Plum Creek Timber Company DEF 14A 2009
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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:
PLUM CREEK TIMBER COMPANY, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
2009 Annual Meeting
and Proxy Statement
PLUM CREEK TIMBER COMPANY, INC.
It is a pleasure to invite you to Plum Creeks Annual Meeting of Stockholders on Wednesday, May 6, 2009, beginning at 9:00 a.m. local time, at the Washington Athletic Club in Seattle, Washington. Driving instructions to the Washington Athletic Club can be found at the back of this document.
Your vote is very important. Whether or not you plan to attend the Annual Meeting in person, I urge you to vote your proxy as soon as possible. You can vote over the internet, by telephone or by mailing back a proxy card. Voting in any of these ways will ensure your representation at the Annual Meeting if you do not attend in person. Please review the instructions on the proxy card regarding each of these options. If you do attend the meeting in person, you will have the opportunity, if you desire, to change your vote at the meeting.
The agenda for the Annual Meeting includes:
The Board of Directors recommends that you vote FOR each of the director nominees, FOR the amendment proposal to eliminate plurality voting in director elections, FOR the amendment proposal to increase the share ownership limitation, FOR ratifying the appointment of Ernst & Young as Plum Creeks independent auditors and AGAINST the stockholder proposal. In addition to these specific matters, there will be a report on Plum Creeks business following the business portion of the meeting, and you will have an opportunity to ask questions.
If you have any questions concerning the Annual Meeting or any of the proposals, please contact our Investor Relations Department at (800) 858-5347 (within the United States and Canada) or (206) 467-3600 (outside the United States and Canada, call collect).
I look forward to seeing you on May 6th in Seattle.
PLUM CREEK 2009 NOTICE AND PROXY STATEMENT
PLUM CREEK TIMBER COMPANY, INC.
999 Third Avenue, Suite 4300
Seattle, Washington 98104-4096
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 6, 2009
NOTICE is hereby given of the Annual Meeting of Stockholders of Plum Creek Timber Company, Inc., a Delaware corporation (the Company).
PLUM CREEK 2009 NOTICE AND PROXY STATEMENT
TABLE OF CONTENTS
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PLUM CREEK TIMBER COMPANY, INC.
999 THIRD AVENUE, SUITE 4300
SEATTLE, WASHINGTON 98104-4096
PROXY STATEMENT FOR THE 2009 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 6, 2009
The Date of this Proxy Statement is March 25, 2009.
PROXIES IN THE FORM ENCLOSED ARE SOLICITED BY THE BOARD OF DIRECTORS OF PLUM CREEK TIMBER COMPANY, INC., TO BE VOTED AT THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 6, 2009, AT 9:00 A.M. LOCAL TIME, AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF, FOR THE PURPOSES SET FORTH IN THE ATTACHED NOTICE OF ANNUAL MEETING OF STOCKHOLDERS. STOCKHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MARCH 10, 2009, ARE ENTITLED TO VOTE AT THE ANNUAL MEETING. THE COMPANY ANTICIPATES THAT THE ATTACHED NOTICE, THIS PROXY STATEMENT AND THE ENCLOSED PROXY CARD WILL FIRST BE SENT TO STOCKHOLDERS ON OR ABOUT MARCH 25, 2009.
SOLICITATION AND REVOCABILITY OF PROXY
This Proxy Statement is furnished to stockholders of Plum Creek Timber Company, Inc., a Delaware corporation (Plum Creek or the Company), in connection with the solicitation by the Companys Board of Directors (the Board) of proxies to be voted at the Companys Annual Meeting of Stockholders on May 6, 2009, or any adjournment or postponement thereof (the Annual Meeting). Proxy cards that are properly executed and returned to the Company or voted by telephone or internet, and not later revoked, will be voted at the Annual Meeting in accordance with the instructions specified on the enclosed proxy card. Proxies received without specific voting instructions, unless revoked before exercised, will be voted:
Proxies will be voted on such other matters as may properly come before the meeting, or any adjournment or postponement thereof, in the discretion of the appointed proxy holders.
Any person giving a proxy may revoke it at any time prior to its exercise. A proxy may be revoked either by: (1) filing an instrument of revocation with the Companys Corporate Secretary at 999 Third Avenue, Suite 4300, Seattle, Washington 98104-4096; (2) voting by telephone at a later date, (3) voting by internet at a later date; or (4) signing and submitting another proxy card with a later date. A proxy may also be revoked by voting in person at the meeting. If your shares of Plum Creek common stock are held in street name (in the name of a broker, bank or other registered holder of record), you must obtain a proxy, executed in your favor, from the registered holder of record of the stock to be able to vote in person at the Annual Meeting.
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The Company will bear the entire cost of solicitation, including the preparation, assembly, printing and mailing of this Proxy Statement, the enclosed proxy card, and any additional material that may be furnished to stockholders. In accordance with the regulations of the Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE), the Company will also reimburse brokerage firms, banks and other registered holders for their expenses incurred in sending proxies and proxy materials to the beneficial owners of shares of Plum Creek common stock. In addition to solicitation by mail, directors, officers or other employees of the Company, without extra compensation, may solicit proxies in person or by telephone or facsimile. Georgeson, Inc. will assist the Company in the solicitation of proxies for a fixed fee of $8,000 and reasonable out-of-pocket expenses, to be paid by the Company.
CERTAIN MATTERS RELATING TO PROXY MATERIALS AND ANNUAL REPORTS
Each year in connection with the annual meeting of stockholders, the Company is required to send to each registered stockholder of record a proxy statement and annual report and to arrange for a proxy statement and annual report to be sent to each beneficial stockholder whose shares are held by or in the name of a broker, bank, trust or other registered holder of record. Because many stockholders hold shares of our common stock in multiple accounts or share an address with other stockholders, this process results in duplicate mailings of proxy statements and annual reports. Stockholders may avoid receiving duplicate mailings and save the Company the cost of producing and mailing duplicate documents as follows.
Stockholders of Record. If your shares are registered in your own name and you are interested in consenting to the delivery of a single proxy statement or annual report, you may contact Investor Relations by mail at 999 Third Avenue, Suite 4300, Seattle, Washington, 98104-4096; or by telephone at (800) 858-5347 if calling within the United States and Canada, or at (206) 467-3600 if calling outside the United States and Canada (call collect).
Beneficial Stockholders . If your shares are not registered in your own name, your broker, bank, trust or other registered holder of record that holds your shares may have asked you to consent to the delivery of a single proxy statement or annual report if there are other Plum Creek stockholders who share an address with you. If you currently receive more than one proxy statement or annual report at your household and would like to receive only one copy of each in the future, you should contact a representative of your broker, bank, trust or other holder of record.
Right to Request Separate Copies. If you consent to the delivery of a single proxy statement and annual report but later decide that you would prefer to receive a separate copy of the proxy statement or annual report for each stockholder sharing your address, then please notify the Company or your broker, bank, trust or other holder of record, and additional proxy statements or annual reports will be delivered to you. If you wish to receive a separate copy of the proxy statement or annual report for each stockholder sharing your address in the future, you may also contact Investor Relations using the contact information provided above.
Your vote is important. Whether or not you expect to attend the Annual Meeting in person, we urge you to vote your shares via the internet, by phone or by signing, dating and returning the enclosed proxy card at your earliest convenience. This will ensure the presence of a quorum at the meeting. Promptly voting your shares will save the
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Company the expense and extra work of additional solicitation. Submitting your proxy now will not prevent you from voting your shares at the meeting if you want to do so, because your vote by proxy is revocable at your option. Voting by internet or telephone is fast and convenient, and your vote is immediately confirmed and tabulated. Most important, by using the internet or telephone, you help the Company reduce postage and proxy tabulation costs. Or, if you prefer, you can vote by mail by returning the enclosed proxy card in the addressed, prepaid envelope provided.
Vote by Internet. You can vote your shares over the internet at www.proxyvote.com until 11:59 P.M. Eastern Time on May 5, 2009, the day before the meeting date. Have the enclosed proxy card in hand when you access the web site and follow the instructions to cast your vote on the five matters discussed in this Proxy Statement.
Vote by Telephone. You can vote your shares over the telephone by calling 1-800-690-6903 until 11:59 P.M. Eastern Time on May 5, 2009, the day before the meeting date. Have the enclosed proxy card in hand when you call and follow the instructions to cast your vote on the five matters discussed in this Proxy Statement.
Vote by Mail. You can vote your shares by mail by signing, dating and completing the enclosed proxy card and mailing it in the enclosed postage paid envelope or you can return it to Plum Creek Timber Company, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
VOTE REQUIRED AND METHOD OF COUNTING VOTES
Under the Delaware General Corporation Law (Delaware Law) and the Companys Amended and Restated Bylaws, as amended (the Company Bylaws), the presence at the Annual Meeting, in person or by duly authorized proxy, of the holders of a majority of the outstanding shares of stock entitled to vote at the Annual Meeting constitutes a quorum for the transaction of business. Each share of Plum Creek common stock entitles the holder to one vote on each of the five (5) proposals to be presented at the Annual Meeting. Abstentions and broker non-votes are counted toward determining a quorum.
A broker non-vote occurs when a registered holder of stock votes on behalf of the beneficial owner of that stock (e.g., a broker or bank holding stock on behalf of its client) on at least one proposal, but not on another, because the registered holder does not have discretionary voting authority with respect to that item of business and has not received instructions from the beneficial owner. We have been advised by the NYSE that the election of directors, the proposals to amend Plum Creeks Restated Certificate of Incorporation (the Certificate of Incorporation) and the ratification of the appointment of our independent auditors are considered discretionary items. This means that brokerage firms and other registered holders of stock may vote in their discretion on these matters on behalf of their clients who have not otherwise furnished voting instructions before the meeting. In contrast, the stockholder proposal is a non-discretionary item. This means that brokerage firms that have not received voting instructions from their clients on this proposal may not vote on the proposal.
Voting Standard for Director Elections
The Companys Certificate of Incorporation currently provides that directors shall be elected by a plurality of the votes of the shares present, in person or by proxy, at an annual meeting and entitled to vote on the election of directors. As described in Proposal 2 below, the Board is proposing and recommending an amendment to the Certificate of Incorporation to eliminate such plurality voting requirement. The Board previously approved an amendment to the Company Bylaws to provide for majority voting in the election of directors by requiring that a nominee for director shall be elected if the votes cast for such nominees election exceed the votes cast against such nominees election in uncontested elections. The Company Bylaws also provide that in a contested election (a situation in which the number of director nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors.
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If Proposal 2 is approved by stockholders, directors will be elected under the majority voting standard. If Proposal 2 is not approved by stockholders, directors will be elected under the plurality voting standard. Under the majority voting standard, Company policy governs whether current directors who are not re-elected continue to serve until their successors are elected. Under Delaware Law, any director who is currently serving on the Board and who is not re-elected at the end of his or her term of office nonetheless continues to serve on the Board as a holdover director until his or her successor has been elected. To address this situation, the Board has adopted a Corporate Governance Policy on Majority Voting, which can be found in the Companys Corporate Governance Guidelines. Under the policy, any director who does not receive the required number of votes for re-election under the majority voting standard, must tender his or her resignation to the Chairman of the Board. The Board will consider the tendered resignation and, within 90 days of the stockholder meeting at which the election occurred, decide whether to accept or reject the tendered resignation, and will publicly disclose its decision and the process involved in the consideration. Absent a compelling reason to reject the resignation, the Board shall accept the resignation. The director who tenders his or her resignation will not participate in the Boards decision. Only persons who are currently serving as directors and seeking re-election can become a holdover director under Delaware Law. Therefore, the Corporate Governance Policy on Majority Voting would not apply to any person who was not then serving as a director at the time he or she sought, and failed to obtain, election to the Board. For 2009, all nominees for the election of directors are currently serving on the Board. The complete Corporate Governance Policy on Majority Voting is available on the Companys website at www.plumcreek.com by clicking on Investors, then Corporate Governance and finally Governance Guidelines.
Vote Required for Each Item of Business
Proposal 1. For Proposal 1, if the majority voting standard applies in the election of directors, a nominee will be elected to the Board only if the votes cast for such nominees election exceed the votes cast against such nominees election. If the plurality voting standard applies in the election of directors, the eight (8) nominees who receive the greatest number of votes cast will be elected to the Board and against or abstain votes will have the same effect as a vote to withhold authority. In either case, abstentions and broker non-votes, if any, will have no effect on the outcome of the election.
Proposal 2 and Proposal 3. For Proposal 2 (amending the Certificate of Incorporation to eliminate the plurality voting requirement in director elections), the affirmative vote of at least 66-2/3% of the outstanding shares entitled to vote is required for approval. For Proposal 3 (amending the Certificate of Incorporation to increase the share ownership limitation from 5% to 9.8% per holder), the affirmative vote of at least a majority of the outstanding shares entitled to vote is required for approval. Abstentions and broker non-votes, if any, will have the same effect as a vote against Proposal 2 and Proposal 3.
Proposal 4 and Proposal 5 . For Proposal 4 (ratifying the appointment of Ernst & Young) and Proposal 5 (stockholder proposal regarding advisory vote on executive compensation), the affirmative vote of the majority of shares present in person or by proxy and entitled to vote at the Annual Meeting is required. Therefore, abstentions and broker non-votes, if any, will have the same effect as a vote against Proposal 4 and Proposal 5.
Role of the Board of Directors
Pursuant to Delaware Law and the Company Bylaws, the business, property and affairs of the Company are managed under the direction of the Board. The current members of the Board are Rick R. Holley, Ian B. Davidson, Robin Josephs, John G. McDonald, Robert B. McLeod, John F. Morgan, Sr., John H. Scully, Stephen C. Tobias and Martin A. White. Members of the Board are kept informed of the Companys business through discussions with Plum Creeks officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees. The Board held four regularly scheduled meetings and one special meeting during 2008.
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The Boards governance principles require that at least two-thirds of the Board be comprised of independent directors and that each of the Boards three committees are comprised solely of independent directors. No director is considered independent unless the Board has determined that he or she has no material relationship with the Company, either directly or as a partner, stockholder or officer of an organization that has a material relationship with the Company. To evaluate the materiality of any such relationship, the Board has adopted categorical independence standards consistent with NYSE listing standards for director independence. A copy of these standards can be found on the Companys website at www.plumcreek.com by clicking on the Investors link and then the Corporate Governance link.
With the assistance of its legal counsel, the Corporate Governance and Nominating Committee reviewed written responses to annually submitted questionnaires completed by each member of the Board against the Boards and the NYSEs director independence standards, along with NYSE and SEC independence standards specifically applicable to Board members who serve on the Audit Committee. On the basis of this review, the Corporate Governance and Nominating Committee advised the full Board of its conclusions regarding director independence. After considering the Committees recommendation, the Board affirmatively determined that each of Ms. Josephs and Messrs. Davidson, McDonald, McLeod, Morgan, Scully, Tobias and White is independent under the Boards and the NYSEs independence standards. In addition, the Board determined that each member of the Audit Committee is independent under the NYSEs and SECs independence standards for directors who serve on audit committees.
The Board has a standing Compensation Committee, Corporate Governance and Nominating Committee and Audit Committee.
Compensation Committee. During 2008, the Compensation Committee met five times. The Compensation Committee acts pursuant to a written charter adopted in January 2003, which can be found on the Companys website at www.plumcreek.com by clicking on the Investors link and then the Corporate Governance link. The Committee is responsible for developing and modifying over time the Companys compensation policies and plans, including the compensation policies and plans for the Companys executive officers and directors. It is also responsible for making recommendations to the Board concerning amendments to the Companys compensation plans and, in certain instances, making amendments to such plans. The Committee also oversees the annual performance evaluation of the Companys President and Chief Executive Officer and is responsible for producing a report on executive compensation for inclusion in the Companys proxy materials. The current members of the Compensation Committee are Ms. Josephs and Messrs. McLeod, Tobias and White (Chairman).
The Compensation Committee reviews executive compensation each year. To assist it in doing its job, the Compensation Committee has retained the firm of Towers Perrin, a nationally recognized compensation consulting firm. Towers Perrin is engaged by and reports directly to the Compensation Committee and interacts with management as necessary to fulfill its responsibilities. Representatives of Towers Perrin participate in most regularly scheduled meetings of the Compensation Committee.
For 2008, the Compensation Committee instructed Towers Perrin to obtain and present relevant competitive data to assist the Committee in determining total direct compensation and perquisites. The Compensation Committee also instructed Towers Perrin to keep the Compensation Committee apprised of current and developing trends in executive compensation.
Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee met two times during 2008. The Committee acts pursuant to a written charter adopted in January 2003, which can be found on the Companys website at www.plumcreek.com by clicking on the Investors link and then the Corporate Governance link. The Committee is responsible for overseeing and coordinating the Companys corporate governance practices. The Committee advises the Board with respect to matters of Board composition and procedures and is responsible for
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developing and recommending to the Board the Companys corporate governance principles. The Committee also oversees the annual performance evaluation of the Board and its committees. The current members of the Corporate Governance and Nominating Committee are Messrs. Davidson, McDonald, Scully (Chairman) and Tobias.
Audit Committee. The Board of Directors has a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the Exchange Act). During 2008, the Audit Committee met nine times. The Audit Committee acts pursuant to a written charter, which was originally adopted by the Board during 2000, and was last revised in May of 2008. The Audit Committee charter can be found on the Companys website at www.plumcreek.com by clicking on the Investors link and then the Corporate Governance link. Among other things, this Committee has the responsibility to appoint, terminate, replace, compensate and oversee the Companys independent auditors, to review and approve the scope of the annual audit; to interview the independent auditors for review and analysis of the Companys financial systems and controls; and to review the independence of, and pre-approve any audit or non-audit services provided by, the independent auditors.
Current members of the Audit Committee are Mr. Davidson, Ms. Josephs and Messrs. McDonald, (Chairman) and Morgan. The Board of Directors has determined that each of the current members of the Audit Committee is independent in accordance with both NYSE listing standards applicable to audit committee members and Rule 10A-3(b)(1) under the Exchange Act. In addition, the Board has designated each of Mr. Davidson and Ms. Josephs as an audit committee financial expert, as that term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC.
Report of the Audit Committee
In connection with the Audit Committees review of the Companys financial statements for the year ended December 31, 2008:
Ian B. Davidson, Robin Josephs, John G. McDonald (Chairman) and John F. Morgan, Sr.
Selection of Nominees to the Board of Directors
Stockholder Nominations. The Corporate Governance and Nominating Committee will consider director nominee recommendations from stockholders. Stockholder recommendations must be in writing and addressed to the Chairman of the Corporate Governance and Nominating Committee, c/o Corporate Secretary, Plum Creek Timber Company, Inc., 999 Third Avenue, Suite 4300, Seattle, Washington, 98104-4096. If a stockholder intends to make a
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nomination at any annual stockholder meeting, the Company Bylaws require that the stockholder deliver written notice to the Company not more than 90 days or less than 60 days prior to the anniversary date of the Companys previous years annual meeting of stockholders. The notice must comply with the Company Bylaws and set forth, among other things: (1) the name and address of the stockholder who intends to make the nomination; (2) the name, age, address and principal occupation of the proposed director nominee or nominees; (3) a representation that the stockholder is entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (4) the consent of each proposed director nominee to serve as a director of the Company if so elected; and (5) the number of shares of common stock of the Company owned by the notifying stockholder and by the proposed director nominee or nominees. These Company Bylaw provisions afford the Board the opportunity to consider the qualifications of the proposed nominees and, to the extent deemed necessary or desirable by the Board, to inform stockholders about such qualifications.
Director Qualifications. The Corporate Governance and Nominating Committee believes that the minimum qualification for serving as a director of the Company is that a director nominee demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Boards oversight of the business and affairs of the Company. A director nominee must also have an impeccable record and reputation for honest and ethical conduct in his or her professional and personal activities. In addition, the Committee examines a candidates specific experiences and skills, time availability in light of other commitments, potential conflicts of interest and independence from management and the Company. The Committee also seeks to have the Board represent a diversity of backgrounds and experience.
Selection Process for Director Nominees. The Corporate Governance and Nominating Committee identifies potential director nominees by asking current directors and executive officers to notify the Committee if they become aware of persons meeting the criteria described above. From time to time, the Committee engages firms that specialize in identifying director candidates. As described above, the Committee will also consider candidates recommended by stockholders.
Once a person has been identified as a potential candidate by the Corporate Governance and Nominating Committee, the Committee may collect and review publicly available information regarding the person to assess whether the person should be considered further. If the Committee determines that the candidate warrants further consideration, the Chairman of the Committee or another member of the Committee contacts the candidate. Generally, if the candidate expresses a willingness to be considered and to serve on the Board, the Committee requests information from the candidate, reviews his or her accomplishments and qualifications in light of any other candidates that the Committee might be considering, and conducts one or more interviews with the candidate. In certain instances, Committee members may contact one or more references provided by the candidate or may contact other members of the business community or other persons that may have greater first-hand knowledge of the candidates accomplishments. The Committees evaluation process does not vary based on whether or not a candidate is recommended by a stockholder.
Executive Sessions of the Board of Directors
In accordance with the Companys Corporate Governance Guidelines, the Boards independent directors meet in executive session at least four (4) times each year. The Chairman of the Board, who must be an independent director under the Corporate Governance Guidelines, presides at, and sets the agenda for, each executive session of the independent directors. If the Board has not selected a Chairman, then the Corporate Governance Guidelines require that the chair of the Audit Committee, the Corporate Governance and Nominating Committee and the Compensation Committee each preside over the meetings of the independent directors in rotating order as decided by the other independent directors. Mr. Davidson served as Chairman of the Board during 2008 and presided over all executive sessions of the independent members of the Board.
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Communicating with the Board
Anyone who wishes to notify or communicate with the entire Board of Directors, any individual director or the independent directors as a group, may do so. Communications should be delivered to the following address, marked confidential, care of Corporate Secretary, Plum Creek Timber Company, Inc., 999 Third Avenue, Suite 4300, Seattle, Washington 98104-4096. The Corporate Secretary reviews all such correspondence and will forward to the Chairman of the Board of Directors, or other individual director or group of directors, as the case may be, a copy of such correspondence that, in the opinion of the Corporate Secretary, relates to the functions of the Board or its committees, or that the Corporate Secretary otherwise determines requires their attention. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Companys internal audit department and handled in accordance with procedures established by the Audit Committee with respect to such matters. These stockholder communication procedures were approved by the Board of Directors.
Board Member Attendance at Board and Committee Meetings During 2008
The table below summarizes Board member attendance at both regularly scheduled and special meetings of the Board of Directors and each committee on which he or she serves. In 2008, there were five (5) meetings of the Board of Directors, nine (9) meetings of the Audit Committee, two (2) meetings of the Corporate Governance and Nominating Committee and five (5) meetings of the Compensation Committee. As the Companys President and Chief Executive Officer, Mr. Holley periodically attended meetings of the Boards committees at their invitation. Mr. Holleys attendance at those meetings is not reported in the table below because Mr. Holley is not a member of any Board committee.
Board Member Attendance at Annual Meetings
While members of the Board are always welcome to attend each annual meeting of stockholders, the Board has no formal policy requiring their attendance. Two of the Companys directors, Messrs. Holley and Davidson, attended the 2008 annual meeting of stockholders held on May 7, 2008.
Code of Ethics and Other Corporate Governance Information
The Company maintains a code of ethics, entitled the Plum Creek Code of Conduct , which applies to each director and to the principal executive officer, the principal financial officer and the principal accounting officer as well as to all other employees of the Company. The Plum Creek Code of Conduct, along with the governing charters of each of the Boards committees and the Companys Corporate Governance Guidelines, can be found in the Corporate
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Governance section of the Companys website accessible to the public at www.plumcreek.com. To find this section of the website, click on the Investors link and then the Corporate Governance link. The Company will post any amendments to, or waivers from, its Code of Conduct (to the extent applicable to any director or any of the Companys executive officers, including the principal executive officer, principal financial officer or principal accounting officer) at this location on its website. In addition to these documents, the Companys proxy statements and annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and reports concerning transactions in the Companys stock by directors and certain officers of the Company, and any amendments to those reports, can also be found on the Companys website by first clicking the Investors link, then the Financial Publications link and finally the SEC Filings link. Copies of any of these documents may be obtained from our website or free of charge by contacting the Companys Investor Relations Department at 999 Third Avenue, Suite 4300, Seattle, Washington 98104-4096, or by calling (800) 858-5347 (within the United States and Canada) or (206) 467-3600 (outside the United States and Canada, call collect).
On May 13, 2008, Rick R. Holley, as President and Chief Executive Officer of the Company, submitted an unqualified certification to the NYSE stating that, as of that date, he was not aware of any violation by the Company of the NYSE Corporate Governance Listing Standards. Additionally, the Company has filed with the SEC the Chief Executive Officer and Chief Financial Officer certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended.
The Compensation Committee periodically reviews director compensation and engages Towers Perrin to advise it on market data, trends and recommendations for this review. Based upon this review and advice, the Compensation Committee then makes recommendations to the full Board regarding the compensation for the outside directors.
2008 Director Compensation
Our non-employee directors receive the following compensation for their service on the Board:
The Chairman of the Board receives an additional annual retainer of $30,000, and members of Board committees may receive the following amounts, depending upon their involvement with each committee of the Board:
Directors have the choice to elect to take all or a portion of their Board fees in common stock of the Company and may defer all or part of their fee compensation. Directors are reimbursed for expenses incurred in connection with attending Board and committee meetings.
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The table below summarizes compensation received by non-employee directors of the Board during 2008.
Election of Directors
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE DIRECTOR NOMINEES.
The Board is authorized under the Company Bylaws to set, by resolution, the number of directors who comprise the Board. The directors whose terms expire in 2009 and have been nominated for election to one-year terms of office expiring at the 2010 Annual Meeting of Stockholders, or until their successors are elected and qualified, are Rick R. Holley, Robin Josephs, John G. McDonald, Robert B. McLeod, John F. Morgan, Sr., John H. Scully, Stephen C. Tobias and Martin A. White. Mr. Davidson, whose term of office expires at the Annual Meeting, has informed the Company that he is retiring from the Board and, therefore, is not standing for re-election. For this reason, he has not been nominated for re-election. In connection with Mr. Davidsons retirement, the Board has passed a resolution reducing the authorized number of directors from nine to eight, effective immediately upon the election of directors at the Annual Meeting.
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In the absence of instructions to the contrary, the proxy holders will vote the proxies received by them for the election of Ms. Josephs and Messrs. Holley, McDonald, McLeod, Morgan, Scully, Tobias and White. Discretionary authority is reserved to cast votes for the election of a substitute should any of the nominees be unable or unwilling to serve as a director.
Each of the nominees has agreed to serve as a director if elected, and the Company believes that each of them will be available to serve. The names and ages of the nominees and their principal occupations or employment during the past five years are set forth below.
Nominees for Election to One-Year Terms Expiring at the 2010 Annual Stockholder Meeting:
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES ON THE ENCLOSED PROXY CARD. UNLESS INDICATED OTHERWISE, THE SHARES WILL BE VOTED FOR EACH OF THE NOMINEES TO BE ELECTED TO THE BOARD OF DIRECTORS.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Companys common stock as of March 10, 2009 for each director, each Named Executive Officer, and the directors and executive officers as a group. Amounts shown do not include restricted stock units held by executive officers. There is no person or entity known to the Company to beneficially own more than 5% of the Companys common stock. Unless otherwise indicated, the address of each person is c/o Plum Creek Timber Company, Inc., 999 Third Avenue, Suite 4300, Seattle, Washington, 98104-4096.
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This section contains information relating to compensation of the Companys named executive officers. The named executive officers are determined in accordance with SEC disclosure rules and include the Companys Chief Executive Officer (CEO), Chief Financial Officer (CFO), and the three most highly compensated executive officers other than the CEO and CFO who were serving as executive officers at the end of 2008 (collectively, the Named Executive Officers or NEOs).
The following provides a brief overview of the more detailed disclosures as covered in the Compensation Discussion & Analysis as outlined below:
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Compensation Discussion and Analysis
With respect to the compensation of the Companys NEOs, this section summarizes:
Objectives of our Executive Compensation Program
Our executive compensation programs are organized around the following objectives:
These objectives reflect our belief that programs which support the attraction and retention of a highly qualified executive management teamcoupled with appropriate incentive programsserve the long-term interests of our stockholders.
With these objectives in mind, the following principles help guide our decisions regarding executive compensation:
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The tables below summarizes the peer companies we use to evaluate Company performance under our long-term incentive plans and the subset we use to benchmark executive compensation:
Peer Groups for Measuring Performance Under Our Long-Term Incentive Plans
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Our Executive Compensation Programs
Overall, our executive compensation programs are designed to be consistent with the objectives and principles set forth above. The basic elements of our 2008 executive compensation program are summarized in the table below, followed by a more detailed discussion of those programs.
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Total Direct Compensation
Based on the principle that NEO compensation opportunities should be competitive with market practices, the specific mix of compensation among base salary, annual incentives and long-term incentives is a function of market pay practices.
Determinations regarding base salary adjustments (as well as other elements of compensation) are made in connection with the annual performance reviews of the NEOs and other members of the management team. The CEO reviews each NEOs annual performance and makes salary recommendations based on merit to the Compensation Committee. The Committee reviews and approves these recommendations.
To determine the compensation for the CEO, the Compensation Committee reviews the annual performance evaluations completed by each member of the Board of Directors. Using these evaluation forms and the competitive data provided by Towers Perrin, the Committee exercises its judgment and determines the appropriate level of remuneration.
With the assistance of Towers Perrin, cash compensation (base salary plus annual bonus) is targeted at approximately the 25th percentile of the market for threshold bonuses (80% of target performance goal) and approximately at the 75th percentile of the market for maximum bonuses (120% of target performance goal). The table below shows the threshold, target and maximum bonus opportunities represented as a percentage of base salary effective as of the end of the year under the 2008 Annual Incentive Plan at corresponding levels of actual financial performance results versus target performance goal.
Earned annual bonuses are determined at year-end based on the Companys performance against the target performance goal of budgeted funds from operations, or FFO, which is net income plus non-cash charges equal
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to depletion, depreciation and amortization, and the cost basis of land sales. Budgeted FFO is presented to the Companys Board of Directors and is approved at the first Board of Directors meeting in late January or early February.
NEOs and other employees of the Company currently receive annual grants of stock options, restricted stock units and value management award units. The mix between these forms of awards is designed to be approximately 50% of the total value delivered in value management awards, 25% in stock options and 25% in restricted stock units. We believe this mix represents a balance among vehicles, rewarding for stock price appreciation and relative shareholder return while supporting both the retention and motivation of our NEOs.
As with other elements of our executive compensation program, long-term incentive award grant opportunities are calibrated to market. With the assistance of Towers Perrin, long-term incentive grant ranges are established which result in total direct compensation levels ranging from the 25th to the 75th percentile of market pay levels but are targeted to the 50th percentile.
Individual determinations are made with respect to the type and amount of each long-term incentive vehicle granted by the Company. The Compensation Committee uses the benchmark data as a guide and also considers each NEOs past performance, as well the Committees future expectations of each executive.
While the vast majority of our awards to NEOs have been made pursuant to our annual grant program, the Committee retains discretion to make awards to NEOs at other times in connection with the hiring of a new executive, for retention purposes or for a significant increase in responsibility.
As described above, all stock options are granted with an exercise price equal to the fair market value of our common stock on the date of grant. Fair market value is defined to be the closing market price of a share of our common stock on the date of grant. We do not have any program, plan or practice of awarding stock options and setting the exercise price based on a date or price other than the closing market price on the grant date. All grants to NEOs are made by the Committee and not pursuant to delegated authority.
Option repricing is expressly prohibited by the terms of the Stock Incentive Plan. The Plan also expressly requires that options be granted at current fair market value, so in-the-money grants are also expressly prohibited.
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In the years 2006, 2007 and 2008, the Compensation Committee approved grants of restricted stock units in conjunction with grants of stock options and value management awards to replace the dividend equivalent rights program described below. In making the decision, the Committee viewed the addition of restricted stock units as increasing the retention value of the overall program and making it more straightforward and, therefore, more meaningful to the participants. In addition, it recognized that restricted stock units are an increasingly common feature of peer companies total compensation program and concluded that the component would assist in attracting and retaining key executives.
Dividend equivalent rights were earned on the basis of relative total shareholder return of the Company relative to that of the three peer groups described above. In addition, the Company was required to have a minimum total shareholder return on an annualized basis of at least 5.5% per year (considering both stock price appreciation plus dividends paid). Based on satisfaction of these performance requirements, up to 100% of the per-share dividends could be earned by participants over a five-year period.
With primary consideration to the complexity of the plan design, the Compensation Committee decided to discontinue the dividend equivalent right plan beginning in 2006. All NEOs hold outstanding dividend equivalent right awards, which could earn additional amounts each year through 2009 if performance goals are met.
For more information regarding stock option awards, restricted stock unit awards, value management awards and dividend equivalent rights, refer to the Companys disclosure in its Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the SEC on February 27, 2009, Part II, Item 8 Notes to Consolidated Financial StatementsNote 14 Share-Based Compensation.
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All employees are eligible to participate in the Thrift and Profit Sharing Plan. We provide this plan because we wish to encourage our employees to save a portion of their cash compensation for retirement in a tax-efficient manner.
In 2002, our Board of Directors engaged William M. Mercer, Incorporated (Mercer), our prior consultant to the Compensation Committee, to conduct a study regarding whether Mr. Holleys pension benefit was competitive with other executives in the forest products industry. The Mercer study concluded there was a shortfall in Mr. Holleys pension benefit, and as a result, the Committee provided Mr. Holley with an enhanced benefit under the supplemental pension plan for years of service through age 60. At that time, consideration was not given to the possibility that Mr. Holley would continue to work beyond age 60. Now that this possibility has increased, the Committee extended his formula for service beyond age 60.
The Company believes that the Qualified Pension Plan and the Supplemental Plans are an important part of our NEO compensation program. These plans serve an important role in the retention of our senior executives. A summary of our various pension plan benefit formulas and valuations are described on pages 31 and 32 of this Proxy Statement.
Severance and Other Termination Benefits
Currently, we do not have any employment, severance or change-in-control contracts other than standard change-in-control provisions in the Stock Incentive Plan that apply to any incentive award granted under the plan.
The Stock Incentive Plan, pursuant to which the stock options, value management awards, dividend equivalent right awards and restricted stock unit awards are granted, contains specific termination and change-in-control provisions. According to the terms of the plan, if the NEO is terminated by the Company within one year following a change-in-control for any reason other than cause or if the NEO is to resign for good reason:
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Decisions by the Company Regarding 2008 Compensation
The Compensation Committee approves all compensation for the CEO, CFO and other NEOs. Information about the Committee and its composition, responsibilities and operations can be found under Board of Directors and Corporate GovernanceBoard CommitteesCompensation Committee on page 5 of this Proxy Statement.
Role of Management in Compensation Decisions
Management plays a significant role in the compensation setting process by preparing materials for each Compensation Committee meeting. Additionally, the CEO plays a significant role in the compensation process for NEOs other than himself by:
The Compensation Committee determines Mr. Holleys compensation during executive session. Mr. Holley makes no recommendations regarding any element of his own compensation. The Compensation Committee considers the competitive market data provided by Towers Perrin as well as the performance evaluations provided by the Board of Directors.
2008 Pay Decisions
Generally, as was the case in 2008, pay decisions are approved by the Compensation Committee at its February meeting. In order to make informed decisions, the Committee reviewed several documents and analyses during 2007 and prior to the February meeting in 2008, including:
After reviewing the CEOs performance assessments and compensation recommendations for each NEO, the Compensation Committee approved base salaries and total direct compensation (target bonus levels and long-term incentive compensation) for 2008. Each NEO fell within a range of plus or minus 10 percent of the 50th percentile of total direct compensationa range that is considered competitive by Towers Perrin. While the Compensation Committee considered realized compensation from earned bonuses, equity awards, value management awards and
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retirement programs through their review of the tally sheets, pay decisions for salary, bonus and long-term incentive opportunities were driven by Company performance and competitive market data, as provided by Towers Perrin.
Annual Incentives Earned for 2008 Performance
The FFO budget for 2008 was set at $451 million in February 2008 by the Board of Directors. The Company achieved $517 million in FFO for 2008, or approximately 115% of the budgeted performance target. However, management recommended to the Compensation Committee that the NEOs not be given credit for a portion of a land sale that was not factored into the budget at the beginning of the year. Conversely, management recommended to the Compensation Committee to include cash flow from natural gas leases that was not captured in the actual FFO measure, and that the NEOs not be penalized for making the strategic decision to reduce harvest levels during a year that witnessed very weak market conditions. The Compensation Committee followed managements recommendation and reduced actual FFO performance by approximately 19% for the unbudgeted land sale, and increased FFO performance by approximately 3% for the decision to include natural gas lease cash flow and 3% for the decision to reduce harvest levels. The Compensation Committee agreed that management made the correct decision to preserve value for the Company and its stockholders by reducing harvests, and also agreed that the land disposition, although in the best interests of the Company and its stockholders, should not be fully factored into FFO performance for 2008. Exercising its discretion under the terms of the Annual Incentive Plan, the Compensation Committee awarded 2008 annual incentive bonus awards based on 102% of budgeted FFO.
Actual Compensation Earned or Vested During 2008
The Committee targets total direct compensation at the 50th percentile of the market with the opportunity to earn up to the 75th percentile for superior performance. Summarized in the table below is the compensation earned or vested for each NEO during 2008. Cash compensation earned during 2008 was approximately at target levels. However, amounts earned from value management awards were above target due to superior performance. For the three-year performance period ending December 31, 2008, our relative performance compared to a peer group of forest product companies was at the 100th percentile and was at the 82nd percentile compared to the S&P 500 Index and at the 80th percentile compared to the REIT Index.
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Other Pay Decisions
During 2007, the Compensation Committee granted Mr. Lindquist 20,000 RSUs which will vest entirely on February 3, 2011. This award was granted to Mr. Lindquist as an incentive for him to remain with the Company at least through the vesting period.
For 2009, management recommended to the Compensation Committee, and the Compensation Committee agreed, that because of current economic conditions, the NEOs would forego a salary increase. Likewise, the Compensation Committee decided to discontinue the leased vehicle and club membership perquisites.
The following abbreviations are used in some of the tables presented in this section:
Summary Compensation Table for the Year 2008
The following table sets forth a summary of compensation for the Named Executive Officers. Information for years ended December 31, 2008, December 31, 2007 and December 31, 2006 are included. Annual compensation amounts are on an accrual basis and include amounts deferred at the Named Executive Officers election.
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Grants of Plan-Based Awards During 2008
The following table supplements the Summary Compensation Table and lists both annual and long-term incentive awards made during 2008 to each Named Executive Officer.
Annual incentive awards are made under the terms of the Annual Incentive Plan. Amounts shown for Annual Incentive Plan awards under the column entitled Estimated Future Payouts Under Non-Equity Incentive Plan Awards
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represent payments the Named Executive Officer could have received under the Annual Incentive Plan depending on Company performance for 2008. The Annual Incentive Plan award actually earned for 2008 (and paid in February 2009) is reported in the Summary Compensation Table on page 24.
Restricted stock units, value management awards and stock options are granted under the Companys Stock Incentive Plan. Amounts shown for value management awards under the column entitled Estimated Future Payouts Under Equity Incentive Plan Awards represent payments the Named Executive Officer could receive depending on Company performance at the end of the three-year performance period on December 31, 2010. Amounts shown for restricted stock units under the column entitled All Other Stock Awards and amounts shown for stock options under the column entitled All Other Option Awards represent the number of restricted stock units and stock options granted to the Named Executive Officer. Amounts shown under the column entitled Grant Date Fair Value of Stock and Option Awards represent the fair value of the restricted stock units, stock options and value management awards on the date that those awards were granted to the Named Executive Officer.
For a discussion of the material terms of these incentive awards and an explanation of the amount of each element of compensation relative to total compensation, refer to the Compensation Discussion and Analysis beginning on page 14 of this Proxy Statement.
For more information regarding these annual and long-term incentive awards, refer to the Compensation Discussion and Analysis beginning on page 14 of this Proxy Statement.
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Outstanding Equity Awards at Fiscal Year-Ended December 31, 2008
The following table presents information for all outstanding equity awards held by the Named Executive Officers as of December 31, 2008. Outstanding equity awards consist of stock options, reported under the table heading Option Awards, and value management awards and restricted stock units, reported under the table heading Stock Awards. Also included under Stock Awards are outstanding dividend equivalent rights, which were last awarded in 2005. Option Awards information includes the number of shares of common stock underlying both vested and unvested stock options, along with the exercise price and expiration date associated with each grant of stock options. Stock Awards information includes the number of outstanding restricted stock units, value management awards and dividend equivalent rights, and the market value or payout value of each as of December 31, 2008.
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Option Exercises and Stock Vested During 2008
The following table presents information about equity awards granted in previous years that vested during 2008. Information under the heading Option Awards pertains to the exercise of stock options by Named Executive Officers during 2008. Information under the heading Stock Awards pertains to dividend equivalent rights, value management awards and restricted stock units that vested during 2008.
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Pension Benefits as of December 31, 2008
The Company maintains three pension plans: the Supplemental Benefits Plan, the Supplemental Pension Plan and the Plum Creek Pension Plan. Only the Plum Creek Pension Plan is a tax-qualified defined benefit plan under the Internal Revenue Code (IRC). Officers whose earnings exceed IRC limitations for tax qualified plans accrue benefits that they would have had, but lost, because of such limitations under either the Supplemental Benefits Plan or the Supplemental Pension Plan. Some officers are prevented from participating in the qualified plan altogether because of IRC rules limiting the percentage of plan benefits that can accrue to individual plan participants. The Board designates the officers who participate in the Supplemental Benefits Plan. All officers of the Company who are not designated to participate in the Supplemental Benefits Plan participate in the Plum Creek Pension Plan and Plum Creek Supplemental Pension Plan.
Each plan provides a pension benefit that is based upon either a cash balance formula, final average pay formula or both. For those eligible to accrue benefits under each formula, on termination of service to the Company, they will receive the greater of the two benefit amounts. Under the cash balance formula, age-weighted pay credits are allocated to a hypothetical account for the participant. The pay credits range is from 4% to 6% of earnings (gross salary and annual incentive cash bonus). Amounts in the hypothetical account are allocated interest credits tied to the 30-year Treasury interest rate. The benefit amount under the final average pay formula is equal to (i) 1.1% of the highest five consecutive year average earnings (gross salary and annual incentive cash bonus) over the 10 years prior to termination from the Company, plus 0.5% of the highest five consecutive year average earnings over the previous 10 years in excess of one-third of the Old Age Survivors and Disability Insurance taxable wage base in effect during the year of termination, multiplied by (ii) the number of years of total credited service at the Company, up to a maximum of 30 years. Unless otherwise specified by the Plum Creek Board of Directors, officers who joined the Company after September 1, 2000 accrue benefits under the cash balance plan. Officers in the Supplemental Benefits Plan accrue benefits under the final average pay formula. Officers in the Supplemental Pension Plan who joined the Company prior to September 1, 2000 accrue benefits under each formula and, on termination of service to the Company, will receive the greater of the two benefit amounts. Benefits for Mr. Lindquist are calculated according to the final average pay formula. Benefits for Mr. Lambert are calculated according to both the final average pay and the cash balance formulas, and he will receive the greater of the two benefit amounts upon termination of service to the Company. Mr. Kilbergs and Mr. Neilsons benefits are each based on the cash balance formula.
Under each plan, a participant becomes eligible for early retirement at age 55 with 10 years of service. Before early retirement age, the benefit is significantly reduced under each plan. Under the Plum Creek Pension Plan and the Supplemental Pension Plan, the accrued benefit is reduced by 5% for each year the participants actual retirement date precedes age 62 up to a 25% total benefit reduction at age 57. Thereafter, the benefit is reduced by an additional 7% at age 56, 6% at age 55 and 17% at age 54. For the Supplemental Benefits Plan, the benefit is reduced by 2% for each year the participants actual retirement date precedes the date the participant would have attained age 65, or the date the participant could have retired after attaining age 60 with 30 years of credited service, if earlier, up to a 20% total benefit reduction at age 55. At age 54, the benefit is reduced by an additional 35%. Given these total benefit reduction factors, the early retirement benefits earned under these plans substantially increases once the participant reaches at least age 55 with 10 years of service to the Company. Early retirement does not affect benefits accrued under the cash balance formula. Mr. Lindquist and Mr. Lambert are eligible for early retirement benefits in 2015, assuming they maintain continuous employment with the Company from now until then. Mr. Kilberg and Mr. Neilson are not eligible for early retirement benefits because their benefits are based on the cash balance formula.
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In addition to the foregoing benefit reductions, benefits accrued under the Plum Creek Pension Plan, and any benefits paid from any predecessor pension plans, reduce on a dollar-for-dollar basis the benefits payable from either the Supplemental Benefits Plan or the Supplemental Pension Plan. Payments from predecessor plans for Messrs. Holley and Lambert are $100,000 and $20,000, respectively.
All benefits under the Supplemental Benefits Plan and Supplemental Pension Plan are paid in the form of a lump sum payable six months following the participants date of termination. Under the Plum Creek Pension Plan, participants may elect to have benefits paid either in the form of an annuity or in the form of a lump sum payment payable any time between the first of the month following termination and age 65. For non-cash balance formula plan participants, lump sum payments are calculated based on the 30-year Treasury interest rate in effect during the year the participant terminates.
In lieu of the benefit described above, an enhanced benefit is payable to Mr. Holley upon reaching age 55. Mr. Holley turned 55 during 2007. This enhanced annual benefit, payable in the form of a lump sum six months following his date of termination, equals 50% of his highest five consecutive year average earnings out of the last ten years. This percentage increases 2% for each year Mr. Holley continues employment with the Company beyond age 55. As of December 31, 2008, he is eligible for an enhanced annual benefit equal to 53.67% of his highest five consecutive year average earnings out of the last ten years. This benefit is reduced by the $100,000 payment described above and by Mr. Holleys estimated primary Social Security benefit.
The following table presents information about each Named Executive Officers pension benefits.
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Nonqualified Deferred Compensation for 2008
Named Executive Officers have the opportunity to participate in the Plum Creek Timber Company, Inc. Deferral Plan (the Deferral Plan). Under the terms of the Deferral Plan, each Named Executive Officer may choose to defer receipt of all or any portion of his or her base salary, annual cash incentive bonus under the Annual Incentive Plan or payouts in cash or stock of value management awards. No other form of compensation may be deferred under the Deferral Plan. Deferred amounts earn a market investment rate of return that varies with the Named Executive Officers specific choice of investment among those investments offered by the Deferral Plan administrator. Participants may invest in the same mutual funds that are available to participants in our Thrift and Profit Sharing Plan.
At the time a deferral election is made, participants must make a distribution election among the following choices: lump sum payment following termination of service to the Company, five annual payments following termination of service to the Company or ten annual payments following termination of service to the Company. Payments will be made, or in the case of annuities will begin, in January of the year following termination of service for all terminations occurring between January 1st and June 30th. Payments will be made or will begin in July of the year following termination of service for all terminations occurring between July 1st and December 31st. Under the terms of the Deferral Plan, participants may not modify their distribution election.
The following table presents information about compensation deferred by the Named Executive Officer.
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Termination Payments at December 31, 2008
No officer of the Company has an employment or change-in-control contract other than termination and change-in-control provisions in the Stock Incentive Plan that apply to any incentive award granted under the plan.
The Stock Incentive Plan, pursuant to which the stock options, dividend equivalent rights, restricted stock awards, restricted stock units and value management awards are granted, contains specific termination and change-in-control provisions. According to the terms of the plan, if the Named Executive Officer is terminated by the Company within one year following a change-in-control for any reason other than for Cause, or if the Named Executive Officer is to resign for Good Reason:
Under the Stock Incentive Plan, the term Cause is defined to mean: (i) a plan participants conviction of or guilty plea to the commission of an act or acts constituting a felony under the laws of the United States or any state thereof; (ii) action by a plan participant involving personal dishonesty, theft or fraud in connection with the plan participants duties as an employee of the Company or a subsidiary of the Company; or (iii) if applicable, a breach of any one or more material terms of a plan participants employment agreement with the Company. The term Good Reason is defined to mean, without a plan participants written consent: (i) a reduction in the plan participants titles, positions, duties and responsibilities as in effect immediately prior to a change in control; (ii) a reduction in the plan participants annual base salary or aggregate compensation and benefits opportunities as in effect immediately prior to a change in control; or (iii) relocation of the plan participants principal place of employment to a location more than 35 miles from the plan participants principal place of employment immediately prior to a change in control.
Furthermore, if a Named Executive Officer is terminated due to death or total disability, there are similar accelerated vesting provisions, except that unvested value management awards are forfeited. Pension and nonqualified deferred compensation benefits are not enhanced upon termination. See pages 32, 33 and 34 of this Proxy Statement for information about accrued pension benefits and accrued nonqualified deferred compensation benefits.
The Company also maintains a broad-based severance program covering all employees which provides up to ten weeks pay depending on years of service. For certain position elimination separations, the Company has provided extended benefits equal to two weeks of pay for every year of service up to one year in consideration of a waiver and release for all potential claims. The Committee reserves the right to adjust this program for executives as well.
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The following table presents information about cash payments and the cash value of accelerated vesting that would be payable to, or realized by, the Named Executive Officer upon a termination of employment following a change in control or by reason of the death or total disability of the Named Executive Officer.
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Equity Compensation Plan Information
The following table summarizes options and other rights outstanding under Plum Creeks equity-based compensation plans as of December 31, 2008:
RELATED PARTY TRANSACTIONS
The Companys Code of Conduct governs related party transactions for the Companys directors, officers and employees and requires potential conflicts of interest to be reported to the Companys legal department. The Companys policy covers any transaction, arrangement or relationship in which the Company or any of its subsidiaries was, is or will be involved and in which any related person had, has or will have a material interest. The Companys policy recognizes that these transactions can present potential or actual conflicts of interest and create the appearance that corporate decisions are based on considerations other than the best interests of the Company and its stockholders. Nevertheless, the Companys policy recognizes that there may be situations where a related party transaction may be in, or may not be inconsistent with, the best interests of the Company and its stockholders, including situations where the Company may obtain products or services of a nature, quantity or quality, or on other
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terms, that are not readily available from alternative sources or when the Company provides products or services to related persons on terms comparable to those provided to or by unrelated third parties.
The legal department reviews all information regarding a related party transaction and assesses whether an actual or proposed transaction is or may be inconsistent with the Companys policy. If the legal department determines that the actual or proposed transaction is or may be inconsistent with the Companys policy, the transaction is submitted to the Board of Directors for review. In reviewing a transaction, the legal department and the Board take into consideration all of the relevant facts and circumstances available to them, including, but not limited to: (1) the related persons relationship to the Company and interest in the transaction; (2) the material facts of the transaction, including the amount involved; (3) the benefits to the Company of the transaction; and (4) an assessment of whether the transaction is on terms that are comparable to the terms available to or from an unrelated party.
In addition, any related party transaction involving a director is reviewed annually by the Corporate Governance and Nominating Committee and the Board of Directors in determining the independence of the Companys directors under the Boards categorical standards for director independence, SEC rules and the NYSE listing standards. Directors and executive officers are required annually to complete a directors and officers questionnaire that elicits information about related party transactions. The Corporate Governance and Nominating Committee reviews all transactions and relationships disclosed in the questionnaires, and the Board makes a formal determination regarding each directors independence under the Boards and the NYSEs independence standards.
For a description of related party transactions during 2008, see Compensation Committee Interlocks and Insider Participation below.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Compensation Committee at any time during 2008 has any compensation committee interlocks or other insider participation to report. Ms. Josephs and Messrs. McLeod, Tobias and White served as members of the Compensation Committee during 2008. No person who served as a member of the Compensation Committee at any time during 2008 is, or was, an officer or employee of the Company. During 2008, the Company paid $719,508 to Norfolk Southern Railway Company for rail transportation services. These payments were made pursuant to a series of arms-length negotiated transactions, and represent less than 2% of the Companys total railway transportation costs. Mr. Tobias serves as vice president and director of Norfolk Southern Railway Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, consisting entirely of independent non-employee directors, has furnished the following report on executive compensation:
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management of the Company. Based on its review and discussions, the Compensation Committee recommended to the full Board that the Compensation Discussion and Analysis be included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and in this Proxy Statement.
The foregoing report has been submitted by the following members of the Compensation Committee:
Robin Josephs, Robert B. McLeod, Stephen C. Tobias and Martin A. White (Chairman)
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The members of the Board, certain officers of the Company designated by the Board and persons who hold more than 10 percent of the Companys common stock are subject to the reporting requirements of Section 16(a) of the
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Exchange Act, which require them to file reports with respect to their ownership of, and transactions in, the Companys securities and furnish to the Company copies of all such reports they file. Based upon the copies of those reports furnished to the Company, and written representations that no other reports were required to be filed, the Company believes that all reporting requirements under Section 16(a) of the Exchange Act for the year ended December 31, 2008 were met in a timely manner by such designated officers, Board members and greater than 10 percent stockholders.
Approval of Amendment to Certificate of Incorporation of the Company to Eliminate the Provision Providing for Plurality Voting in the Election of Directors
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
The Board of Directors proposes and recommends an amendment to the Certificate of Incorporation to eliminate the provision in the Certificate of Incorporation providing for plurality voting in the election of directors (the Majority Vote Amendment). The Board believes that the Majority Vote Amendment is advisable and in the best interests of the Company and its stockholders.
The Board previously approved an amendment to the Company Bylaws to provide for majority voting in the election of directors. The amendment to the Company Bylaws requires that a nominee for director be elected if the votes cast for such nominees election exceed the votes cast against such nominees election in uncontested elections. In a contested election (a situation in which the number of director nominees exceeds the number of directors to be elected), the standard for election of directors is a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors.
The Certificate of Incorporation currently provides for the election of directors by plurality vote. The Majority Vote Amendment, if adopted, will amend the Certificate of Incorporation to eliminate this provision, so that directors will be elected in the manner set forth in the Company Bylaws.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE MAJORITY VOTE AMENDMENT ON THE ENCLOSED PROXY CARD. AN AFFIRMATIVE VOTE OF AT LEAST 66-2/3% OF THE OUTSTANDING SHARES ENTITLED TO VOTE IS NECESSARY FOR APPROVAL.
If this proposal is approved, the Company will promptly file the Majority Vote Amendment with the Secretary of State of the State of Delaware. A copy of the Majority Vote Amendment is attached hereto as Appendix B. Deletions are indicated by strikeouts and additions are indicated by underline.
Approval of Amendment to Certificate of Incorporation of the Company to Amend the Ownership Limit and Related Provisions
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
The Board of Directors proposes and recommends an amendment to the Certificate of Incorporation that will increase the Ownership Limit as set forth in the Certificate of Incorporation from 5% to 9.8% and eliminate the concept of Excluded Holder (the Ownership Limit Amendment). The Board believes that the Ownership Limit Amendment is advisable and in the best interests of the Company and its stockholders.
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To qualify as a REIT under the Internal Revenue Code, no more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code) during the last half of any taxable year. Our capital stock must also be beneficially owned by 100 or more persons during at least 335 days of each taxable year or during a proportionate part of any short taxable year. Because we intend to maintain our qualification as a REIT, the Certificate of Incorporation contains ownership limits designed to ensure that these provisions of the Internal Revenue Code are always satisfied.
Subject to specified exceptions, the Certificate of Incorporation provides that no holder of our capital stock may own, or be deemed to own by virtue of the attribution provisions of the Internal Revenue Code, (1) more than 5% of the lesser of the total number of outstanding shares of our common stock and the value of the outstanding shares of our common stock, or (2) more than 5% of the lesser of the total number of outstanding shares of our preferred stock and the value of the outstanding shares of our preferred stock.
Our Board has received the advice of counsel and of others with relevant REIT experience that our status as a REIT would not be adversely affected by the increase in the ownership limit to 9.8%.
Although the current 5% ownership limit has served us well, our Board has determined that increasing the ownership limit to 9.8% would be beneficial to the Company and its stockholders. Our Board believes that a 9.8% ownership limit is consistent with the ownership limits of other REITs that do not have special limits in excess of 9.8% for significant individual stockholders.
In addition, in considering the increase in the ownership limit, our Board has determined that the exception to the ownership limit for the Excluded Holder should be eliminated. The exception permits the stockholders specified in the Certificate of Incorporation to continue to maintain their positions in the Companys securities without violating the ownership limit. Because the stockholders no longer require the benefit of the exception due to their decreased ownership, our Board proposes to eliminate the Excluded Holder provisions from the Certificate of Incorporation.
The Ownership Limit Amendment, if adopted, will increase the Ownership Limit set forth in the Certificate of Incorporation from 5% to 9.8% and will remove the concept of Excluded Holder from the Certificate of Incorporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE OWNERSHIP LIMIT AMENDMENT ON THE ENCLOSED PROXY CARD. AN AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ENTITLED TO VOTE IS NECESSARY FOR APPROVAL.
If this proposal is approved, the Company will promptly file the Ownership Limit Amendment with the Secretary of State of the State of Delaware. A copy of the Ownership Limit Amendment is attached hereto as Appendix C. Deletions are indicated by strikeouts and additions are indicated by underline.
Ratify Appointment of the Independent Auditors For 2009
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
Ernst & Young LLP (Ernst & Young) currently serves as the Companys independent auditors, and that firm conducted the audit of the Companys accounts for the year 2008. The Audit Committee appointed Ernst & Young in February of 2009 to serve as independent auditors to conduct an audit of the Companys accounts for the year 2009, subject to ratification by stockholders. A representative of Ernst & Young will attend the Annual Meeting and be available to respond to appropriate questions and have the opportunity to make a statement if he or she desires to do so.
PLUM CREEK 2009 NOTICE AND PROXY STATEMENT | 39
Selection of the Companys independent auditors is not required to be submitted to a vote of the stockholders of the Company for ratification. However, the Board of Directors is submitting this matter to the stockholders as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether to retain Ernst & Young, and it may retain that firm or another without re-submitting the matter to the Companys stockholders. Even if the stockholders ratify the appointment of Ernst & Young, the Audit Committee may, in its discretion, direct the appointment of different independent auditors at any time during the year if it determines that such a change would be in the best interests of the Company and the stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR RATIFYING THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANYS INDEPENDENT AUDITORS ON THE ENCLOSED PROXY CARD.
Fees to the Independent Auditors for 2007 and 2008
Ernst & Young billed the Company for the following services for the years ended December 31, 2007, and December 31, 2008:
All of the services provided by the independent auditors in 2007 and 2008 were pre-approved by the Audit Committee, which concluded that the provision of such services by the independent auditors was compatible with the maintenance of its independence in the conduct of its auditing functions. Consistent with the terms of its charter, the Audit Committee is required to pre-approve all audit and non-audit services provided by the independent auditors. The Audit Committee may delegate its pre-approval responsibility to a single member of the Audit Committee, provided that any pre-approval decisions made by any such single Committee member is presented to and discussed by the full Committee at its next scheduled meeting. This responsibility has been delegated to Mr. McDonald, the Chairman of the Audit Committee, with respect to services to be provided prior to any scheduled meeting of the Committee.
40 | PLUM CREEK 2009 NOTICE AND PROXY STATEMENT
Newground Social Investment, on behalf of Ms. Nancy M. Herbert, holder of 85 shares of common stock, and Trillium Asset Management, on behalf of James Fenton Co., Inc, holder of 1,052 shares of common stock, have each notified the Company that they intend to present a proposal at the Annual Meeting. The proposal and supporting statement, for which the Company has no responsibility, is set forth below.
RESOLVED: That shareholders urge the Board of Directors of Plum Creek (the Company) to adopt a policy allowing shareholders to vote on an advisory resolution at each annual shareholders meeting, proposed by Companys management, to ratify the compensation of the named executive officers (NEOs) included in the proxys Summary Compensation Table and accompanying narrative disclosure of material factors. The proposal should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO.
As long-term shareholders in Plum Creek, we feel that senior executive compensation at the Company has not always been structured in ways that best serve shareholders.
As the nations largest landowner in many communities, we have a particular interest in protecting and promoting our brand name and image. A reputation as anything less than a good neighbor or trustworthy partner can create unnecessary obstacles to success in community after communityrisking long-term shareholder value.
Earlier, our Company was branded the Darth Vader of the State of Washington by Republican Congressman Rod Chandler (Wall Street Journal, June 1990). Substantial Company resources and executive focus were spent overcoming that reputational damage.
A July 5th 2008 front-page article in the Washington Post, headlined: Closed-Door Deal Could Open Land in Montana. The article focused squarely on our Company, stating: The deal was struck behind closed doors between Mark E. Rey, the former timber lobbyist who oversees the U.S. Forest Service, and Plum Creek Timber Co., a former logging company turned real estate investment trust local [Montana] officials were stunned and outraged at the deal.
There is concern that the Washington Post story describes a short-term strategy that may harm long-term prospects for our Companys shareowners.
We believe existing U.S. corporate governance arrangements, including SEC rules and stock exchange listing standards, do not allow adequate shareholder input on senior executive compensation. In contrast to U.S. practices, shareholders of U.K. public companies cast advisory votes on the directors remuneration report. While not binding, the vote gives shareholders a clear advisory voice on senior executive compensation.
Current U.S. listing standards require shareholder approval of equity-based compensation plans. However, those plans only set general parameters and accord compensation committees substantial discretion in making awards and establishing performance thresholds year-by-year. Shareholders do not have any mechanism for providing feedback on how these apply to individual pay packages. (Bebchuk & Fried, Pay Without Performance, 2004.)
Similarly, performance criteria submitted for shareholder approval to allow a company to deduct compensation in excess of $1 million are broad and do not constrain compensation committees in dealing with particular senior executives. Withholding votes from compensation committee members who stand for re-election is insufficient for registering dissatisfaction with the way committees has administered prior-year compensation plans and policies.
PLUM CREEK 2009 NOTICE AND PROXY STATEMENT | 41
Therefore, we urge the Board to allow shareholders a voice on senior executive compensation by establishing an annual referendum process. Such a referendum would provide important information about whether shareholders view senior executive compensation practices, year-by-year, to be in shareholders best interests.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THE ADOPTION OF THIS PROPOSAL FOR THE FOLLOWING REASONS:
This proposal calls for an annual non-binding stockholder vote to ratify the compensation of the officers named in the Summary Compensation Table. For the reasons stated below, the Board of Directors does not believe the proposal to be necessary or in the best interests of the Company and its stockholders.
The Boards Compensation Committee, comprised exclusively of independent directors, is responsible for discharging the Boards responsibility relating to executive compensation. The Committee has designed the Companys incentive compensation programs to achieve two goals: to effectively align management and stockholder interests and to attract and retain talented and experienced executives. The Company makes complete disclosure of its executive compensation plans. Detailed descriptions of the long-term and short-term incentive compensation programs and related performance goals can be found in the Executive CompensationCompensation Discussion and Analysis section of this Proxy Statement.
The Board believes that an independent, well informed and experienced committee of the Board of Directors is in the best position to make judgments about the amount and form of executive compensation. In fulfilling its fiduciary duty in setting executive pay, the Compensation Committee considers great amounts of information and advice provided by its independent compensation consultant. Based on this information and advice, the Committee makes numerous complicated and inter-related decisions, all requiring careful balancing of many factors.
The type of advisory vote that this proposal seeks would not, in our view, help the Compensation Committee in fulfilling its duty in setting executive pay because it would not provide the Committee with meaningful information. If implemented, the proposal would require Plum Creek stockholders to vote yes or no (by voting For or Against) on the compensation for all Named Executive Officers named in the Summary Compensation Table and the accompanying narrative disclosure. However, the compensation of these senior executives is comprised of several different elements, and a simple yes or no vote on the whole compensation package would give the Committee no information or guidance about which element or elements stockholders were voting against, or the nature of their specific concerns or objections. Nor would such a vote inform the Committee about whether stockholder concern is focused on the compensation of one or more Named Executive Officers, or the compensation of every Named Executive Officer. In turn, the Committee could only speculate as to the stockholders intent.
The Board also believes that there is a far more effective way for stockholders to communicate their views about executive pay or any other matter pertaining to the Companys affairs. Stockholders can, and do, communicate their views about compensation and other matters directly to the Board of Directors and its committees by means of letters, e-mails and, on occasion, through meetings with management. In addition, stockholders are also able to voice their views by attending the Annual Meeting. In this way, specific concerns are communicated, which provides the Committee and the Board with more meaningful feedback.
FOR THESE REASONS, THE BOARD OF DIRECTORS UNANIMOUSLY OPPOSES THIS PROPOSAL AND RECOMMENDS THAT YOU VOTE AGAINST IT ON THE ENCLOSED PROXY CARD.
42 | PLUM CREEK 2009 NOTICE AND PROXY STATEMENT
OUTSTANDING CAPITAL STOCK
The common stock of the Company is its only class of voting capital stock. The Companys common stock is traded on the New York Stock Exchange. The record date for stockholders entitled to vote at the meeting is the close of business on March 10, 2009. At the close of business on that date, the Company had 162,804,208 issued and outstanding shares of common stock, $.01 par value. The closing price of the Companys common stock on that date was $26.53 per share.
The Company anticipates that the next Annual Meeting of stockholders will be held in May of 2010. Any stockholder who desires to submit a proposal for inclusion in the proxy materials related to the next Annual Meeting of stockholders must do so in writing and it must be received at the Companys principal executive offices on or before November 25, 2009. Any stockholder proposal submitted for inclusion in the Companys proxy materials must comply with the requirements of Rule 14a-8 under the Exchange Act.
In order for proposals of stockholders made outside of Rule 14a-8 under the Exchange Act to be considered timely within the meaning of Rule 14a-4(c) under the Exchange Act, such proposals must be received at the Companys principal executive offices not later than March 7, 2010. The Company Bylaws require that proposals of stockholders made outside of Rule 14a-8 under the Exchange Act must be submitted, in accordance with the requirements of the Company Bylaws, not earlier than February 5, 2010, and not later than March 7, 2010. Article II, Section 5 of the Company Bylaws governs submission of matters for presentation at stockholder meetings.
This Proxy Statement has been preceded or accompanied by the Annual Report for the fiscal year ended December 31, 2008. Stockholders are referred to such report for financial and other information about the activities of the Company. Except for those pages specifically incorporated into this Proxy Statement, such report is not to be deemed a part of the proxy soliciting material.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROXY STATEMENT IS DELIVERED, WITHIN ONE BUSINESS DAY OF RECEIPT OF THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANYS ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (NOT INCLUDING EXHIBITS TO THE FORM 10-K). REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO PLUM CREEK TIMBER COMPANY, INC., INVESTOR RELATIONS, 999 THIRD AVENUE, SUITE 4300, SEATTLE, WASHINGTON, 98104-4096, OR BY TELEPHONE AT (800) 858-5347 IF CALLING WITHIN THE UNITED STATES AND CANADA, OR AT (206) 467-3600 IF CALLING OUTSIDE THE UNITED STATES AND CANADA (CALL COLLECT).
INCORPORATION BY REFERENCE
According to the provisions of Schedule 14A under the Securities Exchange Act of 1934, the following document or portion thereof is incorporated by reference: Executive Officers of the Registrant from Part I of the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as filed with the Securities and Exchange Commission on February 27, 2009.
In the event that any matter not described herein is properly presented for a stockholder vote at the meeting, or any adjournment thereof, the persons named in the form of proxy will vote in accordance with their best judgment. At the time this proxy statement went to press, the Company knew of no other matters that might be presented for stockholder action at the meeting.
PLUM CREEK 2009 NOTICE AND PROXY STATEMENT | 43
A-1 | PLUM CREEK 2009 NOTICE AND PROXY STATEMENT
Proposed Amendments to Paragraph A of Article FIFTH of the Certificate of Incorporation:
Notwithstanding the foregoing, whenever, pursuant to the provisions of Article FOURTH of this Certificate, the holders of any one or more series of Preferred Stock shall have the right, voting separately as a series or together with holders of other such series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation, including any Preferred Stock Designation applicable thereto.
During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to the provisions of Article FOURTH of this Certificate of Incorporation, then upon commencement and for the duration of the period during which such right continues: (a) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions and (b) each such additional director shall serve until such directors successor shall have been duly elected and qualified, or until such directors right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to such directors earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board of Directors in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate and the total authorized number of directors of the Corporation shall be reduced accordingly.
PLUM CREEK 2009 NOTICE AND PROXY STATEMENT | B-1
Proposed Amendments to Paragraph E.2 of Article FOURTH of the Certificate of Incorporation:
Proposed Amendments to the Following Definitions in Article ELEVENTH of the Certificate of Incorporation:
Ownership Limit shall mean (
C-1 | PLUM CREEK 2009 NOTICE AND PROXY STATEMENT
MAP TO THE WASHINGTON ATHLETIC CLUB
Reprinted with the permission of the Washington Athletic Club
[Form of Proxy Card]
PLUM CREEK TIMBER COMPANY, INC.
999 THIRD AVENUE, SUITE 4300
SEATTLE, WASHINGTON 98104-4096
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 5, 2009, the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by Plum Creek in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 5, 2009, the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Plum Creek Timber Company, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET.
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED.
The Board recommends a vote FOR each nominee listed below:
In their discretion, the Proxies are authorized to vote on such other matters as may properly come before the meeting or any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. If no direction is made, this proxy will be voted FOR each of the nominees for director in Proposal 1; FOR with respect to Proposal 2; FOR with respect to Proposal 3; FOR with respect to Proposal 4; and AGAINST with respect to Proposal 5.
For address changes or comments, please check this box and write them on the back where indicated. ¨
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS. IF ACTING AS ATTORNEY, EXECUTOR, TRUSTEE, OR IN A REPRESENTATIVE CAPACITY, SIGN NAME AND PROVIDE TITLE.
Attending the Meeting in Person. Directions to the location of the Annual Meeting are available on Plum Creeks web site at http://proxy.plumcreek.com.
This Proxy is Solicited on Behalf of the Board of Directors for
the 2009 Annual Meeting of Stockholders, May 6, 2009.
The undersigned acknowledges receipt of (a) the Notice of 2009 Annual Meeting of the Stockholders of Plum Creek Timber Company, Inc. (the Company), (b) the accompanying Proxy Statement and (c) the Annual Report of the Company for its fiscal year ended December 31, 2008. Rick R. Holley, David W. Lambert and James A. Kraft, or any one of them, with power of substitution and revocation, are hereby appointed Proxies of the undersigned to vote all stock of the Company which the undersigned is entitled to vote at the 2009 Annual Meeting of Stockholders to be held at the Washington Athletic Club, located at 1325 Sixth Avenue, Seattle, Washington 98101, on May 6, 2009 at 9:00 a.m., local time, or any adjournment or postponement thereof, with all powers which the undersigned would possess if personally present, upon such business as may properly come before the meeting or any adjournment or postponement thereof.
THE COMPANYS BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR IN PROPOSAL 1, AND SHARES WILL BE SO VOTED UNLESS OTHERWISE DIRECTED.
THE COMPANYS BOARD OF DIRECTORS RECOMMENDS A VOTE FOR WITH RESPECT TO PROPOSAL 2, AND SHARES WILL BE SO VOTED UNLESS OTHERWISE DIRECTED.
THE COMPANYS BOARD OF DIRECTORS RECOMMENDS A VOTE FOR WITH RESPECT TO PROPOSAL 3, AND SHARES WILL BE SO VOTED UNLESS OTHERWISE DIRECTED.
THE COMPANYS BOARD OF DIRECTORS RECOMMENDS A VOTE FOR WITH RESPECT TO PROPOSAL 4, AND SHARES WILL BE SO VOTED UNLESS OTHERWISE DIRECTED.
THE COMPANYS BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST WITH RESPECT TO PROPOSAL 5, AND SHARES WILL BE SO VOTED UNLESS OTHERWISE DIRECTED.
YOU MAY ALSO VOTE VIA TELEPHONE OR INTERNET. SEE INSTRUCTIONS ON REVERSE SIDE.