SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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Check the appropriate box:
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( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section
Tredegar Industries, Inc.
(Name of Registrant as Specified in its Charter)
Tredegar Industries, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11:
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( ) Check box if any part of the fee is offset as provided by Exchange Act
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paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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TREDEGAR INDUSTRIES, INC.
1100 BOULDERS PARKWAY
RICHMOND, VIRGINIA 23225
ANNUAL MEETING OF SHAREHOLDERS
March 28, 1994
To the Shareholders:
We invite you to attend the Annual Meeting of Shareholders to be held in
the SINCLAIR AMPHITHEATRE OF THE ATLANTA AIRPORT HILTON AND TOWERS, 1031
VIRGINIA AVENUE IN ATLANTA, GEORGIA, ON THURSDAY, MAY 26, 1994, AT 9:00 A.M.,
EASTERN DAYLIGHT TIME. A formal notice of the meeting, together with a proxy
statement and proxy form, is enclosed with this letter. The notice points out
that you will be asked to elect directors and to approve the designation of
auditors for the coming year.
Please read the notice and proxy statement carefully, complete the proxy
form and mail it promptly.
JOHN D. GOTTWALD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TREDEGAR INDUSTRIES, INC.
1100 BOULDERS PARKWAY
RICHMOND, VIRGINIA 23225
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of the holders of shares of
Common Stock, no par value (Common Stock), of Tredegar Industries, Inc.
(Tredegar) will be held in the SINCLAIR AMPHITHEATRE OF THE ATLANTA AIRPORT
HILTON AND TOWERS, 1031 VIRGINIA AVENUE, IN ATLANTA, GEORGIA, ON THURSDAY, MAY
26, 1994, AT 9:00 A.M., EASTERN DAYLIGHT TIME, for the following purposes:
1. To elect four directors, one to serve until the 1996 annual meeting of
shareholders, three to serve until the 1997 annual meeting and, in each
case, until their successors are elected;
2. To approve the designation of Coopers & Lybrand as auditors for the
fiscal year ending December 31, 1994; and
3. To transact such other business as may properly come before the meeting.
Holders of shares of Common Stock of record at the close of business on
March 21, 1994, will be entitled to vote at the meeting.
You are requested to complete, sign, date and return the enclosed proxy
form promptly, regardless of whether you expect to attend the meeting. A
self-addressed, stamped envelope is enclosed for your convenience.
If you are present at the meeting, you may vote in person even if you have
already returned your proxy.
By Order of the Board of Directors
NANCY M. TAYLOR, SECRETARY
March 28, 1994
ANNUAL MEETING OF SHAREHOLDERS
TREDEGAR INDUSTRIES, INC.
To be held May 26, 1994
Approximate date of mailing -- March 28, 1994
Proxies in the form enclosed are solicited by the Board of Directors of
Tredegar (the Board) for the Annual Meeting of Shareholders to be held on
Thursday, May 26, 1994. Any person giving a proxy may revoke it any time before
it is voted by voting in person at the meeting or delivering another proxy, or
written notice of revocation, to the Secretary of Tredegar. A proxy, if executed
and not revoked, will be voted, and, if it contains any specific instructions,
will be voted in accordance with such instructions.
On March 21, 1994, the date for determining shareholders entitled to vote
at the meeting, there were 10,897,111 outstanding shares of Common Stock. Each
share of Common Stock is entitled to one vote.
The cost of the solicitation of proxies will be borne by Tredegar. In
addition to the use of the mails, proxies may be solicited personally or by
telephone by regular employees of Tredegar. Corporate Investor Communications,
Inc. has been engaged to assist in the solicitation of proxies from brokers,
nominees, fiduciaries and other custodians. Tredegar will pay that firm $5,000
for its services plus reimbursement for out-of-pocket expenses.
Tredegar's address is 1100 Boulders Parkway, Richmond, Virginia 23225.
ELECTION OF DIRECTORS
The Board is divided into three classes of directors as nearly equal in
number as possible, each of which serves for three years. The term of office of
one class of directors expires each year in rotation so that one class is
elected at each annual meeting for a three-year term.
The terms of four of the present directors, Austin Brockenbrough, III,
Bruce C. Gottwald, W. Thomas Rice and Norman A. Scher, will expire at the 1994
Annual Meeting. Messrs. Austin Brockenbrough, III, Bruce C. Gottwald and Norman
A. Scher have been nominated by the Board for election at the 1994 Annual
Meeting for the term expiring at the 1997 Annual Meeting of Shareholders. Mr. W.
Thomas Rice has been nominated by the Board for election at the 1994 Annual
Meeting for the term expiring at the 1996 Annual Meeting and will belong to the
same class of directors as Ms. Phyllis Cothran (formerly known as Phyllis
Marstiller) and Messrs. Richard W. Goodrum and Floyd D. Gottwald, Jr. The class
of directors with the term expiring at the 1995 Annual Meeting will consist of
Messrs. John D. Gottwald, Andre B. Lacy, James F. Miller and Emmett J. Rice.
The election of each nominee for director requires the affirmative vote of
the holders of a plurality of the shares of Common Stock cast in the election of
directors. Unless otherwise specified in the accompanying form of proxy, it is
intended that votes will be cast for the election of all of the nominees as
directors. Votes that are withheld and shares held in street name that are not
voted in the election of directors will not be included in determining the
number of votes cast. If any of the nominees for director should be unavailable
for election, a circumstance that is not expected, the Board may either reduce
the number of directors accordingly or designate a substitute nominee in the
place and stead of the unavailable person. In the latter event, it is intended
that votes in respect of all shares for which proxies have been given will be
cast for the election of such substitute nominee.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR ALL OF THE NOMINEES.
Following is certain information concerning the nominees and the directors
whose terms of office will continue after the meeting:
AUSTIN BROCKENBROUGH, III - age 57; director since 1993; Managing Director and
President of Lowe, Brockenbrough, Tierney & Tattersall, Inc. (private investment
counseling firm) since 1970. Other directorships: Trustee of The Jamestown
Balanced Fund, The Jamestown Equity Fund, The Jamestown Bond Fund and The
Jamestown Short Term Fund. Term expires 1994.
PHYLLIS COTHRAN - age 47; director since 1993; President and Chief Operating
Officer of Blue Cross and Blue Shield of Virginia since November 1990; having
served previously as Chief Financial Officer of Blue Cross and Blue Shield of
Virginia since 1981. Term expires 1996.
RICHARD W. GOODRUM - age 66; director since 1989; Executive Vice President and
Chief Operating Officer of Tredegar since July 10, 1989; having served
previously as Divisional Vice President -- Aluminum, Plastics and Energy of
Ethyl Corporation, a producer of fuel and lubricant additives (Ethyl), from
January 1, 1989 through July 10, 1989. Term expires 1996.
BRUCE C. GOTTWALD - age 60; director since 1989; Chairman of the Board and
Executive Committee and Chief Executive Officer of Ethyl since March 1, 1994;
having served previously as President, Chief Executive Officer and Chief
Operating Officer of Ethyl from 1969 until March 1, 1994. Other directorships:
Albemarle Corporation, Ethyl, First Colony Corporation, James River Corporation,
Dominion Resources, Inc. and CSX Corporation. Term expires 1994.
FLOYD D. GOTTWALD, JR. - age 71; director since 1989; Chairman of the Board and
Executive Committee and Chief Executive Officer of Albemarle Corporation, a
chemicals company (Albemarle) and Vice Chairman of Ethyl since March 1, 1994;
having served previously as Chairman of the Board and Executive Committee of
Ethyl from 1968 until March 1, 1994. Other directorships: Albemarle, Ethyl and
First Colony Corporation. Term expires 1996.
JOHN D. GOTTWALD - age 39; director since 1989; President and Chief Executive
Officer of Tredegar since July 10, 1989; having served previously as Corporate
Vice President -- Aluminum, Plastics and Energy of Ethyl from January 1, 1989
through July 10, 1989. Other directorship: Albemarle. Term expires 1995.
ANDRE B. LACY - age 54; director since 1989; Chairman of the Board, President
and Chief Executive Officer of LDI Management, Inc. (management and investment
holding company), and Managing General Partner of LDI, Ltd. (industrial and
investment limited partnership) since 1986. Other directorships: Albemarle,
Ethyl, First Colony Corporation, IPALCO Enterprises, Inc. and Patterson Dental
Company. Term expires 1995.
JAMES F. MILLER - age 89; director since 1989; Private investment counselor;
former President of Blyth & Co. (private investment banking corporation). Other
directorship: Fibreboard Corporation. Term expires 1995.
EMMETT J. RICE - age 74; director since 1989; retired, former member of the
Board of Governors of the Federal Reserve System. Other directorships:
Albemarle, Ethyl and Jardine-Fleming China Region Fund. Term expires 1995.
W. THOMAS RICE - age 81; director since 1989; retired, former Chairman and Chief
Executive Officer of Seaboard Coastline Industries, Inc. (transportation
company). Other directorship: Florida Rock Industries, Inc. Term expires 1994.
NORMAN A. SCHER - age 56; director since 1989; Executive Vice President, Chief
Financial Officer and Treasurer of Tredegar since July 10, 1989; having served
previously as assistant managing partner of the law firm of Hunton & Williams.
Other directorship: Dibrell Brothers, Incorporated. Term expires 1994.
Each director attended all five of the meetings of the Board held during
1993 and at least 75% of the total number of meetings held by all committees of
the Board on which the director then served.
Tredegar has an Executive Committee consisting of Messrs. John D. Gottwald,
Richard W. Goodrum and Norman A. Scher. Pursuant to Tredegar's By-laws, the
Executive Committee may exercise the full authority of the Board, except as
limited by the Virginia Stock Corporation Act and except with respect to the
compensation of the executive officers, which is determined by the Executive
Compensation Committee. During 1993, the Executive Committee met at least
monthly as Tredegar's principal management committee and met more frequently as
Messrs. Andre B. Lacy, Emmett J. Rice, W. Thomas Rice and Austin
Brockenbrough, III, serve on Tredegar's Audit Committee. The Audit Committee met
on two occasions during 1993. The Audit Committee reviews Tredegar's internal
audit and financial reporting functions and the scope and results of the audit
performed by Tredegar's independent accountants and matters relating thereto and
reports thereon to the Board. The Audit Committee also recommends to the Board
the engagement of the independent accountants of Tredegar.
Messrs. John D. Gottwald, Norman A. Scher and Andre B. Lacy serve on
Tredegar's Nominating Committee. During 1993, the Nominating Committee met
formally on one occasion. The Nominating Committee makes recommendations to the
Board regarding nominees for election as directors and other recommendations
regarding tenure, classification and compensation of directors.
Tredegar's By-laws provide that a shareholder of Tredegar entitled to vote
for the election of directors may nominate persons for election to the Board by
mailing written notice to the Secretary of Tredegar not later than (i) with
respect to an election to be held at an annual meeting of shareholders, 90 days
prior to such meeting and (ii) with respect to an election to be held at a
special meeting of shareholders for the election of directors, the close of
business on the seventh day following the date on which notice of such meeting
is given to shareholders. Any such shareholder's notice shall include (i) the
name and address of the shareholder and of each person to be nominated, (ii) a
representation that the shareholder is a holder of record of stock of Tredegar
entitled to vote at such meeting and intends to appear in person or by proxy at
the meeting to nominate each person specified, (iii) a description of all
arrangements or understandings between the shareholder and each nominee and any
other person (naming such person) pursuant to which the nomination is to be made
by the shareholder, (iv) such other information regarding each nominee as would
be required to be included in a proxy statement filed pursuant to the applicable
rules of the Securities and Exchange Commission had the nominee been nominated
by the Board and (v) the consent of each nominee to serve as a director of
Tredegar if so elected.
Ms. Phyllis Cothran and Messrs. Emmett J. Rice, James F. Miller and W.
Thomas Rice serve on Tredegar's Executive Compensation Committee. The Executive
Compensation Committee met on three occasions during 1993. This Committee
approves the salaries of executive officers and all bonus awards to executive
officers, and grants options under Tredegar's stock incentive plans. The
Executive Compensation Committee is composed of individuals who are not, and
have not been for the preceding year, eligible to participate in any stock
incentive plan of Tredegar.
Messrs. Floyd D. Gottwald, Jr., and Bruce C. Gottwald are brothers. Mr.
John D. Gottwald is the son of Mr. Floyd D. Gottwald, Jr. The Gottwalds may be
deemed to be control persons of Tredegar.
The following table lists the direct or indirect beneficial ownership of
Tredegar's Common Stock by the directors, nominees and the executive officers
named in the Summary Compensation Table as of February 15, 1994, and all
directors and executive officers of Tredegar as a group as of February 15, 1994.
(a) Except as indicated, each person or group owns less than 1% of
Tredegar's outstanding Common Stock.
(b) Certain shares may be deemed to be beneficially owned by more than one
person or group listed, and, except as noted in (g) below, are reported as being
beneficially owned by each.
(c) Austin Brockenbrough, III, disclaims beneficial ownership of 1,680
shares of Common Stock.
(d) The total number of shares for the following executive officers and
Management as a group includes shares with respect to which certain executive
officers have the right to acquire beneficial ownership within 60 days of
February 15, 1994: Richard W. Goodrum, 47,676; John D. Gottwald, 53,944; Steven
M. Johnson, 17,500; Anthony J. Rinaldi, 13,000; and Norman A. Scher, 43,944; and
Management as a group, 211,064.
(e) Bruce C. Gottwald disclaims beneficial ownership of 420,185 shares of
(f) Floyd D. Gottwald, Jr., disclaims beneficial ownership of 443,294
shares of Common Stock.
(g) John D. Gottwald disclaims beneficial ownership of 67,390 shares of
Common Stock. As co-trustee of a revocable trust created by Floyd D. Gottwald,
Jr., John D. Gottwald may be deemed to have shared voting and investment power
with respect to 626,917 shares which have been reported for Floyd D. Gottwald,
Jr., in the second column of the above table.
(h) Andre B. Lacy disclaims beneficial ownership of 90,390 shares of Common
(i) James F. Miller disclaims beneficial ownership of 1,040 shares of
(j) Anthony J. Rinaldi disclaims beneficial ownership of 1,325 shares of
(k) The directors, nominees and executive officers have sole voting and
investment power over all of the shares disclosed except for the shares listed
in the second column, which are held by or jointly with spouses, by children or
in partnerships and certain trust relationships. Any shares held under Ethyl's
or Tredegar's benefit plans for the benefit of any director, nominee or
executive officer are included in the number of shares over which the director,
nominee or executive officer has sole voting or investment power. Shares held by
the Trustees of such plans for the benefit of other employees are not included.
See Note (c) to the table Security Ownership of Certain Beneficial Owners below.
(l) Voting and investment power is shared by two directors with respect to
37,660 shares. This overlap in beneficial ownership has been eliminated for
purposes of calculating the number of shares and the percentage of class owned
(m) The above table does not include certain shares owned by adult children
and attributed to Floyd D. Gottwald, Jr., and Bruce C. Gottwald in the table
Security Ownership of Certain Beneficial Owners below. If such shares were
included in the above table, the total number of shares of Management would
equal 3,118,068 and the percentage owned by Management would equal 28.07%.
Based solely on its review of the copies of the forms prescribed by Section
16(a) of the Securities Exchange Act of 1934 received by Tredegar, or written
representations from certain reporting persons that no Forms 5 were required for
those persons, Tredegar believes that all of its Section 16 reporting persons
complied with the filing requirements of Section 16(a) as of December 31, 1993.
The following table lists any person (including any group as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934) who, to the
knowledge of Tredegar, was the beneficial owner as of February 15 1994, of more
than 5% of the shares of Tredegar's Common Stock.
Security Ownership of Management
NUMBER OF SHARES NUMBER OF SHARES TOTAL
WITH SOLE VOTING WITH SHARED VOTING NUMBER
AND INVESTMENT AND INVESTMENT OF PERCENT OF
POWER POWER SHARES CLASS(A)
DIRECTORS, NOMINEES AND
Austin Brockenbrough, III 4,000 1,680 5,680(c)
Phyllis Cothran -- 100 100
Richard W. Goodrum 102,028 3,000 105,028(d)
Bruce C. Gottwald 885,378 46,511 931,889(e) 8.55%
Floyd D. Gottwald, Jr. 520,803 696,538 1,217,341(f) 11.17%
John D. Gottwald 355,746 64,036 419,782(d)(g) 3.83%
Steven M. Johnson 23,070 1,500 24,570(d)
Andre B. Lacy 223 120,000 120,223(h) 1.10%
James F. Miller 56,000 1,040 57,040(i)
Emmett J. Rice 530 -- 530
W. Thomas Rice 4,000 -- 4,000
Anthony J. Rinaldi 23,094 1,357 24,451(d)(j)
Norman A. Scher 55,565 40 55,605(d)
and executive officers
as a group
(15)(k)(l) 2,080,881 878,154 2,979,035(d)(m) 26.82%(m)
(a) Floyd D. Gottwald, Jr., and Bruce C. Gottwald (the Gottwalds), together
with members of their immediate families, including John D. Gottwald, who is an
employee of Tredegar, may be deemed to be a group for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, although there is no agreement
among them with respect to the acquisition, retention, disposition or voting of
Common Stock. This table does not include John D. Gottwald, who, as co-trustee
of a revocable trust created by Floyd D. Gottwald, Jr., may be deemed to have
shared voting and investment power with respect to 626,917 shares of Common
Stock attributed to Floyd D. Gottwald, Jr.
(b) The Gottwalds, individually or collectively, have sole voting and
investment power over all of the shares disclosed except for 637,287 shares held
by their respective wives and children, and in certain trust relationships, some
of which might be deemed to be beneficially owned by the Gottwalds under the
rules and regulations of the Securities and Exchange Commission, but as to which
the Gottwalds disclaim beneficial ownership. Shares owned by the adult children
of Floyd D. Gottwald, Jr., and Bruce C. Gottwald are included in the holdings of
the Gottwalds as a group.
(c) This amount includes shares owned of record by NationsBank of Virginia,
N.A., Richmond, Virginia (NationsBank), as Trustee, under Tredegar's savings
plan for the benefit of certain members of the Gottwald family. This amount does
not include 1,067,107 shares held by the Trustee of such plan for the benefit of
employees other than members of the Gottwald family. This amount also includes
shares owned of record by NationsBank as Trustee under the Savings Plan for the
Employees of Ethyl Corporation (the Ethyl Savings Plan) for the benefit of the
Gottwalds and the members of their immediate families. Shares held under
Tredegar's savings plans are voted by the Trustee in accordance with
instructions solicited from employees participating in the plans. If a
participating employee does not give the Trustee voting instructions, his shares
are voted by the Trustee in accordance with the Board's recommendations to the
shareholders. Because members of the Gottwald family are executive officers,
directors and the largest shareholders of Tredegar, they may be deemed to be
control persons of Tredegar and to have the capacity to control any such
recommendation of the Board.
(d) As of February 15, 1994, as Trustee for the Savings Plan for the
Employees of Ethyl Corporation, NationsBank Corporation and NationsBank of
Virginia, N.A. also owned of record 451,503 shares of Tredegar's Common Stock,
representing 4.14% of the outstanding Common Stock. As of February 15, 1994, the
Ethyl Savings Plan held 411,431 shares of Common Stock for employees other than
the Gottwalds and the members of their immediate families.
(e) The number of shares owned is as of December 31, 1990, as reported in
the Schedule 13G filed by United States Steel and Carnegie Pension Fund, Inc.
and received by Tredegar on February 1, 1991.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth the compensation paid by Tredegar to the
Chief Executive Officer and the four other highest paid executive officers for
services in all capacities to Tredegar for the fiscal years ended December 31,
1993, 1992 and 1991, respectively.
SUMMARY COMPENSATION TABLE
Security Ownership of Certain Beneficial Owners
NAMES AND ADDRESSES NUMBER OF
OF BENEFICIAL OWNERS OF SHARES CLASS
Floyd D. Gottwald, Jr., and
Bruce C. Gottwald(a)
330 South Fourth Street
P.O. Box 2189
Richmond, VA 23217 2,670,385(b)(c) 24.39%
NationsBank Corporation and
NationsBank of Virginia, N.A., as
Trustee for the Savings Plan for
the Employees of Tredegar
12th & Main Streets
Richmond, VA 23219 1,110,292(d) 10.19%(d)
United States Steel and
Carnegie Pension Fund, Inc.
767 Fifth Avenue
New York, NY 10153 664,410(e) 6.10%
(1) For years prior to 1993, amounts reflect matching contributions made by
Tredegar with respect to the executive officers under the Savings Plan for the
Employees of Tredegar Industries, Inc. (the Savings Plan).
(2) Each option granted includes a tandem stock appreciation right.
(3) Matching contributions under the Savings Plan ($10,000) and credit
under the Savings Plan Benefit Restoration Plan (the SPBR Plan) ($6,124).
(4) Matching contributions under the Savings Plan ($10,000) and credit
under the SPBR Plan ($4,662).
(5) Matching contributions under the Savings Plan ($10,000) and credit
under the SPBR Plan ($4,662).
(6) Matching contributions under the Savings Plan ($5,812) and credit under
the SPBR Plan ($2,000).
(7) Matching contributions under the Savings Plan ($5,627) and credit under
the SPBR Plan ($1,894).
STOCK OPTIONS AND SARS
No stock options or stock appreciation rights (SARs) were granted to any
executive officer during the fiscal year ended December 31, 1993.
The following table sets forth information with respect to the fiscal
year-end value of all unexercised stock options held by the executive officers
named in the Summary Compensation Table. None of such executive officers
exercised any Stock Options or tandem SARs during the fiscal year ended December
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
NAME AND SALARY BONUS OPTIONS/SARS COMPENSATION (1)
PRINCIPAL POSITION YEAR ($) ($) (POUND) ($)
John D. Gottwald 1993 $322,500 $42,500 -0- $ 16,124(3)
President and Chief 1992 308,500 75,000 30,000(2) 10,000
Executive Officer 1991 293,750 30,000 -0- 10,000
Richard W. Goodrum 1993 293,250 32,500 -0- 14,662(4)
Executive Vice 1992 280,625 55,000 20,000(2) 9,250
President and Chief 1991 267,375 24,000 -0- 10,000
Norman A. Scher 1993 293,250 32,500 -0- 14,662(5)
Executive Vice 1992 280,625 55,000 20,000(2) 9,250
President, Chief 1991 267,375 24,000 -0- 10,000
Financial Officer and Treasurer
Steven M. Johnson 1993 156,233 20,000 -0- 7,812(6)
Vice President -- 1992 132,975 28,000 10,000(2) 4,383
Corporate Development 1991 126,625 16,000 -0- 6,331
Anthony J. Rinaldi 1993 150,417 20,000 -0- 7,521(7)
Vice President 1992 142,500 28,000 10,000(2) 4,750
and President of 1991 116,100 20,000 -0- 6,350
(1) Each option granted includes a tandem SAR.
(2) Based on the closing price of $15 on 12/31/93.
(3) The number of options and related SARs listed for Messrs. Gottwald and
Goodrum include additional options and related SARs to purchase 6,900 and 3,900
shares of Common Stock of Tredegar, respectively, granted as compensation for
incentive stock options to purchase shares of Ethyl common stock held by Messrs.
Gottwald and Goodrum that expired after the spin-off of Tredegar from Ethyl. The
6,900 options granted to Mr. Gottwald are incentive stock options and the 3,900
options granted to Mr. Goodrum are non-incentive stock options.
(4) Rounded to nearest dollar.
All of the executive officers participate in the Tredegar Industries, Inc.
Retirement Income Plan (the Pension Plan). The Pension Plan provides a normal
retirement benefit equal to 1.1% of the participant's final average earnings up
to his Social Security covered compensation, times his years of pension benefit
service, plus 1.5% of final average earnings in excess of covered compensation,
times his years of pension benefit service. There is no deduction for Social
Security benefits. Estimated annual benefits under the Pension Plan upon
retirement at age 65, determined as of December 31, 1993, to persons with
specified earnings and years of pension benefit service are set forth in the
The Internal Revenue Code limits (a) the annual retirement benefit that may
be paid under the Pension Plan and (b) the earnings that may be used in
computing a benefit. The maximum benefit and earnings limitations are adjusted
each year to reflect changes in the cost of living. For 1993, the maximum
benefit limitation was $112,382 (based on a five-year certain and life annuity)
and the earnings limitation was $235,840.
The Corporation also maintains the Tredegar Industries, Inc. Retirement
Benefit Restoration Plan (the Restoration Plan). The Restoration Plan is
designed to restore to selected participants the benefits that cannot be paid
under the Pension Plan due to the Internal Revenue Code maximum benefit
limitation, the earnings limitation, or both. The benefit payable under the
Restoration Plan is the difference between the benefit that would have been
payable under the Pension Plan, but for either or both of the Internal Revenue
Code limitations, and the amount actually payable under the Pension Plan.
PENSION PLAN TABLE
(ESTIMATED ANNUAL BENEFITS PAYABLE AT RETIREMENT(1)(2))
NUMBER OF SECURITIES
UNDERLYING VALUE OF
OPTIONS/SARS AT IN-THE-MONEY
FISCAL YEAR-END OPTIONS/SARS AT
(POUND)(1) FISCAL YEAR-END ($)(2)
ON EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (POUND) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
J. D. Gottwald -0- -0- 53,944/7,956(3) 86,250/0
R. W. Goodrum -0- -0- 47,676/1,224(3) 57,500/0
N. A. Scher -0- -0- 43,944/1,056 57,500/0
S. M. Johnson -0- -0- 15,747/1,753 23,710/5,040(4)
A. J. Rinaldi -0- -0- 11,247/1,753 23,710/5,040(4)
(1) The estimated benefits assume retirement at age 65 and assume that
payment will be made for the lifetime of the participant, with five years'
payment guaranteed, which is the normal form of payment under the Pension Plan
and the Restoration Plan. The table assumes attainment of age 65 in 1993 and
covered compensation of $22,716.
(2) The estimated benefit set forth in the table was determined without
regard to the Internal Revenue Code maximum benefit limitation or its limitation
on earnings that may be used in computing a benefit. The Restoration Plan will
provide Messrs. Gottwald, Goodrum and Scher (currently, the only employees
adversely affected by the Internal Revenue Code limitations) the benefit that is
lost under the Pension Plan due to the Internal Revenue Code maximum benefit
limitation. In addition, the Restoration Plan will provide Mr. Goodrum the
benefit that is lost under the Pension Plan due to the Internal Revenue Code
limitation on the earnings that may be used in computing a benefit.
(3) Final-Average Earnings is the average of the highest three consecutive
calendar year's earnings (base earnings plus 50% of bonuses) during the 10
consecutive years immediately preceding the
date of determination. The current compensation covered under the Pension Plan
for each of the executive officers named in the Summary Compensation Table and,
in the case of Messrs. Gottwald, Goodrum and Scher, the Restoration Plan, are:
John D. Gottwald, $235,840; Richard W. Goodrum, $320,744; Norman A. Scher,
$235,840; Steven M. Johnson, $170,233; and Anthony J. Rinaldi, $164,417.
(4) The years of pension benefit service for each of the executive officers
named in the Summary Compensation Table are: John D. Gottwald, 15; Richard W.
Goodrum, 36.5; Norman A. Scher, 4; Steven M. Johnson, 4; and Anthony J. Rinaldi,
COMPENSATION OF DIRECTORS
Each member of the Board who was not an employee of Tredegar or any of its
subsidiaries was paid $500 in 1993 for attendance at each Board meeting and at
each meeting of a committee of the Board of which he was a member. Each chairman
of a Board committee received an additional $250 for attendance at each meeting
of his committee. In addition, each director was paid a quarterly fee of $3,000
during 1993. Employee members of the Board are not paid separately for their
service on the Board.
EMPLOYMENT CONTRACT WITH NORMAN A. SCHER
Tredegar has an employment agreement with Norman A. Scher, effective until
June 30, 1997, providing for an annual salary of not less than $250,000 and the
payment to him of up to two years' salary in case of termination of employment
under certain conditions and, in case of disability, annual benefits of a
specified amount. A substantial part of such disability benefits are available
under Tredegar's disability benefit plan. In the event of Mr. Scher's death,
Tredegar has agreed to pay his estate an amount equal to two years' salary less
any amounts payable to his estate under any group insurance program of Tredegar.
At present, such benefit would be payable to Mr. Scher's estate under Tredegar's
general group insurance program supplemented by insurance purchased by Mr.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee (the Committee) is comprised of four
independent directors who have no interlocking relationships as defined by the
SEC. No member of the Committee is a former or current officer or employee of
Tredegar or any of its subsidiaries. No member of the Committee is eligible to
participate in any of the plans that it administers.
As members of the Committee, it is our duty to administer Tredegar's
executive incentive plans; to review compensation plans, programs and policies;
to monitor the performance and compensation of executive officers; and to make
recommendations and reports to the Board concerning matters of executive
compensation. In performing these duties, we consider management's evaluations
and recommendations along with other factors including overall company
performance and external comparisons.
Tredegar's executive compensation plans are designed to motivate and retain
executive officers with incentives that are linked to financial performance and
enhanced shareholder value. In evaluating
compensation for each executive, the Committee reviews surveys prepared by major
compensation consulting firms.
Tredegar's general approach to executive compensation involves setting
total compensation, and each element therein, near the midrange of a sample
composed of comparable U.S. manufacturing companies. We believe this comparison
is reasonable and enables Tredegar to assure executives they are paid fairly.
This comparison method also ensures that Tredegar is not setting compensation at
unnecessarily high levels.
The companies chosen for the comparison group generally are not the same
companies that comprise the published industry index in the performance graph
included in this proxy statement. We believe that the companies included in the
published industry index are not necessarily direct competitors for executive
The Committee considers the entire pay package when setting each component
of pay. To date, Tredegar's executive compensation program has had three main
components: base salary, bonuses, and stock options. Base salary pays executives
for the primary job. Bonuses are rewards related to performance measures and
progress in corporate strategy. Stock options provide an incentive to create
value for all shareholders.
In determining base salaries, Tredegar considers the midpoints and ranges
of the comparison group described above. Tredegar then establishes its own
midpoints and ranges based on competitive practice and a comparison of job
responsibilities at Tredegar versus job responsibilities at companies included
in the comparison group. Individual salaries may vary in relation to midpoints
due to individual performance and experience.
Annual salary increases are based on a variety of factors including average
increases at other manufacturing companies, Tredegar's financial condition,
individual performance, and the officer's position in the range. Individual
performance is subjectively evaluated.
The 1993 base salary for the Chief Executive Officer (CEO) was $322,500.
This salary is below the midpoint of the comparison group. The CEO's 1993 base
salary increase was 4.4% which is in line with increases for other salaried
Tredegar has a discretionary bonus program that allows an annual payment
based on individual and company performance. In determining bonus awards for
1993, the Committee considered Tredegar's shareholder value concepts and
reviewed measurements such as segment operating profit, net income, earnings per
share, return on sales, and return on equity. The Annual Report to Shareholders
contains a discussion of Tredegar's approach to measuring shareholder value.
Consideration of these financial measures is subjective. In addition to these
measures, progress toward longer term objectives, execution of corporate
strategy, and individual performance are considered on a subjective basis.
While bonus evaluations are subjective and have no established targets, the
Committee generally intends for bonuses to be indicative of Tredegar's overall
Total bonuses paid in 1993 were 28% less than bonuses paid in 1992. Bonuses
paid exclusively to executive officers were 37% lower than in 1992. Bonuses paid
in 1993 decreased primarily because operating earnings and other elements of
financial performance decreased in 1993.
The Committee, upon considerations of the factors discussed above, awarded
the CEO a bonus of $42,500 for 1993 (down 43% from 1992).
Tredegar has two stock incentive plans (collectively, the SIP). During each
year, the Committee considers granting key employees, including executive
officers, awards under the SIP. The SIP is designed to align executives'
interests with those of Tredegar's shareholders. The SIP enables the Committee
to grant stock options, stock appreciation rights (SARs), and shares of
restricted stock to executive officers and other individuals. (Restricted stock
is stock normally sold at a discount or given to an executive, who is restricted
from selling or transferring it for a specified time period or until certain
criteria have been met.) The Committee determines the terms and conditions of
any options, SARs or restricted stock granted. To date, no shares of restricted
stock have been awarded under the SIP.
No stock options or SARs were granted to executive officers in 1993.
$1 MILLION DEDUCTION LIMIT
Effective for 1994, Congress passed a law that disallows corporate tax
deductions for pay to certain proxy table executives in excess of $1 million.
Various exemptions are available, including an exemption for compensation that
is performance-based as defined by the law. In order to be performance-based,
incentive plans must be based on formulas, rather than subjective judgments.
Tredegar is not currently in danger of losing deductions under the new law.
The Committee will consider carefully any plan or compensation arrangement that
would result in the disallowance of compensation deductions. The Committee will
use its best judgment in such cases, taking all factors into account, including
the materiality of any deductions that may be lost. To date, the Committee has
not adopted a policy that dictates its decision in such a situation.
In general, Tredegar's executive compensation policy has been influenced
primarily by operating results since 1989. This policy includes rewarding
performance that has enhanced shareholder value, and limiting compensation when
results have not been satisfactory.
Executive Compensation Committee
Emmett J. Rice, Chairman James F. Miller
Phyllis Cothran W. Thomas Rice
February 24, 1994
ADDITIONAL INFORMATION ON COMPENSATION PAID TO TREDEGAR'S CHIEF EXECUTIVE
OFFICER HAS BEEN INCLUDED IN TREDEGAR'S ANNUAL REPORT TO SHAREHOLDERS.
COMPARATIVE COMPANY PERFORMANCE
The following graph compares cumulative total returns for Tredegar, the S&P
500 Stock Index, and the S&P Manufacturing (Diversified Industries), a
nationally recognized industry index, since the spin-off of Tredegar on July 10,
[Insert Performance Graph]
(FINAL-AVERAGE YEARS OF SERVICE(4)
EARNINGS)(3) 15 20 25 30 35 40
$125,000................ $17,841 $ 26,762 $ 35,683 $ 44,603 $ 53,524 $ 62,445 $ 71,365
150,000................. 21,591 32,387 43,183 53,978 64,774 75,570 86,365
175,000................. 25,341 38,012 50,683 63,353 76,024 88,695 101,365
200,000................. 29,091 43,637 58,183 72,728 87,274 101,820 116,365
225,000................. 32,841 49,262 65,683 82,103 98,524 114,945 131,365
250,000................. 36,591 54,887 73,183 91,478 109,774 128,070 146,365
300,000................. 44,091 66,137 88,183 110,228 132,274 154,320 176,365
350,000................. 51,591 77,387 103,183 128,978 154,774 180,570 206,365
400,000................. 59,091 88,637 118,183 147,728 177,274 206,820 236,365
450,000................. 66,591 99,887 133,183 166,478 199,774 233,070 266,365
500,000................. 74,091 111,137 148,183 185,228 222,274 259,320 296,365
*Return for S&P Manufacturing (Diversified Industries) commenced June 30, 1989.
DESIGNATION OF AUDITORS
The Board has designated Coopers & Lybrand, certified public accountants,
as Tredegar's independent auditors for the year 1994, subject to shareholder
approval. This firm has audited Tredegar's financial statements since Tredegar
became an independent company. A representative of Coopers & Lybrand is expected
to be present at the meeting with an opportunity to make a statement and to be
available to respond to appropriate questions.
Coopers & Lybrand's principal function is to audit the consolidated
financial statements of Tredegar and its subsidiaries and, in connection with
the audit, to review certain related filings with the Securities and Exchange
Commission and to conduct limited reviews of the unaudited financial statements
included in each of Tredegar's quarterly reports.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE DESIGNATION OF COOPERS &
LYBRAND AS AUDITORS.
PROPOSALS FOR 1995 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 1995 annual
meeting of shareholders must present such proposal to Tredegar at its principal
office in Richmond, Virginia, not later than December 24, 1994, in order for the
proposal to be considered for inclusion in Tredegar's proxy statement.
In addition to any other applicable requirements, for business to be
properly brought before the annual meeting by a shareholder, even if the
proposal is not to be included in Tredegar's proxy statement, Tredegar's By-laws
provide that the shareholder must give timely notice in writing to the Secretary
of Tredegar not later than 90 days prior to the meeting. As to each matter, the
notice must contain (i) a brief description of the business desired to be
brought before the annual meeting (including the specific proposal to be
presented) and the reasons for addressing it at the annual meeting, (ii) the
name of, record address of, and class and number of shares beneficially owned
by, the shareholder proposing such business, and (iii) any material interest of
the shareholder in such business.
ANNUAL REPORT ON FORM 10-K
TREDEGAR WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROXY
STATEMENT HAS BEEN DELIVERED, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY
OF TREDEGAR'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
1993, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.
REQUESTS FOR SUCH COPY SHOULD BE DIRECTED TO TREDEGAR INDUSTRIES, INC., 1100
BOULDERS PARKWAY, RICHMOND, VIRGINIA, 23225, ATTENTION: CORPORATE SECRETARY.
PROVIDED WITH THE COPY OF THE FORM 10-K WILL BE A LIST OF EXHIBITS TO THE FORM
10-K, SHOWING THE COST OF EACH. ANY OF SUCH EXHIBITS WILL BE PROVIDED UPON
PAYMENT OF THE CHARGE NOTED ON THE LIST.
The Board is not aware of any matters to be presented for action at the
meeting other than set forth herein. However, if any other matters properly come
before the meeting, or any adjournment thereof, the person or persons voting the
proxies will vote them in accordance with their best judgment.
By Order of the Board of Directors
Nancy M. Taylor, SECRETARY
MAY 26, 1994
TREDEGAR INDUSTRIES, INC.
1100 Boulders Parkway
Richmond, Virginia 23225
TREDEGAR INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 26, 1994
The undersigned hereby appoints Richard W. Goodrum, Norman A. Scher and
Nancy M. Taylor, or any of them, with full power of substitution in each,
proxies (and if the undersigned is a proxy, substitute proxies) to vote all
shares of stock of Tredegar Industries, Inc. that the undersigned is entitled to
vote at the annual meeting of shareholders to be held on May 26, 1994 and at any
and all adjournments thereof:
1989 1990 1991 1992 1993
TREDEGAR $117 $ 56 $ 78 $122 $120
S&P 500 $110 $106 $139 $149 $164
S&P MFG.* $107 $106 $130 $141 $171
Austin Brockenbrough, III, Bruce C. Gottwald, W. Thomas Rice and Norman A. Scher
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY OF SUCH NOMINEES WRITE THE
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW
2. ( ) FOR ( ) AGAINST ( ) ABSTAIN The proposal to approve the designation of
Coopers & Lybrand as the auditors for Tredegar
In their discretion, the Proxies are authorized to vote upon such other business
and matters incident to the conduct of the meeting as may properly come before
PLEASE SIGN AND DATE ON THE REVERSE SIDE
This Proxy is solicited on behalf of the Board of Directors. This Proxy,
when properly executed, will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this Proxy will be voted for
Proposals 1 and 2.
Dated , 1994
Please sign name exactly as it
appears on the stock certificate.
Only one of several joint owners
need sign. Fiduciaries should give
Please mark, sign, date and return
the Proxy Card Promptly Using the
( )PLEASE CHECK THE BOX IF YOU PLAN
TO ATTEND THE ANNUAL MEETING IN
1. ELECTION OF DIRECTORS ( ) FOR all nominees listed ( ) WITHHOLD AUTHORITY
below (except as indicated to the to vote for all of the
contrary below) nominees listed below