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SCHEDULE 14A
(RULE 14A - 101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Buckeye Technologies Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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BUCKEYE TECHNOLOGIES INC.
P.O. Box 80407
1001 Tillman Street
Memphis, Tennessee 38108-0407
September 26, 2001
TO THE STOCKHOLDERS OF BUCKEYE TECHNOLOGIES INC.
You are cordially invited to attend the annual meeting of stockholders
of Buckeye Technologies Inc. to be held on Thursday, November 1, 2001 at 5:00
p.m. Central Time, at our headquarters, 1001 Tillman Street, Memphis, Tennessee.
At the meeting, you will be asked to consider the matters described in the
enclosed proxy statement.
In connection with the meeting, we are enclosing a notice of annual
meeting of stockholders, a proxy statement, and a form of proxy. Please complete
the enclosed form of proxy so that your shares can be voted in the event you are
unable to attend the meeting. If you are present at the meeting and want to vote
your shares personally, your form of proxy will be withheld from voting upon
your request prior to balloting. We urge you to return your proxy card to us in
the enclosed, postage-prepaid envelope as soon as possible, even if you plan to
attend the meeting. Your vote is very important.
Detailed information relating to Buckeye's activities and operating
performance during fiscal 2001 is contained in our Annual Report to
Stockholders, which is being mailed to you with this proxy statement, but is not
a part of the proxy soliciting material. If you do not receive or have access to
the 2001 Annual Report, you may request a copy from Shirley Spears, Buckeye
Technologies Inc., P.O. Box 80407, 1001 Tillman Street, Memphis, Tennessee
38108-0407, (901) 320-8125. It is also available on our internet site at
www.bkitech.com.
Very truly yours,
/s/ Robert E. Cannon
ROBERT E. CANNON
Chairman and Chief Executive Officer
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BUCKEYE TECHNOLOGIES INC.
P.O. Box 80407
1001 Tillman Street
Memphis, Tennessee 38108-0407
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 1, 2001
The regular annual meeting of stockholders of Buckeye Technologies Inc.
will be held on Thursday, November 1, 2001 at 5:00 p.m., Central Time, at our
headquarters, 1001 Tillman Street, Memphis, Tennessee, for the following
purposes:
1. ELECTION OF DIRECTORS. To elect three Class III directors to
serve until the 2004 annual meeting of stockholders;
2. RATIFICATION OF AUDITORS. To ratify the selection of Ernst &
Young LLP as Buckeye's independent auditors for fiscal 2002; and
3. OTHER BUSINESS. To transact such other business as may properly
come before the meeting or any adjournment of the meeting.
Only those stockholders of record at the close of business on September 10,
2001 are entitled to notice of, and to vote at, the annual meeting and any
adjournment thereof. On that day, 34,673,900 shares of common stock were
outstanding. Each share entitles the holder to one vote.
We have enclosed with this proxy statement a copy of our Annual Report to
Stockholders.
By Order of the Board of Directors
/s/ Sheila Jordan Cunningham
SHEILA JORDAN CUNNINGHAM
Senior Vice President,
General Counsel and Corporate Secretary
September 26, 2001
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YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, AND DATE YOUR PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
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BUCKEYE TECHNOLOGIES INC.
P.O. Box 80407
1001 Tillman Street
Memphis, Tennessee 38108-0407
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PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
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Your vote is very important. Whether or not you plan to attend the
annual meeting, the Board of Directors requests that you sign, date and return
the enclosed proxy card at your earliest convenience. This proxy statement, the
form of proxy and the Annual Report to Stockholders are being sent to you in
connection with this request and are being mailed to all stockholders beginning
on or about September 26, 2001.
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INFORMATION ABOUT THE ANNUAL MEETING
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DATE AND TIME OF THE MEETING
Thursday, November 1, 2001, 5:00 p.m. Central Time.
LOCATION OF THE MEETING
Buckeye Technologies Inc., 1001 Tillman Street, Memphis, Tennessee.
ITEMS TO BE VOTED UPON BY STOCKHOLDERS
You will be voting on the following matters:
1. ELECTION OF DIRECTORS. To elect three Class III directors to serve
until the 2004 annual meeting of stockholders;
2. RATIFICATION OF AUDITORS. To ratify the selection of Ernst &
Young LLP as Buckeye's independent auditors for fiscal year 2002;
and
3. OTHER BUSINESS. To transact such other business as may properly
come before the meeting or any adjournment of the meeting.
STOCKHOLDERS ENTITLED TO VOTE
You are entitled to vote your common stock if our records show that you
held your shares as of the close of business on the record date, September 10,
2001. Each stockholder is entitled to one vote for each share of common stock
held on that date. On September 10, 2001, there were 34,673,900 shares of common
stock outstanding and entitled to vote. A list of stockholders entitled to vote
on matters at the annual meeting will be available at Buckeye's headquarters
beginning on or about September 27, 2001.
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VOTING BY PROXY
To vote by proxy, simply mark, date, and sign your proxy card and
return it to us, before the annual meeting, in the postage-paid envelope
provided. We will then vote your shares as you direct. For the election of
directors, you may vote for (1) all of the nominees, (2) none of the nominees,
or (3) some nominees but not others. For each other item of business, you may
vote "FOR" or "AGAINST" or you may "ABSTAIN" from voting.
If you return your signed proxy card but do not specify how you want to
vote your shares, we will vote them
- "FOR" the election of all of our nominees for director; and
- "FOR" the ratification of Ernst & Young LLP as our independent
auditors.
If any matters other than those set forth above are properly brought
before the annual meeting, the individuals named in your proxy card may vote
your shares in accordance with their best judgment.
CHANGING OR REVOKING A PROXY
You can change or revoke your proxy at any time before it is voted at
the annual meeting by:
(1) submitting another proxy in writing as of a more recent date than
that of the proxy first given;
(2) attending the annual meeting and voting in person; or
(3) sending written notice of revocation to our corporate secretary,
Sheila Jordan Cunningham.
VOTES REQUIRED
If a quorum is present at the annual meeting,
- the director nominees will be elected by a plurality of the votes
cast in person or by proxy at the meeting; and
- the approval of independent auditors and all other matters
submitted to the stockholders will require the affirmative vote of
a majority of the shares of common stock present or represented by
proxy at the meeting.
QUORUM
A majority of the outstanding shares, present or represented by proxy,
constitutes a quorum. A quorum is necessary to conduct business at the annual
meeting. Under Delaware law, stockholders who abstain from voting on a proposal
are treated as present and entitled to vote at the annual meeting and therefore
have the effect of a vote against the proposal. If shares of common stock are
held in the name of a broker, the failure of the broker to vote the shares is
treated as if the beneficial owner of such shares failed to vote such shares.
THE COST OF SOLICITING PROXIES
We will pay the cost of preparing, printing and mailing material in
connection with this solicitation of proxies. In addition to solicitation by
mail, regular employees of Buckeye and paid solicitors may make solicitations
personally and by telephone or otherwise. We will, upon request, reimburse
brokerage firms, banks and others for their reasonable out-of-pocket expenses in
forwarding proxy material to beneficial owners of stock or otherwise in
connection with this solicitation of proxies.
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STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING OF STOCKHOLDERS
In accordance with Buckeye's By-laws, stockholders' proposals intended
to be presented at the 2002 annual meeting of stockholders must be received in
writing by the Secretary of Buckeye not fewer than 60 days nor more than 90 days
prior to the 2002 annual meeting (which is expected to be held in November
2002), in the form set forth in the By-laws, for inclusion in the proxy
statement and form of proxy relating to that meeting.
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THE PROPOSALS
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PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, with each class
elected for a three-year term. The Board has nominated the following three
persons to serve as Class III Directors: Robert E. Cannon, Henry F. Frigon and
Samuel M. Mencoff. We do not anticipate that any of these nominees will be
unavailable for election but, if such a situation arises, the proxy will be
voted in accordance with the best judgment of the named proxies unless you have
directed otherwise. The election of a director requires the affirmative vote of
a plurality of shares present or represented by proxy at the meeting. The
remaining members of the Board listed below will continue as members of the
Board until their respective terms expire, as indicated below.
INFORMATION ABOUT THE THREE INDIVIDUALS NOMINATED AS DIRECTORS AND THE
REMAINING MEMBERS OF THE BOARD IS PROVIDED BELOW. SHARES OF COMMON STOCK
REPRESENTED BY PROXY CARDS RETURNED TO US WILL BE VOTED FOR THE NOMINEES LISTED
BELOW UNLESS YOU SPECIFY OTHERWISE.
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NOMINEES FOR ELECTION AS CLASS III DIRECTORS
(TERMS EXPIRING 2004)
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Robert E. Cannon, age 71, has served as Chairman and Chief Executive
Officer of Buckeye since March 1993, the same year in which he became a
director. Before assuming his current position, he served as Dean of the College
of Management, Policy and International Affairs at the Georgia Institute of
Technology from 1991 through 1992, and Senior Vice President of Procter & Gamble
from 1989 to 1991. He was Group Vice President - Industrial Products of Procter
& Gamble, which included the operations of Buckeye Cellulose Corporation, then a
subsidiary of Procter & Gamble, from 1981 to 1989. He was President of the
subsidiary from 1971 through 1981.
Henry F. Frigon, age 66, has been a director of Buckeye since 1996.
He has been a private investor and consultant since 1995. He previously served
as Executive Vice President - Corporate Development and Strategy and Chief
Financial Officer of Hallmark Cards, Inc. from 1991 to 1995 and as President and
Chief Executive Officer of BATUS Inc. from 1983 to 1991. Mr. Frigon is a
director of H&R Block Inc., Dimon International Inc., Sypris Solutions Inc.,
Tuesday Morning Corporation and Packaging Corporation of America.
Samuel M. Mencoff, age 45, was elected a director in 1993. He is
currently a Managing Director of Madison Dearborn Partners, LLC, a private
equity investment firm, which he co-founded in January 1993. He previously
served as Vice President of First Chicago Venture Capital from 1987 to 1993.
Mr. Mencoff is a director of Packaging Corporation of America, Bay State Paper
Holding Company and Riverwood International Corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES
LISTED ABOVE.
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INCUMBENT DIRECTORS -- CLASS I
(TERMS EXPIRING 2002)
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R. Howard Cannon, age 39, now serves as Vice President, Nonwovens
Sales, and previously served as Manager, Corporate Strategy since November 1999.
He has served as a director of Buckeye since 1996. Before assuming a position
with Buckeye, he was President of Dryve, Inc., a company consisting of 33 dry
cleaning operations, a position he had held since 1987. He is co-trustee of the
Cannon Family Trust. R. Howard Cannon is the son of Robert E. Cannon.
George W. Bryan, age 57, has served as a director of Buckeye since
April 2001. Mr. Bryan served as Chief Executive Officer of Sara Lee Foods from
1998 until his retirement in 2000 and as a Senior Vice President of the Sara Lee
Corporation between 1983 and 1998. Mr. Bryan presently serves on the Board of
Directors of Union Planters Corporation.
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INCUMBENT DIRECTORS -- CLASS II
(TERMS EXPIRING 2003)
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Red Cavaney, age 58, has served as a director of Buckeye since 1996 and
as President, Chief Executive Officer and Director of the American Petroleum
Institute since October 1997. He was President, Chief Executive Officer and a
director of the American Plastics Council from 1994 to 1997 immediately
following service as President of the American Forest & Paper Association and
President of its predecessor, the American Paper Institute. He is Chairman-Elect
of the American Society of Association Executives and Chairman of the
Associations Division of the United States Chamber of Commerce.
David B. Ferraro, age 63, has served as President and Chief Operating
Officer of Buckeye since March 1993, the same year in which he first became a
director. He was Manager of Strategic Planning of The Procter & Gamble Company
from 1991 through 1992. He served as President of Buckeye Cellulose Corporation,
then a subsidiary of Procter & Gamble, from 1989 through 1991, as its Executive
Vice President and Manager of Commercial Operations from 1987 through 1989, and
as its Comptroller from 1973 through 1986.
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INFORMATION ABOUT THE BOARD OF DIRECTORS
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ROLE OF THE BOARD
Pursuant to Delaware law, our business, property and affairs are
managed under the direction of our Board of Directors. The Board has
responsibility for establishing broad corporate policies and for the overall
performance and direction of Buckeye Technologies Inc., but is not involved in
day-to-day operations. Members of the Board keep informed of our business by
participating in Board and committee meetings, by reviewing reports sent to them
regularly, and through discussions with our executive officers.
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BOARD STRUCTURE
We currently have seven directors. Our Board is divided into three
groups, Class I Directors, Class II Directors, and Class III Directors. Each
class of directors is elected to serve a three-year term. This means that the
Class III directors who are elected at the 2001 meeting will serve until the
2004 annual meeting of stockholders unless they resign or are removed.
2001 BOARD MEETINGS
Buckeye's Board of Directors conducted five meetings (exclusive of
committee meetings) during fiscal 2001, and no director attended less than 75%
of the meetings held during the period.
BOARD COMMITTEES
The Board of Directors has an Audit Committee and a Compensation
Committee.
THE AUDIT COMMITTEE, which consists of Messrs. Henry F. Frigon,
Chairman, Red Cavaney and Samuel M. Mencoff, met five times during fiscal year
2001. The Audit Committee has the authority and responsibility:
- to hire one or more independent public accountants to audit our
books, records and financial statements and to review our systems
of accounting (including our systems of internal control);
- to discuss with the independent accountants the results of the
annual audit and quarterly reviews;
- to conduct periodic independent reviews of the systems of
accounting (including systems of internal control);
- to make reports periodically to the Board with respect to its
findings; and
- to undertake other activities described more fully in the section
called "Report of the Audit Committee of the Board of Directors."
THE COMPENSATION COMMITTEE of the Board is composed of Messrs. Samuel
M. Mencoff, Chairman, George W. Bryan and Red Cavaney, all of whom are
non-employee directors of Buckeye. The Compensation Committee met three times
during fiscal year 2001. The Compensation Committee is responsible for
establishing and administering Buckeye's executive compensation plan and
developing policies and guidelines for administering the plan.
DIRECTOR COMPENSATION
Directors who are employees of Buckeye are not entitled to receive any
fees for serving as directors. However, non-employee directors receive
directors' fees in the amount of $20,000 per annum payable quarterly, in cash or
an equivalent amount of Buckeye's common stock, with the option provided to each
director to defer receipt of his fees and receive in lieu thereof, upon the
expiration of his tenure as a member of the Board, a cash payment equal to the
number of shares of common stock which could have been purchased on the open
market at the time of the deferral multiplied by the fair market value of the
common stock at the time of expiration of such director's tenure.
Pursuant to Buckeye's Amended and Restated Formula Plan for
Non-Employee Directors, each of Messrs. Bryan, Cavaney, Frigon, Mencoff has been
granted an option to acquire 10,000 shares of common stock at the prevailing
market price at the time of the grant. Messrs. Cavaney, Frigon and Mencoff
received their stock option grants on November 2, 2000 and Mr. Bryan received
his stock option grant on April 17, 2001. Each of these directors will be
granted an additional option for 10,000 shares on the date of each annual
meeting of stockholders at which he is reelected to the Board or continues his
service on the Board. Under the Formula Plan, each option that
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is issued on the date of an annual meeting of stockholders becomes fully
exercisable on the first anniversary of its issuance or the next regularly
scheduled annual meeting of stockholders, whichever occurs first. Each option
issued on a date other than the date of an annual meeting of stockholders
becomes fully exercisable on the first anniversary of its issuance. Future
non-employee directors newly elected or appointed to the Board will also be
entitled to receive options under the Formula Plan. Mr. Mencoff has
contractually agreed to assign to Madison Dearborn Partners, L.P., an entity for
which Mr. Mencoff's employer serves as general partner, all rights to director's
fees and options to which he may be entitled as a director of Buckeye. All
directors are reimbursed for out-of-pocket expenses related to their services as
directors.
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PROPOSAL 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
accountants, to audit our financial statements for fiscal year 2002. We are
presenting this proposal to the stockholders for ratification at the annual
meeting. A representative of Ernst & Young LLP is expected to be present at the
meeting, will have the opportunity to make a statement, and is expected to be
available to respond to appropriate questions.
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS BUCKEYE'S
INDEPENDENT AUDITORS REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY
OF THE SHARES OF COMMON STOCK REPRESENTED AT THE ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS BUCKEYE'S INDEPENDENT AUDITORS FOR FISCAL
YEAR 2002.
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
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The Audit Committee consists of three directors, Messrs. Henry F.
Frigon, Chairman, Red Cavaney and Samuel M. Mencoff. Each member meets the
independence and qualification standards required by the New York Stock
Exchange. The Audit Committee operates in accordance with its written charter,
which was adopted by the Board on April 18, 2000. A copy of the Audit Committee
charter appears as Exhibit A to this proxy statement. During the fiscal year
ended June 30, 2001, the Audit Committee met five times.
The Audit Committee monitors and reviews the performance of the
independent auditors and the quality and integrity of Buckeye's internal
accounting, auditing and financial reporting practices. The Audit Committee's
chief duties are to:
- hire one or more independent public accountants to audit
Buckeye's books, records and financial statements and to
review its system of accounting, including its systems of
internal control;
- monitor and evaluate, independently and objectively, Buckeye's
internal financial controls and financial reporting procedure;
- discuss with the independent accountants the results of their
audits and reviews;
- periodically communicate the Audit Committee's findings to the
Board; and
- facilitate communication among the Board, the independent
auditors, and Buckeye's management.
The Audit Committee has obtained from the independent auditors, Ernst &
Young LLP, a formal written statement describing all relationships between the
auditors and Buckeye that might bear on the auditors'
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independence. This statement conforms to Independence Standards Board Standard
No. 1, "Independence Discussions with Audit Committees." The Audit Committee
also has discussed with the auditors any relationships that may impact their
objectivity and independence, and it has considered Buckeye's payment of fees to
the auditors, and the Audit Committee is satisfied that the auditors are
independent of Buckeye.
The Audit Committee has discussed with management Buckeye's audited
financial statements for the year ended June 30, 2001. The Audit Committee also
has discussed with the independent auditors the matters required to be discussed
by Statement on Auditing Standards No. 61, as amended ("Communication with Audit
Committees") and, with and without management present, discussed and reviewed
the results of the independent auditors' examination of Buckeye's financial
statements. The Audit Committee also has discussed with the independent auditors
its evaluation of Buckeye's internal controls and the overall quality of
Buckeye's financial reporting.
Based upon the results of the inquiries and actions discussed above, in
reliance upon management and Ernst & Young LLP, and subject to the limitations
of its role, the Audit Committee recommended to the Board that Buckeye's audited
financial statements be included in its Annual Report on Form 10-K for the year
ended June 30, 2001, for filing with the SEC. The Audit Committee has also
recommended the reappointment, subject to stockholder approval, of the
independent auditors, Ernst & Young LLP.
AUDIT COMMITTEE
Henry F. Frigon, Chairman
Red Cavaney
Samuel M. Mencoff
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AUDIT FEES
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During fiscal year 2001, Ernst & Young LLP not only acted as independent
auditors for Buckeye and our subsidiaries (work related to auditing the annual
financial statements for fiscal year 2001 and reviewing the financial statements
included in our Forms 10-Q) but also rendered on our behalf other services,
including tax-related services, management consulting services and other
accounting and auditing services. The following table sets forth the aggregate
fees billed or expected to be billed by Ernst & Young LLP for audit services
rendered in connection with the financial statements and reports for fiscal year
2001 and for other services rendered during fiscal year 2001 on our behalf, as
well as all "out-of-pocket" costs incurred in connection with these services,
which have been billed to us.
Audit and Quarterly Review Fees
(for the audit of the 2001 financial statements): $392,000
Financial Information Systems Design and Implementation Fees: 0
All Other Fees: 351,000
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Total Fees $743,000
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OTHER INFORMATION
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BUCKEYE STOCK OWNERSHIP
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Except as noted below, as of September 1, 2001, our records indicated
that the following number of shares were beneficially owned by (i) each person
known by Buckeye to beneficially own more than 5% of Buckeye's shares; (ii) each
director of Buckeye and each of the five most highly compensated executive
officers; and (iii) all directors and executive officers of Buckeye as a group.
AMOUNT AND NATURE OF PERCENT OF
NAME BENEFICIAL OWNERSHIP(1) CLASS(1)
--------------------------------------------------------------------------- ----------------------- ----------
(i) R. Howard Cannon, Co-Trustee (2)................................. 4,756,410 13.9%
432 East Racquet Club Place
Memphis, Tennessee 38117
NewSouth Capital Management, Inc. (3)............................ 5,859,918 16.9%
1000 Ridgeway Loop Road, Suite 233
Memphis, Tennessee 38120-4023
Gilchrist Berg (4)............................................... 1,832,553 5.3%
Robin Bradbury
Water Street Capital, Inc.
225 West Water Street, Suite 1987
Jacksonville, Florida 32202
(ii) George W. Bryan ................................................. 2,500 *
Robert E. Cannon (5)............................................. 1,497,253 4.3%
R. Howard Cannon (2) (6) (7)..................................... 4,811,586 13.9%
Red Cavaney (7).................................................. 60,000 *
David B. Ferraro (8)............................................. 1,469,005 4.2%
Henry F. Frigon (7).............................................. 54,000 *
Samuel M. Mencoff (7)(9)......................................... 181,364 *
George B. Ellis (10)............................................. 845,397 2.4%
Henry P. Doggrell (11)........................................... 108,844 *
E. Allen Eppinger (12)........................................... 339,692 1.0%
(iii) All Directors and Executive Officers as a group (13) (16 persons) 10,629,011 30.7%
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* Less than 1% of the issued and outstanding shares of common stock of
Buckeye.
(1) Unless otherwise indicated, beneficial ownership consists of sole
voting and investing power based on 34,667,900 shares issued and
outstanding as of September 1, 2001. Options to purchase an aggregate
of 2,034,000 shares are exercisable or become exercisable within 60
days of September 1, 2001. Such shares are deemed to be outstanding for
the purpose of computing the percentage of outstanding shares owned by
each person to whom a portion of such options relate but are not deemed
to be outstanding for the purpose of computing the percentage owned by
any other person.
(2) As of September 1, 2001, includes 4,756,410 shares held by the Cannon
Family Trust, R. Howard Cannon and Richard Prosser Guenther,
Co-Trustees.
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(3) New South Capital Management, Inc. filed a Schedule 13G/A with the
Securities and Exchange Commission as of December 31, 2000, stating
that as an investment advisor, it had sole dispositive power of the
shares set forth herein, which constitute more than 5% of Buckeye's
common stock.
(4) Gilchrist Berg and Robin Bradbury, affiliates of Water Street Capital,
Inc., filed a Schedule 13G/A with the Securities and Exchange
Commission as of December 31, 2000, stating they have sole or shared
dispositive power of the shares set forth herein, which constitute more
than 5% of Buckeye's common stock.
(5) Includes 181,176 shares held by Kathryn Gracey Cannon, wife of Robert
E. Cannon, as to which Mr. Cannon disclaims beneficial ownership;
15,574 shares held in Buckeye's 401(k) and retirement plans; 21,152
shares of restricted stock issued pursuant to Buckeye's Restricted
Stock Plan; and 400,000 shares issuable upon the exercise of options.
(6) Includes 4,000 shares issuable upon the exercise of options.
(7) Includes 50,000 shares issuable upon the exercise of options granted
under Buckeye's stock option plan for non-employee directors.
(8) Includes 13,777 shares held in Buckeye's 401(k) and retirement plans;
15,235 shares of restricted stock issued pursuant to Buckeye's
Restricted Stock Plan; and 300,000 shares issuable upon the exercise of
options.
(9) Mr. Mencoff has contractually agreed to assign to Madison Dearborn
Partners, L.P., an entity for which his employer serves as general
partner, all rights to options to which Mr. Mencoff may be entitled as
a director of Buckeye.
(10) Includes 19,069 shares held by Julie Ellis, wife of George B. Ellis,
individually and as custodian for minor children, as to which Mr. Ellis
disclaims beneficial ownership; 5,556 shares held in Buckeye's 401(k)
and retirement plans; 6,384 shares of restricted stock issued pursuant
to Buckeye's Restricted Stock Plan; and 128,000 shares issuable upon
the exercise of options.
(11) Includes 3,444 shares held in Buckeye's 401(k) and retirement plans;
and 100,000 shares issuable upon the exercise of options.
(12) Includes 8,033 shares held in Buckeye's 401(k) and retirement plans;
2,967 shares of restricted stock issued pursuant to Buckeye's
Restricted Stock Plan; and 120,000 shares issuable upon the exercise of
options.
(13) Includes an aggregate of 2,034,000 shares issuable upon exercise of
options granted under the stock option plan for non-employee directors
and Buckeye's other stock option plans.
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EXECUTIVE COMPENSATION
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The following summary compensation table sets forth the annual salary,
bonus compensation and long-term incentive awards paid or accrued by Buckeye for
each of fiscal years 2001, 2000 and 1999 to or for the account of the Chief
Executive Officer and the four other most highly compensated executive officers
of Buckeye (the "executive officers") for the fiscal year 2001.
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SUMMARY COMPENSATION TABLE
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Long Term
Annual Compensation Compensation Awards
--------------------- ---------------------------
Securities
Restricted underlying All other
Fiscal Stock awards options/SARS compensation
Name and Position Year Salary($) Bonus($) ($)(1) (#)(2) ($)(3)
----------------- ------ --------- -------- --------- ------------ -------------
Robert E. Cannon.......... 2001 650,000 5,850 59,468 -- 18,700
Chairman and Chief 2000 600,000 746,400 69,225 70,000 25,500
Executive Officer 1999 550,000 218,350 63,290 -- 24,000
David B. Ferraro.......... 2001 500,000 4,500 41,441 -- 18,700
President and Chief 2000 470,673 575,351 48,752 60,000 25,500
Operating Officer 1999 433,173 168,725 45,903 -- 24,000
George B. Ellis........... 2001 295,000 2,655 16,917 -- 18,700
Senior Vice President, 2000 290,289 259,635 20,403 30,000 25,500
Cotton Cellulose 1999 280,289 70,675 20,341 -- 24,000
Henry P. Doggrell (4)..... 2001 295,000 2,655 11,541 -- 12,750
Senior Vice President, 2000 285,000 238,830 14,397 30,000 18,700
Business Development 1999 275,000 70,675 13,687 -- 16,800
E. Allen Eppinger......... 2001 268,173 2,374 6,029 -- 37,376
Senior Vice President, 2000 234,423 181,470 11,428 30,000 45,096
Nonwovens Manufacturing 1999 205,000 74,620 8,389 -- 51,262
-----------------
(1) Pursuant to Buckeye's Restricted Stock Plan, restricted shares of stock
were awarded for the executive officers for fiscal years 2001, 2000 and
1999 in the following amounts: (i) in the case of Mr. Cannon, 4,823
shares, 2,962 shares and 4,157 shares, respectively; (ii) in the case
of Mr. Ferraro, 3,361 shares, 2,086 shares and 3,015 shares,
respectively; (iii) in the case of Mr. Ellis, 1,372 shares, 873 shares
and 1,336 shares, respectively; (iv) in the case of Mr. Doggrell, 936
shares, 616 shares and 899 shares, respectively, and (v) in the case of
Mr. Eppinger, 1,084 shares, 489 shares and 551 shares, respectively.
The prices per share of $12.33 for fiscal year 2001, $23.37 for fiscal
year 2000 and $15.23 for fiscal year 1999 were based on the average
closing price of the common stock on the NYSE for the 20 business days
prior to the date of grant. Although the shares may be voted by the
recipient, the shares may not be sold, pledged or otherwise transferred
before the recipient's approved retirement from Buckeye, and if the
recipient should violate the restrictions or otherwise leave Buckeye
before an approved retirement date, the shares are subject to
forfeiture. The aggregate value of all restricted stock holdings at the
end of fiscal year 2001 for Messrs. Cannon, Ferraro, Ellis,
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Doggrell and Eppinger was $304,589, $219,384, $91,930, $48,945 and
$42,725, respectively. If dividends are paid to holders of common
stock, holders of restricted stock similarly will be eligible to
receive dividends.
(2) None of the executive officers received options during fiscal year
2001. Options granted in fiscal year 2000 were granted pursuant to the
1995 Stock Option Plan. The exercise price of options granted to
Messrs. Cannon, Ferraro, Ellis, Doggrell and Eppinger during fiscal
year 2000 is $16.00 per share. None of the executive officers received
options during fiscal year 1999. All outstanding options vest
periodically over a period of five years, except that optionees who
were over the age of 57 at the time of the option grant have shorter
vesting periods. Options that have vested may be exercised within a
period of ten years from the date the options were granted or such
shorter periods as are defined in the subscription agreements executed
between Buckeye and the optionees.
(3) Amounts consist of accruals under the Buckeye Retirement Plan (the
"Retirement Plan") and the Buckeye Retirement Plus Savings Plan (the
"Retirement Plus Plan"), both of which are defined contribution
retirement plans covering substantially all employees. Buckeye
contributes 1% of the employee's gross compensation plus 1/2% for each
year of service up to a maximum of 11% of the employee's gross
compensation under the Retirement Plan. The Retirement Plus Plan
provides for contributions by Buckeye of shares of common stock equal
to an additional 4% of the employee's gross compensation during years
when Buckeye has been financially successful based on a predetermined
financial threshold approved by the Board. No contribution will be made
to the Retirement Plus Plan for fiscal year 2001 because such threshold
was not reached. Mr. Eppinger also received taxable living expenses
while on assignment away from home.
(4) Mr. Doggrell resigned from his position with Buckeye on August 7, 2001
in order to pursue other business opportunities.
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--------------------------------------------------------------------------------
OPTIONS/SARS GRANTED IN LAST FISCAL YEAR
--------------------------------------------------------------------------------
No stock options were granted to the executive officers during fiscal
year 2001.
--------------------------------------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
--------------------------------------------------------------------------------
The following table discloses information regarding stock options held
at the end of or exercised in fiscal year 2001 for each of the executive
officers as of June 30, 2001.
Shares Securities underlying Value of unexercised
acquired on Value unexercised options in-the-money options
Name exercise(1) realized(1) at June 30, 2001 at June 30, 2001(2)
-------------------- ------------- ----------- ---------------------------- -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Robert E. Cannon.... -- -- 365,000 35,000 $ 649,502 --
David B. Ferraro.... -- -- 270,000 30,000 $ 515,000 --
George B. Ellis..... -- -- 101,000 39,000 $ 257,500 --
Henry P. Doggrell... -- -- 482,000 48,000 $2,788,000 --
E. Allen Eppinger... -- -- 105,000 15,000 $ 154,500 --
-----------------
(1) As of June 30, 2001, no options have been exercised by the executive
officers.
(2) Based on $14.40 per share, the closing price on the New York Stock
Exchange as of June 30, 2001.
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REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
The Compensation Committee of the Board of Directors is comprised of
three directors who are not employees of Buckeye. The Committee is responsible
for establishing and administering Buckeye's executive compensation programs, as
well as determining the salaries, compensation and benefits of the Chief
Executive Officer and the Chief Operating Officer. The Compensation Committee
has engaged the consulting firm of William M. Mercer, Inc., Atlanta, Georgia, to
conduct appropriate surveys of executive compensation plans and to compile data
for comparable companies for committee comparison and review.
This report of the Compensation Committee describes the components of
Buckeye's executive officer compensation programs and describes the basis upon
which compensation is awarded to the executive officers of Buckeye.
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that Buckeye specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Compensation Philosophy and Structure
Total compensation levels are designed to attract, retain and reward
executives who contribute to the long-term success of Buckeye. Compensation for
Buckeye executives is comprised of three principal components: salary and
benefits, annual at risk compensation, and long-term, equity-based incentive
compensation. The Compensation Committee believes that executive compensation
should be materially influenced by Buckeye's financial performance and, as such,
the Committee has approved an executive compensation program that places a
significant portion of executive compensation "at risk" dependent upon the
company's and each individual's performance against clearly established
criteria.
Buckeye seeks to provide salary and benefit levels that are comparable
to those of companies that perform similarly. Salary targets are established for
various officer positions based on surveys of relevant industries conducted by
an outside compensation consultant. Utilizing these targets, individual salaries
are established to reflect the officer's performance in meeting the company's
objectives.
During 2001, Buckeye paid bonuses averaging 0.9% of base salary to
eligible employees, including officers, under a broad-based profit sharing plan
for company employees. Under this plan, bonuses of up to 15% of base salary are
achievable depending upon Buckeye's business performance measured against
specific annual financial targets.
Buckeye makes payments under its At Risk Compensation ("ARC") program
to officers and certain other employees based on Buckeye's business performance
and the individual's role in contributing to the success of Buckeye. These
awards are determined within a percentage range of base salary, with the payment
of at least two-thirds of the award based on quantifiable performance criteria
established by the Chief Executive Officer and the Chief Operating Officer, and
the balance based on an assessment of the individual's overall performance and
his or her contribution to Buckeye during the fiscal year. During the 2001
fiscal year, no payments were made to executive officers under the ARC program.
In addition, from time-to-time, Buckeye makes long-term incentive
awards to officers and certain other employees of (1) incentive and
non-qualified stock options from stock option plans previously approved by the
stockholders and (2) restricted stock from treasury shares of common stock set
aside by Buckeye pursuant to the Restricted Stock Plan approved by the Board of
Directors. The purpose of these awards is to focus the recipient's
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attention on the long-term performance of the business and to strengthen the
alignment of stockholder and employee interests in share price appreciation.
Restricted stock has been issued to certain Buckeye officers under the
Restricted Stock Plan, at the fair market value of the common stock based on the
average closing price on the New York Stock Exchange for the 20 business days
prior to the date of grant, as a supplemental retirement benefit to partially
offset the loss of benefits under Buckeye's defined contribution plans resulting
from the cap on wages required by applicable rules and regulations.
Chief Executive Officer and Chief Operating Officer
Policies with respect to the compensation of the Chief Executive
Officer and the Chief Operating Officer are essentially the same as those for
other officers, except that their compensation, including the criteria used for
determining their ARC, is directly established by the Compensation Committee.
The salary and bonus compensation of the Chief Executive Officer and the Chief
Operating Officer for fiscal year 2001 reflect Buckeye's overall performance
during the period. Neither the Chief Executive Officer nor the Chief Operating
Officer received an ARC award for fiscal year 2001.
The consulting firm engaged by the Committee has conducted compensation
and benefit surveys that include both an assessment of Buckeye's financial
performance compared to a group of comparable companies, as well as comparisons
with the compensation paid to the chief executive officers and the chief
operating officers of other companies.
The Compensation Committee believes that the compensation levels of
Buckeye's executive officers are competitive and reasonably comparable with the
compensation and benefits paid to executive officers of companies that generate
similar financial results.
COMPENSATION COMMITTEE
Samuel M. Mencoff, Chairman
George W. Bryan
Red Cavaney
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--------------------------------------------------------------------------------
PERFORMANCE GRAPH
--------------------------------------------------------------------------------
The following graph compares the cumulative total stockholder returns
from June 28, 1996 through June 30, 2001 with returns based on the S&P 500 Index
and the New York Stock Exchange (NYSE) listed Paper and Allied Products
companies (SIC 2600-2699 U.S. and foreign companies). The graph assumes $100
invested on June 28, 1996, and the reinvestment of any dividends paid on account
of the investments.
(GRAPH)
TOTAL RETURNS INDEX 06/1996 06/1997 06/1998 06/1999 06/2000 06/2001
------- ------- ------- ------- ------- -------
Buckeye Technologies Inc......... 100.0 122.7 171.4 110.5 159.5 104.7
S&P 500 Stocks................... 100.0 134.7 175.9 215.8 231.9 197.8
NYSE Paper Stocks................ 100.0 134.4 128.5 146.2 122.2 145.2
--------------------------------------------------------------------------------
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------
The federal securities laws require Buckeye's directors and executive
officers, and persons who beneficially own more than 10% of a registered class
of Buckeye's equity securities, to file with the SEC initial reports of
ownership and reports of changes in ownership of any securities of Buckeye. To
Buckeye's knowledge, based solely on review of the copies of such reports
furnished to Buckeye and representations by certain reporting persons, all of
Buckeye's officers, directors and greater than 10% beneficial owners made all
filings required in a timely manner.
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CERTAIN TRANSACTIONS
--------------------------------------------------------------------------------
Prior to April 2001, Mr. Robert E. Cannon was the sole owner of a
limited liability company that owned an aircraft that was leased to Buckeye from
time to time for company business. The Audit Committee of the Board of Directors
has determined that the charges for the use of the aircraft by Buckeye were no
less favorable to Buckeye than those that would be paid in a comparable
transaction in arm's-length dealings with an unrelated party.
--------------------------------------------------------------------------------
OTHER MATTERS
--------------------------------------------------------------------------------
The Board of Directors knows of no matters other than those discussed
in this proxy statement which will be presented at the 2001 annual meeting of
stockholders. However, if any other matters are properly brought before the
meeting, any proxy given pursuant to this solicitation will be voted in
accordance with the recommendations of management.
Upon the written request of any record holder or beneficial owner of
common stock entitled to vote at the annual meeting, we will provide, without
charge, a copy of our Annual Report on Form 10-K for the year ended June 30,
2001. Requests should be directed to Shirley Spears, Buckeye Technologies Inc.,
P.O. Box 80407, 1001 Tillman Street, Memphis, Tennessee 38108-0407, (901)
320-8125.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Sheila Jordan Cunningham
SHEILA JORDAN CUNNINGHAM
Senior Vice President,
General Counsel and Corporate Secretary
Memphis, Tennessee
September 26, 2001
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EXHIBIT A
BUCKEYE TECHNOLOGIES INC.
AUDIT COMMITTEE CHARTER
ORGANIZATION
This charter governs the operations of the audit committee. The committee shall
review and reassess the charter at least annually and obtain the approval of the
board of directors. The committee shall be appointed by the board of directors
and shall comprise at least three directors, each of whom are independent of
management and the Company. Members of the committee shall be considered
independent if they have no relationship that may interfere with the exercise of
their independence from management and the Company. All committee members shall
be financially literate, and at least one member shall have accounting or
related financial management expertise.
STATEMENT OF POLICY
The audit committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the board. In so
doing, it is the responsibility of the committee to maintain free and open
communication between the committee, independent auditors, the internal auditors
and management of the Company. In discharging its oversight role, the committee
is empowered to investigate any matter brought to its attention with full access
to all books, records, facilities, and personnel of the Company and the power to
retain outside counsel, or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of
their activities to the board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The committee in carrying out its
responsibilities believes its policies and procedures should remain flexible, in
order to best react to changing conditions and circumstances. The committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
A-1
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The following shall be the principal recurring processes of the audit
committee in carrying out its oversight responsibilities. The processes
are set forth as a guide with the understanding the committee may
supplement them as appropriate.
- The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the board and the audit committee, as representatives of
the Company's shareholders. The committee shall have the authority and
responsibility to evaluate and, where appropriate, recommend replacement
of the independent auditors. The committee shall discuss with the
auditors their independence from management and the Company and the
matters included in the written disclosures required by the Independence
Standards Board. Annually, the committee shall review and recommend to
the board the selection of the Company's independent auditors, subject
to shareholders' approval.
- The committee shall discuss with the internal auditors and the
independent auditors the overall scope and plans for their respective
audits including the adequacy of staffing and compensation. Also, the
committee shall discuss with management, the internal auditors, and the
independent auditors the adequacy and effectiveness of the accounting
and financial controls, including the Company's system to monitor and
manage business risk, and legal and ethical compliance programs.
Further, the committee shall meet separately with the internal auditors
and the independent auditors, with and without management present, to
discuss the results of their examinations.
- The committee shall review the interim financial statements with
management and the independent auditors prior to filing of the Company's
Quarterly Report on Form 10-Q. Also, the committee shall discuss the
results of the quarterly review and any other matters required to be
communicated to the committee by the independent auditors under
generally accepted auditing standards.
- The committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report
on Form 10-K (or the annual report to shareholders if distributed prior
to the filing of Form 10-K), including their judgment about the quality,
not just acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the
financial statements. Also, the committee shall discuss the results of
the annual audit and any other matters required to be communicated to
the committee by the independent auditors under generally accepted
auditing standards.
A-2
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PROXY
BUCKEYE TECHNOLOGIES INC.
P.O. BOX 80407
1001 TILLMAN STREET
MEMPHIS, TENNESSEE 38108-0407
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned appoints each of Sheila Jordan Cunningham and Gayle L.
Powelson, or either of them, with full power of substitution and revocation as
Proxy to vote all shares of stock standing in my name on the books of Buckeye
Technologies Inc. (the "Company") at the close of business on September 10,
2001, which the undersigned would be entitled to vote if personally present at
the Annual Meeting of Stockholders of the Company to be held at the Company's
headquarters, 1001 Tillman Street, Memphis, Tennessee, on November 1, 2001, at
5:00 p.m., Central Time, and at any and all adjournments, upon the matters set
forth in the Notice of the meeting. The Proxy is further authorized to vote in
his or her discretion as to any other matters which may come before the meeting.
At the time of preparation of the Proxy Statement, the Board of Directors knows
of no business to come before the meeting other than that referred to in the
Proxy Statement.
THE SHARES COVERED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN AND WHEN NO INSTRUCTIONS ARE GIVEN WILL BE VOTED FOR THE
PROPOSALS DESCRIBED IN THE ACCOMPANYING NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT AND ON THIS PROXY.
24
[X] Please mark votes as in this example.
--------------------------------------------------------- ----------------------------------------
ELECTION OF DIRECTORS (terms expiring in 2004)
RATIFICATION OF APPOINTMENT OF
Nominees: Robert E. Cannon, Henry F. Frigon, INDEPENDENT AUDITORS.
Samuel M. Mencoff
FOR AGAINST ABSTAIN
FOR WITHHELD [ ] [ ] [ ]
[ ] [ ] ----------------------------------------
Exceptions:
---------------------------------------------------------
For all nominees except as noted above.
---------------------------------------------------------
Dated: , 2001 Signed:
---------- ----------------------------------------------
Signed:
----------------------------------------------
Shareholder should sign here exactly as
shown on the label affixed hereto.
[Label to be placed here] Administrator, Trustee, or Guardian,
please give full title. If more than one
Trustee, all should sign. All Joint Owners
should sign.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE TO: Proxy Department, First Union National Bank, 1525 W. T. Harris
Boulevard, Building 3C3, Charlotte, North Carolina 28288-1153.