, by filing another
duly executed proxy bearing a later date with the Secretary, or by giving
oral notice to the presiding officer at the annual meeting.
All shares represented by your properly completed proxy which have
been submitted to the company prior to the meeting (and which have not
been revoked) will be voted in accordance with your instructions. IF YOU
DO NOT INDICATE HOW YOUR SHARES SHOULD BE VOTED ON A PROPOSAL, THE SHARES
REPRESENTED BY YOUR PROPERLY COMPLETED PROXY WILL BE VOTED AS THE BOARD OF
DIRECTORS RECOMMENDS.
If any other matters are properly presented at the annual meeting for
consideration, including, among other things, consideration of a motion to
adjourn the meeting to another time or place, the persons named as proxies
in the proxy form furnished to you by the Board will have discretion to
vote on those matters according to their best judgment to the same extent
as you would be entitled to vote. As of the date of this proxy statement,
we do not anticipate that any other matters will be presented to the
annual meeting.
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SHAREHOLDERS ENTITLED TO VOTE
GENERAL. Shareholders at the close of business on the record date are
entitled to notice of and to vote at the annual meeting. Each share is
entitled to one vote on each proposal properly brought before the annual
meeting. Votes cast by proxy or in person at the annual meeting will be
tabulated by an inspector of elections appointed by the Board. On the
record date, there were 51,511,091 shares of common stock outstanding.
DIVIDEND REINVESTMENT PLAN AND COMMON STOCK PURCHASE PLAN
PARTICIPANTS. If you are a participant in the Dividend Reinvestment and
Stock Purchase Plan or Common Stock Purchase Plan, your proxy will also
serve to direct the plan administrator to vote any shares of common stock
held for you under either plan at the close of business on the record
date. Shares beneficially owned by participants in the plans for which no
proxy or other voting directions are received will not be voted. Your
form of proxy will permit you to vote the shares held in the plan.
401(K) PLAN PARTICIPANTS. If you are a participant in our 401(k) plan
you may vote an amount of shares equivalent to the interest in our common
stock credited to your account as of the record date. Your proxy card
will serve as voting instructions for the trustee of the 401(k) plan. If
you own shares through the 401(k) plan and do not vote, the plan trustees
will vote the plan shares in the same proportion as shares for which
instructions were received under the plan. Your form of proxy will permit
you to vote the shares held in the plan.
QUORUM, REQUIRED VOTE AND RELATED MATTERS
QUORUM. A quorum is present if a majority of the votes entitled to
be cast on a proposal are represented at the annual meeting in person or
by proxy. For purposes of determining a quorum, shareholders who are
present in person or are represented by proxy, but who abstain from
voting, are considered present and count toward the determination of the
quorum. Shares reported as broker non-votes are also considered to be
shares present for purposes of determining whether a quorum is present.
BROKER NON-VOTES. If you hold shares in "street name" through a
broker or other nominee, your broker or nominee may not be permitted to
exercise voting discretion with respect to some of the proposals to be
voted upon. Brokers or nominees who are the holders of record of company
common stock for customers generally have discretionary authority to vote
on certain routine matters. However, such brokers generally will not have
authority to vote on other matters if they have not received instructions
from their customers. If you do not give your broker or nominee specific
instructions, your shares may not be voted on those proposals or counted
in determining the number of shares necessary for approval. In
determining the vote of a shareholder on matters for which a broker or
nominee does not have the authority to vote shares held of record by the
broker or nominee, the shares will be recorded as a "broker non-vote."
ELECTION OF DIRECTORS. Directors are elected by a plurality of the
votes cast. For this purpose, a "plurality" means that the individuals
receiving the largest number of votes are elected as directors, up to the
maximum of the two directors to be chosen at the annual
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meeting. You may vote in favor of the nominees specified on the
accompanying proxy form or may withhold your vote as to one or more of
such nominees. Shares withheld or not otherwise voted in the election of
directors (because of abstention, broker non-vote, or otherwise) will have
no effect on the election of directors.
ALL OTHER PROPOSALS. As of the date of this proxy statement, we do
not anticipate that any other proposals will be brought before the annual
meeting. Generally, proposals other than the election of directors which
are brought before the meeting will be approved if the votes cast for the
proposal exceed the votes cast against the proposal.
COSTS OF SOLICITATION
In addition to solicitation by mail, our officers, directors and
regular employees may solicit proxies in person or by telephone,
facsimile, electronic mail or other forms of communication. Expenses in
connection with the solicitation of proxies, including the reasonable
expenses of brokers, fiduciaries and other nominees in forwarding proxy
material to beneficial owners of our common stock, will be borne by us.
PROXY STATEMENT PROPOSALS
Any shareholder who intends to present a proposal at the annual
meeting to be held in 2003 must deliver the written proposal to the
Secretary of the company at our office in Mosinee, Wisconsin:
o not later than November 15, 2002, if the proposal is submitted
for inclusion in our proxy materials for the 2003 meeting pursuant
to Rule 14a-8 under the Securities Exchange Act of 1934; or
o or after January 18, 2003, and on or before February 17,
2003, if the proposal is submitted pursuant to our bylaws, in which
case we are not required to include the proposal in our proxy materials.
Shareholders may present a proposal at the 2003 annual meeting for
consideration only if proper notice of the proposal has been given in
accordance with one of these requirements. Nominations for director made
from the floor at the annual meeting of shareholders to be held in 2003
require advance notice in accordance with the bylaws.
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
We intend to begin "householding" for all relevant accounts for the
annual meeting to be held in 2003 in order to reduce the volume of
duplicate information you receive and our expenses in printing and mailing
that duplicate information. "Householding" means that we will send a
single set of our annual report and proxy statement to any household at
which two or more shareholders reside if we believe that those
shareholders are members of the same family or otherwise share the same
address. Each shareholder will continue to receive a separate proxy
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card. A separate notice has been enclosed with this proxy statement to
shareholders who will be affected by our decision to implement the
householding rules for 2003.
Some banks, brokers and other nominee record holders may be
householding proxy statements and annual reports this year for
shareholders whose accounts are held in street name. This means that only
one copy of our proxy statement or annual report to shareholders may have
been sent to multiple shareholders in each household. We will promptly
deliver a separate copy of either document to any shareholder upon written
or oral request to the Secretary, Wausau-Mosinee Paper Corporation, 1244
Kronenwetter Drive, Mosinee, WI 54455-9099, telephone: (715) 693-4470.
Any shareholder whose shares are held in street name and who wants to
receive separate copies of the proxy statement or annual report to
shareholders in the future, or any shareholder who is receiving multiple
copies and would like to receive only one copy per household, should
contact the shareholder's bank, broker, or other nominee record holder, or
the shareholder may contact the Secretary of the company at the above address
and phone number.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
At the annual meeting, shareholders will be asked to elect two Class
III directors for terms of office which will expire at the annual meeting
of shareholders to be held in 2005. Upon recommendation of its Nominating
Committee, the Board nominated Gary W. Freels and Thomas J. Howatt for
election as Class III directors. Each of the candidates has consented to
serve if elected, but in the event one or more of the nominees is not a
candidate at the annual meeting, it is the intention of the proxies to
vote for such substitute or substitutes as may be designated by the Board.
The Board is composed of three classes consisting of three Class I and
Class II directors, respectively, and two Class III directors. One class
of directors is to be elected at each annual meeting of shareholders to
serve a three-year term. No person may be elected a director if that
person has attained age 70 as of the date of the election.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE TWO
NOMINEES FOR CLASS III DIRECTOR. The following table sets forth
information concerning the business background and experience of the
nominees for reelection and all continuing directors. Unless specified,
all current positions listed for a nominee or director have been held for
at least five years.
PRINCIPAL OCCUPATION CLASS AND YEAR
AND OTHER WHICH TERM DIRECTOR
NAME AND AGE DIRECTORSHIPS WILL EXPIRE SINCE
NOMINEES
Gary W. Freels, 53 President, Alexander Properties, Inc. Class III 1996
(investment management); formerly 2005
President, M&I First American
Bank (1992-1995)
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Thomas J. Howatt, 52 President and Chief Executive Officer Class III 2000
of the Company since August, 2000; 2005
formerly Senior Vice President, Printing
& Writing Group (1997-2000) and
Vice President and General Manager,
Printing & Writing Division (1994-1997)
CONTINUING DIRECTORS
Walter Alexander, 67 President of Alexander Lumber Class I 1997
Co.; also a director of Old Second 2003
Bancorp, Inc.; formerly a director
of Mosinee Paper Corporation (1987-1997)
San W. Orr, Jr., 60 Chairman of the Board of the Company Class I 1970
and Advisor, Estates of A.P. Woodson 2003
and Family; Chief Executive Officer
of the Company (2000; 1994-1995);
formerly Chairman of the Board
(1987-1997) and a director (1972-1997)
of Mosinee Paper Corporation; also a
director of Marshall & Ilsley Corporation
David B. Smith, Jr., 63 Consultant; formerly Vice President, Class I 1972
Labor Relations, Weyerhaeuser Company 2003
Harry R. Baker, 69 Former President and Chief Class II 1992
Executive Officer, Marathon Electric 2004
Manufacturing Corporation
(1989-1998); formerly a director of
Mosinee Paper Corporation (1995-1997)
Richard L. Radt, 70 Vice Chairman of the Board of the Class II 1997
Company; President and Chief Executive 2004
Officer and a director of the Company
(1977-1987); formerly Vice Chairman
(1993-1997) and President and Chief
Executive Officer (1988-1993) of Mosinee
Paper Corporation
Dennis J. Kuester, 60 President and CEO and a director of Class II 2001
Marshall & Ilsley Corporation; also 2004
Chairman and CEO of M&I Marshall &
Ilsley Bank, Chairman of the Board and
director of Metavante Corporation and a
director of Modine Manufacturing Company
COMMITTEES AND MEETINGS
The Board met nine times in 2001. Each of the directors attended at
least 75% of the total number of the meetings of the Board and the
committees on which they served during the last fiscal year.
The standing committees of the Board include the Audit, Executive
Compensation & Bonus, and Nominating Committees.
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As part of its duties, the Audit Committee recommends to the Board the
engagement of our independent auditor and reviews with the auditor the
scope and results of the audit, our internal system of accounting
controls, auditor independence, financial reporting matters, and the other
professional services provided by the auditor. The members of the Audit
Committee also serve on the Board's Oversight Committee which is charged
with monitoring our program to maintain legal and ethical standards. Mr.
Baker, Mr. Alexander, Mr. Freels and Mr. Kuester are members of the Audit
Committee. The Committee met nine times during 2001. See "Audit
Committee Report."
The Executive Compensation & Bonus Committee reviews management
compensation matters and makes recommendations to the Board concerning the
compensation levels and programs of our executive officers. The Committee
met three times in 2001. Mr. Orr, Mr. Radt, Mr. Baker and Mr. Smith serve
as members of the Committee. The Board's Option and SAR Committee reviews
and grants, as it deems appropriate, options, stock appreciation rights,
and dividend equivalents. Mr. Alexander, Mr. Baker, Mr. Freels, and Mr.
Smith serve on the Option and SAR Committee. See "Committees' Report on
Compensation Policies."
The Nominating Committee considers and recommends to the Board
nominees for election as directors. Inquiries concerning nominations with
pertinent background information should be directed to the Chairman of the
Nominating Committee in care of the company. Mr. Orr, Mr. Radt, Mr.
Alexander and Mr. Freels serve on the Nominating Committee. The committee
met once in 2001.
DIRECTOR COMPENSATION
Directors are paid a retainer of $2,000 per month and $1,000 for each
meeting of the Board attended. Mr. Smith participates in our health
insurance plan and the other directors who are officers of the company
receive salaries and benefits related to their duties. No other director
received more than the standard arrangements described above.
The Directors' Deferred Compensation Plan provides that directors may
elect each year to defer some or all of the fees otherwise payable in cash
during the year. Amounts deferred become payable in cash in a lump sum or
in quarterly installments after a director's termination of service. In
the event a director's service terminates because of a change of control
of the company, as defined in the plan, payment of all deferred amounts
will be made in a lump sum. During the period in which payment is
deferred, a director may elect that the deferred fees be credited with
interest at the prime rate in effect as of each calendar quarter at The
Chase Manhattan Bank of New York or that the deferred fees be converted
into common stock equivalent units. If common stock equivalent units are
elected, the director's account is also credited with stock equivalent
units representing the common stock which could have been purchased with
the cash dividends which would have been paid on the accumulated stock
equivalent units had the units been actual common stock. Stock equivalent
units are converted to cash based upon the fair market value of the common
stock at the time of distribution. During 2001, Mr. Alexander, Mr. Baker,
Mr. Howatt, Mr. Freels, and Mr. Kuester participated in the plan and
deferred all or a portion of the retainer or meeting fees otherwise
payable to them.
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Our retirement policy for directors provides for the payment of
retirement benefits for directors who have served on the Board for at
least five years prior to their termination of service. A retired
director's monthly benefit is equal to the monthly retainer and meeting
fees in effect at his termination of service and is paid for a period of
time equal to the retired director's period of service on the Board,
including service on the board of directors of Mosinee Paper Corporation
prior to December 17, 1997. Retirement benefits terminate at death and
are accelerated in the event of a change of control of the company, as
defined in the policy.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 2001, we engaged in various business transactions with
companies for which some of our directors serve as directors or officers.
Each of these transactions was done in the ordinary course of business and
at prices and on terms prevailing at the time for comparable transactions
with unrelated persons. These transactions included banking and trust
services provided by subsidiaries of Marshall & Ilsley Corporation, for
which Mr. Kuester serves as President and CEO and Mr. Kuester and Mr. Orr
serve as board members. We believe that none of the transactions were
material to us or the other companies or individuals involved. We expect
that similar transactions in the ordinary course of our business will
continue in the future.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, based on statements filed with the SEC
or information otherwise known to us, the name of each person believed by
us to own more than 5% of our common stock and the number of shares of
common stock held by each person.
COMMON SHARES PERCENT OF
NAME AND ADDRESS BENEFICIALLY OWNED CLASS
Wilmington Trust Company ...................9,465,785 18.38%
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
Trustees of David B. Smith Family Trust ....3,172,517{ (1)} 6.16%
1206 E. Sixth Street
Merrill, WI 54452
<FN>
{(1)}David B. Smith, Jr., Thomas P. Smith, Margaret S. Mumma and Sarah S.
Miller are the co-trustees of the David B. Smith Family Trust
(the "Trust") which owns 2,368,372 shares of common stock.
Including common stock which is beneficially owned by the trustees
on an individual basis and common stock owned by the Trust, each of
the trustees has sole or shared investment authority with respect to
the following percentages of common stock: David B. Smith, Jr.,
4.69%; Thomas P. Smith, 4.76%; Margaret S. Mumma, 5.32%; and Sarah
S. Miller, 5.18%.
The following table sets forth the number of shares of common stock
beneficially owned as of the record date by each of the directors, each
person nominated to become a director, each of our current executive
officers named in the summary compensation table and all such nominees,
directors and executive officers as a group.
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COMMON STOCK PERCENT OF
NAME BENEFICIALLY OWNED CLASS
Walter Alexander 31,212 {(1)} *
Harry R. Baker 28,473 {(1)} *
Gary W. Freels 995,085 {(2)} 1.93%
Thomas J. Howatt 506,041 {(1)} *
Dennis J. Kuester 15,000 {(3)} *
San W. Orr, Jr. 1,195,820 {(4)} 2.31%
Richard L. Radt 48,546 {(1)} *
David B. Smith, Jr. 2,417,491 {(5)} 4.69%
Stuart R. Carlson 129,791 {(1)} *
David L. Canavera 167,514 {(1)} *
Dennis M. Urbanek 148,369 {(1)} *
John J. Schievelbein 100,000 {(1)} *
All directors and executive officers as a group (15 persons) 5,994,080 {(6)} 11.31%
<FN>
*Less than 1%
{(1)}Includes shares which may be acquired through the exercise of
options on or before 60 days.
{(2)}Includes 975,065 shares of common stock held by two charitable
foundations of which Mr. Freels serves as president and/or a director.
{(3)}The Marshall & Ilsley Trust Company is trustee of the company's
retirement plans and holds our common stock as such trustee and in its various
other fiduciary capacities, including the shares held as custodian of the
David B. Smith Family Trust described in note (5). Mr. Kuester is the
President and a director of Marshall & Ilsley Corporation, the parent
corporation of the Trust Company. Mr. Kuester disclaims any beneficial
interest in the shares held of record by the Trust Company.
{(4)}Includes 686,011 shares as to which Mr. Orr exercises shared voting
and investment power (and as to which beneficial ownership is disclaimed) and
shares which may be acquired through the exercise of options on or before 60
days.
{(5)}David B. Smith, Jr. is a co-trustee of the David B. Smith Family
Trust which holds 2,368,372 shares of common stock. Also includes shares
which may be acquired through the exercise of options on or before 60 days.
See note (1) under the preceding table.
{(6)}The shares disclosed incorporate footnotes (1) - (5).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires directors and officers and persons who own more than 10%
of the common stock outstanding ("reporting persons") to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Reporting persons are also
required by SEC regulations to furnish us with copies of all Section 16(a)
forms filed by them with the SEC. We review copies of the Section 16(a)
forms received by us or rely upon written representations from certain of
these reporting persons to determine compliance with the Section 16(a)
regulations for purposes of this proxy statement. Based on our review of
these reports and the representations of the reporting persons, we believe
that all reports required to be filed by Section 16(a) were filed on a
timely basis.
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COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The table below sets forth compensation earned by, or awarded or paid
by us to, the CEO as of December 31, 2001, and to each of our four most
highly compensated executive officers as of December 31, 2001, whose
salary and bonus exceeded $100,000 for the last fiscal year.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM
COMPENSATION
AWARDS
OTHER ANNUAL OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY{(1)} BONUS COMPENSATION($) SARS(#) COMPENSATION
Thomas J. Howatt, 2001 $452,083 $113,021 $0 18,000* $ 59,165{(2)}
President and CEO 2000 $335,345 $ 71,413 $0 382,500* $ 18,570
1999 $247,841 $ 61,631 $0 86,205* $ 3,360
Stuart R. Carlson, Executive 2001 $281,592 $ 70,375 $0 18,000* $ 4,092{(3)}
Vice President, Administration 2000 $261,593 $ 36,715 $0 42,500* $ 3,570
1999 $247,126 $ 36,963 $0 29,600* $ 3,360
David L. Canavera, Senior Vice 2001 $212,592 $108,885 $0 18,000* $ 3,570{(4)}
President, Towel & Tissue 2000 $212,000 $100,287 $0 17,500* $ 3,570
Group 1999 $204,643 $ 83,011 $0 31,840* $ 3,360
Dennis M. Urbanek, Senior Vice 2001 $215,444 $ 48,459 $0 18,000* $ 4,942{(3)}
President, Engineering and 2000 $215,000 $ 49,450 $0 42,500* $ 3,570
Environmental Services 1999 $205,379 $ 51,355 $0 28,520* $ 3,360
John J. Schievelbein, Senior 2001 $182,221 $ 49,016 $0 18,000* $ 4,306{(3)}
Vice 2000 $137,744 $ 45,240 $0 88,500* $ 18,570
President, Printing & Writing
Group
<FN>
*Options to acquire common stock.
{(1)}Includes compensation deferred by officers under 401(k) plan.
{(2)}Director's fees of $30,000, 401(k) contribution of $3,570, and
credits of $25,595 payable under the company's flexible benefit plan.
Mr. Howatt's fees were deferred under the Deferred Compensation Plan for
Directors described under the caption "Director Compensation."
{(3)}Contributions of $3,570 under 401(k) plan and credits payable under
the company's flexible benefit plan to: Mr. Carlson, $522; Mr. Urbanek,
$1,372; and Mr. Schievelbein, $736.
{(4)}Contributions under 401(k) plan.
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STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
GRANTS. We maintain stock appreciation rights ("SAR") and stock
option plans pursuant to which grants may be made to key employees. The
following grants were made in 2001 to executive officers named in the
summary compensation table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS ALTERNATIVE
GRANT DATE
VALUE
% OF TOTAL MARKET PRICE
OPTIONS/SARS OF STOCK ON
GRANTED TO EXERCISE OR DATE OF GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE GRANT EXPIRATION PRESENT
NAME GRANTED(#)* FISCAL YEAR ($/SH) DATE VALUE${ (1)}
Mr. Howatt 18,000{(2)} 4.04% $ 10.71 $ 10.71 12/13/21 $68,580
Mr. Carlson 18,000{(2)} 4.04% $ 10.71 $ 10.71 12/13/21 $68,580
Mr. Canavera 18,000{(2)} 4.04% $ 10.71 $ 10.71 12/13/21 $68,580
Mr. Urbanek 18,000{(2)} 4.04% $ 10.71 $ 10.71 12/13/21 $68,580
Mr. Schievelbein 18,000{(2)} 4.04% $ 10.71 $ 10.71 12/13/21 $68,580
<FN>
* All grants in 2001 were stock options.
{(1)}Determined pursuant to Black-Scholes option pricing model. The
material assumptions and adjustments incorporated into the Black-Scholes model
in estimating the value of the options reflected in the above table include
(a) an option term of 20 years; (b) risk-free rate of return (represented by
the interest rate on long-term U.S. Treasury securities with maturity date
corresponding to the term on the grant date); (c) volatility calculated using
daily stock prices for the 36-month period prior to the grant date; (d)
dividends representing the annualized dividend paid with respect to the
underlying common stock; and (e) reductions to reflect the probability of a
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shortened term due to termination of employment prior to the option expiration
date. The particular assumptions used for each grant date are:
GRANT RISK-FREE ANNUAL REDUCTION FOR
DATE RATE OF DIVIDEND SHORTENED
RETURN VOLATILITY DIVIDENDS YIELD TERM
12/13/2001 5.02% 45.0% $0.34 3.17% 15.1%
The actual value, if any, a grantee will realize upon exercise of an
option will depend on the excess of the market value of the common stock over
the exercise price on the date the option is exercised. See "Committees'
Report on Compensation Policies--Stock Based Compensation."
{(2)}Subject to satisfaction of financial performance conditions by the
company for fiscal 2002.
EXERCISE AND YEAR-END VALUE. The following table sets forth information
regarding the exercise of stock options or SARs in 2001 by each of the
executive officers named in the summary compensation table and the December
31, 2001 value of unexercised, in-the-money stock options or SARs held by each
such person.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
Number of Unexercised Value of Unexercised In-the-
Shares Value Options/SARs at FY-End(#) Money Options/SARs at FY-
Acquired on Realized End($)
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
Mr. Howatt 0 0 492,817* 18,000* $1,134,550*{(1)} $22,140*
22,183<dagger> 0 $ 227,802 $ 0
Mr. Carlson 0 0 128,800* 18,000* $ 197,823* $22,140*
46,200<dagger> 0 $ 225,128<dagger> $ 0
Mr. Canavera 0 0 119,200* 18,000* $ 62,524* $22,140*
30,800<dagger> 0 $ 146,073<dagger> $ 0
Mr. Urbanek 0 0 131,520* 18,000* $ 127,364* $22,140*
18,480<dagger> 0 $ 83,912<dagger> $ 0
Mr. Schievelbein 0 0 100,000* 18,000* $ 250,974* $22,140*
<FN>
* Options.
<dagger>SARs exercisable only for cash. In cases of SAR valuations,
includes, in cases where the grant so provides, the value of hypothetical
shares credited to grantee under provision in SAR grant which assumes cash
dividends are paid on underlying shares and invested in hypothetical common
stock.
{(1)} Value of options with respect to 32,444 shares includes the value
of hypothetical shares credited under the Dividend Equivalent Plan which
assumes cash dividends are paid on underlying shares and invested in
hypothetical common stock.
RETIREMENT BENEFITS
Our retirement plan bases a participant's pension on the value of a
hypothetical account balance in the plan. Participants in the plan as of
December 31, 1998, received a beginning cash balance account in an amount
equal to the present value of their benefit under the former retirement plan
formula which was based on years of credited service and covered compensation,
with an offset to reflect our contribution to Social Security. In addition,
non-union participants as of December 31, 1998 received a special one-time
transition credit in an amount equal to a specified percentage varying with
age, multiplied by credited service and 1998 covered compensation. A
participant will receive an annual credit to his account equal to 4.25% of
covered compensation up to the Social Security taxable wage base and 8.5% of
the covered compensation in excess of the taxable wage base, plus an interest
credit on all prior accruals equal to the one year Constant Maturity U.S.
Treasury rate. The benefit payable under the plan is determined by converting
the hypothetical account balance credits into annuity form. Individuals who
were participants in the plan on December 31, 1998 and who retire on or before
December 31, 2006 will receive a minimum benefit equal to the benefit they
would have received under the plan formula as in effect on December 31, 1998.
Executive officers also participate in a nonqualified supplemental
retirement plan under which benefits are determined by compensation without
regard to limitations contained in the cash balance plan. The supplemental
plan will provide an executive officer with a retirement
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benefit equal to 50% of his average salary and bonus upon retirement at age
62 after 10 years of service as an executive officer. The supplemental plan
provides for an offset of benefits payable under the cash balance plan.
Accrued benefits under the supplemental plan will be paid in a lump sum in
the event of a change of control of the company, as defined in the
supplemental plan.
Based on average covered compensation as of December 31, 2001, the
following estimated single life annual benefits would be payable from the cash
balance and supplemental retirement plans upon retirement at normal retirement
age under the cash balance plan (age 65) to the following executive officers:
ADDITIONAL TOTAL AVERAGE
YEARS OF QUALIFIED SUPPLEMENTAL RETIREMENT COVERED
EXECUTIVE OFFICER SERVICE{(1)} PLAN BENEFIT PLAN BENEFIT BENEFIT REMUNERATION
Mr. Howatt 9 $51,000 $148,000 $199,000 $399,000
Mr. Carlson 10 $17,000 $148,000 $165,000 $329,000
Mr. Canavera 10 $17,000 $130,000 $147,000 $294,000
Mr. Urbanek 11 $34,000 $ 91,000 $125,000 $250,000
Mr. Schievelbein 11 $24,000 $ 51,000 $ 75,000 $178,000
<FN>
{(1)}Years of service as an executive officer under the supplemental plan.
Vesting under the supplemental plan with respect to the listed officers
requires attainment of age 55 and 10 years of service as an executive officer.
All officers are vested in their accrued benefit under the cash balance plan.
COMMITTEES' REPORT ON COMPENSATION POLICIES
The Executive Compensation & Bonus Committee (the "Compensation
Committee") establishes and reviews base salaries of executive officers and is
responsible for the establishment and implementation of executive bonus and
incentive programs and general compensation policies. The compensation
program for executive officers may include various grants under stock option,
SAR and dividend equivalent plans. The plans are administered by the Board's
Option and SAR Committee which generally considers recommendations of the
Compensation Committee with respect to grants, but has full discretion and
control over whether a grant will be made and the amount and terms of any such
grant. Insofar as this report includes a description of the compensation
policies relating to the stock option, SAR and dividend equivalent plans, it
is a joint report of the Compensation Committee and the Option and SAR
Committee. Executive officers who served on the Compensation Committee do not
participate in the Committee's determination of their own compensation.
This report describes the policies of the committees and the company as in
effect for the 2001 fiscal year. As circumstances change and one or more of
the committees deem it appropriate, policies in effect from time to time for
years after 2001 may change.
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GENERAL
The compensation policy is designed so that a significant portion of each
executive officer's compensation package is directly related to the annual
performance of the company and the performance of the company's common stock.
The policy is designed to attract and retain individuals who have experience
in the paper industry or who otherwise have particular training or skills
which will satisfy particular requirements of the company. This policy is
also intended to reward job performance which the Compensation Committee
believes to be at or above the level expected of the company's executive
officers. The total compensation paid to executive officers and the
retirement and other fringe benefits provided by the company are designed to
offer a level of compensation which is competitive with other companies in the
paper industry. Some, but not all, of the companies used for purposes of
compensation comparisons are included in the 47 companies which, in addition
to the company's, comprise the Media General index of paper companies' stock
performance under the heading "Stock Price Performance Graph." The Committee
makes compensation comparisons only with those companies whose operations are
similar to the company or which have operating units which are similar to the
company. Given the disparity in size between companies which operate in the
paper industry and the difficulty in determining the precise duties of
executive officers of other companies, it is difficult to draw exact
comparisons with the compensation policies of other companies. The
determination of executive compensation is, therefore, subjective.
The Compensation Committee is aware that, except for certain plans
approved by shareholders, Section 162(m) of the Internal Revenue Code of 1986,
as amended, limits deductions to $1 million for compensation paid to the CEO
and each of the four most highly paid executive officers named in the summary
compensation table who are officers on the last day of the year. No
compensation paid in 2001 exceeded the deductible limit. The Committee
intends that compensation paid to executives will qualify for this deduction
and it reviews this limit and its application to the company's compensation
policies as part of its compensation policy.
BASE COMPENSATION
The Compensation Committee does not rely on specific salary and benefit
comparisons, but does periodically consider and review a general survey of
paper industry compensation prepared by an independent compensation and
benefit consultant in order to gauge the relationship of its executive
officers' base salary and benefit levels to the levels of comparable operating
units of larger paper companies. Annual increases in the base salary of each
of the company's executive officers are determined in accordance with the
Committee's policy of maintaining competitive salary levels with other paper
industry companies (as discussed above), more general factors such as the rate
of inflation, and individual job performance.
Individual job performance in the prior fiscal year is the most important
factor considered by the Compensation Committee in annual reviews and in
determining appropriate increases in base salary. The CEO annually assesses
the job performance of executive officers who report to him. The CEO's base
salary is determined by the Committee on the same basis as that of the
company's other executive officers, except that the Committee annually
establishes performance criteria for the CEO and reviews his performance.
Individual performance criteria generally include an evaluation of the
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performance of the individual officer's fundamental duties and
responsibilities, an evaluation of satisfaction of company-wide criteria for
all salaried employees, and the extent to which specific individual
performance goals used to measure incentive compensation have been achieved.
INCENTIVE COMPENSATION BASED ON FINANCIAL PERFORMANCE OF THE COMPANY AND
INDIVIDUAL PERFORMANCE
The company maintains incentive reward plans for executive officers which
provide for the payment of annual cash bonuses to participants if the
company's annual financial and/or individual performance objectives are met.
The criteria by which incentive awards are determined are based on the
Compensation Committee's assessment of the total cash compensation available
to executive officers as base salary and under the incentive plans and are
designed to provide total annual cash compensation which is comparable to
amounts paid to officers in comparable positions in the paper industry. The
Committee can modify performance objectives during a fiscal year under any of
the plans if an unusual or nonrecurring event occurs which would have a
significant effect on the stated performance goals.
In 2001, Mr. Howatt, Mr. Carlson, and Mr. Urbanek participated in a plan
which provided for incentive compensation equal to a maximum of 75% of base
salary based upon the company's earnings per share. Incentive bonuses were 0%
at adjusted earnings per share (as defined in the plan) of $.37 and increased
on a pro rata basis to the maximum percentage of salary at $1.09 per share.
The officers could also earn an additional 25% of base salary upon achievement
of individual performance objectives.
Senior Vice Presidents of the operating groups each participated in a plan
which provided for incentive compensation ranging from 0% of base salary to
50% of base salary, depending upon achievement of his operating group's
targeted operating profit. Each also had the opportunity to earn 25% of base
salary based upon achievement of individual performance objectives and 25% of
base salary based on the earnings per share incentive bonus program described
in the preceding paragraph.
Criteria used in the assessment of Mr. Howatt's eligibility for incentive
compensation based upon individual objectives included whether the company met
capital spending targets, the increase in paper and pulp mill productivity,
and the achievement of reductions in working capital. The individual
performance objectives for executive officers other than the CEO vary by
individual job responsibilities. They may include, for example, the
successful negotiation of labor agreements, reductions in working capital,
reductions in capital spending, increases in productivity and volume of
product shipped, and reduction in operating costs.
In all cases, earnings per share were adjusted for accruals on SARs, bonus
expense, the effect of purchases of company stock under the stock repurchase
program, and extraordinary items.
STOCK BASED COMPENSATION
Executive officers participate in stock option, SAR and dividend
equivalent plans at various levels. The Option and SAR Committee may
impose restrictions as to exercise or vesting of grants. The Option
and SAR Committee has not established formal criteria by
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which the size of plan grants are determined, but the committee considers the
amount and terms of each grant already held by an executive officer in
determining the size and terms of any new grant. The value of these grants
are principally related to the long-term performance of the common stock and,
therefore, provide an identity of interests between executive officers and
the shareholders.
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Orr is Chairman of the Board and served on the Compensation Committee
in 2001. None of the members of the Option and SAR Committee is an officer of
the company.
MEMBERS OF
MEMBERS OF EXECUTIVE COMPENSATION
OPTION AND SAR COMMITTEE & BONUS COMMITTEE
Walter Alexander San W. Orr, Jr.
Harry R. Baker Harry R. Baker
Gary W. Freels Richard L. Radt
David B. Smith, Jr. David B. Smith, Jr.
AUDIT COMMITTEE REPORT
The Audit Committee is appointed by the Board of Directors to assist the
Board in monitoring (1) the integrity of the company's financial statements,
(2) compliance by the company with legal and regulatory requirements and (3)
the independence and the performance of the company's independent auditor.
The Committee is responsible for matters concerning the relationship between
the company and its independent auditor (including recommendations for the
appointment or removal of the auditor), reviewing the scope of audit services
and related fees, reviewing and approving any other services being provided by
the auditor to the company, and determining whether the auditor is independent
within the meaning of Securities and Exchange Commission ("SEC") rules.
The Audit Committee operates under a charter which was adopted by the
Board. As required by the charter, each member of the Committee meets the
independence and experience standards of the New York Stock Exchange listing
requirements.
The Audit Committee recommended to the Board the engagement of Arthur
Andersen LLP as the Company's independent auditor for the 2001 fiscal year.
During the year, the Committee met at various times with senior members of the
company's financial management team and the independent auditor (or the
predecessor auditor) to review and discuss the company's financial statements,
to discuss significant accounting issues which apply or may apply to the
company, financial management issues, and the company's system of internal
controls. The discussions of the company's system of internal controls
included its senior internal auditing executive and involved discussions with
the independent auditor of the internal audit department's responsibilities,
budget and staffing.
The Audit Committee met with the company's senior financial management
team and the independent auditor to review the Company's audited financial
-17-
statements for the 2001 fiscal year prior to their issuance. At that meeting,
the Committee received assurances from senior financial management that all
financial statements had been prepared in accordance with generally accepted
accounting principles. In addition, the Committee asked the independent
auditor to address and respond to questions concerning the audited financial
statements, the audit process and other related matters. This discussion
centered on the following questions posed by the Committee to the independent
auditor:
o Are there any accounting judgments made by management in preparing the
financial statements that would have been made differently had the auditor
prepared and been responsible for the financial statements?
o Based on the auditor's experience and its knowledge of the company, do
the company's financial statements fairly present to investors, with
clarity and completeness, the company's financial position and
performance for the reporting period in accordance with generally
accepted accounting principles and SEC disclosure requirements?
o Based on the auditor's experience and its knowledge of the company,
has the company implemented all internal controls and internal audit
procedures that are appropriate for the company?
In connection with its review of the audited financial statements, the
Audit Committee discussed with the independent auditor the independence of the
firm under SEC rules for the purposes of expressing an opinion on the
company's financial statements and considered whether the provision of
nonaudit services is compatible with maintaining the auditor's independence.
The Committee received from the independent auditor the written disclosure and
the letter relating to the independence of the firm required by the
Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees). The Committee also discussed with the independent auditor
the matters required to be discussed pursuant to Statement on Auditing
Standards No. 61 (Communication With Audit Committees).
Management has the primary responsibility for the company's financial
statements and the overall reporting process. It is not the duty of the Audit
Committee to conduct auditing or accounting reviews or procedures. The
Committee acts only in an oversight capacity and it necessarily relies on the
work and assurances provided by management and the independent auditor and it
therefore does not have an independent basis to determine whether management
has maintained appropriate accounting and financial reporting principles or
policies or appropriate internal controls and procedures. Accordingly, the
Committee's reviews of the company's financial statements and its discussions
with the company's senior financial management team and the independent
auditor do not guarantee that the Company's financial statements have been
prepared in accordance with generally accepted accounting principles or that
the audit has been carried out in accordance with generally accepted auditing
standards.
In reliance on the reviews and discussions described in this report and on
the report of the independent auditor, the Audit Committee recommended to the
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Board of Directors that it approve the inclusion of the company's audited
financial statements in the company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001, for filing with the SEC.
MEMBERS OF THE AUDIT COMMITTEE
HARRY R. BAKER (CHAIRMAN)
WALTER ALEXANDER
GARY W. FREELS
DENNIS J. KUESTER
INDEPENDENT AUDITOR FEES
During the last fiscal year, Andersen billed aggregate fees for various
services in the following categories:
AUDIT FEES
Audit fees for professional services rendered for the audit of the
company's financial statements for 2001 and review of the unaudited financial
statements included in the company's quarterly report on Form 10-Q for the
third quarter 2001 were $182,613.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Andersen did not perform any professional services in 2001 with respect to
the company's information systems, management of the company's local area
network, or the design or implementation of a hardware or software system that
aggregates source data for the company's financial statements or generates
information significant to the statements.
ALL OTHER FEES
Andersen's aggregate fees billed in 2001 for services to the company other
than fees for services described under "Audit Fees" were $30,850. These fees
represented professional services relating primarily to accounting and tax
issues.
RELATIONSHIP WITH INDEPENDENT AUDITOR
Upon the recommendation of the Audit Committee, the Board has appointed
Arthur Andersen LLP as independent auditor to audit the books, records and
accounts of the company for the fiscal year ending December 31, 2002.
Representatives of Andersen will be present at the annual meeting and will
have an opportunity to make a statement or respond to appropriate questions.
Andersen was also appointed as the company's independent auditor for the
2001 fiscal year. The firm of Wipfli Ullrich Bertleson LLP ("Wipfli")
previously served as the company's independent auditor. As the company
previously reported in a Form 8-K dated October 19, 2001:
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o the reports of Wipfli on the company's financial statements for the
two fiscal years ended December 31, 2000 and 1999 did not contain any
adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope, or accounting principles;
o in connection with the audits for the two most recent fiscal years and
through October 19, 2001, there were no disagreements with Wipfli on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which would have caused Wipfli
to make reference to them in its report on the financial statements for
those years if not resolved to its satisfaction;
o during the same period ending October 19, 2001, there were no events
relating to, among other things, the former auditor's concerns over the
company's internal controls, the auditor's ability to rely on management's
representations, the scope of the audit, or the fairness or reliability
of the company's financial statements, nor was Andersen consulted by the
company on any such matters; and
o during the same period ending October 19, 2001, Andersen was not
consulted regarding the application of accounting principles to a
specified transaction, the type of audit option that might be rendered
on the company's financial statements, any matter that was either the
subject of disagreement on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedures,
or any matter described in the preceding paragraph.
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STOCK PRICE PERFORMANCE GRAPH
The following graph and table compare the yearly percentage change in the
cumulative total shareholder return on our common stock for the period
beginning December 31, 1991 and ending December 31, 2001 with the Media
General Financial Services' Russell 2000 and Paper and Paper Products Indices
for the same periods. The graph and table assume that the value of the
investment in our common stock and each index on December 31, 1996 was $100
and that all dividends were reinvested. All price information is as of the
last trading day of the fiscal year.
[Stock Price Performance Graph deleted pursuant to Rule 304(d) of
Regulation S-T. Data reported in the graph is also reported in the
following tabular form in the proxy statement delivered to
shareholders.]
December 31
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Wausau-Mosinee
Paper Corporation 82.71 85.56 113.57 87.50 116.53 100.00 110.12 98.22 66.38 59.53 73.16
MG Paper & Paper Products 57.03 60.00 62.69 70.05 87.05 100.00 106.20 106.32 131.98 119.85 117.69
Russell 2000 Index 48.30 57.19 68.00 66.77 85.76 100.00 122.34 118.91 142.20 136.06 137.45
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OTHER MATTERS
We know of no other matters to be presented at the annual meeting. If
other matters now unknown are properly presented at the annual meeting, the
persons named as proxies will vote in accordance with their judgment.
Dated: March 18, 2002.
By order of the Board of Directors
SCOTT P. DOESCHER
Scott P. Doescher
Secretary
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
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PROXY
WAUSAU-MOSINEE PAPER CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING
TO BE HELD APRIL 18, 2002
The undersigned hereby appoint(s) San W. Orr, Jr., Richard L. Radt and Thomas
J. Howatt, and each of them, proxies of the undersigned, with full power of
substitution, to vote all shares of common stock of Wausau-Mosinee Paper
Corporation that the undersigned is entitled to vote at the annual meeting of
shareholders to be held on April 18, 2002 and at any adjournment thereof (the
"Annual Meeting"). The proxies have the authority to vote such stock as
directed on the reverse side hereof with respect to the proposals set forth in
the Proxy Statement with the same effect as though the undersigned were
present in person and voting such shares. For participants in the Dividend
Reinvestment and Stock Purchase Plan, Common Stock Purchase Plan and the
Corporations' 401(k) plan, the proxy also serves as voting instructions to the
plan administrator or trustee, as applicable, of such plans to vote the shares
of common stock beneficially owned by the participants in each plan. The
undersigned hereby revokes all proxies heretofore given to vote at the Annual
Meeting and any adjournment thereof.
PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW YOUR STOCK IS TO BE
VOTED. IF NO SPECIFIC VOTING INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
(Continued and to be signed on reverse side.)
WAUSAU-MOSINEE PAPER CORPORATION
PLEASE MARK YOUR VOTE IN THE FOLLOWING MANNER USING DARK INK ONLY <square>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED IN
PROPOSAL 1.
1. Election of Directors: For all except the nominees
For All Withhold All written below
GARY W. FREELS AND THOMAS J. HOWATT <square> <square> ______________________________
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
Please sign exactly as name appears at left.
Dated _______________________________, 2002
_________________________________________
Signature
_________________________________________
Signature if held jointly
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title. If a corporation, please sign in full corporate name by president or
other authorized officer.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.