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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
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Georgia-Pacific 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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[Georgia-Pacific Corporation Letterhead]
March 22, 1996
Dear Shareholder:
The Annual Meeting of Shareholders of Georgia-Pacific Corporation will be
held on May 7, 1996, at the Radisson Riverfront Hotel, 2 Tenth Street, in
Augusta, Georgia. The meeting will begin promptly at 11:00 A.M., local time, and
we hope that it will be possible for you to attend.
The following Notice of Annual Meeting lists the business to be conducted
at the meeting, which includes the election of directors.
To expedite the admissions process for the Annual Meeting, please indicate
if you will be attending by marking the appropriate box on the enclosed proxy
card and returning it to our transfer agent, First Chicago Trust Company of New
York. Please also detach the enclosed admission card and bring it with you to
the Annual Meeting.
Regardless of whether you plan to be present at the Annual Meeting, your
shares should be represented and voted. THEREFORE, PLEASE COMPLETE, SIGN AND
RETURN THE ENCLOSED PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE ENVELOPE
PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND.
Sincerely,
/s/ A. D. Correll
A. D. Correll
Chairman and Chief Executive Officer
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GEORGIA-PACIFIC CORPORATION
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 7, 1996
---------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Georgia-Pacific Corporation will be held at the Radisson Riverfront Hotel, 2
Tenth Street, Augusta, Georgia, on Tuesday, May 7, 1996, at 11:00 A.M., local
time, for the purposes of:
(1) electing four directors; and
(2) transacting such other business as may properly come before the meeting
or any adjournment thereof.
Only the holders of record of Common Stock of the Corporation at the close
of business on March 11, 1996 are entitled to notice of, and to vote at, the
meeting.
By order of the Board of Directors,
/s/ Kenneth F. Khoury
Kenneth F. Khoury
Vice President and Secretary
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
March 22, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU
ATTEND THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
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GEORGIA-PACIFIC CORPORATION
133 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30303
---------------------
PROXY STATEMENT
The 1996 Annual Meeting of Shareholders of Georgia-Pacific Corporation
("Georgia-Pacific" or the "Corporation") will be held on May 7, 1996, for the
purposes set forth in the Notice of Annual Meeting of Shareholders. The
solicitation of the enclosed proxy is made by the Board of Directors of the
Corporation (the "Board") and the cost of the solicitation will be borne by the
Corporation. The Corporation commenced mailing this Proxy Statement and the
enclosed form of proxy to holders of the Common Stock of the Corporation
("Common Stock") on or about March 22, 1996.
ACTION TO BE TAKEN UNDER THE PROXIES
A properly executed proxy in the enclosed form will be voted in accordance
with the instructions thereon. If no instructions are given with respect to the
matters to be acted on, the persons acting under the proxies will vote the
shares represented thereby for the election of four nominees for director in
Class III, and at their discretion as to such other business as may properly
come before the meeting or any adjournment thereof. At this time, the Board does
not know of any other business to be brought before the meeting. It is not
anticipated that any nominee for election as a director will become unable to
accept nomination, but if such an event should occur the person or persons
acting under the proxies will vote for any substitute nominee who may be
designated by the Governance Committee of the Board or by the Board itself.
VOTING PROCEDURES
The presence in person or by proxy of holders of a majority of the
outstanding shares of Common Stock constitutes a quorum for the transaction of
business at the Annual Meeting of Shareholders. The vote required to elect
directors is set forth under "Election of Directors" below. Proxy cards which
are executed and returned without any designated voting direction will be voted
in the manner stated on the proxy card. Shares beneficially held in street name
are counted for quorum purposes if such shares are voted on at least one matter
to be considered at the meeting. Broker non-votes are not voted for or against
matters presented for shareholder consideration. Consequently, so long as a
quorum is present, such non-votes have no effect on the outcome of any vote.
Abstentions with respect to a proposal are counted for purposes of establishing
a quorum. If a quorum is present, abstentions have no effect on the outcome of
voting for directors.
EXECUTION AND REVOCATION OF PROXY
If stock is registered in the name of more than one person, each such
person should sign the proxy. If the proxy is signed by an attorney, executor,
administrator, trustee, guardian or by any other person in a representative
capacity, the full title of the person signing the proxy should be given and (if
not previously furnished with a prior proxy) a certificate should be furnished
showing evidence of appointment.
The giving of a proxy does not affect the right to vote in person should
the shareholder be able to attend the meeting. The proxy may be revoked at any
time before it is exercised, in which event written notice of revocation should
be filed with the Secretary of the Corporation.
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CONFIDENTIAL VOTING POLICY
The Board has adopted a policy to ensure the confidentiality of the
individual votes of the Corporation's shareholders, with certain limited
exceptions. The policy provides that all shareholder proxies, ballots and voting
materials that identify the votes of specific shareholders will be kept
confidential and will not be disclosed to the Corporation, its affiliates,
directors, officers and employees or to any third parties except where (i)
disclosure is required by applicable law, (ii) a shareholder expressly requests
disclosure with respect to his or her vote, or (iii) the Corporation concludes
in good faith that a bona fide dispute exists as to the authenticity of one or
more proxies, ballots or votes, or as to the accuracy of any tabulation of such
proxies, ballots or votes. In addition, aggregate vote totals may be disclosed
to the Corporation from time to time and publicly announced at the meeting of
shareholders to which such vote totals relate. Proxy cards will be returned to,
and tabulated by, an independent third party. The Corporation is not required to
comply with this confidential voting policy in the event of a proxy contest
unless the other person soliciting proxies in the contest agrees to comply with
the policy.
This confidential voting policy does not prohibit shareholders from
disclosing the nature of their votes to the Corporation or to the Board if they
wish to do so. The policy is intended to enhance shareholder rights and to
encourage free and voluntary communication between the Corporation and its
shareholders.
OUTSTANDING VOTING SECURITIES OF THE CORPORATION
Holders of record of Common Stock at the close of business on March 11,
1996, are entitled to one vote for each share of Common Stock held. As of March
11, 1996, 91,325,367 shares of Common Stock were outstanding.
I. ELECTION OF DIRECTORS
CORPORATE GOVERNANCE MATTERS
The Board of Directors has adopted a set of Policies and Procedures
governing the composition and operation of the Board and its Committees. These
Policies and Procedures address, among other things, qualifications and tenure
of directors, responsibilities and operation of committees, review of capital
plans and appropriations, succession planning and performance reviews of the
Chief Executive Officer and the Board itself. Some of the most significant of
these policies are further detailed below.
Pursuant to the Policies and Procedures, when the Chief Executive Officer
resigns or retires, he must simultaneously offer to resign from the Board. All
other directors may continue to serve until the annual meeting nearest to the
date they attain the age of 72 years (except that two serving directors will
continue to age 73), even if the term of office to which they were elected would
extend beyond such date, except that such other directors should offer to resign
in the event of prolonged ill health or if the principal employment or similar
responsibility he or she had when elected to the Board changes.
The Policies and Procedures also require the Corporation to maintain a
majority of "independent" directors, and that all directors serving on the Audit
and Compensation Committees be independent. An "independent" director is one who
is not an officer or former officer of the Corporation and is not related to any
such person, is not an officer of a significant customer or a supplier to the
Corporation, does not have a significant personal services contract with the
Corporation, is not a significant adviser (other than as a director) or
consultant to the Corporation, and is not affiliated with a tax-exempt entity
that receives significant contributions from the Corporation. Beginning with the
1996 Annual Meeting, the Governance Committee will also be composed entirely of
independent directors.
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The Governance Committee will make an annual assessment of the Board's
overall performance, and report its findings to the full Board. Each Committee
of the Board also assesses annually its performance in carrying out its duties.
Pursuant to the Policies and Procedures, the outside directors, acting as a
group, will annually evaluate the performance of the Chief Executive Officer
based on objective criteria such as the overall performance of the Corporation,
the accomplishment of long-term strategic objectives, the development of
management and performance against specific targets. The Chief Executive Officer
reports regularly to the Board on the overall process of management development
and succession planning for the Corporation.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors currently appoints an Audit Committee, Compensation
Committee, Executive Committee, Finance Committee and Governance Committee
(formerly the Nominating Committee).
Audit Committee. Dr. Jewel Plummer Cobb, Dr. Louis W. Sullivan, Mr. Robert
Carswell, Mr. Francis Jungers and Mr. Robert E. McNair, none of whom is an
employee of the Corporation, are members of the Audit Committee, and Mr. Jungers
is Chairman of the Committee. The primary responsibilities of the Audit
Committee are to provide assurance to the Board of Directors that the
Corporation's financial reports fairly present its financial condition, cash
flows and results of operations, that the Corporation is in reasonable
compliance with pertinent laws and regulations, is conducting its affairs
ethically and is maintaining effective controls to prevent and detect employee
conflicts of interest, misconduct and fraud; to review the planning and results
of the audit of the Corporation's financial statements with the Corporation's
independent public accountants; to review the adequacy of the system of internal
controls; and to review the planned scope of and fees charged by the independent
public accountants for examinations of the Corporation's financial statements.
In addition, the Audit Committee reviews the results of certain examinations
performed by the Internal Audit Department of the Corporation. This Committee
held four meetings in 1995.
Compensation Committee. Mr. Donald V. Fites, Mr. Richard V. Giordano, Mr.
David R. Goode, Mr. M. Douglas Ivester and Mr. James B. Williams, none of whom
is an employee of the Corporation, are members of the Compensation Committee,
and Mr. Giordano is Chairman of the Committee. This Committee is responsible for
administering the compensation program of the Corporation. The Committee
approves the design of, is Administrator of, and makes grants and awards and
sets performance targets under the compensation plans of the Corporation in
which officers are eligible to participate, and certain other plans. The members
of the Committee are not eligible to participate in any of these plans. The
Committee evaluates the performance of the Chairman and Chief Executive Officer
and reviews all aspects of his compensation, and determines and makes
recommendations to the Board regarding all officers' salaries. The Committee
also studies and makes determinations regarding other forms of compensation for
officers and employees of the Corporation, including incentive compensation,
retirement plans and other similar plans. From time to time the Committee meets
privately with a compensation consultant employed by management of the
Corporation to discuss executive compensation matters. This Committee held three
meetings in 1995.
Executive Committee. Mr. Alston D. Correll, Mr. Harvey C. Fruehauf, Jr.,
Mr. T. Marshall Hahn, Jr., and Messrs. Fites, Giordano and Jungers are members
of the Executive Committee, and Mr. Correll is Chairman of the Committee. The
Executive Committee is authorized to exercise the powers of the full Board
between meetings, except that its authority does not extend to certain
fundamental matters of corporate governance or to certain fundamental corporate
transactions. The Committee does not hold regularly scheduled meetings but meets
when necessary. This Committee did not meet in 1995.
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Finance Committee. Ms. Jane Evans and Messrs. Carswell, Goode, Ivester and
Williams, none of whom is an employee of the Corporation, are members of the
Finance Committee, and Mr. Williams is Chairman of the Committee. This Committee
is primarily responsible for reviewing and recommending all forms of major
financing, including the issuance of securities, all financial planning for the
Corporation, including payment of dividends, and all policies to be implemented
by management in the areas of corporate borrowing, major real property and
equipment leases, acquisitions and dispositions of business operations and
capital assets. This Committee held four meetings in 1995.
Governance Committee. Drs. Cobb and Sullivan, Ms. Evans and Messrs.
Fruehauf and McNair, none of whom is an employee of the Corporation, are members
of the Governance Committee, and Mr. McNair is Chairman of the Committee. This
Committee reviews and makes recommendations to the Board of Directors as to the
composition, organization, work and compensation of the Board and its
committees. Beginning in 1996 it will conduct an annual evaluation of the Board
as a whole. It reviews all persons recommended to serve on the Board of
Directors and makes recommendations to the Board of Directors regarding persons
to be proposed by the Board as nominees for election as directors. The Committee
will consider persons recommended for membership on the Board when suggested in
good faith by a shareholder (with the consent of the nominee). The procedure
shareholders must follow in order to nominate an individual for election to the
Board of Directors is set forth under "Shareholder Nominations for Election of
Directors" on page 10. This Committee held three meetings in 1995.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors is scheduled to hold six regular meetings in 1996
and will hold special meetings when the business of the Corporation requires.
During 1995 the Board held six regular meetings, and members of the Board
attended, on average, 90% of all Board meetings and meetings of Committees of
which they were members.
DIRECTORS AND NOMINEES
The Bylaws of the Corporation provide for the division of the Board into
three classes with the directors in each class serving for a term of three
years. At the Annual Meeting of Shareholders on May 7, 1996, four nominees for
director in Class III are to be elected to serve until the Annual Meeting of
Shareholders in 1999, or until their successors are elected and qualified.
Directors are elected by a plurality of the votes cast by the holders of Common
Stock at a meeting at which a quorum is present, in person or by proxy. All
current directors serve on the Board pursuant to shareholder election.
Dr. Cobb and Mr. McNair will be retiring from the Board, in accordance with
the Board's current retirement policy, effective at the May 7, 1996 Annual
Meeting. The Bylaws of the Corporation require that each class of the Board be
composed, as nearly as possible, of one-third the total number of directors. In
order to correct the imbalance among the classes created by Dr. Cobb's and Mr.
McNair's upcoming retirement, Mr. Correll has been nominated for re-election in
Class III.
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- --------------------------------------------------------------------------------
Nominees for Election in Class III on May 7, 1996
- --------------------------------------------------------------------------------
- ---------------- ROBERT CARSWELL, 67, Of Counsel to the law firm of Shearman & Sterling, New
- ---------------- York, New York since January 1994, has been a director of Georgia-Pacific
- ---------------- since 1987. Mr. Carswell was a partner of Shearman & Sterling from 1981
- ----[PHOTO]----- through 1993. He also has served as Chairman of the Private Export Funding
- ---------------- Corporation, New York, New York (finance company affiliated with the
- ---------------- Export-Import Bank of the United States) since 1993.
- ----------------
- ----------------
- ----------------
- ----------------------------------------------------------------------------------------------
- ---------------- ALSTON D. CORRELL, 54, Chief Executive Officer of Georgia-Pacific since May
- ---------------- 4, 1993, and Chairman of the Corporation since December 2, 1993, has been a
- ---------------- director of the Corporation since 1992. Mr. Correll served as President and
- ----[PHOTO]----- Chief Operating Officer of the Corporation from August 1991 until May 1993,
- ---------------- and as President and Chief Executive Officer from May 1993 until December
- ---------------- 1993. Mr. Correll became an officer of the Corporation in 1988, and served
- ---------------- as Senior Vice President -- Pulp and Printing Paper from February 1988
- ---------------- through March 1989, and Executive Vice President -- Pulp and Paper from
- ---------------- April 1989 through July 1991.
Mr. Correll is also a director of The Southern Company, SunTrust Bank,
Atlanta, and SunTrust Banks of Georgia, Inc.
- ----------------------------------------------------------------------------------------------
- ---------------- T. MARSHALL HAHN, JR., 69, Honorary Chairman of the Board of Georgia-
- ---------------- Pacific since December 2, 1993, has been a director of the Corporation
- ---------------- since 1973. Mr. Hahn served as Chief Executive Officer of the Corporation
- ----[PHOTO]----- from 1983 until May 4, 1993, and as Chairman from 1984 until December 2,
- ---------------- 1993.
- ----------------
Mr. Hahn is also a director of Coca-Cola Enterprises Inc., Norfolk Southern
- ---------------- Corporation, SunTrust Banks of Georgia, Inc. and SunTrust Banks, Inc.
- ----------------
- ----------------
- ----------------------------------------------------------------------------------------------
- ---------------- FRANCIS JUNGERS, 69, a private investor and business consultant in
- ---------------- Portland, Oregon, has been a director of Georgia-Pacific since 1978. Mr.
- ----[PHOTO]----- Jungers has been a consultant since January 1, 1978, when he retired as
- ---------------- Chairman and Chief Executive Officer of Arabian American Oil Company (an
- ---------------- oil and gas producer), a position he had held since 1973.
- ---------------- Mr. Jungers is also a director of Dual Drilling Company, Star Technologies,
- ---------------- Inc., Thermo Ecotek Corporation, Thermo Electron Corporation, Thermo
- ---------------- Instrument Systems, Inc., Pacific Rehabilitation & Sports Medicine, Inc.,
- ---------------- Donaldson, Lufkin & Jenrette, Inc. and The AES Corporation.
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- ----------------------------------------------------------------------------------------------
Continuing Directors
- ----------------------------------------------------------------------------------------------
- ---------------- JANE EVANS, 51, President and Chief Operating Officer of SmartTV (inter-
- ---------------- active television/smart cards), Burbank, California since August 1995, has
- ----[PHOTO]----- been a director of Georgia-Pacific since 1994, and her current term as
- ---------------- director will expire in 1997. From April 1, 1991 until March 1, 1995, she
- ---------------- was Vice President and General Manager of the Home and Personal Services
- ---------------- Market Unit of US West Communications, Inc. (telecommunications company),
- ---------------- Denver, Colorado. From 1989 through March 1991, Ms. Evans was President and
- ---------------- Chief Executive Officer of InterPacific Retail Group (apparel specialty
- ---------------- store retailer).
Ms. Evans is also a director of Philip Morris Companies, Inc., Edison
Brothers Stores, Inc., Kaufman & Broad Home Corp. and Banc One -- Arizona.
- ----------------------------------------------------------------------------------------------
- ---------------- DONALD V. FITES, 62, Chairman of the Board and Chief Executive Officer of
- ---------------- Caterpillar Inc. (manufacture of earthmoving, construction and other
- ----[PHOTO]----- equipment and engines), Peoria, Illinois since July 1, 1990, has been a
- ---------------- director of the Corporation since 1992, and his current term as director
- ---------------- will expire in 1998. Mr. Fites previously served as President and Chief
- ---------------- Operating Officer of Caterpillar, Inc. from June 1989 through June 1990 and
- ---------------- as Executive Vice President from 1985 through June 1989. Prior to that
- ---------------- time, he held various positions with Caterpillar Inc. since 1956.
- ---------------- Mr. Fites is also a director of Caterpillar Inc., First Chicago NBD
Corporation and Mobil Corporation.
- ----------------------------------------------------------------------------------------------
- ---------------- HARVEY C. FRUEHAUF, JR., 66, President of HCF Enterprises, Inc. (private
- ---------------- investment management company), St. Clair Shores, Michigan since 1969, has
- ----[PHOTO]----- been a director of Georgia-Pacific since 1968, and his current term as
- ---------------- director will expire in 1998.
- ----------------
- ----------------
- ----------------
- ----------------
- ----------------
- ----------------------------------------------------------------------------------------------
- ---------------- RICHARD V. GIORDANO, 62, Chairman of British Gas plc (purchase, distri-
- ---------------- bution and sale of gas and gas supported services), London, England since
- ----[PHOTO]----- January 1, 1994, has been a director of Georgia-Pacific since 1984, and his
- ---------------- current term as director will expire in 1997. Mr. Giordano served as Chief
- ---------------- Executive of The BOC Group plc (manufacture of industrial gases and other
- ---------------- products) from 1979 until January 1991 and as Chairman of that company from
- ---------------- 1985 until January 1992.
- ---------------- Mr. Giordano also serves as Deputy Chairman of Grand Metropolitan plc and
- ---------------- is a member of the Board of Directors of RTZ Corporation plc.
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- ----------------------------------------------------------------------------------------------
- ---------------- DAVID R. GOODE, 55, Chairman, President and Chief Executive Officer of
- ---------------- Norfolk Southern Corporation (transportation holding company), Norfolk,
- ---------------- Virginia since September 1, 1992, has been a director of Georgia-Pacific
- ---------------- since 1992, and his current term as director will expire in 1998. Mr. Goode
- ----[PHOTO]----- served as Vice President -- Taxation of Norfolk Southern Corporation from
- ---------------- July 1, 1985, until January 1, 1991, as Executive Vice
- ---------------- President -- Administration from January 1, 1991, until October 1, 1991,
- ---------------- and as President from October 1, 1991, until assuming his present duties.
- ---------------- Mr. Goode is also a director of Norfolk Southern Corporation, Caterpillar
Inc., TRINOVA Corporation and Texas Instruments Incorporated.
- ----------------------------------------------------------------------------------------------
- ---------------- M. DOUGLAS IVESTER, 49, President and Chief Operating Officer of The
- ---------------- Coca-Cola Company (manufacture, marketing and distribution of soft drink
- ---------------- syrups, concentrates and soft drink products, and juice and juice
- ----[PHOTO]----- products), Atlanta, Georgia since July 1994, has been a director of
- ---------------- Georgia-Pacific since 1993, and his current term as director will expire in
- ---------------- 1997. Mr. Ivester served as President, European Community Group of the
- ---------------- International Soft Drink Business Sector of The Coca-Cola Company from June
- ---------------- 1989 until August 1990. He was named President of Coca-Cola USA in August
- ---------------- 1990, President of The Coca-Cola Company's North America Business Sector in
September 1991, and Executive Vice President and Principal Operating
Officer/North America of The Coca-Cola Company in April 1993.
Mr. Ivester is also a director of The Coca-Cola Company and is Chairman of
the Board of Coca-Cola Enterprises Inc.
- ----------------------------------------------------------------------------------------------
- ---------------- LOUIS W. SULLIVAN, M.D., 62, President of Morehouse School of Medicine,
- ---------------- Atlanta, Georgia since January 1993, has been a director of Georgia-Pacific
- ---------------- since 1993, and his current term as director will expire in 1997. Dr.
- ----[PHOTO]----- Sullivan served as Secretary of the United States Department of Health and
- ---------------- Human Services from March 1989 until January 1993.
- ---------------- Dr. Sullivan is also a director of General Motors Corporation, CIGNA Corpo-
- ---------------- ration, Bristol-Myers Squibb Company, Household International, Inc.,
- ---------------- Equifax Inc. and Minnesota Mining & Manufacturing Company.
- ----------------
- ----------------------------------------------------------------------------------------------
- ---------------- JAMES B. WILLIAMS, 63, Chairman and Chief Executive Officer of SunTrust
- ---------------- Banks, Inc. (bank holding company), Atlanta, Georgia since April 1991 and
- ---------------- April 1990, respectively, has been a director of Georgia-Pacific since
- ---------------- 1989, and his current term as director will expire in 1998. Mr. Williams
- ---------------- was President of SunTrust Banks, Inc. from April 1990 until April 1991 and
- ---(New Photo--- Vice Chairman from July 1984 through April 1990.
- ----to Come)---- Mr. Williams is also a director of The Coca-Cola Company, Genuine Parts
- ---------------- Company, Rollins, Inc., RPC, Inc., Sonat Inc. and SunTrust Banks, Inc.
- ----------------
- ----------------
- ----------------
- ----------------
- ----------------
OWNERSHIP OF COMMON STOCK OF THE CORPORATION
Set forth below is the number of shares of Common Stock beneficially owned
on March 1, 1996 by all directors and nominees for director, by each of the
executive officers named in the Summary Compensation Table on page 16, and by
all directors and executive officers as a group, based on data furnished by such
directors, nominees and executive officers. Also set forth below is the number
of shares of Common Stock beneficially owned, as of December 31, 1995, by
persons
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known to the Corporation to be beneficial owners of more than five percent of
the outstanding Common Stock. Unless otherwise specifically stated, all such
persons have sole voting and investment power with respect to shares listed.
NUMBER OF
SHARES OWNED
AND NATURE OF PERCENT OF
NAME BENEFICIAL OWNERSHIP COMMON STOCK
------------------------------------------------ -------------------- ------------
Robert Carswell................................. 1,200(1)(2) * %
Jewel Plummer Cobb.............................. 705(1)(2) *
Alston D. Correll............................... 96,000(3) *
Jane Evans...................................... 200(2) *
Donald V. Fites................................. 1,910(2) *
Harvey C. Fruehauf, Jr. ........................ 850,110(2)(4) *
Richard V. Giordano............................. 1,200(2) *
David R. Goode.................................. 700(1)(2) *
T. Marshall Hahn, Jr. .......................... 55,116(2)(5) *
M. Douglas Ivester.............................. 1,200(1)(2) *
Francis Jungers................................. 4,200(2) *
Robert E. McNair................................ 517(1)(2)(6) *
Louis W. Sullivan............................... 300(2) *
James B. Williams............................... 10,200(1)(2) *
W. E. Babin..................................... 10,000(3) *
John F. McGovern................................ 28,701(3) *
Davis K. Mortensen.............................. 62,111(3) *
James F. Kelley................................. 200 *
All Directors and Executive Officers as a
Group......................................... 1,297,248(7) 1.42%(7)
5% BENEFICIAL OWNERS:
Wellington Management Company................. 11,184,565(8) 12.29%
75 State Street, Boston MA 02109
Vanguard/Windsor Fund, Inc.................... 9,009,500(9) 9.90%
100 Vanguard Boulevard
Malvern, PA 19355
- ---------------
* Less than 1 percent.
(1) In addition to the shares beneficially owned by such person, this director
has elected to defer payment of a portion of the directors' fees paid or
payable to him or her, with such amounts to earn a return to be determined
as if they had been invested in Common Stock of the Corporation. As of
March 1, 1996, the deferred compensation account of the directors listed
below included amounts equivalent to the number of shares of Common Stock
listed opposite their names:
Mr. Carswell 8,510
Dr. Cobb 408
Mr. Goode 2,375
Mr. Ivester 1,752
Mr. McNair 9,679
Mr. Williams 3,426
(2) Includes 200 restricted shares of Common Stock received under the Outside
Directors Stock Plan, which is further described on page 10 under
"Compensation of Directors."
(3) Includes the following numbers of restricted shares of the Corporation's
Common Stock awarded under the 1990 Long-Term Incentive Plan to the
following persons in their capacity as executive officers of the
Corporation:
Mr. Correll 42,000 Mr. Babin 10,000
Mr. Mortensen 20,000 Mr. McGovern 8,000
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(4) With respect to these shares, Mr. Fruehauf has: (i) sole voting and
investment power as to 298,079 shares; (ii) sole voting power and shared
investment power as to 311,649 shares; (iii) shared voting and investment
power as to 204,159 shares; and (iv) shared investment power but no voting
power as to 36,223 shares.
(5) Includes 4,600 shares held by Emory University, of which Mr. Hahn is a
trustee and Chairman of the Investment Committee. Mr. Hahn shares voting and
dispositive power with respect to these shares, but disclaims beneficial
ownership of such shares.
(6) Includes 317 shares held by Mr. McNair's spouse. Mr. McNair disclaims
beneficial ownership of such shares.
(7) Includes an aggregate of 161,400 shares of restricted Common Stock awarded
to executive officers under the 1990 Long-Term Incentive Plan. As of March
1, 1996, no director or executive officer beneficially owned in excess of 1%
of the outstanding Common Stock.
(8) Information regarding the ownership of Common Stock by Wellington Management
Company ("WMC") was obtained from a Schedule 13G, dated January 30, 1996,
filed by WMC with the Securities and Exchange Commission. The Schedule
indicates that as of December 31, 1995, WMC was the beneficial owner of
11,184,565 shares of Common Stock, representing approximately 12.29% of the
Common Stock then outstanding. The shares were acquired by Wellington Trust
Company, N.A., a wholly-owned subsidiary of WMC, and are owned by various
investment advisory clients of WMC or Wellington Trust Company, N.A.,
including Vanguard/ Windsor Fund, Inc. (see Footnote 9 below). WMC is deemed
the beneficial owner of the shares by virtue of the direct or indirect
investment and/or voting discretion it possesses pursuant to the provisions
of investment advisory agreements with its clients. With the exception of
Vanguard/Windsor Fund, Inc., no such client is known to have an interest
with respect to more than 5% of the outstanding Common Stock. WMC shares
dispositive power as to all 11,184,565 shares, and shares voting power as to
720,860 of such shares.
(9) Information regarding the ownership of Common Stock by Vanguard/Windsor
Fund, Inc. ("Vanguard/Windsor") was obtained from a Schedule 13G, dated
February 2, 1996, filed by Vanguard/Windsor with the Securities and Exchange
Commission. The Schedule indicates that as of December 31, 1995,
Vanguard/Windsor was the beneficial owner of 9,009,500 shares of Common
Stock, representing approximately 9.90% of the Common Stock then
outstanding. Vanguard/Windsor shares dispositive power as to all 9,009,500
shares, and has sole voting power as to all 9,009,500 shares.
COMPENSATION OF DIRECTORS
Directors who are not officers of the Corporation receive an annual
retainer fee of $32,500 per year (plus an additional $5,000 per year to each
non-officer director serving as chairman of one or more committees of the Board
of Directors) and an attendance fee of $1,500 for each Board and committee
meeting and expenses incurred in attending all such meetings. Directors may
defer all or a part of the fees payable to them provided at least $10,000 is
deferred in each calendar year. Directors may make elections under this plan to
have (a) the return on such deferred fees determined as if such funds had been
invested (i) in Common Stock of the Corporation or (ii) at a floating interest
rate equal to 3/4% over the six-month Treasury Bill rate, and (b) the deferred
fees (adjusted for investment gains or losses) paid upon retirement in a single
payment or in annual cash payments.
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13
In addition, any director who has never been an officer of the Corporation
and has served as a director of the Corporation for at least two years will be
entitled to certain benefits upon retirement. The annual retirement benefit will
equal 100% of the annual retainer for active directors in effect at the date of
retirement (giving effect, as applicable and under certain conditions, to the
additional retainer for committee chairmen), less 10% for each year less than
ten years' total service as a director. The Corporation also provides $50,000 of
group term life insurance for each director who is not an officer of the
Corporation.
In 1995, the shareholders of the Corporation adopted the Outside Directors
Stock Plan, which is designed to more closely align the interests of
non-employee directors with those of other shareholders. Under this plan, each
outside director received 200 restricted shares of Common Stock in 1995, and in
subsequent years each outside director in office on May 15 will be issued a
number of restricted shares of Common Stock equal to $15,000 divided by the mean
between the high and low sales price of the Common Stock on such day. Such
shares become "unrestricted" and may be sold or otherwise transferred only upon
the director's death, six months after the director retires pursuant to the
Board's retirement policy, or in the event continued service is prohibited by
law or by the policies of a governmental, charitable or educational institution
with which the director accepts a position. If the director's service on the
Board terminates for any other reason, all shares issued to him or her under the
Plan will be forfeited.
TRANSACTIONS WITH DIRECTORS AND FIVE PERCENT SECURITY HOLDERS
Mr. Carswell is Of Counsel to and was a partner in the law firm of Shearman
& Sterling, New York, New York. Shearman & Sterling performed legal services for
the Corporation in 1995, and it is anticipated that such firm will perform legal
services for the Corporation in 1996.
Mr. McNair is Chairman of McNair Law Firm, P.A., Columbia, South Carolina.
McNair Law Firm, P.A. performed legal services for the Corporation in 1995, and
it is anticipated that such firm will perform legal services for the Corporation
in 1996.
See "Compensation Committee Interlocks and Insider Participation in
Compensation Decisions" on page 14 for additional information regarding Messrs.
Fites, Goode, Ivester and Williams.
Vanguard/Windsor Fund, Inc., beneficial owner of approximately 9.90% of the
Common Stock at December 31, 1995, maintains approximately an 8% ownership
interest in Vanguard Group, Inc., of which Vanguard Trust Company is a
wholly-owned subsidiary. Vanguard Group, Inc. and Vanguard Fiduciary Trust
Company (collectively, the "Vanguard Group") provide administrative,
recordkeeping and trustee services to the Corporation in connection with certain
of the Corporation's employee benefit plans. The Vanguard Group's fees for such
services performed during 1995 totalled $381,486, and it is anticipated that the
Vanguard Group will continue to perform such services for the Corporation in
1996. All transactions between the Corporation and the Vanguard Group have been
at arms' length and on normal business terms.
SHAREHOLDER NOMINATIONS FOR ELECTION OF DIRECTORS
The Bylaws of the Corporation provide that any shareholder of record
entitled to vote generally in the election of directors may nominate persons for
election as directors at a meeting if written notice of such shareholder's
intent to make such nomination has been given, either by personal delivery or by
first class United States mail, postage prepaid, to the Secretary of the
Corporation not less than 60 days nor more than 75 days prior to the meeting. In
the event that less than 70 days' notice or prior public disclosure of the date
of the meeting is given or made to shareholders, notice by the shareholder of
his or her intent to nominate must be so received by the Secretary of the
Corporation by the close of business on the 10th day following the day on which
such notice of the date of meeting was mailed or such public disclosure was
made, whichever first occurs.
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14
Each such shareholder notice to the Secretary of his or her intent to
nominate must set forth: (i) the name and address of record of the shareholder
who intends to make the nomination; (ii) a representation that the shareholder
is a holder of record of shares of the Corporation's capital stock entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to nominate the persons specified in the notice; (iii) the number of shares of
Common Stock held of record, owned beneficially, and represented by proxy, by
the shareholder, and each proposed nominee, as of the date of the notice; (iv)
the name, age, business and residence addresses, and principal occupation or
employment of each proposed nominee; (v) a description of all arrangements or
understandings between the shareholder and each proposed nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder; (vi) such other
information regarding each proposed nominee as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission; and (vii) the written consent of each proposed nominee to
serve as a director of the Corporation if so elected. The Corporation may
require any proposed nominee to furnish such other information as may reasonably
be required by the Corporation to determine the eligibility of such proposed
nominee to serve as a director of the Corporation.
II. COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
administering executive compensation. The duties of this Committee are set forth
on page 3 under the heading "Compensation Committee".
The Corporation's executive compensation program consists of three
elements: base salaries, annual cash incentive compensation opportunities, and
long-term equity incentive compensation opportunities. Upon the recommendation
of the Board of Directors, in 1995 the Corporation's shareholders approved new
annual and long-term incentive plans. These plans have been designed to tie
compensation to enhancement of shareholder returns and achievement of the
Corporation's business objectives.
Targeted levels of each component of executives' compensation are set at
levels that the Committee believes, based on a regular review of survey data
provided by two nationally recognized compensation consulting firms, approximate
the 50th percentile of prevailing practice. Because the Committee believes that
the competitive environment for qualified executives extends beyond the paper
and forest products industry, this survey data covers a cross-section of U.S.
industrial companies, representing a range of industries, which are similar to
the Corporation in terms of size and complexity of operations (the "Comparison
Group"). The overall Comparison Group includes 9 of the 12 companies in the
Standard & Poor's Paper and Forest Products Index (the "S&P Peer Group")
included in the Comparison of Cumulative Five-Year Shareholder Return (the
"Performance Graph") on page 15.
The Internal Revenue Code generally provides that corporate deductions will
be disallowed for annual compensation in excess of $1,000,000 paid to certain
executive officers. "Performance-based compensation" is not subject to the
$1,000,000 cap on deductibility. The Compensation Committee's policy is to
design and administer the Corporation's executive compensation program to
minimize any loss of tax deductibility, while at the same time ensuring that the
Corporation's compensation program remains competitive. The Corporation's annual
and long-term incentive plans are intended to qualify payments under those plans
as performance-based compensation.
Base Salary. Executive officers' base salaries are reviewed annually, and
are approved by the Compensation Committee and the Board of Directors. Initial
salaries and subsequent increases in such salaries are based on individual
qualifications, experience and performance, the nature of job
11
15
responsibilities and competitive marketplace data. Salaries of executive
officers are established by reference to the median base salary of their
counterparts in the Comparison Group. In determining 1995 base salaries, the
Compensation Committee focused on base salaries paid to bonus-eligible
executives in the Comparison Group. For 1995, executive officer salaries,
including those of the officers included in the Summary Compensation Table on
page 16, on average approximated the median (50th) percentile of prevailing
comparative salary practices among the Comparison Group, based on surveys
available as of the beginning of 1995.
Mr. Correll's annual base salary rate was increased from $925,000 to
$962,000 effective January 1995. The Compensation Committee based this increase
on its and the Board of Directors' assessment of his contributions to the
Corporation, his experience and qualifications, and competitive base salary
levels for comparable positions in the Comparison Group. Mr. Correll's 1995 base
salary was approximately 95% of the median of salaries paid by the Comparison
Group.
Economic Value Incentive Plan ("EVIP"). The EVIP is designed to align
annual cash incentive compensation opportunities with the Corporation's
financial strategy. As further described in its 1995 Annual Report to
Shareholders, Georgia-Pacific has established Economic Value Added ("EVA(R)") as
its principal financial metric to evaluate its progress. EVA, which measures the
Corporation's ability to generate net after-tax operating profits in excess of
its cost of capital (both equity and debt), drives the "annual" portion of the
cash bonus incentives under the EVIP. The remainder of participants' bonuses
under the EVIP (the "long-term" portion) is based on assessments of each
business unit's efforts during a given year to increase the EVA of the
Corporation in succeeding years.
Bonuses could be earned for 1995 under the annual portion of the EVIP at
three different levels. Before any amount could be earned, a threshold EVA level
had to be achieved, and intermediate and maximum EVA levels also were
established. The Committee set EVA targets for the Corporation as a whole, and
Mr. Correll, as CEO, established EVA goals for each business segment and
division consistent with these corporate goals. Participants could earn a
predetermined percentage of their base salary grade midpoint upon achievement of
corporate, segment and/or division EVA targets applicable to them, with higher
bonus percentages being assigned to participants in positions of greater
responsibility within the Corporation.
The Committee set the corporate intermediate EVA target and the
corresponding bonus percentages such that the total bonus opportunity under the
EVIP would lie at the median (50th percentile) of competitive practice if this
intermediate EVA goal were achieved, and threshold and maximum EVA (and the
corresponding bonus percentages) were set at levels designed to afford
participants below- and above-average bonus opportunities, respectively. The
Corporation, with Compensation Committee oversight, structured the EVIP based on
the median practices of Comparison Group companies included in one of the two
surveys used in the determination of base salaries.
The Corporation as a whole achieved all-time record earnings and exceeded
its maximum EVA goal in 1995. Accordingly, bonuses were paid to the
Corporation's executive officers and other EVIP participants under the annual
portion of the EVIP. The precise amount paid to each participant was based on
the percentages set by the Committee of the salary grade midpoint of each
participant and the degree to which each business segment or division to which
the participant was assigned achieved the EVA goals set for it.
Bonuses were awarded by Mr. Correll (to other participants) under the
long-term half of the EVIP based on his assessment of actions taken during 1995
by each operating division and corporate staff department to increase EVA in
future years. Notwithstanding the results of this process and the bonus
percentages set under the annual portion of the EVIP, for participants other
than the CEO the total (annual and long-term) bonus payable to each such
participant was limited to 100% of his base salary. Based on competitive data
used by the Corporation in developing annual cash incentive compensation
opportunities under the EVIP, total bonuses paid to the executive officers
(other than the CEO) included in the Summary Compensation Table on page 16
ranged
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between 104% and 173% of the median bonuses paid to comparable executives by
Comparison Group companies. On average they were approximately 44% greater than
such median bonuses.
Because the Corporation achieved maximum EVA in 1995, Mr. Correll was
entitled to a maximum bonus of $1,346,000 under the terms of the EVIP. Based on
Mr. Correll's leadership of the Corporation during a year in which it achieved
all-time record earnings in excess of $1 billion, the Committee awarded Mr.
Correll a total bonus of $1,300,000. Due to the Corporation's strong
performance, the Committee determined this bonus to be appropriate even though
it was well above the 75th percentile of bonuses paid to CEOs in the Comparison
Group companies.
Shareholder Value Incentive Plan ("SVIP"). The SVIP is a performance
option plan designed to provide an incentive to participants to maximize total
shareholder return. Under the SVIP, both grant levels and the vesting schedule
are driven by Georgia-Pacific's total shareholder return performance relative to
the S&P Peer Group.
All executive officers and other key employees designated by the
Compensation Committee as participants were granted options effective April 1,
1995. As disclosed to the Corporation's shareholders in its 1995 Proxy
Statement, Mr. Correll was awarded options to purchase 83,000 shares of Common
Stock. As required by the SVIP, the exercise price of the options granted in
1995 was $80.50, the fair market value of Georgia-Pacific Common Stock on the
date of grant. The number of options granted to each participant in 1995 was
that number of options (a "Normal Grant"), based on his or her base salary
grade, which provided such participant with an expected long-term compensation
opportunity equivalent to the median (50th percentile) amount of long-term
incentive awards provided by the same Comparison Group companies used in
determining annual cash incentive compensation opportunities under the EVIP.
Because of the SVIP's performance-based vesting feature, the ultimate value
of options to participants is subject to significant risk. Except in limited
situations involving an optionee's retirement or a change in control of the
Corporation, unless specified performance targets are met vesting of options
will not occur until nine and one-half years from their grant date, and such
options will then remain exercisable for only six months prior to their
expiration. Performance vesting may occur at the end of three, four or five
years from the grant date only if, at any such date, the Corporation's "Total
Shareholder Return" over the immediately preceding three, four or five full
fiscal years, as the case may be, exceeds the weighted average Total Shareholder
Return of the companies included in the S&P Peer Group for the same period.
"Total Shareholder Return" for the Corporation and each S&P Peer Group
company will be determined in the same manner as such return is determined for
purposes of the Performance Graph, and is defined in the SVIP as (i) the sum of
(A) the aggregate value, based on the issuer's share price at the end of the
measurement period and assuming reinvestment of all dividends, of an investment
in such issuer's stock assumed to have been made at the beginning of the
measurement period at the then-current share price, less (B) the value of such
investment at the beginning of the measurement period, divided by (ii) the value
of the investment at the beginning of the measurement period.
Donald V. Fites
Richard V. Giordano, Chairman
David R. Goode
M. Douglas Ivester
James B. Williams
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Messrs. Fites, Giordano, Goode, Ivester and Williams, current directors of
the Corporation, served on the Compensation Committee of the Board of Directors
during 1995.
Caterpillar Inc., of which Mr. Fites is Chairman of the Board and Chief
Executive Officer, has been, and continues to be, engaged in a number of
commercial transactions with the Corporation, all of which have been, and are
expected to be, in the ordinary course of business. During 1995, sales of
machines and parts by Caterpillar Inc. dealers to the Corporation totalled
approximately $11.5 million, and sales of the Corporation's products to
Caterpillar Inc. totalled approximately $2.7 million. All such transactions were
at arms' length and on normal business terms.
Mr. Goode is Chairman, President and Chief Executive Officer of Norfolk
Southern Corporation. In 1995, the Corporation purchased common carrier and
contract rail services from Norfolk Southern Corporation and/or its subsidiaries
in the aggregate amount of approximately $62 million, representing less than one
and two percent, respectively, of 1995 revenues of the Corporation and Norfolk
Southern. The Corporation also purchased transportation services from North
American Van Lines, Inc., a wholly-owned subsidiary of Norfolk Southern
Corporation, in an amount totalling approximately $213,000. All such
transactions were at arms' length and on normal business terms.
The Corporation and The Coca-Cola Company, of which Mr. Ivester is
President, Chief Operating Officer and a Director, were parties to a contract
for the sale by the Corporation of corrugated packaging. The term of this
contract expired December 31, 1995. During 1995, The Coca-Cola Company paid the
Corporation approximately $10.4 million pursuant to this contract.
Mr. Williams is Chairman and Chief Executive Officer of SunTrust Banks,
Inc. The Corporation has ordinary borrowing and banking relationships with one
or more subsidiaries of SunTrust Banks, Inc. All such transactions are at arms'
length and on normal business terms.
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FIVE-YEAR SHAREHOLDER RETURN COMPARISON
As required by the rules of the Securities and Exchange Commission, below
is a line-graph presentation comparing cumulative, five-year shareholder returns
on an indexed basis for the Corporation, the S&P 500 Stock Index and the
Standard & Poor's Paper and Forest Products Index.
COMPARISON OF CUMULATIVE FIVE-YEAR SHAREHOLDER RETURN*
GRAPH
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Georgia-Pacific Corporation $100 $149 $177 $200 $214 $211
S&P 500** Stock Index $100 $130 $140 $155 $157 $215
S&P P&FP** Stock Index $100 $127 $145 $160 $167 $183
- ---------------
* Assumes that the value of the investment in Georgia-Pacific Common Stock and
each index was $100 on December 31, 1990 and that all dividends were
reinvested.
** Provided by Standard & Poor's Compustat, a division of The McGraw-Hill
Companies.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the compensation of
the Corporation's Chief Executive Officer and each of the other four most highly
compensated executive officers of the Corporation at the end of the last
completed fiscal year.
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SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
---------------------------
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------- SECURITIES PAYOUTS ALL
OTHER ANNUAL UNDERLYING ------------ OTHER
NAME AND BONUS COMPENSATION OPTIONS/SARS LTIP PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($)(2) (#)(3) ($) ($)(4)
- ----------------------- ---- --------- ---------- ------------ ------------ ------------ ------------
Alston D. Correll...... 1995 $962,000 $1,300,000 $ 205,120 83,000 $ -0- $ 6,000
Chairman and Chief 1994 925,000 600,000 2,161,232 -0- 465,750 6,000
Executive Officer 1993 816,667 550,000 661,061 -0- 1,368,625 6,000
Davis K. Mortensen..... 1995 580,000 361,500 69,964 25,000 -0- 11,625
Executive Vice 1994 555,000 194,250 2,376,223 -0- -0- 11,625
President-Building 1993 515,000 195,134 848,083 -0- 718,750 12,266
Products
W. E. Babin............ 1995 490,000 490,000 56,126 25,000 -0- 11,625
Executive Vice 1994 460,000 161,000 47,320 -0- -0- 11,400
President-Pulp and 1993 440,000 157,274 38,544 -0- 359,375 11,966
Paper
John F. McGovern....... 1995 350,370 348,000 36,709 13,600 -0- 10,650
Executive Vice 1994 306,667 101,638 748,788 -0- -0- 10,275
President-Finance and 1993 250,000 89,360 269,312 -0- 360,125 10,753
Chief Financial
Officer
James F. Kelley........ 1995 365,000 263,300 162,402 12,000 -0- 11,625
Senior Vice 1994 350,000 116,000 155,750 -0- -0- 3,000
President-Law(5) 1993 26,923 -0- 1,516 -0- -0- -0-
- ---------------
(1) Reflects bonus paid under the EVIP and under the 1994 and 1993 Management
Incentive Plans.
(2) Other Annual Compensation is composed of annual compensation not properly
categorized as salary or bonus. It includes dividends paid during the years
reported with respect to shares of restricted Common Stock which were
previously awarded under the 1988 and 1990 Long-Term Incentive Plans (the
"LTIPs") when the Corporation achieved specified stock price appreciation
performance goals. The dividends paid in 1995 on such shares of restricted
Common Stock were as follows: Mr. Correll, $79,800; Mr. Mortensen, $38,000;
Mr. Babin, $19,000; Mr. McGovern, $15,200; and Mr. Kelley, $0.
Other Annual Compensation also includes the following amounts which exceed
25% of the total personal benefits provided to the following executive
officers in 1995: for Mr. Correll, personal accounting fees of $22,500 and
personal use of aircraft of $50,406; for Mr. Babin, a personal automobile
allowance of $12,516; for Mr. Mortensen, a personal automobile allowance of
$12,516; for Mr. McGovern, a personal automobile allowance of $10,644; and
for Mr. Kelley, reimbursement of relocation expenses of $73,625 and
reimbursement for taxes on imputed income related to such reimbursement of
expenses in the amount of $61,712.
(3) Granted pursuant to the SVIP, the terms of which are further described on
page 13 under "Report of Compensation Committee on Executive Compensation".
(4) Includes contributions by the Corporation to the Georgia-Pacific Corporation
Savings and Capital Growth Plan on behalf of the named individuals in the
following amounts for 1995: Mr. Correll, $3,000; Mr. Mortensen, $8,625; Mr.
Babin, $8,625; Mr. McGovern, $8,625; and Mr. Kelley, $8,625. Also includes
premiums for life insurance for the benefit of the named individuals paid by
the Corporation in the following amounts for 1995: Mr. Correll, $3,000; Mr.
Mortensen, $3,000; Mr. Babin, $3,000; Mr. McGovern $2,025; and Mr. Kelley,
$3,000.
(5) Mr. Kelley joined the Corporation as an executive officer during 1993.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS GRANT
UNDERLYING GRANTED TO EXERCISE OR DATE
OPTIONS/SARS EMPLOYEES BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#)(2) IN FISCAL YEAR ($/SH) DATE VALUE($)(3)
- -------------------------------- ------------ ---------------- ----------- ---------- -----------
Alston D. Correll............... 83,000 6.79% $ 80.50 3/31/05 $ 2,576,320
Davis K. Mortensen.............. 25,000 2.04 80.50 3/31/05 776,000
W. E. Babin..................... 25,000 2.04 80.50 3/31/05 776,000
John F. McGovern................ 13,600 1.11 80.50 3/31/05 422,144
James F. Kelley................. 12,000 .98 80.50 3/31/05 372,480
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(1) There were no SAR grants in 1995.
(2) Options become exercisable six months prior to their expiration, but may
become exercisable earlier if certain performance goals based on Total
Shareholder Return are achieved. See "Shareholder Value Incentive Plan" on
page 13. In addition, if an optionee retires, becomes disabled or dies and
performance-based vesting is not achieved, between 50% and 100% of such
person's options, determined according to the number of years elapsed in the
option term, will become exercisable for no more than six months. In the
event of a change in control of the Corporation, options become exercisable
for the remainder of their term if the Corporation's Total Shareholder
Return over the immediately preceding three, four or five years exceeded the
Total Shareholder Return of the Standard & Poor's Paper and Forest Products
Index over the same period.
(3) Based on the Black-Scholes option valuation model. The actual value, if any,
an executive officer may realize ultimately depends on the market value of
the Common Stock at a future date. This valuation is provided pursuant to
Securities and Exchange Commission disclosure rules. There is no assurance
that the value realized will be at or near the value estimated by the
Black-Scholes model. Assumptions used to calculate this value: (i)
volatility factor of .238; (ii) risk-free rate of 7.38%; (iii) dividend
yield of 2.5%; (iv) exercise on October 1, 2004; and (v) 3% option
forfeiture rate.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS/SARS
AT FISCAL YEAR-END (#)
------------------------------
NAME EXERCISABLE UNEXERCISABLE*
- ----------------------------------------------------------------- ----------- --------------
Alston D. Correll................................................ -0- 83,000
Davis K. Mortensen............................................... -0- 25,000
W. E. Babin...................................................... -0- 25,000
John F. McGovern................................................. -0- 13,600
James F. Kelley.................................................. -0- 12,000
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* Except in circumstances involving a change in control of the Corporation,
options granted under the SVIP will be exercisable no earlier than April 1,
1998. The exercise price for such options of $80.50 exceeded the closing price
of the Common Stock at fiscal year-end.
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Officers Retirement Plan ("Retirement Plan"). The Retirement Plan is
represented by separate but substantially similar agreements with each officer.
Subject to certain offsets, the Retirement Plan provides that Georgia-Pacific
will make post-retirement monthly payments to each officer for life, based on an
aggregate annual amount equal to 50% of the officer's average annual
compensation (including bonuses under management incentive plans) during the
officer's last four years of employment and, at the officer's death, will
continue to pay to the officer's surviving spouse, for the remainder of such
spouse's life, 50% of the amount that had been payable to the officer. Full
benefits are payable upon retirement after attaining age 55 with 15 years of
service (commencing at age 62) or age 65. Benefits generally are available to an
officer who terminates employment with the Corporation before age 65 with at
least three years of service but are not payable until age 62. Such termination
benefits are reduced proportionately if total service at termination of
employment is less than 15 years. Disability and death benefits are also
provided.
Retirement Plan benefits are subject to offset. Such offsets include the
amounts which would become payable to the officer and to the officer's surviving
spouse under the Georgia-Pacific Salaried Employees Retirement Plan ("SERP") and
the value of the Corporation's contributions to the Georgia-Pacific Savings and
Capital Growth Plan (the "Savings Plan"), in which virtually all salaried
employees of the Corporation or its participating subsidiaries are eligible to
participate. In the case of both the Savings Plan and the SERP, the officer's
interest is converted to an actuarially equivalent joint and 50% survivor
annuity for offset purposes. If an officer engages in certain competitive
activity after retirement, benefits under the Retirement Plan terminate.
The table below sets forth certain information relating to benefits under
the Retirement Plan with respect to the named individuals (a) assuming
retirement as of January 1, 1996, and (b) assuming retirement at age 65, using
projected years of credited service at age 65 and final average compensation as
of December 31, 1995. The benefits disclosed in the table represent the maximum
estimated annual benefits under the Retirement Plan, without reduction for
offsets provided for in such Plan. Because such amounts exceed the total of such
offsetting payments, the amounts disclosed in the table below represent the
estimated maximum aggregate benefit payable to the named executive officers
under all pension and other defined benefit or actuarial plans.
ANNUAL BENEFIT BASED ON 50% OF FINAL
AVERAGE COMPENSATION(1)
RETIREMENT
AT
RETIREMENT ON JANUARY 1, 1996 AGE 65
----------------------------- -----------------
ANNUAL YEARS OF ANNUAL
BENEFITS CREDITED SERVICE BENEFIT(2)
-------- ---------------- -----------------
Mr. Correll...................................... $356,047 7 $ 762,958
Mr. Mortensen.................................... 393,523 33 393,523
Mr. Babin........................................ 113,085 5(3) 339,255
Mr. McGovern..................................... 202,713 14 217,192
Mr. Kelley....................................... 36,053 2 234,342
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(1) "Compensation" for these purposes means only base salary (including salary
deferred as before-tax contributions to the Savings Plan) and annual
incentive bonuses, if any, and excludes any other cash or non-cash
compensation items.
(2) Represents the formula benefit at normal retirement age 65 under the
Retirement Plan, based on average annual compensation during the period
1992-1995.
(3) Does not reflect credit for past industry service. If Mr. Babin terminates
his employment with the Corporation after attaining age 62, for purposes of
calculating his benefit Mr. Babin will be credited with industry service
prior to joining the Corporation. Any resulting additional benefits will be
offset by retirement benefits paid to Mr. Babin by prior employers with
respect to such additional period of service.
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III. OTHER MATTERS
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has audited the accounts of the Corporation and its
subsidiaries since 1948 and will continue in that capacity during 1996. A
representative of Arthur Andersen LLP will be present at the Annual Meeting of
Shareholders with the opportunity to make a statement and will be available to
respond to appropriate questions.
ADDITIONAL SOLICITATIONS
Georgeson & Company Inc. has been engaged by the Corporation to solicit
proxies at a cost not to exceed approximately $9,000. In addition to the
solicitation of proxies by mail, other means of communication such as telephone,
facsimile and personal interview may be employed by the officers, directors and
regular employees of the Corporation. The Corporation will reimburse brokerage
firms and other custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy material and annual reports to the beneficial
owners of stock in accordance with the schedule of charges approved by the New
York Stock Exchange.
REPORTING REQUIREMENT UNDER SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers to file with the Securities and
Exchange Commission and the New York Stock Exchange reports of changes in
ownership of Common Stock. Securities and Exchange Commission regulations
require that such directors and executive officers furnish to the Corporation
copies of all Section 16(a) forms they file. To the Corporation's knowledge,
based solely on review of the copies of such reports furnished to the
Corporation and written representations that no other reports were required,
during the fiscal year ended December 31, 1995, all its officers and directors
complied with applicable Section 16(a) filing requirements.
SHAREHOLDER PROPOSALS
Shareholder proposals for the Annual Meeting of Shareholders on May 6,
1997, will not be included in the Corporation's Proxy Statement for that meeting
unless received by the Corporation at its executive office in Atlanta, Georgia,
on or prior to November 23, 1996. Such proposals must also meet the other
requirements of the rules of the Securities and Exchange Commission relating to
shareholder proposals.
By order of the Board of Directors,
/s/ Kenneth F. Khoury
Kenneth F. Khoury
Vice President and Secretary
Atlanta, Georgia
March 22, 1996.
19
23
THE CORPORATION'S 1995 ANNUAL REPORT TO SHAREHOLDERS, WHICH INCLUDES
AUDITED FINANCIAL STATEMENTS, HAS BEEN MAILED TO SHAREHOLDERS OF THE
CORPORATION. THE ANNUAL REPORT DOES NOT FORM ANY PART OF THE MATERIAL FOR THE
SOLICITATION OF PROXIES.
A COPY OF GEORGIA-PACIFIC CORPORATION'S 1995 ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K WILL BE SUPPLIED WITHOUT CHARGE
UPON REQUEST. ANNUAL STATISTICAL UPDATES ARE ALSO AVAILABLE. REQUESTS FOR SUCH
INFORMATION SHOULD BE DIRECTED TO:
INVESTOR RELATIONS
GEORGIA-PACIFIC CORPORATION
P. O. BOX 105605
ATLANTA, GEORGIA 30348
(404) 652-5555
20
24
EVA IS A REGISTERED TRADEMARK OF STERN STEWART & CO.
PRINTED ON GEORGIA-PACIFIC FINANCIAL OPAQUE 27 LB. BOOK.
25
GEORGIA-PACIFIC [LOGO]
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
26
GEORGIA-PACIFIC CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING MAY 7,1996
P The undersigned hereby appoints A.D. Correll, James F. Kelley and
R Kenneth F. Khoury, jointly and severally, proxies with full power of
O substitution, to vote all shares of Common Stock of GEORGIA-PACIFIC
X CORPORATION owned of record by the undersigned, and which the
Y undersigned is entitled to vote on all matters which may come before the
1996 Annual Meeting of Shareholders to be held at the Radisson
Riverfront Hotel, 2 Tenth Street, Augusta, Georgia, on May 7, 1996 at
11:00 a.m., local time, and any adjournments thereof, unless otherwise
specified herein.
Election of Directors: Change of Address:
Nominees in Class III:
Robert Carswell, ------------------------------
Alston D. Correll,
T. Marshall Hahn Jr., ------------------------------
Francis Jungers
------------------------------
------------------------------
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card.)
You are encouraged to specify your choices by marking the appropriate
box, SEE REVERSE SIDE, but you need not mark any box if you wish to vote
in accordance with the Board of Directors' recommendation. The proxies
cannot vote your shares unless you sign and return this card.
-----------
SEE REVERSE
SIDE
-----------
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
[GEORGIA-PACIFIC LOGO]
ADMISSION TICKET
ANNUAL MEETING OF SHAREHOLDERS
If you plan to attend the 1996 Annual Meeting of Shareholders, please
mark the appropriate box on the reverse of the attached Proxy Card. The
meeting will be held on Tuesday, May 7, 1996, at the Radisson
Riverfront Hotel, 2 Tenth Street, Augusta, Georgia. The meeting will
begin promptly at 11:00 a.m. local time.
TO AVOID DELAY AT THE ENTRANCE, PLEASE PRESENT THIS TICKET
------------------------------------------------------------------------
AGENDA
ELECTION OF FOUR DIRECTORS
TRANSACTION OF OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
------------------------------------------------------------------------
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING, WHETHER
OR NOT YOU ATTEND THE MEETING IN PERSON. TO MAKE SURE YOUR SHARES ARE
REPRESENTED, WE URGE YOU TO COMPLETE AND MAIL THE PROXY CARD ABOVE.
27
/X/ Please mark your
votes as in this
example.
This Proxy, when properly executed, will be voted in the manner directed herein. If no direction is made, this Proxy will be
voted FOR election of directors.
- -----------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Item 1.
- -----------------------------------------------------------------------------------------------------------------------------------
FOR WITHHELD I plan to attend / /
1. Election of / / / / the Annual Meeting
Directors
For, except vote withheld from the following nominee(s):
Change of Address on / /
------------------------------------------------------- Reverse Side
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNATURE(S) DATE
-------------------------------------------------------------------------------------------------- --------------
NOTE: Please sign exactly as name appears hereon. Joint owners should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
-FOLD AND DETACH HERE-
28
[Georgia-Pacific Corporation Letterhead]
March 22, 1996
To Participants in the Georgia-Pacific Stock Fund of the Georgia-Pacific
Corporation Savings and Capital Growth Plan and the Georgia-Pacific Corporation
Hourly 401(k) Savings Plan (the "Plans"):
In connection with the Georgia-Pacific Corporation 1996 Annual Meeting of
Shareholders (the "Annual Meeting") to be held on May 7, 1996, enclosed are
proxy materials relative to shares allocated to you with respect to your
interest in the Georgia-Pacific Stock Fund of one or both of the Plans mentioned
above.
We wish to call your attention to the fact that pursuant to the provisions
of both Plans, Vanguard Fiduciary Trust Company, the Trustee under the Plans,
cannot vote your allocable shares of Georgia-Pacific Common Stock on the matters
to be acted on at the Annual Meeting without your specific voting instructions.
Accordingly, in order for your allocable shares to be voted at the Annual
Meeting, please give your voting instructions over your signature on the
enclosed card and return it to First Chicago Trust Company of New York, who will
tabulate the votes for the Trustee, promptly in the enclosed, self-addressed,
postage-paid envelope. It is understood that if you sign without otherwise
marking the card, you wish the Trustee to vote your shares FOR the election of
directors, as recommended by the Board of Directors of Georgia-Pacific
Corporation.
We urge you to send in the enclosed card promptly so that the Trustee may
vote the shares allocable to you under the Plans in accordance with your wishes.
Very truly yours,
/s/ Kenneth F. Khoury
Kenneth F. Khoury
Vice President and Secretary
29
P R O X Y
CONFIDENTIAL VOTING INSTRUCTIONS
GEORGIA-PACIFIC CORPORATION
ANNUAL MEETING MAY 7, 1996
The undersigned hereby directs Vanguard Fiduciary Trust Company, as
Trustee under the Georgia-Pacific Corporation Savings and Capital Growth Plan
and the Georgia-Pacific Corporation Hourly 401(k) Savings Plan (the "Plans"),
to vote in person or by proxy all shares of Common Stock of Georgia-Pacific
Corporation allocated to any accounts of the undersigned under the Plans in the
manner indicated on the reverse hereof with respect to Item 1, as described in
the Georgia-Pacific Corporation Notice of 1996 Annual Meeting of Shareholders
and Proxy Statement, in connection with the Georgia-Pacific Corporation Annual
Meeting of Shareholders to be held on May 7, 1996.
Election of Directors:
Nominees in Class III: Robert Carswell, Alston D. Correll,
T. Marshall Hahn, Jr., Francis Jungers
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
30
[X] Please mark your
vote as in this
example.
WHEN THIS CARD IS PROPERLY EXECUTED, YOUR INTEREST WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE BY MARKING THE APPROPRIATE BOX BELOW,
THE TRUSTEE WILL VOTE FOR ELECTION OF DIRECTORS.
FOR WITHHELD
1. Election of Directors [ ] [ ]
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEE(S):
- --------------------------------------------------------
SIGNATURE(S) DATE
--------------------------------------------------- -------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -