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
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] 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, 2002
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 7, 2002 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 if you do not 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. Please return your proxy card to us in the enclosed,
postage-prepaid envelope as soon as possible, even if you plan to attend the
meeting. Also, registered and most beneficial shareholders may vote by telephone
or through the internet. Instructions for using these convenient services are
explained on the enclosed proxy. Your vote is very important. I urge you to vote
your proxy as soon as possible.
Detailed information relating to Buckeye's activities and operating
performance during fiscal 2002 is contained in our Annual Report on Form 10-K,
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 2002
Annual Report on Form 10-K, 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
Buckeye Technologies Inc.
P.O. Box 80407
1001 Tillman Street
Memphis, Tennessee 38108-0407
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 7, 2002
The regular annual meeting of stockholders of Buckeye Technologies Inc.
will be held on Thursday, November 7, 2002 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 two Class I directors to serve
until the 2005 annual meeting of stockholders;
2. Ratification of Auditors. To ratify the selection of Ernst & Young
LLP as Buckeye's independent auditors for fiscal 2003; 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, 2002 are entitled to notice of, and to vote at, the annual
meeting and any adjournment thereof. On that day, 36,948,900 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 on
Form 10-K.
By Order of the Board of Directors
/s/ Sheila Jordan Cunningham
Sheila Jordan Cunningham
Senior Vice President,
General Counsel and Corporate Secretary
September 26, 2002
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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. Registered and
most beneficial shareholders may also vote via telephone or through the
internet.
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Table of Contents
Page No.
Information about the Annual Meeting.......................................... 1
Proposal 1--Election of Directors............................................. 4
Information about the Board of Directors............................. 6
Proposal 2--Ratification of Appointment of Independent Auditors............... 7
Report of the Audit Committee of the Board of Directors.............. 7
Audit Fees........................................................... 8
Other Information............................................................. 9
Buckeye Stock Ownership.............................................. 9
Executive Compensation....................................................... 11
Summary Compensation Table.......................................... 11
Options/SARs Granted in Last Fiscal Year............................ 13
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal
Year-End Options/SAR Values.................................. 13
Equity Compensation Plan Information................................ 14
Compensation Committee Interlocks and Insider Participation......... 14
Report of the Compensation Committee on Executive Compensation...... 14
Performance Graph............................................................ 16
Section 16(a) Beneficial Ownership Reporting Compliance...................... 17
Other Matters................................................................ 17
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, or vote by telephone or on the internet at your earliest
convenience. This proxy statement, the form of proxy and the Annual Report on
Form 10-K are being sent to you in connection with this request and are being
mailed to all stockholders beginning on or about September 26, 2002.
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Information about the Annual Meeting
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Date and time of the meeting
Thursday, November 7, 2002, 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 two Class I directors to serve
until the 2005 annual meeting of stockholders;
2. Ratification of Auditors. To ratify the selection of Ernst & Young
LLP as Buckeye's independent auditors for fiscal year 2003; 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,
2002. Each stockholder is entitled to one vote for each share of common stock
held on that date. On September 10, 2002, there were 36,948,900 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, 2002.
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Voting by proxy
You may choose one of the following ways to vote:
Vote by Internet: You can choose to vote your shares at any time using the
internet site listed on your proxy card. This site will give you the opportunity
to make your selections and confirm that your instructions have been followed.
We have designed our internet voting procedures to authenticate your identity by
use of a unique control number found on the enclosed proxy card. To take
advantage of the convenience of voting on the internet, you must subscribe to
one of the various commercial services that offers access to the world wide web.
Costs normally associated with electronic access, such as usage and telephone
charges, will be borne by you. Buckeye does not charge any separate fees for
access to its internet site. If you vote via the internet, you do not need to
return your proxy card.
Vote by Telephone: You can also vote by telephone at any time by calling
the toll-free number (for residents of the U.S.) listed on your proxy card. To
vote, enter the control number listed on your proxy card and follow the simple
recorded instructions. If you vote by telephone, you do not need to return your
proxy card.
Vote by Mail: If you choose to vote by mail, simply mark your proxy card,
and then date, sign and return it to us, before the annual meeting, in the
postage-paid envelope provided. We will then vote your shares as you direct.
Shareholders who hold their shares beneficially in street name through a
nominee (such as a broker) may be able to vote by telephone or the internet as
well as by mail. You should follow the instructions you receive from your
nominee to vote these shares.
For the election of directors, you may vote for (1) both of the nominees,
(2) neither of the nominees, or (3) one of the nominees but not the other. 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
o "For" the election of both of our nominees for director; and
o "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, by telephone or by the internet
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.
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Votes required
If a quorum is present at the annual meeting,
o the director nominees will be elected by a plurality of the votes cast
in person or by proxy at the meeting; and
o 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.
Stockholder proposals for the 2003 annual meeting of stockholders
In accordance with Buckeye's by-laws, stockholders' proposals intended to
be presented at the 2003 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 2003 annual meeting (which is expected to be held in November
2003), 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 two persons
to serve as Class I Directors: George W. Bryan and R. Howard Cannon. We do not
anticipate that either 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 two 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 I Directors
(Terms expiring 2005)
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George W. Bryan, age 58, 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 TBC Corporation and Union Planters Corporation.
R. Howard Cannon, age 40, 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.
The Board of Directors recommends a vote "FOR" each of the nominees listed
above.
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Incumbent Directors -- Class II
(Terms Expiring 2003)
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Red Cavaney, age 59, 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 of
the American Society of Association Executives.
David B. Ferraro, age 64, 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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Incumbent Directors -- Class III
(Terms expiring 2004)
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Robert E. Cannon, age 72, 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 67, 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 Inc., Sypris Solutions Inc., Tuesday Morning
Corporation and Packaging Corporation of America.
Samuel M. Mencoff, age 46, 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.
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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.
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 I
directors who are elected at the 2002 meeting will serve until the 2005 annual
meeting of stockholders unless they resign or are removed.
2002 Board meetings
Buckeye's Board of Directors met 7 times (exclusive of committee meetings)
during fiscal 2002, and no director attended less than 75% of the meetings held
by the Board and meetings held by committees of which he was a member.
Board committees
The Board of Directors has an Audit Committee and a Compensation Committee.
A Governance and Nominating Committee will be established as required in the
future.
The Audit Committee consists of Messrs. Henry F. Frigon (Chairman), Red
Cavaney and Samuel M. Mencoff, all of whom are independent, non-employee
directors of Buckeye. The Audit Committee met 5 times during fiscal year 2002.
The Audit Committee has the authority and responsibility:
o with approval of the stockholders, 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);
o to discuss with the independent accountants the results of the annual
audit and quarterly reviews;
o to conduct periodic independent reviews of the systems of accounting
(including systems of internal control);
o to make reports periodically to the Board with respect to its
findings; and
o to undertake other activities described more fully in the section
called "Report of the Audit Committee of the Board of Directors."
The Compensation Committee consists 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 3 times during fiscal year
2002. The Compensation Committee is responsible for establishing and
administering Buckeye's executive compensation plan and developing policies and
guidelines for administering the plan.
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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 the director's tenure.
Additionally, pursuant to Buckeye's Amended and Restated Formula Plan for
Non-Employee Directors, on November 2, 2001, Messrs. Bryan, Cavaney, Frigon,
Mencoff each were granted an option to acquire 10,000 shares of common stock at
the prevailing market price at the time of the grant. 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 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 2003. 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 2003.
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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. During the fiscal year ended
June 30, 2002, the Audit Committee met 5 times.
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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 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' 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, 2002. 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, 2002, 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 2002, 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 2002 and reviewing the financial statements
included in our Forms 10-Q) but also rendered on our behalf other services,
including tax-related 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 2002 and for other services rendered
during fiscal year 2002 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 2002 financial statements): $ 431,200
Financial Information Systems Design and Implementation Fees: 0
All Other Fees: 456,100
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Total Fees $ 887,300
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Other Information
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Buckeye Stock Ownership
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Except as noted below, as of September 3, 2002, 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 six 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)
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(i) Cannon Family Trust, R. Howard Cannon, Co-Trustee (2).......... 3,436,410 9.4%
432 East Racquet Club Place
Memphis, Tennessee 38117
NewSouth Capital Management, Inc. (3)........................... 5,978,989 16.7%
1000 Ridgeway Loop Road, Suite 233
Memphis, Tennessee 38120-4023
T. Rowe Price Associates, Inc. (4).............................. 3,088,000 8.4%
100 E. Pratt Street
Baltimore, Maryland 21202
(ii) George W. Bryan (5).............................................. 30,000 *
Robert E. Cannon (6)............................................. 1,497,282 4.0%
R. Howard Cannon (2) (7)......................................... 3,495,586 9.5%
Red Cavaney (8).................................................. 80,000 *
David B. Ferraro (9)............................................. 1,465,783 4.0%
Henry F. Frigon (8).............................................. 74,000 *
Samuel M. Mencoff (8)(10)........................................ 501,364 1.4%
George B. Ellis (11)............................................. 735,478 2.0%
John B. Crowe (12)............................................... 77,985 *
Paul N. Horne (13)............................................... 312,747 *
Kristopher J. Matula (14)........................................ 455,776 1.2%
(iii) All Directors and Executive Officers as a group (15) (15 persons) 9,166,717 24.8%
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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 36,948,900 shares issued and outstanding as of
September 3, 2002. Options to purchase an aggregate of 2,003,000 shares are
exercisable or become exercisable within 60 days of September 3, 2002. 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 3, 2002, includes 3,436,410 shares held by the Cannon
Family Trust, R. Howard Cannon and Richard Prosser Guenther, Co-Trustees.
9
(3) NewSouth Capital Management, Inc. filed a Form 13F with the Securities and
Exchange Commission on August 13, 2002, 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) T. Rowe Price Associates, Inc. filed a Form 13F with the Securities and
Exchange Commission on August 13, 2002, stating that as an investment
advisor, it had sole or shared dispositive power of the shares set forth
herein, which constitute more than 5% of Buckeye's common stock.
(5) Includes 20,000 shares issuable upon the exercise of options.
(6) Includes 181,176 shares held by Kathryn Gracey Cannon, wife of Robert E.
Cannon, as to which Mr. Cannon disclaims beneficial ownership; 15,603
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.
(7) Includes 58,000 shares issuable upon the exercise of options.
(8) Includes 70,000 shares issuable upon the exercise of options granted under
Buckeye's stock option plan for non-employee directors.
(9) Includes 15,605 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.
(10) Mr. Mencoff has contractually agreed to assign to Madison Dearborn
Partners, L.P., an entity for which his employer serves as a general
partner, all rights to options to which Mr. Mencoff may be entitled as a
director of Buckeye.
(11) Includes 20 shares held by Julie Ellis, wife of George B. Ellis, as
custodian for a minor child, 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 140,000 shares issuable upon the exercise of options.
(12) Includes 264 shares held by a Managed Account; 1,011 shares held in
Buckeye's 401(k) and retirement plans; 710 shares of restricted stock
issued pursuant to Buckeye's Restricted Stock Plan; and 76,000 shares
issuable upon the exercise of options.
(13) Includes 1,787 shares held in Buckeye's 401(k) and retirement plans; 2,088
shares of restricted stock issued pursuant to Buckeye's Restricted Stock
Plan; and 108,000 shares issuable upon the exercise of options.
(14) Includes 8,645 shares held in Buckeye's 401(k) and retirement plans; 1,465
shares of restricted stock issued pursuant to Buckeye's Restricted Stock
Plan; and 408,000 shares issuable upon the exercise of options.
(15) Includes an aggregate of 2,003,000 shares issuable upon exercise of options
granted under the stock option plan for non-employee directors and
Buckeye's other stock option plans.
10
--------------------------------------------------------------------------------
Executive Compensation
--------------------------------------------------------------------------------
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 2002, 2001 and 2000 to or for the account of the Chief
Executive Officer and the five other most highly compensated executive officers
of Buckeye (the "executive officers") for the fiscal year 2002.
--------------------------------------------------------------------------------
Summary Compensation Table
--------------------------------------------------------------------------------
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.......... 2002 650,000 --- --- 200,000 18,700
Chairman and 2001 650,000 5,850 59,468 --- 18,700
Chief 2000 600,000 746,400 69,225 70,000 25,500
Executive Officer
David B. Ferraro.......... 2002 500,000 --- --- 150,000 18,700
President and 2001 500,000 4,500 41,441 --- 18,700
Chief 2000 470,673 575,351 48,752 60,000 25,500
Operating Officer
George B. Ellis........... 2002 295,000 --- --- 30,000 18,700
Senior Vice President, 2001 295,000 2,655 16,917 --- 18,700
Cotton Cellulose 2000 290,289 259,635 20,403 30,000 25,500
John B. Crowe............. 2002 260,000 --- --- 50,000 12,750
Senior Vice President, 2001 237,500 --- 6,646 20,000 11,900
Wood Cellulose 2000 200,000 130,200 3,996 20,000 17,850
Paul N. Horne............. 2002 260,000 --- --- 30,000 18,700
Senior Vice President, 2001 251,250 2,261 11,997 --- 18,700
Cotton Cellulose 2000 225,000 204,975 10,190 30,000 25,500
Kristopher J. Matula...... 2002 260,000 --- --- 30,000 15,300
Senior Vice President, 2001 251,250 2,261 8,841 --- 14,450
Nonwovens 2000 225,000 177,525 7,315 30,000 20,400
-----------------
(1) Pursuant to Buckeye's Restricted Stock Plan, restricted shares of stock
were awarded for the executive officers for fiscal years 2002, 2001 and
2000 in the following amounts: (i) in the case of Mr. Cannon, 0 shares,
4,823 shares and 2,962 shares, respectively; (ii) in the case of Mr.
Ferraro, 0 shares, 3,361 shares and 2,086 shares, respectively; (iii) in
the case of Mr. Ellis, 0 shares, 1,372 shares and 873 shares, respectively;
(iv) in the case of Mr. Crowe, 0 shares, 539 shares and 171 shares,
respectively; (v) in the case of Mr. Horne, 0 shares, 973 shares and 436
11
shares, respectively; and (vi) in the case of Mr. Matula, 0 shares, 717
shares and 363 shares, respectively. The prices per share of $12.33 for
fiscal year 2001 and $23.37 for fiscal year 2000 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
2002 for Messrs. Cannon, Ferraro, Ellis, Crowe, Horne and Matula was
$207,290, $149,303, $62,563, $6,958, $20,462 and $14,357, respectively. If
dividends are paid to holders of common stock, holders of restricted stock
similarly will be eligible to receive dividends.
(2) Options granted in fiscal year 2002 were granted pursuant to the 1995 Stock
Option Plan. The exercise price of options granted to Messrs. Cannon,
Ferraro, Ellis, Crowe, Horne and Matula during fiscal year 2002 is $11.25
per share. A portion of the options granted to Mr. Crowe in 2002 were
granted pursuant to the 1995 Management Stock Option Plan at an exercise
price of $7.60 per share. Mr. Crowe was granted options in fiscal year 2001
pursuant to the 1995 Stock Option Plan at an exercise price of $15.06. None
of the other 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, Crowe, Horne and Matula during fiscal year 2000 is $16.00
per share. All outstanding options vest periodically over a period of five
years, except that optionees who were over the age of 57 at the time of the
option grant have shorter vesting periods. Options that have vested may be
exercised within a period of ten years from the date the options were
granted or such shorter periods as are defined in the subscription
agreements executed between Buckeye and the optionees.
(3) Amounts consist of accruals under the Buckeye Retirement Plan (the
"Retirement Plan") which is a defined contribution retirement plan covering
substantially all employees. Buckeye contributes 1% of the employee's gross
compensation plus 1/2% for each year of service up to a maximum of 11% of
the employee's gross compensation under the Retirement Plan. Additionally,
the Retirement Plan provides for contributions by Buckeye of shares of
common stock equal to an additional 4% of the employee's gross compensation
during years when Buckeye has been financially successful based on a
predetermined financial threshold approved by the Board. The additional 4%
contribution will not be made to the Retirement Plan for fiscal year 2002
because the threshold was not reached.
-12-
--------------------------------------------------------------------------------
Options/SARs Granted in Last Fiscal Year
--------------------------------------------------------------------------------
Potential realizable
value at assumed
rates of stock price
appreciation for
Individual Grants option term
---------------------------------------------------------------------- --------------------------
Percent of
Number of securities total options Exercise or
underlying options employees in base price Expiration
Name granted (#) fiscal year ($/sh) date 5%($) 10%($)
---- --------------------------------------------------------------------------------------------------
Robert E. Cannon 200,000 16.8% 11.25 04/23/12 1,415,013 3,585,921
David B. Ferraro 150,000 12.6% 11.25 04/23/12 1,061,260 2,689,440
George B. Ellis 30,000 2.5% 11.25 04/23/12 212,252 537,888
John B. Crowe 30,000 2.5% 11.25 04/23/12 212,252 537,888
John B. Crowe 20,000 1.7% 7.60 04/23/12 214,601 431,692
Paul N. Horne 30,000 2.5% 11.25 04/23/12 212,252 537,888
Kristopher J. Matula 30,000 2.5% 11.25 04/23/12 212,252 537,888
--------------------------------------------------------------------------------
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 2002 for each of the executive officers
as of June 30, 2002.
Shares Securities underlying Value of unexercised
acquired on Value unexercised options in-the-money options
Name exercise(1) realized(1) at June 30, 2002 at June 30, 2002(2)
-------------------- ------------- ------------ ----------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- -------------- ----------- -------------
Robert E. Cannon.... --- --- 400,000 200,000 $ 59,609 ---
David B. Ferraro.... --- --- 300,000 150,000 $ 55,000 ---
George B. Ellis..... --- --- 128,000 42,000 $ 27,500 ---
John B. Crowe....... --- --- 72,000 114,000 $ ---- 44,100
Paul N. Horne....... --- --- 90,000 60,000 $ 16,500 ---
Kristopher J. Matula --- --- 390,000 60,000 $678,000 ---
-----------------
(1) As of June 30, 2002, no options have been exercised by the executive officers.
(2) Based on $9.80 per share, the closing price on the NYSE as of June 28, 2002.
13
--------------------------------------------------------------------------------
Equity Compensation Plan Information
--------------------------------------------------------------------------------
Number of securities to Weighted-average Number of securities
be issued upon exercise exercise price of remaining available for
of outstanding options, outstanding options, future issuance under
Plan Category warrants and rights warrants and rights equity compensation plans
------------- ------------------------- ------------------------- ----------------------------
Equity compensation plans
approved by stockholders (1) 4,562,950 $14.02 460,400
Equity compensation plans not
approved by stockholders (2) 331,159 $14.58 1,112,245(3)
--------- ---------
Total 4,894,109 $14.06 1,572,645
========= =========
(1) Buckeye stockholders approved both the 1995 Incentive and Non-Qualified
Stock Option Plan and the 1995 Management Stock Option Plan.
(2) The Formula Plan and the Restricted Stock Plan were approved by the
unaffected members of the Board of Directors.
(3) Includes 370,000 shares reserved for issuance under the Formula Plan and
742,245 shares reserved for issuance under the Restricted Stock Plan.
--------------------------------------------------------------------------------
Compensation Committee Interlocks and Insider Participation
--------------------------------------------------------------------------------
The Compensation Committee of the Board is composed of Messrs. Samuel M.
Mencoff, Chairman, George W. Bryan and Red Cavaney, all of whom are independent
directors. No director who also serves as an executive officer participated in
deliberations regarding his own compensation. For 2003, Messrs. Mencoff, Bryan
and Cavaney will continue to serve as the Compensation Committee.
--------------------------------------------------------------------------------
Report of the Compensation Committee on Executive Compensation
--------------------------------------------------------------------------------
The Compensation Committee of the Board of Directors is comprised of three
non-employee directors who are independent as defined under the listing
standards of the New York Stock Exchange. 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. In prior years, 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 these Acts.
14
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.
Because of Buckeye's poor financial performance in fiscal year 2002,
Buckeye paid no bonuses under its 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 2002
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 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 2002 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 2002.
15
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
--------------------------------------------------------------------------------
Performance Graph
--------------------------------------------------------------------------------
The following graph compares the cumulative total stockholder returns from
June 28, 1997 through June 29, 2002 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, 1997, and the reinvestment of any dividends paid on account of the
investments.
[GRAPHIC OMITTED]
Total Returns Index 06/1997 06/1998 06/1999 06/2000 06/2001 06/2002
------- ------- ------- ------- ------- -------
Buckeye Technologies Inc........................... 100.0 139.6 90.0 130.0 85.3 58.1
S&P 500 Stocks..................................... 100.0 130.6 160.2 172.1 146.9 120.4
NYSE Paper Stocks.................................. 100.0 95.6 108.7 90.9 108.1 126.6
16
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
Other Matters
--------------------------------------------------------------------------------
The Board of Directors knows of no matters other than those discussed in
this proxy statement which will be presented at the 2002 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, 2002.
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, 2002
17
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,
2002, 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 7, 2002, 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
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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Buckeye Technologies Inc.
Annual Meeting of Stockholders
Thursday, November 7, 2002
5:00 p.m. Central Time
THERE ARE THREE WAYS TO VOTE YOUR PROXY
INTERNET VOTING TELEPHONE VOTING VOTING BY MAIL
Visit the Internet voting This method of voting is Simply mark, sign
website at http://proxy. available for residents of and date your Proxy
georgeson.com. Enter the the U.S. and Canada. On Card and return it
COMPANY NUMBER and CONTROL a touch tone telephone, in the postage-paid
NUMBER shown below and call TOLL FREE 1-877-260- envelope. Any mailed
follow the instructions on 0388, 24 hours a day, 7 Proxy Card must be
your screen. You will days a week. You will be received prior to
incur only your usual asked to enter ONLY the the vote at the
Internet charges. Available CONTROL NUMBER shown below. meeting. If you are
until 5:00 p.m. Eastern Have your Proxy Card ready, voting by telephone
Time on Wednesday, November then follow the prerecorded or the Internet,
6, 2002. instructions. Your vote please do not mail
will be confirmed and cast your card.
as you directed. Available
until 5:00 p.m.Eastern Time
on Wednesday, November 6,
2002.
COMPANY NUMBER CONTROL NUMBER
PLEASE DETACH PROXY HERE
--------------------------------------------------------------------------------
[X] Please mark votes as in this example.
------------------------------------------------------ -----------------------------------------------------
ELECTION OF DIRECTORS RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(terms expiring in 2005)
Nominees: George W. Bryan
R. Howard Cannon
FOR WITHHELD FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ]
Exceptions:
-----------------------------------------------------
For all nominees except as noted above.
------------------------------------------------------ -----------------------------------------------------
Dated: , 2002 Signed:
----------- ----------------------------------------
[Label to be placed here] Signed:
----------------------------------------
Stockholder should sign here exactly as shown on
the label affixed hereto. Adminstrator, 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:
Georgeson Shareholder
Wall Street Station
P.O. Box 1101
New York, NY 10269-0666