WESTVACO
December 27, l996
Dear Fellow Shareholders:
We cordially invite you to join us at the l997 Annual
Meeting of Shareholders of Westvaco Corporation to be held
at 10 a.m. on Tuesday, February 25, 1997. The meeting will
be held in the Stuyvesant Room of The New York Marriott East
Side Hotel, Lexington Avenue at 49th Street, New York, New
York. Whether or not you expect to attend the meeting,
however, please sign, date and promptly return the enclosed
proxy.
This year our proxy material includes three proposals. We
ask for your support in voting FOR Proposal 1, the election
of directors; FOR Proposal 2, the appointment of
independent accountants; and FOR Proposal 3, the approval of
an amendment to the corporation's Restated Certificate of
Incorporation.
Proposal 3 seeks to increase the authorized shares of the
company's existing class of common stock from 200,000,000
shares to 300,000,000 shares. The proposed increase in
authorized shares of common stock follows the three-for-two
stock split in 1995 which substantially depleted the number
of authorized shares available for general purposes. An
increase in authorized shares has typically followed a stock
split.
Your interest in your company as demonstrated by the
representation of your shares at our annual meeting is a
great source of strength for your company. Your vote is
very important to us and, accordingly, we ask that you sign,
date and return the enclosed proxy as soon as conveniently
possible.
Sincerely,
John A. Luke, Jr.
Chairman, President and
Chief Executive Officer
Paper, packaging and specialty chemicals
Notice of 1997 Annual Meeting of Shareholders
and Proxy Statement
The Annual Meeting of Shareholders of Westvaco Corporation
will be held in the Stuyvesant Room of The New York Marriott
East Side Hotel, Lexington Avenue at 49th Street, New York,
New York, on Tuesday, February 25, 1997, at ten o'clock in
the morning for the following purposes:
1. To elect four directors for terms of three years each;
2. To consider and vote upon a proposal to ratify the action
of the Board of Directors in appointing Price Waterhouse LLP
as independent accountants for the corporation for the
fiscal year 1997;
3. To consider and vote upon an amendment to the
corporation's Restated Certificate of Incorporation
increasing from 200,000,000 to 300,000,000 the number of
authorized shares of common stock.
All holders of common stock of record at the close of
business on December 27, 1996 will be entitled to receive
notice of and to vote at the annual meeting. Whether or not
you expect to be at the meeting, please sign, date, and
promptly return the enclosed proxy.
By Order of the Board of Directors
John W. Hetherington
Vice President and Secretary
December 27, 1996
Proxy Statement
Westvaco Corporation
299 Park Avenue
New York, New York 10171
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of
Westvaco Corporation for the Annual Meeting of
Shareholders to be held on February 25, 1997. Only
holders of Westvaco common stock of record at the close
of business on December 27, 1996 will be entitled to
vote at the meeting, each share of such stock being
entitled to one vote. The Proxy Statement and enclosed
form of proxy are being mailed on or about Tuesday,
January 7, 1997 to each shareholder entitled to vote.
The presence of a majority of the outstanding shares of
common stock, represented in person or by proxy at the
meeting, will constitute a quorum. The nominees
receiving the highest vote totals will be elected
directors. Accordingly, abstentions and broker non-votes
will not affect the outcome of the election. All
other matters to be voted on (other than the proposed
amendment to Westvaco's Restated Certificate of
Incorporation) will be decided by the affirmative vote
of a majority of the shares present or represented at
the meeting and entitled to vote. On any such matter,
an abstention will have the same effect as a negative
vote but, because shares held by brokers will not be
considered entitled to vote on matters as to which the
brokers lack authority to vote, a broker non-vote will
have no effect on the vote. The proposed amendment to
the Restated Certificate of Incorporation of Westvaco
Corporation will require the affirmative vote of a
majority of all of the issued and outstanding shares of
common stock; accordingly, with respect to the proposed
amendment, abstentions and broker non-votes will have
the same effect as negative votes.
On December 27, 1996 there were outstanding 101,912,538
shares of Westvaco common stock. The only entity
believed by the company to be the beneficial owner (as
defined for certain purposes by the Securities and
Exchange Commission) of more than 5% of its stock is
Invesco PLC, 11 Devonshire Sq., London, England, which,
principally through its subsidiary, Invesco Capital
Management, 1315 Peachtree Street, Atlanta, GA 30309, an
SEC registered investment adviser, is reported to have
investment authority with respect to 9,136,298 shares,
or approximately 9%, and voting authority with respect
to a portion of such shares. The Westvaco savings and
investment plans for salaried and hourly employees held,
as of October 31, 1996, a total of 13,286,302 shares, or
13%, for which full voting rights are exercisable by
members of the plans. As of that date there were 12,260
current or former employees of Westvaco and its
subsidiaries participating in such plans. All directors
and officers as a group owned 4,407,530 shares, or 4.2%,
of Westvaco common stock, including shares in the
Savings and Investment Plan for Salaried Employees as of
October 31, 1996, and including shares in which they had
the right to acquire beneficial interest within 60 days
through the exercise of stock options. In addition to
the stock beneficially owned by each executive officer
who is also a director, as shown hereinafter in
connection with the election of directors, the following
executive officers named in the Summary Compensation
Table on page 16 held the following number of shares:
Philip H. Emery, Jr., 156,856 shares, Frederick C. Haas,
295,149 shares, and Jack A. Hammond, 172,885 shares.
All information concerning such share ownership is as of
the most recent practicable date.
Attendance at the meeting will be limited to holders of
record as of the record date, or their authorized
representatives (not to exceed one per shareholder), and
guests of management.
Management has been gratified by the interest in Westvaco
shown by its shareholders as evidenced by the
representation, in person or by proxy, of more than 90% of
its outstanding stock at each of the annual meetings held
during the past 29 years.
It is important that your stock be represented at the
meeting. Whether or not you plan to attend, please sign,
date and return the enclosed proxy promptly in order to be
sure that your shares will be voted. You may revoke your
proxy at any time before it is voted at the meeting by
submitting a written revocation or a new proxy, or by
attending and voting at the annual meeting.
In addition to solicitation by mail, officers and assistant
officers of Westvaco may solicit proxies by telephone or
other electronic communication, or by personal contact. The
cost of solicitation of proxies will be borne by Westvaco.
Westvaco may engage the services of D. F. King & Co., Inc.
for the solicitation of proxies on a limited basis at a cost
which is estimated not to exceed $11,500 in fees, and
somewhat more than half that amount in expenses.
1. Election of directors
Four directors are to be elected to hold office for the
terms set forth below and, in all cases, until their
successors are elected and shall qualify. There is no
provision for cumulative voting in the election of
directors. At the meeting, one of the persons named in the
enclosed proxy (or a substitute) will, if authorized, vote
the shares covered by such proxy for election of the four
nominees for directors listed on the following pages.
The present nominees, Samuel W. Bodman III, Dr. Thomas W.
Cole, Jr., Rudolph G. Johnstone, Jr. , and John A. Luke, if
elected, will be elected for a term expiring at the Annual
Meeting of Shareholders to be held in the year 2000. The
Board of Directors unanimously recommends a vote FOR the
named nominees and, unless otherwise specified by the
shareholder, the Board of Directors intends the accompanying
proxy to be voted for the election of these nominees. Should
any of these nominees become unavailable for election for
any reason presently unknown, a person named in the enclosed
proxy (or a substitute) will vote for the election of such
other person or persons as the Board of Directors may
recommend.
David L. Hopkins, Jr., Douglas S. Luke, Katherine G. Peden,
and Richard A. Zimmerman will continue to serve for a term
expiring at the annual meeting to be held in 1998. W.L.
Lyons Brown, Jr., John A. Luke, Jr., and William R. Miller
will continue to serve for a term expiring at such meeting
to be held in 1999. John A. Luke is the father of John A.
Luke, Jr., and the father-in-law of John W. Hetherington.
Brief statements appear on the following pages setting forth
the age, principal occupation, and other biographical
information concerning each nominee and continuing director.
Such statements include the number of shares of Westvaco
common stock owned, representing in the case of each nominee
and continuing director less than 1% of the outstanding
shares . All information in this Proxy Statement concerning
share ownership by nominees or continuing directors is as of
the most recent practicable date.
Nominees for election as directors
for a term of three years expiring in 2000
Samuel W. Bodman III: Chairman and Chief
Executive Officer, Cabot Corporation, a
chemical, energy and materials company, since
1988. Westvaco Director since 1987. B.S.,
Cornell University, 1960. Sc.D., M.I.T., 1964.
Joined FMR Corporation in 1970 and served as
President and Chief Operating Officer from
1983-1986 prior to joining Cabot Corporation
as President and Chief Operating Officer.
Director: Cabot Oil and Gas Corporation, John
Hancock Mutual Life Insurance Co., Security
Capital Group Incorporated. Trustee:
Massachusetts Institute of Technology,
Isabella Steward Gardner Museum. Age 58.
Westvaco shares owned 33,000 (Note 1). Term to
expire: 2000
Dr. Thomas W. Cole, Jr.: President, Clark
Atlanta University since l989. Westvaco
Director since 1994. B.S. , Wiley College,
1961. Ph.D, University of Chicago, 1966.
Joined faculty of Atlanta University in l966
and became Chairman, Department of Chemistry,
Fuller E. Callaway Professor of Chemistry,
Provost and Vice President for Academic
Affairs prior to becoming President of West
Virginia State College in 1982. Chancellor of
the West Virginia Board of Regents, 1986-1988
and President of Clark College in 1988.
Director: West Virginia Wesleyan College,
Atlanta Chamber of Commerce, Central Atlanta
Progress , Atlanta Committee for Public
Education, First Union Bank of Georgia,
Atlanta Action Forum. Vice President: Atlanta
Area Council, Boy Scouts of America , Eagle
Scout. Age 55.
Westvaco shares owned 3,350 (Note 1).Term to
expire: 2000
Rudolph G. Johnstone, Jr. : Executive Vice
President, Westvaco; Director since 1995. B.S.
and M.S. , North Carolina State University,
1958, 1960. Advanced Management Program
Wharton School, University of Pennsylvania,
1989. Joined Westvaco in 1957. Container
Division Regional Manager, 1970 and Assistant
Division Manager, 1980. Became Vice President
and Container Division Manager, 1985; Senior
Vice President and Envelope Division Manager,
1990; Senior Vice President with
responsibilities for Corporate Data
Processing, Marketing Services and Human
Resources, 1992; Executive Vice President,
1995. Director and Executive Committee Member:
National Association of Manufacturers.
Director: Direct Marketing Association. Age 60.
Westvaco shares owned 212,081 (Note 1).Term to
expire : 2000
John A. Luke: Retired President and Chief
Executive Officer, Westvaco; Director since
1960. A.B., Yale University, 1949. Joined
Westvaco in 1949 at the Charleston, South
Carolina, mill. Appointed Manager of the Luke,
Maryland, mill in 1955 and Manager, Fine
Papers Division, 1960. Became Vice President,
1966; Senior Vice President, 1974; Executive
Vice President, 1976; President, 1980. Served
as President and Chief Executive Officer,
1988-l992. Trustee and Chairman: Yale-China
Association. Former Director and Executive
Committee Member, Former Chairman
International Business Committee: American
Paper Institute. Former Chairman and Governor:
National Council of The Paper Industry for Air
and Stream Improvement, Inc. Age 71.
Westvaco shares owned 515,293 (Note 1). Term to
expire: 2000
Directors whose terms of office continue
W. L. Lyons Brown, Jr.: Former Chairman of the
Board and Chief Executive Officer,
Brown-Forman Corporation, a diversified
consumer products company. Westvaco Director
since 1994. B.A., University of Virginia, 1958.
B.S., American Graduate School of International
Management, 1960. Joined Brown-Forman
Corporation 1960. Became a Director, 1964;
Executive Vice President, 1972; President,
1975; and Chairman of the Board, 1983; Chief
Executive Officer, 1975-1993. Director:
Pennzoil Company. Advisory Director: Bessemer
Holdings. L.P. Member: President's Advisory
Committee for Trade Policy and Negotiations.
Vice Chairman and Trustee: Winterthur Museum.
Trustee: World Monuments Fund. Alumni Trustee:
University of Virginia Endowment Fund.
Trustees' Council: National Gallery of Art.
Age 60.
Westvaco shares owned 7,500 (Note 1). Term to
expire : 1999
John A. Luke, Jr.: Chairman, President and
Chief Executive Officer, Westvaco; Director
since 1989. B.A., Lawrence University, 1971.
M.B.A., The Wharton School, University of
Pennsylvania, 1979. Joined Westvaco in 1979.
Became Assistant Treasurer, 1982; Treasurer,
1983; Vice President and Treasurer, 1986;
Senior Vice President, 1987; Executive Vice
President, 1990; President and Chief Executive
Officer, 1992; Chairman, President and Chief
Executive Officer, 1996. Director: American
Forest and Paper Association, The Americas
Society, Inc., Arkwright Mutual Insurance Co.,
The Bank of New York, United Negro College
Fund. Trustee: Lawrence University, Tinker
Foundation. Governor: National Council of The
Paper Industry for Air and Stream Improvement,
Inc. Age 48.
Westvaco shares owned 477,035 (Notes 1, 2).
Term to expire: 1999
William R. Miller: Corporate Director.
Westvaco Director since 1992. B.A., St. Edmund
Hall, Oxford University, 1952, M.A., l956.
Joined Bristol-Myers Company (now
Bristol-Myers Squibb Company), a
pharmaceutical company, in 1964. Became
President International Division, 1972;
President Pharmaceutical and Nutrition Group,
1981; Vice Chairman of the Board, 1985-1990.
Former Chairman and Director: Pharmaceutical
Manufacturers Association. Chairman of the
Board: Vion Pharmaceuticals, Inc. (formerly
OncoRx), SIBIA Neurosciences, Inc. Director:
ImClone Systems, Inc., ISIS Pharmaceuticals,
Inc., St. Jude Medical, Inc., Transkaryotic
Therapies, Inc., Xomed Surgical Products, Inc.
Advisory Director: Chugai Pharmaceuticals,
Inc. Vice Chairman of the Board of Cold Spring
Harbor Laboratory. Trustee: Manhattan School
of Music, Metropolitan Opera Association,
Opera Orchestra of New York. Member of Oxford
University Chancellor's Court of Benefactors,
Honorary Fellow of St. Edmund Hall. Chairman
of the English-Speaking Union of the United
States. Age 68.
Westvaco shares owned 4,500 (Note 1).Term to
expire: 1999
David L. Hopkins, Jr.: Managing Director, Alex
Brown & Sons, Incorporated; Head, Alex Brown
Asset Management, since 1993. Retired Managing
Director, Morgan Guaranty Trust Company of New
York. Westvaco Director since 1969. A.B.,
Princeton University, 1950. Director:
Metropolitan Opera Association. Trustee and
Chairman Finance Committee: Episcopal Church
Foundation. Trustee: The Maryland Historical
Society. Age 68.
Westvaco shares owned 48,206 (Notes 1, 2). Term
to expire: 1998
Douglas S. Luke: President and Chief Executive
Officer, WLD Enterprises, Inc., a private
investment company with diversified interests
in marketable securities, real estate and
operating businesses, since 1991. Westvaco
Director since October 1996. B.A., University
of Virginia, 1964. M.B.A., the Darden School,
University of Virginia, 1966. Managing
Director and Officer of Rothschild Inc and its
predecessor, New Court Securities Corporation,
1979-1990. Director: Orbital Sciences
Corporation, Regency Realty Corporation, DNAP
Holding Corporation. Age 55.
Westvaco shares owned 45,998 (Note 2). Term
to expire: 1998
Katherine G. Peden: President, Katherine G.
Peden & Associates, Inc., industrial and
community development consultants, since 1968.
Westvaco Director since 1977. Commissioner of
Commerce and Member of the Governor's Cabinet,
Commonwealth of Kentucky, 1964-1968. Director:
Kentucky Science & Technology Council,
International Federation of Business &
Professional Women. Advisory Board: Norfolk
Southern Corporation. Age 71.
Westvaco shares owned 6,096 (Note 1). Term to
expire: 1998
Richard A. Zimmerman: Retired Chairman and
Chief Executive Officer, Hershey Foods
Corporation, a manufacturer of food products.
Westvaco Director since 1989. B.A.,
Pennsylvania State University, 1952. Joined
Hershey Foods Corporation in 1958. Became
President and Chief Operating Officer, 1976;
and Chief Executive Officer, 1984. Director:
Eastman Kodak Corporation, Lance, Inc. Trustee
and Chairman of the Board: United Theological
Seminary, Pennsylvania State University. Board
of Governors: United Way of America, Inc. Age
64.
Westvaco shares owned 6,150 (Note 1). Term to
expire: 1998
Notes with respect to nominees' and continuing directors'
shareholdings
(l) The total shares shown include shares of Westvaco
common stock in which the nominees and continuing directors
had a right to acquire beneficial interest within 60 days by
the exercise of stock options.
(2) The shares shown also include the following shares:
Douglas S. Luke is a co-trustee of a trust which held a
total of 25,998 shares of Westvaco common stock. John A.
Luke, Jr. is a co-trustee of two trusts which held a total
of 7,693 shares of Westvaco common stock. David L. Hopkins,
Jr. is a co-trustee of a trust which held a total of 44,887
shares of Westvaco common stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires reporting by directors and certain officers of the
company concerning their holdings and transactions in
Westvaco common stock. A review of the company's records
indicates that all reports required under the Section 16(a)
rules were filed in a timely manner during the year.
Board and committee meetings
The Board of Directors held twelve meetings, one each month,
and 32 committee meetings during fiscal year 1996. Average
attendance by directors at meetings of the Board and its
committees was 94% .
The Audit Committee, which met three times in fiscal year
1996, has as its members William R. Miller, Chair ; Dr.
Thomas W. Cole, Jr., David L. Hopkins, Jr., Katherine G.
Peden, and Richard A. Zimmerman, none of whom is an officer
or employee of the corporation. The Audit Committee reviews
the audit examination and annual financial reports of the
corporation, and meets with and remains accessible to the
internal auditors and independent accountants of the
corporation. It reviews in advance the appointment of the
independent accountants, the scope of their work, and the
fees for all services provided. It also reviews annually
with the General Counsel the status of the company's legal
compliance program.
The Compensation Committee, which met six times in fiscal
year 1996, has as its members Richard A. Zimmerman, Chair;
Samuel W. Bodman III, Dr.Thomas W. Cole, Jr., David L.
Hopkins, Jr., and Katherine G. Peden, none of whom is an
officer or employee of the corporation. The Compensation
Committee receives regular reports on industrial relations,
approves or reviews all compensation of senior management,
determines awards under the Annual Incentive Compensation
Plan, oversees matters relating to the corporation's Stock
Option and Stock Appreciation Rights Plans and its unfunded
benefits plans, and the level of company contributions to
its savings and investment plans.
The Committee on Board Membership, which met nine times in
fiscal year 1996 has as its members Katherine G. Peden,
Chair; Samuel W. Bodman III, W.L. Lyons Brown, Jr., John A.
Luke, John A. Luke, Jr., and Richard A. Zimmerman. The
Committee on Board Membership reviews and makes
recommendations concerning the qualifications of individuals
for re-election and to fill vacancies on the Board of
Directors, as well as the levels of compensation paid to
non-salaried directors.
A Westvaco bylaw requires nominations for the Board from any
shareholder to be delivered to the Board Membership
Committee, c/o Westvaco's Secretary, not less than 90 days in
advance of an annual meeting nor later than the seventh day
following the date that notice of a special meeting is
first given to shareholders. The bylaw also requires the
nomination to contain specified information about the
nominee and the shareholder making the nomination, as well
as a consent to serve by the nominee. In addition to such
nominations, the Board Membership Committee will consider such
suggestions for nominations as may be sent by shareholders to the
Committee. Westvaco's bylaws also contain detailed procedures,
including time limitations, which a shareholder must comply
with in order to introduce an item of business at an annual
meeting.
The Finance Committee, which met eight times in fiscal year
1996, has as its members David L. Hopkins, Jr., Chair; W. L.
Lyons Brown, Jr., Douglas S. Luke, John A. Luke, John A.
Luke, Jr., and William R. Miller. The Finance Committee
reviews the financial condition of the corporation and its
requirement for funds, studies its credit and financing
policies, considers the dividend policy of the corporation
and makes recommendations concerning these matters, and
reviews funding recommendations for the salaried and hourly
pension plans together with the investment performance of
such plans.
The Committee on the Environment, Safety and Health, which
met three times in fiscal year 1996, has as its members
Samuel W. Bodman III, Chair; Dr. Thomas W. Cole, Jr.,
Douglas S. Luke, John A. Luke, John A. Luke, Jr., William R.
Miller, and Katherine G. Peden. The Committee on the
Environment, Safety and Health oversees the stewardship of
the corporation with respect to the conservation of the
natural resources and its ability to protect the natural
environment. It also oversees implementation of the
company's strong emphasis on workplace safety and health as
reflected in its policies . The committee receives regular
reports from management, reviews environmental, safety and
health matters with management, and makes recommendations as
needed.
The International Committee, which met three times in fiscal
year 1996, has as its members John A. Luke, Chair; Samuel W.
Bodman III, W. L. Lyons Brown, Jr., John A. Luke, Jr.,
William R. Miller, and Richard A. Zimmerman. The
International Committee shares its knowledge and expertise
on opportunities outside of the United States which may be
of interest to the company. The committee serves as a
resource for management in discussing opportunities which
appear attractive to Westvaco and which lie outside the
United States or outside areas where the company has direct
experience.
Director compensation
Only directors who are not employees of the corporation
receive fees. Since January 1, 1992, fees paid to each
outside director have consisted of an annual retainer of
$24,000 plus an attendance fee of $1,000 for each meeting of
the Board and committee meeting of the Board at which the
director is present. Each director may elect to defer
payment of a percentage of his or her fees, with interest,
to a later date or dates. The annual retainer will be
increased to $30,000 effective March 1, 1997. Options and
Stock Appreciation Rights covering 1,500 shares were granted
to each non-employee director in December 1996 and will
continue each year in a similar amount up to the limit of
shares in a plan approved by shareholders in 1995.
Effective March 1, 1997 the Westvaco Retirement Plan for
outside directors will be terminated. Prior to that date,
each outside director who retires will receive after
retirement each year an amount determined as follows:
$24,000 less $2,400 X (70 minus the director's age at the
time of retirement) and also less $2,400 X (10 minus the
director's years of service prior to age 72 at the time of
retirement.) Upon the effective date of termination of the
plan, any benefits accrued up to that date will be preserved
and paid in accordance with the plan, but with no further
benefits accruing, and all benefits established for
directors previously retired will continue to be paid in
accordance with such plan.
Executive Compensation
Report of the Compensation Committee
The Committee
The Westvaco Executive Compensation Program (the "Program")
is designed to attract and retain an organization of able
and motivated individuals who can create and execute
programs that will produce sound, long-term gains in
shareholder value. It is administered by the Compensation
Committee (the "Committee") of the Board of Directors (the
"Board"). The Committee is composed entirely of independent
outside directors, none of whom is or has been at any time a
salaried employee of the company or receives any
compensation from the company other than as a director. The
Committee determines the compensation of all employees,
including executive officers, whose annual compensation
exceeds $275,000, and informs the Board on any action taken
with respect to the compensation of the CEO. The Committee
also administers and makes all grants under the company's
stock option and stock appreciation rights plans, reviews
and recommends to the Board the benefit levels for the
salaried and hourly pension plans, oversees matters relating
to nonqualified benefit plans, and has the authority to
establish the performance criteria for company matching
contributions to the savings and investment plans for
salaried and hourly employees.
Performance Factors
A major Westvaco objective is to increase the value of the
company for its shareholders over the long term. Beginning
in July 1967, the company began to measure the performance
of its stock against major market indices as well as against
its peers and other leading industrial companies. The
results, which are shown on page 15 , show a high degree of
success in creating long-term shareholder value over this
measuring period.
Another major company objective has been to minimize the
impact of the business cycle on its earnings through an
extensive emphasis on distinctive and differentiated
products and services. This program was initiated in 1984
and has been described since then in company literature
distributed to shareholders. The success of this product
strategy, as well as the company's cost containment and
productivity improvement strategies, is regularly monitored
within the company and at the Board level.
The contribution of an individual to the execution of
corporate strategies, including the foregoing objectives, is
the principal basis on which job performance is evaluated
and, therefore, is a significant factor in determining
salary, awards of bonuses to the most senior executives as
hereafter described, and grants of stock options and stock
appreciation rights.
Cash Compensation
Over a long period of time Westvaco relied solely on
well-designed salary compensation to provide attractive and
competitive levels of cash compensation for its salaried
employees at all management levels. This approach worked
well and created a strongly motivated and loyal
organization. In 1993, however, Congress changed the tax
laws so that, in general, a corporation could not deduct for
tax purposes the compensation of any senior executive in
excess of $1 million in a single year unless that part of
the compensation occurs as a consequence of a shareholder-approved
pay-for-performance compensation plan.
Because of this 1993 tax legislation, as well as the need to
consider competitive compensation increases for senior
Westvaco personnel, the Committee concluded that it was
appropriate for the company to modify the Program to
supplement base salaries for senior management members with
variable bonus compensation. The approach places a portion
of a senior executive's compensation at risk, and ties it to
company and personal performance, thereby ensuring that all
compensation is tax deductible. The Westvaco Annual
Incentive Compensation Plan (the "Plan") was therefore
developed, and approved by the Committee and the Board of
Directors. It was presented to shareholders and received the
support of over 91 percent of the votes cast on this
proposal at the company's 1996 Annual Shareholders' Meeting.
The Plan is administered by the Compensation Committee.
Funding for awards is based on a formula tied to the overall
performance of the company. The formula, which provides
funding based on 2% of net income in excess of 6% return on
shareholders' equity, is designed so that in years of good
or excellent performance a pool of money will be available
for use by the Committee to provide annual cash compensation
for senior managers in the then-current competitive range as
indicated by regular annual studies. The Plan is designed
to meet IRS requirements for tax deductibility. The
Committee uses its discretion under the Plan carefully,
taking into account anticipated competitive compensation for
various job levels, and uses good and rigorous judgement in
appraising the performance of the company and of the
individuals in senior management in determining awards to
each individual considered. Under the Plan no one executive
can receive more than 20% of the available bonus pool. It
is likely that in many years something less than the total
amount of the available pool will be used. Any amounts that
are not awarded in a particular year may not be carried over
to the bonus pool for a subsequent year. Based on 1996
fiscal year performance, the funding formula provided a
total available bonus pool of $1,669,000 . The total bonus
payout for eleven executives after the close of fiscal year
1996 was $520,000 , representing 31% of the total
available award pool.
The Committee believes that it is important that total cash
compensation for Westvaco's executive officers be at a level that
is competitive with that paid by comparable companies. The
competitiveness of the compensation of the CEO and the other executive
officers identified in the Summary Compensation Table is evaluated
through an assessment of annual cash compensation (salary +
annual bonus) paid by the seven peer paper companies that
comprise the Peer Group Companies (the "Peer Group") in the
proxy performance graphs on pages 14 and 15 , and by other
companies comparable in size to Westvaco. Such assessments
are supported by executive compensation surveys performed
for the Committee each year. Using this frame of reference
as a general guideline, actual compensation levels are
determined by an annual evaluation of individual job
performance, without attempting to target a specific level
within the competitive frame of reference.
Salaries for the other senior officers are determined on a
similar basis, except that a salary range is established for
each such officer based upon total annual cash compensation,
including any bonus, paid to comparable officers of the
companies in the Peer Group. A midpoint is determined with
reference to the median of the Peer Group and annual cash
compensation paid by other companies comparable to Westvaco
both within and without the paper industry. Individual
salaries are reviewed annually under a formal performance
appraisal program and adjusted relative to the midpoint
within the range, as appropriate, based on individual job
performance.
The Committee regularly reviews the cash compensation of the
company's executive officers named in the Summary
Compensation Table relative to the annual cash compensation
paid by companies in the Peer Group. Compensation at
Westvaco is inclined to be more level throughout the
organization than is generally seen in most companies, and
the compensation philosophy at Westvaco tends to be
conservative. In 1995, five of the seven reporting companies
in the Peer Group provided more total cash compensation than
Westvaco to their five highest paid executives.
Equity-Based Compensation
Stock Options and Stock Appreciation Rights
Grants of stock options and stock appreciation rights are
made by the Committee to create a direct tie between the
interests of key employees and shareholders of the company.
Such options and rights are normally granted each year with
an exercise price equal to the market price of the related
shares on the date of grant, so that individuals receiving
such grants benefit only if shareholders benefit through
appreciation in the post-grant value of Westvaco shares.
Position responsibility, job performance, and salary level
are principal factors considered by the Compensation
Committee in determining the size of grants. Grants are
also compared with the grants of options and other long-term
incentives within the Peer Group, and by other companies
comparable in revenues to Westvaco in other industries. The
Committee does not consider the number of options and rights
already held by an individual in making additional grants.
The Savings and Investment Plans
The savings and investment plans for Westvaco employees ,
(the "S&I Plans"), with company matching, provide an
attractive way for all employees, including executive
officers, to acquire and hold stock in the company by
contributing a percentage of their compensation. They
reflect the company's very strong feelings about equity
ownership and tying the interests of all members of the
Westvaco organization to the interests of the shareholders
as a whole. The S&I Plans provide specific and
pre-established performance-based criteria to determine the
level of supplemental company matching. While the company's
strategy of differentiated products and services contributed
to greater stability of earnings as compared with its
competitors, less favorable market conditions caused the
company not to meet or exceed each of these pre-established
reference points for fiscal 1996. As a result, there was no
supplemental match for fiscal 1996 above the regular company
match of 75 percent.
Compensation for the Past Year
Westvaco's differentiated product strategy continues to
yield clear benefits. A comparison of the company's total
return to shareholders over the past two years with that of
the Peer Group or the Dow Jones Paper Index, as reviewed by
the Committee, is clearly more favorable to the company as
reflected on the following graph:
Total Return to Shareholders
The performance graph required by Regulation S-K Item 402(1)
is filed in paper form simultaneously with this electronic
filing under cover of Form SE.
Oct. 1994 Oct. 1995 Oct. 1996
Westvaco 100.00 122.36 129.51
Peer Group 100.00 116.25 118.08
DJ Paper 100.00 120.39 124.16
S&P 500 100.00 126.44 156.90
Data source: Standard & Poor's Compustat Services, a division
of McGraw-Hill Companies except for Dow Jones Paper Index data
which comes from Dow Jones & Company, Inc.
The company's financial performance under the current very
challenging business conditions confronting the paper
industry (as measured by stability of earnings) as compared
to the company's record earnings in 1995, also compares very
favorably with the Peer Group.
Compensation for the Chief Executive Officer
Base salary adjustments were granted in 1996 to the
executive officers named in the Summary Compensation Table.
The base salary of the company's Chairman, President and
Chief Executive Officer, John A. Luke, Jr., was increased to
$875,000 on January 1, 1996. He received a bonus award for
1996 of $150,000. The total bonus payout to the executive
officers listed in the Summary Compensation Table was
$375,000. Taking into account the bonus, the Committee
believes John A. Luke, Jr.'s total cash compensation is
appropriate when compared to the total cash compensation for
similar positions in the Peer Group companies. In December
1995 the Committee granted stock options to John A. Luke,
Jr. for 85,000 shares and simultaneously made grants to 375
other officers and salaried employees.
In determining 1996 compensation of all executive officers,
the Committee carefully evaluated the contribution by
individual executive officers to the success of corporate
strategies, and to the performance of the company and the
impact of these contributions on shareholder values. The
Committee considered, in particular, the stability of
earnings relative to their previous high resulting from the
development of new and differentiated products.
Conclusion
The Committee remains convinced that the caliber and
motivation of the company's executives and all of its
employees is extremely important to the company's ability to
meet future challenges and to continue to deliver long-term
value to its shareholders. The Committee also believes that
the Westvaco Executive Compensation Program is making an
important contribution to the company's performance, and is
deserving of shareholder support.
Richard A. Zimmerman, Chair
Samuel W. Bodman III
Dr. Thomas W. Cole, Jr.
David L. Hopkins, Jr.
Katherine G. Peden
Total Return to Shareholders
Oct91 Oct92 Oct93 Oct94 Oct95 Oct96
Westvaco 100.00 96.16 89.48 97.32 119.07 126.03
Peer Group 100.00 97.07 97.83 118.47 137.72 139.88
DJ Paper 100.00 95.50 93.45 115.03 138.49 142.83
S&P 500 100.00 109.95 126.38 131.27 165.97 205.96
Data source: Standard & Poor's Compustat Services, a division
of McGraw-Hill Companies except for Dow Jones Paper Index data
which comes from Dow Jones & Company, Inc.
This graph compares the cumulative total return to
shareholders on Westvaco common stock for a five-year period
ended October 31, 1996 with the return on the Standard &
Poor's 500 Stock Index (S&P 500), the Dow Jones Paper Index,
and the average return on the stock of a group consisting of
companies in the paper industry (the "Peer Group"). The total
return shown in the graph assumes reinvested dividends and is
weighted on the basis of market capitalization at the
beginning of each year of measurement. The companies included
in the Peer Group are: Boise Cascade Corp., Champion
International Corp., Consolidated Papers, Inc., International
Paper Company, Mead Corp., Potlatch Corp., and Union Camp
Corp. The Peer Group is the same group referred to in the
Report of the Compensation Committee. Federal Paper Board Co.,
which was included in the Peer Group for fiscal year 1995, was
acquired during 1996 by International Paper Company and,
therefore, is no longer included in the Peer Group. The Dow
Jones Paper Index was added because it is a broad, as well as
published, industry index which includes the Peer Group.
Long-Term Total Return to Shareholders
This optional graph of the long-term total return on Westvaco
common stock in comparison to the S&P 500 and the average
return on the peer groups over a long-term period is filed in
paper form simutaneously with this electronic filing under
cover of Form SE.
Creating long-term rewards for shareholders is a major
Westvaco objective. Accordingly this graph, using the same
method of measuring return as in the five-year graph and
using the same indices and Peer Group, is presented to show
comparative cumulative return over a long term. The period
was selected because the beginning of that period marks the
point at which Westvaco began a second five-year program to
further enhance the earning power of the company after a
successful first five-year program had more than doubled the
previous earnings per share of the company. At that point
the company decided to measure the return on its stock
against major market indices as well as against its peers
and other leading industrial companies. Neither this graph,
nor the graph for the five-year period, should be taken to
imply any assurance that past performance is predictive of
future performance.
Summary Compensation Table
The following shows the compensation paid or accrued by Westvaco to each of
its five most highly compensated executive officers for all
periods during the fiscal year ended October 31, 1996.
Long-term
Compensation
Annual Awards
Name and Compensation Options/ All Other
Principal Position Year* Salary Bonus SARs(#) Compensation(l)
John A. Luke, Jr. 1996 $862,500 $150,000 85,000 45,563
Chairman, President and 1995 783,333 200,000 75,000 64,957
Chief Executive Officer 1994 700,000 - 52,500 31,500
Rudolph G. Johnstone, Jr. 1996 583,333 100,000 50,000 30,750
Executive Vice President 1995 475,000 125,000 37,500 39,613
1994 350,000 - 24,000 15,750
Frederick C. Haas 1996 490,000 45,000 45,000 24,075
Senior Vice President 1995 429,167 50,000 30,000 31,659
1994 375,000 - 27,000 16,875
Jack A. Hammond 1996 450,000 40,000 40,000 22,050
Senior Vice President 1995 437,500 75,000 30,000 33,838
1994 375,000 - 24,000 16,875
Philip H. Emery, Jr. 1996 437,500 40,000 40,000 21,488
Senior Vice President 1995 356,667 50,000 27,000 26,879
1994 265,000 - 18,000 11,925
*Fiscal years ended October 31
(l)Represents company contributions of $7,125 and $38,438 for
John A. Luke, Jr.; $6,253 and $15,797 for Jack A. Hammond; and
$16,219 and $5,269 for Philip H. Emery, Jr., to the salaried
Savings and Investment Plan and unfunded Savings and Investment
Restoration Plan, respectively. Represents company contributions
to only the unfunded Savings and Investment Restoration Plan for
Rudolph G. Johnstone, Jr., and Frederick C. Haas in 1996. The
five executive officers named above hold interests equivalent to
a total of 63,419 shares under such plan.
Option/SAR Grants in the Fiscal Year Ended October 31, 1996
Individual Grants
Number of % of Total
Securities Option/SARs
Underlying Granted to
Options/SARs Employees in Exercise Expiration
Name Granted(#) Fiscal Year(2) Price($/Sh) Date
John A. Luke, Jr. 85,000 8.77%/12.42% $25.0625 12/19/2005
Rudolph G. Johnstone, Jr. 50,000 5.16%/7.31% 25.0625 12/19/2005
Frederick C. Haas 45,000 4.64%/6.58% 25.0625 12/19/2005
Jack A. Hammond 40,000 4.13%/5.84% 25.0625 12/19/2005
Philip H. Emery, Jr. 40,000 4.13%/5.84% 25.0625 12/19/2005
All Optionees 969,392 100% $25.0625 12/19/2005
Potential Realizable Value at Assumed Annual Rates of Stock
Appreciation for Option Term (1)
5% 10%
John A. Luke, Jr. $1,339,732 $3,395,164
Rudolph G. Johnstone, Jr. 788,078 1,997,155
Frederick C. Haas 709,270 1,797,440
Jack A. Hammond 630,462 1,597,724
Philip H. Emery, Jr. 630,462 1,597,724
All Optionees $15,279,126 $38,720,530
All Shareholders(3) $1,605,961,342 $4,069,845,011
Optionees gain as a % of
all shareholder gain 0.95% 0.95%
(1) The dollar amounts under these columns are not intended to
and may not accurately forecast possible future appreciation, if
any, of Westvaco's common stock price. These are purely
hypothetical amounts resulting from calculations at the 5% and
10% rates required by the Securities and Exchange Commission.
(2) Executive Officers are granted options in tandem with stock
appreciation rights (SARs). Tandem limited stock appreciation
rights (LSARs) are also granted to executive officers and are
exercisable in the event of a change in control. All options are
granted at market value on the date of grant and become
exercisable twelve months from the date of grant. Exercise of an
option, SAR or LSAR cancels any tandem grant. For each of the
named executives the percentage on the left represents the
percent of total options granted to all employees and the
percentage on the right represents the percent of total SARs
granted to all employees.
(3) As of October 31, l996, there were 101,891,044 shares of
common stock outstanding. The calculations shown are based on the
assumed rates of appreciation, compounded annually, from the
stock's fair market value of $25.0625 on December 19, 1995 when
the above options were granted.
Aggregated Option/SAR Exercises in Last Fiscal Year
and October 31, l996 Option/SAR Values
Number of
Number of Unexercised
Securities Options/SARs at
Underlying 10/31/96(#)
Options/SARs Value Exercisable/
Exercised (#) Realized(1) Unexercisable
Name
John A. Luke, Jr. 10,125 $147,702 309,368/85,000
Rudolph G. Johnstone, Jr. - - 98,954/50,000
Frederick C. Haas 51,561 615,524 138,553/45,000
Jack A. Hammond 4,144 27,195 87,353/40,000
Philip H. Emery, Jr. 28,294 292,554 87,379/40,000
Value of Unexercised
In-the-Money Options/SARs
at 10/31/96(2)
Exercisable/Unexercisable
John A. Luke, Jr. $1,774,366/$286,875
Rudolph G. Johnstone, Jr. 424,563/168,750
Frederick C. Haas 760,081/151,875
Jack A. Hammond 328,119/135,000
Philip H. Emery, Jr. 409,172/135,000
(l) The value realized on stock option and SAR exercises
represents the difference between the grant price of the
options/SARs and the market price of the shares of underlying
stock as of the date of exercise multiplied by the number of
options/SARs exercised. All grants are made at the fair market
value of the stock on the date of grant.
(2) The value of unexercised in-the-money options/SARs represents
the difference between the grant price of the options/SARs and
the market price of $28.4375 at October 31, 1996 multiplied by
the number of in-the-money options/SARs outstanding.
Pension Plan Table
Years of Service
Remuneration 25 30 35 40 45
$ 500,000 $174,400 $209,300 $244,100 $279,100 $314,800
660,000 231,600 277,900 324,200 370,500 417,700
820,000 288,700 346,500 404,200 461,900 520,500
980,000 345,900 415,100 484,200 553,400 623,400
1,140,000 403,000 483,600 564,200 644,800 726,300
1,300,000 460,200 552,200 644,200 736,300 829,200
The corporation's contributions to its Retirement Plan for
Salaried Employees are computed on an aggregate actuarial basis
with no specific allocation of contributions to individuals. The
table above shows the approximate annual retirement benefits net
of social security benefits that would be received under current
plan provisions based upon the noted compensation levels and years
of service. As of December 31, 1996, the executive officers named
in the Summary Compensation Table set forth on page 16 will have
the following years of credited service: John A. Luke, Jr., 17.7 ;
Rudolph G. Johnstone, Jr., 33.6; Frederick C. Haas, 33.8; Jack A.
Hammond, 35.5 ; and Phillip H. Emery, Jr., 31. The amounts of
covered compensation under the plan during 1996 for each of the
individuals named in the Summary Compensation Table set forth on
page 16 were approximately the same as set forth in the salary and
bonus columns of that table.
These approximated annual retirement benefits have been calculated
under the plan's 50% joint and survivor annuity form of pension
and on the assumption of retirement benefits beginning at age 65.
To the extent that an employee's retirement benefit as computed in
accordance with the plan exceeds maximum amounts permitted under
the Internal Revenue Code, the difference will be paid by Westvaco
under an unfunded benefit plan approved by the Board of Directors.
Benefit Assurance Trusts. The company has entered into four
benefit assurance trusts in connection with the company's unfunded
benefit plans in order to preserve the benefits earned under the
plans in the event of a significant change in corporate structure.
Upon the occurrence of any potentially significant change in
corporate structure, the company will contribute additional funds
to the trusts which will be sufficient to pay, in accordance with
the terms of the plans, the benefits authorized under the plans.
If the funds in the trusts are insufficient to pay amounts due
under the plans, the company remains obligated to pay any
deficiency.
Severance Pay Plans
Westvaco has implemented two severance pay plans for salaried
employees who are involuntarily terminated. One plan, which
covers normal business occurrences of job elimination and
discharge for reasons other than gross misconduct, provides
severance pay ranging from 2 weeks to 52 weeks of an employee's
salary (including any bonus) based on years of service.
Terminated employees also receive unused and accrued vacation pay.
In the case of job elimination, an employee may continue medical,
dental, disability, accidental death and dismemberment and life
insurance coverage for specified periods of time ranging from 1 to
6 months.
The other plan provides that if any salaried employee is
involuntarily terminated (including, in the case of employees
above a determined senior grade, certain actions constituting
constructive discharge) for any reason other than fraud,
misappropriation or embezzlement within two years after a
significant change (a 30 percent acquisition of the company's
voting securities, a merger, sale or dissolution of the company in
certain circumstances, or certain changes in the composition of
the company's Board of Directors), the employee is entitled to
severance pay ranging from 2 weeks to 104 weeks of any employee's
salary (including any bonus) based on years of service, plus an
additional 20 percent. In addition, employees will receive the
value of lost benefits under the company's retirement, savings and
investment, medical, dental, disability, accidental death and life
insurance plans and any unused and accrued vacation pay.
2. Proposal to ratify appointment of independent accountants
The Board of Directors, pursuant to the recommendation of its
Audit Committee, has appointed Price Waterhouse LLP to serve as
independent accountants for the corporation for the 1997 fiscal
year subject to approval of the shareholders at the annual
meeting. Price Waterhouse LLP currently serves as the
corporation's independent accountants and received $1,458,800 in
fees and expenses during fiscal year 1996 for audit-related
services. The Audit Committee has been advised by Price Waterhouse
LLP that neither the firm, nor any of its partners or staff, has
any direct financial interest or material indirect financial
interest in the corporation or any of its subsidiaries.
Representatives of Price Waterhouse LLP will attend the annual
meeting, will have an opportunity to make a statement if they
desire and will be available to respond to appropriate questions.
If the shareholders do not ratify this appointment, the
appointment of other independent public accountants will be
considered by the Audit Committee.
The Board of Directors unanimously recommends a vote FOR the
ratification of the appointment of Price Waterhouse LLP as
independent accountants. Unless otherwise specified by the
shareholder, the Board intends the accompanying proxy to be voted
for such ratification.
3. Proposal to amend Westvaco Corporation's Restated Certificate
of Incorporation to increase the number of authorized shares of
common stock.
The Board of Directors has unanimously approved an amendment to
Article FOURTH of the corporation's Restated Certificate of
Incorporation to increase the number of authorized shares of
Westvaco common stock of the par value of $5 per share from
210,044,170 to 310,044,170, of which 44,170 shares shall be
Cumulative Preferred Stock of the par value of $100 per share,
10,000,000 shares shall be Preferred Stock without par value, and
300,000,000 shall be Common Stock of the par value of $5 per
share, and has voted unanimously to recommend that the
corporation's shareholders approve such amendment.
Reasons for the Proposal:
On August 22, 1995, the Board of Directors voted to split the
corporation's common stock on a three-for-two basis, payable
October 2, 1995 to shareholders of record on September 1, 1995.
The split, which was accompanied by a 20% increase in the common
dividend, was preceded by similar three-for-two splits in 1987,
1986, 1981 and 1976, and by a two-for-one stock split in 1968.
Each of the preceding splits was followed by an amendment to
Westvaco's Certificate or Restated Certificate of Incorporation
increasing the number of authorized but unissued shares of common
stock.
The proposal would increase the authorized shares by a number
greater than the number of shares issued pursuant to the 1995
stock split in order to increase the shares available for possible
issuance pursuant to the corporation's various benefit plans and
Dividend Reinvestment Plan, to have shares available for possible
future stock dividends or splits, to provide the maximum
flexibility to respond to other favorable opportunities, including
possible acquisitions, and for other general corporate purposes.
As in the case of the existing authorized but unissued shares, the
additional authorized shares may be issued without further
shareholder action unless such action is required by applicable
law or the rules of the New York Stock Exchange on which the
corporation's common stock is listed, or any other stock exchanges
on which the corporation's securities may be listed. There is no
present intention, however, to issue additional shares except
possibly pursuant to the corporation's various benefit plans and
Dividend Reinvestment Plan. The additional shares of common stock
for which approval is sought would have the same rights and
privileges as the common stock currently outstanding.There are no
preemptive or subscription rights with respect to any shares of
the corporation's capital stock.
Although a proposal to increase the authorized common stock of a
company may be construed as having an anti-takeover effect,
neither the management of Westvaco nor the Board of Directors
views this proposal in that light. The proposal has not been
prompted by any effort by anyone to gain control of the
corporation and the corporation is not aware of any such effort.
Explanation of the Proposal:
The first paragraph of Article FOURTH of the Corporation's
Restated Certificate of Incorporation would be amended to provide
as follows:
The total number of all classes of
capital stock which the corporation
shall have authority to issue is
310,044,170 of which 44,170 shares
shall be Cumulative Preferred Stock
of the par value of $100 per share,
10,000,000 shares shall be
Preferred Stock without par value
and 300,000,000 shall be Common
Stock of the par value of $5 per
share. No holder of any stock of
the corporation of any class, now
or hereafter authorized, shall have
any preemptive right to subscribe
to any or all additional issues of
stock of the Corporation of any or
all classes.
As of December 27, 1996, there were issued and outstanding
101,912,538 shares of Westvaco common stock, which reflects the
1995 three-for-two stock split. Approximately an additional
15,100,000 shares of common stock were reserved for issuance under
the corporation's various benefit plans and Dividend Reinvestment
Plan. There were, as of such date, approximately 83,000,000
shares of authorized, unissued and unreserved shares of common
stock. The proposal would increase this number to about
183,000,000 shares.
Vote Required
The affirmative vote of a majority of all of the issued and
outstanding shares of common stock is required for adoption of the
proposed amendment to the Restated Certificate of Incorporation.
The Board of Directors unanimously recommends a vote FOR approval
of the proposed amendment to the Restated Certificate of
Incorporation. Unless otherwise specified by the shareholder, the
Board intends the accompanying proxy to be voted for such
approval.
Other Matters
The Board of Directors knows of no other matters to be brought
before the meeting. However, if any other matters do properly come
before the meeting, a person named in the accompanying proxy (or a
substitute) will vote thereon in accordance with his best
judgment.
Shareholder proposal date
Proposals which shareholders intend to present at the 1998 Annual
Meeting of Shareholders must be received by the corporation by
August 29, 1997 to be considered for inclusion in the
corporation's Proxy Statement and form of proxy relating to the
1998 annual meeting.
John W. Hetherington
Vice President and Secretary
December 27, 1996
Form 10-K available without charge
The corporation's annual report on Form 10-K filed with the
Securities and Exchange Commission may be obtained at no charge
after January 29 , 1997 by writing to: Secretary, Westvaco
Corporation, 299 Park Avenue, New York, New York 10171. Exhibits
to the Form 10-K are also available at a cost of twenty-five cents
per page.
WESTVACO
Westvaco Corporation
Westvaco Building, 299 Park Avenue
New York, New York 10171
212 688 5000
For shareholder information
outside of New York City, call toll free
1 800 432 9874
50% recovered fiber
10% postconsumer fiber
The proxy statement is printed on American Eagle
web dull paper manufactured at Westvaco's
Tyrone, PA, fine papers mill.
November 26, 1996
Dear Savings and Investment Plan Participant:
In the next few weeks you will receive a proxy statement and a
confidential instruction card which describe the important
matters to be voted upon at our 1997 annual meeting of
shareholders. The instruction card will enable you to direct
Wachovia Bank, which serves as trustee of the Savings and
Investment Plan, how you wish the Westvaco shares attributed to
your plan account to be voted.
I hope that you will complete and return your confidential
instructions to the trustee. Participation by our shareholders
in the annual meeting process is a great strength for your
company.
Sincerely,
John A. Luke, Jr.
Chairman and Chief
Executive Officer
