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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
COMMISSION FILE NUMBER 1-3053
CHAMPION INTERNATIONAL CORPORATION
NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN
(FULL TITLE OF THE PLAN)
CHAMPION INTERNATIONAL CORPORATION
ONE CHAMPION PLAZA
STAMFORD, CONNECTICUT 06921
(NAME OF ISSUER OF SECURITIES HELD PURSUANT TO
THE PLAN AND ADDRESS OF ITS
PRINCIPAL EXECUTIVE OFFICE)
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FINANCIAL STATEMENTS AND EXHIBIT
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(a) Financial Statements and Supplemental Schedules
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<TABLE>
<CAPTION>
Page No.
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<S> <C>
Champion International Corporation Nonqualified Supplemental
Savings Plan:
Report of Independent Public Accountants dated January 16, 1998.............. 3
Statements of Net Assets Available for Benefits as of
December 31, 1997 and 1996................................................. 4
Statements of Changes in Net Assets Available for Benefits for the
Years Ended December 31, 1997, 1996 and 1995............................... 5
Statements of Accumulated Plan Benefits as of December 31, 1997 and 1996..... 6
Statements of Changes in Accumulated Plan Benefits for the Years Ended
December 31, 1997, 1996 and 1995........................................... 7
Notes to Financial Statements - December 31, 1997, 1996 and 1995............. 8-10
Supplemental Schedules: All Supplemental Schedules have been omitted since
the information is not applicable or is not required.
(b) Exhibit
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Exhibit 23 - Consent of Independent Public Accountants....................... 11
</TABLE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Pension and Employee Benefits Committee, the administrator of the
registrant's plan described herein, has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CHAMPION INTERNATIONAL CORPORATION
NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN
By /s/ William C. Foster
------------------------------------------
(William C. Foster)
Senior Associate Counsel - Employee
Relations/Human Resources
March 27, 1998
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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To the Board of Directors and the
Pension and Employee Benefits Committee of
Champion International Corporation:
We have audited the accompanying statements of net assets available for benefits
and of accumulated plan benefits of the CHAMPION INTERNATIONAL CORPORATION NON-
QUALIFIED SUPPLEMENTAL SAVINGS PLAN as of December 31, 1997 and 1996, and the
related statements of changes in net assets available for benefits and changes
in accumulated plan benefits for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Plan Administrator. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Plan Administrator, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial status of the Plan as of December 31, 1997
and 1996, and the changes in its financial status for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles.
/s/ ARTHUR ANDERSEN LLP
Cincinnati, Ohio,
January 16, 1998
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CHAMPION INTERNATIONAL CORPORATION
NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
December 31,
------------------------------
1997 1996
---- ----
<S> <C> <C>
ASSETS:
Receivable from Champion International Corporation (Note 1) $10,691,260 $6,711,206
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Net Assets Available for Benefits $10,691,260 $6,711,206
=========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
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CHAMPION INTERNATIONAL CORPORATION
NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
December 31,
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1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Compensation Deferrals (Note 1):
Participant $ 3,126,845 $ 3,469,979 $1,503,859
Company --
Matching deferral 319,387 1,226,408 622,699
Phantom investment earnings deferral 1,213,322 482,325 316,890
----------- ----------- ----------
1,532,709 1,708,733 939,589
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Total Deferrals 4,659,554 5,178,712 2,443,448
----------- ----------- ----------
Benefits paid (Note 1):
Participant deferral (493,664) (1,237,136) (95,444)
Company deferral (185,836) (610,492) (55,921)
----------- ----------- ----------
Total benefits paid (679,500) (1,847,628) (151,365)
----------- ----------- ----------
Net increase 3,980,054 3,331,084 2,292,083
----------- ----------- ----------
Net Assets Available for Benefits
Beginning of Year $ 6,711,206 $ 3,380,122 $1,088,039
----------- ----------- ----------
Net Assets Available for Benefits
End of Year $10,691,260 $ 6,711,206 $3,380,122
=========== =========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
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CHAMPION INTERNATIONAL CORPORATION
NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN
STATEMENTS OF ACCUMULATED PLAN BENEFITS
AS OF DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
December 31,
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1997 1996
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<S> <C> <C>
Present value of accumulated plan benefits
Vested benefits:
Vested benefits of participants currently receiving payments $ 1,700,613 $ 24,940
Other vested benefits 8,988,537 6,684,644
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10,689,150 6,709,584
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Nonvested benefits 2,110 1,622
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Total present value of accumulated plan benefits $10,691,260 $6,711,206
=========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
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CHAMPION INTERNATIONAL CORPORATION
NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN
STATEMENTS OF CHANGES IN ACCUMULATED PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
December 31,
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1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Present value of accumulated plan benefits
Beginning of Year $ 6,711,206 $ 3,380,122 $1,088,039
Increase (decrease) during the year attributable to:
Benefits accumulated through (Note 1):
Participant compensation deferrals 1,349,320 3,469,979 1,503,859
Company matching deferral 319,387 1,226,408 622,699
Phantom investment earnings deferral 1,213,322 482,325 316,890
----------- ----------- ----------
2,882,029 5,178,712 2,443,448
----------- ----------- ----------
Plan amendment (Note 1) 1,777,525 -0- -0-
Benefits paid (679,500) (1,847,628) (151,365)
----------- ----------- ----------
Net increase 3,980,054 3,331,084 2,292,083
----------- ----------- ----------
Present value of accumulated plan benefits
End of Year $10,691,260 $ 6,711,206 $3,380,122
=========== =========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
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<PAGE>
CHAMPION INTERNATIONAL CORPORATION
NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
(1) Plan Description
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The following description of the Champion International Corporation
Nonqualified Supplemental Savings Plan (the Plan) provides only summary
information. Reference should be made to the Plan document for a more
complete description of the Plan's provisions.
The Plan, which became effective on August 1, 1994, is an unfunded deferred
compensation arrangement established for the purpose of providing
supplemental retirement savings primarily for a select group of management
or highly compensated employees of Champion International Corporation (the
Company). As an unfunded Plan, no assets of the Company have been
segregated to pay the amounts due to participants under the Plan. The Plan
is administered by the Company through the Pension and Employee Benefits
Committee (PEBC). Certain expenses of the Plan are paid by the Company and
are not included in the accompanying statements. Effective April 1, 1995,
William M. Mercer, Inc. (Mercer) was appointed to perform certain
administrative and record keeping functions of the Plan.
Among other things, the Plan provides that eligible participants may elect
to defer a percentage of their compensation (as defined in the Plan) that
is in excess of the Internal Revenue Code Section 401 (a) (17) limitation.
The Company will match participant deferrals in an amount equal to fifty
percent of the first six percent of the participant deferral. In addition,
each participant must elect to have the amounts deferred treated as if they
were invested in one or more of the investment options offered by the
Champion International Corporation Salaried Savings Plan #077 (Plan #077).
At December 31, 1995, 1996 and 1997 and for the years then ended,
participant-directed investment options for Plan #077 consisted of the
Stable Value Fund (i.e., pool of investment contracts issued by a
diversified list of insurance companies), the S&P 500 Index Fund (i.e.,
commingled fund of the common stocks of large companies in a variety of
industries), the Small Company Fund (i.e., commingled fund of the common
stocks of small U.S. companies in a variety of industries), and the
International Equities Index Fund (i.e., commingled fund of the common
stock of medium to large companies based in economically developed
countries outside of the U.S.). Effective October 1, 1997, participants in
the Plan were permitted to have the amounts deferred treated as if they
were invested in the Company Stock Fund. The Company matching deferral
component of the participants' deferral compensation accounts is credited
with earnings or losses as if the matching deferral had been invested in
the Company Stock Fund of Plan #077. Although the Plan itself has no
investment assets, participant deferred compensation accounts are credited
with earnings or losses, based upon the participant investment elections
and the actual earnings and losses of Plan #077 investments, for the
period.
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(1) Plan Description Continued
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Effective March 1, 1996, the Plan was amended to permit deferral of all or
any part of a participant's Management Incentive Award, provided certain
conditions were met. Effective January 1, 1998, the Plan was further
amended and the ability to defer all or any part of a participant's
Management Incentive Award under the Plan was terminated.
Participants are immediately vested in the participant deferral, as
adjusted for the earnings and losses previously discussed. Participants
vest in the Company matching deferral, as adjusted for any earnings or
losses, based upon years of service. A participant is 100% percent vested
after five years of credited service. All vested amounts are distributable
to participants from the assets of the Company upon retirement, death,
disability or other termination of employment in a single lump sum cash
payment or in up to ten annual cash installments.
(2) Significant Accounting Policies
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(a) Basis of Accounting -- The Plan uses the accrual basis of accounting.
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(b) Payment of Benefits -- Benefits are recorded when paid.
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(c) Present Value of Accumulated Plan Benefits -- Accumulated plan benefits
------------------------------------------
represent the future benefit payments due to participants under the
provisions of the Plan. The present value of accumulated plan benefits
is equal to the total of the fair market value of the participants'
deferred compensation account balances (i.e., compensation deferred
plus Company matching deferral plus (minus) phantom investment earnings
(losses) less benefits paid). (Note 1)
(d) Use of Estimates -- The preparation of financial statements in
----------------
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the financial
statements. Actual results could differ from those estimates.
(3) Priorities Upon Termination of the Plan
---------------------------------------
Upon termination of the Plan, participants become fully vested in their
individual deferred compensation accounts. As an unfunded Plan, no assets
of the Company have been segregated to pay amounts due to participants
under the Plan. The Plan is not eligible for Pension Benefit Guaranty
Corporation coverage.
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(4) Tax Status
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The Plan is an "employee benefit plan" under Section 3 (3) of the Employee
Retirement Income Security Act of 1974 (ERISA), as amended, but is exempt
from many of the provisions of ERISA. The Plan is not a qualified plan
under Section 401 (a) of the Internal Revenue Code of 1986, as amended.
The Plan is subject to federal income taxes; however, the unfunded nature
of the Plan precludes the occurrence of a taxable event arising from the
Plan's operation. Amounts deferred are not considered taxable income to
participants until distributed.
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EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated January 16, 1998 on the Champion International
Corporation Nonqualified Supplemental Savings Plan included in this Form 11-K
into the Company's previously filed Registration Statement on Form S-8
(Registration No. 333-34069).
/s/ Arthur Andersen LLP
New York, N.Y.
March 27, 1998
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