SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
() Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JAMES RIVER CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[James River logo] JAMES RIVER CORPORATION OF VIRGINIA
March 17, 1997
Dear Shareholder:
It is our pleasure to invite you to the Annual Meeting of
Shareholders of James River Corporation of Virginia to be held at
10:00 A.M. (Eastern daylight time) on THURSDAY, APRIL 24, 1997, IN
THE HALSEY FAMILY LECTURE HALL AT THE VIRGINIA HISTORICAL SOCIETY,
428 North Boulevard, Richmond, Virginia. A Notice of this Annual
Meeting and a Proxy Statement covering the formal business of the
meeting are enclosed, along with the Company's Annual Report to
Shareholders for the fiscal year ended December 29, 1996. During the
meeting, time will be provided for a review of operations for the
past year and items of general interest about the Company.
It is important that your shares be represented at the meeting
whether or not you expect to attend; therefore, please promptly
sign, date and return the proxy card in the accompanying
postage-paid envelope. Even though you execute this proxy, you may
revoke it at any time before it is voted. If you attend the meeting,
you will be able to vote in person if you wish to do so, even if you
have previously returned your proxy card.
We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Miles L. Marsh
--------------
Miles L. Marsh
CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
<PAGE>
[James River logo]
JAMES RIVER CORPORATION
OF VIRGINIA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 24, 1997
TO THE SHAREHOLDERS OF
JAMES RIVER CORPORATION OF VIRGINIA
Notice is hereby given that the Annual Meeting of Shareholders of James
River Corporation of Virginia (the "Company" or "James River") will be held in
the morning at 10:00 a.m. on Thursday, April 24, 1997, in The Halsey Family
Lecture Hall at The Virginia Historical Society, 428 North Boulevard, Richmond,
Virginia, for the following purposes:
1. To elect a Board of Directors consisting of eleven (11) persons to serve
for the ensuing year; and
2. To transact such other business as may properly come before the meeting.
The close of business on February 20, 1997, has been fixed as the record
date to determine the shareholders entitled to vote at the Annual Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED. Shareholders,
whether or not they expect to attend the meeting in person, are requested to
date, sign and return the enclosed proxy card in the envelope provided, on which
no postage is needed if mailed in the United States.
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 29, 1996, is being mailed to you with this Notice and the Proxy
Statement.
You are cordially invited to attend the meeting.
By order of the Board of Directors,
CLIFFORD A. CUTCHINS, IV
CORPORATE SECRETARY
March 17, 1997
<PAGE>
JAMES RIVER CORPORATION
OF VIRGINIA
P. O. BOX 2218
RICHMOND, VIRGINIA 23218
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement, which is being mailed to shareholders on or about
March 17, 1997, is furnished in connection with the solicitation by the Board of
Directors of James River Corporation of Virginia ("James River" or the
"Company") of proxies in the form accompanying this Proxy Statement to be voted
at the Annual Meeting of Shareholders to be held at 10:00 a.m. on April 24,
1997, in The Halsey Family Lecture Hall at The Virginia Historical Society, 428
North Boulevard, Richmond, Virginia, and any adjournment thereof.
Shareholders of record of the Company's common stock, par value $.10 per
share ("Common Stock"), and its Series P 9% Cumulative Convertible Preferred
Stock ("Series P Preferred Stock") at the close of business on February 20,
1997, will be entitled to receive notice of, and to vote at, the Annual Meeting
and any adjournment thereof. The Series P Preferred Stock is held in the form of
depositary shares, with each depositary share representing a one-hundredth
interest in a share of Series P Preferred Stock. As of February 20, 1997, there
were 86,305,095 shares of Common Stock and 16,664,366 depositary shares of
Series P Preferred Stock outstanding. Each share of Common Stock is entitled to
one vote on each matter presented to the shareholders. Each depositary share of
Series P Preferred Stock is entitled to .8547 of a vote on each matter presented
to the shareholders, voting as a single group with holders of Common Stock.
The Common Stock and depositary shares of Series P Preferred Stock
represented by each properly executed proxy will be voted in the manner
specified by the shareholder. If no specific instruction is received, a proxy,
when executed and not revoked, will be voted FOR the election of the nominated
directors. Execution of the accompanying proxy will not affect a shareholder's
right to attend the Annual Meeting and vote in person. Any shareholder giving a
proxy has the right to revoke it at any time before it is voted by submitting
written notice of revocation or a new proxy.
Shares for which the holder has elected to withhold or abstain the proxies'
authority to vote, including shares held in street name that are not voted, will
count toward a quorum but will have no effect on the action taken.
The cost of solicitation of proxies will be borne by the Company.
Solicitation will be made initially by mail; however, the directors, officers
and employees of the Company and its subsidiaries may, without additional
compensation, solicit proxies by telephone, telegraph or personal interview. The
Company intends to engage Georgeson & Co. to solicit proxies from brokers, banks
and other institutional holders at an estimated fee of approximately $8,000 plus
reimbursable expenses.
ELECTION OF DIRECTORS
The Bylaws of the Company provide for a Board of Directors (the "Board")
consisting of eleven members. Each of the directors will serve for a term which
will run until the next annual meeting of shareholders or until his or her
successor has been elected. Barbara L. Bowles was elected to the Board of
Directors on February 20, 1997. Each of the nominees listed has been nominated
by the Nominating Committee of the Board and is standing for re-election.
Although the Company anticipates that all of the nominees will be able to serve,
if at the time of the meeting any nominees are unable or unwilling to serve,
shares represented by properly executed proxies will be voted at the discretion
of the persons named therein for such other person or persons as the Board of
Directors may designate.
1
<PAGE>
INFORMATION ON NOMINEES
<TABLE>
<CAPTION>
DIRECTOR BUSINESS EXPERIENCE AND DIRECTORSHIPS
NAME AGE PRINCIPAL OCCUPATION SINCE IN OTHER PUBLIC COMPANIES
- - ------------------------------- --- -------------------------------------- -------- --------------------------------------
<S> <C>
Barbara L. Bowles 49 President, Kenwood Group, Inc., 1997 Has held present position for more
Chicago, Illinois (investment management than five years. Director of Black &
firm) Decker Corporation.
William T. Burgin 53 Partner, Bessemer Venture Partners, 1978 Has held present position for more
Wellesley Hills, Massachusetts than five years. Director of Galileo
(venture capital partnership) Electro-Optics Corporation.
Worley H. Clark, Jr. 64 President, W.H. Clark Associates, 1993 Retired from Nalco Chemical Company in
Ltd., Chicago, Illinois (consulting 1994 where he served as Chairman and
firm) Chief Executive Officer. Director of
NICOR, Inc., Merrill Lynch & Company
Inc., USG Corporation, Bethlehem Steel
Corporation, Inc., Ultramar Diamond
Shamrock Corporation and Millennium
Chemicals, Inc.
William T. Comfort, Jr. 59 Chairman, Citicorp Venture Capital, 1978 Has held present position for more
Ltd. and Court Square Capital, Ltd., than five years.
New York, New York (subsidiaries of
Citibank, N.A. and Citicorp)
Gary P. Coughlan 53 Senior Vice President, Finance and 1996 Has held present position for more
Chief Financial Officer, Abbott than five years.
Laboratories, Abbott Park, Illinois
(diversified health care company)
William V. Daniel 68 Retired Managing Director of Wheat 1969 Retired from Wheat First Butcher
First Butcher Singer, Richmond, Singer in 1994. Prior to that time,
Virginia (investment banking and served as Managing Director of Wheat
financial services) First Butcher Singer. Director of
Crown Vantage Inc.
Bruce C. Gottwald 63 Chairman and Chief Executive Officer, 1972 Has held present position since 1994.
Ethyl Corporation, Richmond, Virginia From 1992 to 1994, served as President
(petroleum additives business) and Chief Executive Officer of Ethyl
Corporation. Prior to 1992, served as
President and Chief Operating Officer
of Ethyl Corporation. Director of
Ethyl Corporation, Tredegar
Industries, Inc. and CSX Corporation.
Miles L. Marsh 49 Chairman, President and Chief 1995 Has held position as President and
Executive Officer of the Company Chief Executive Officer since 1995 and
position as Chairman since 1996. From
1991 to 1995, served as Chairman and
Chief Executive Officer of Pet Inc.
Director of Dean Witter, Discover &
Co., GATX Corporation and Whirlpool
Corporation.
Robert M. O'Neil 62 Director, The Thomas Jefferson Center 1987 Has held present position for more
for the Protection of Free Expression, than five years.
Charlottesville, Virginia
Richard L. Sharp 49 Chairman, President and Chief 1996 Has held position as President and
Executive Officer, Circuit City Chief Executive Officer since 1986 and
Stores, Inc., Richmond, Virginia position as Chairman of the Board
(consumer electronics company) since 1994. Director of Circuit City
Stores, Inc. and Flextronics
International, Ltd.
Anne Marie Whittemore (1) 50 Partner, McGuire, Woods, Battle & 1994 Has held present position for more
Boothe, L.L.P., Richmond, Virginia than five years. Director of Owens &
(attorneys-at-law) Minor, Inc., USF&G Corporation, T.
Rowe Price Associates, Inc. and
Albemarle Corporation.
</TABLE>
- - ---------------
(1) McGuire, Woods, Battle & Boothe, L.L.P. serves as primary outside legal
counsel to the Company.
2
<PAGE>
VOTE REQUIRED
For the election of directors, the eleven nominees receiving the greatest
number of affirmative votes cast at the Annual Meeting of Shareholders will be
elected.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met on nine occasions during 1996, including three
meetings held by telephone. All members of the Board, except for Mr. Gottwald,
attended at least seventy-five percent, in the aggregate, of the meetings of the
Board and committees on which they served.
The Audit Committee of the Board, whose members are William V. Daniel
(Committee Chairman), William T. Burgin, Gary P. Coughlan, Bruce C. Gottwald and
Robert M. O'Neil, consists of only non-employee directors and met on three
occasions during 1996. Throughout the year, the Audit Committee meets
periodically with management, members of the Company's internal audit staff and
representatives of the Company's independent accountants. The Audit Committee
reviews the scope of internal and external audit activities and the results of
such audits and is responsible for making the annual recommendation to the Board
of Directors for the firm of independent accountants to be retained by the
Company.
The Compensation Committee, whose members are Robert M. O'Neil (Committee
Chairman), William T. Burgin, Worley H. Clark, Jr., William V. Daniel and
Richard L. Sharp, consists of only non-employee directors. The Compensation
Committee met on seven occasions during 1996 and is responsible for recommending
the salaries and compensation programs for executive officers to the Board of
Directors. This committee is also responsible for administering the Company's
Management Incentive Plan, its stock incentive plan and other benefit programs.
None of the members of the Compensation Committee are entitled to participate in
any of the Company's employee benefit plans.
The Executive Committee, whose members are Miles L. Marsh (Committee
Chairman), Worley H. Clark, Jr., William T. Comfort, Jr., William V. Daniel and
Robert M. O'Neil, can exercise most of the powers and authorities of the full
Board of Directors in the management of the Company between regularly scheduled
board meetings.
The Finance Committee, whose members are William T. Comfort, Jr. (Committee
Chairman), Gary P. Coughlan, Richard L. Sharp and Anne Marie Whittemore,
consists of only non-employee directors and met on two occasions during 1996.
The Finance Committee meets periodically to review the financial strategy for
the Company including balance sheet structure and overall capitalization and
related matters.
The Nominating Committee, whose members are Worley H. Clark, Jr. (Committee
Chairman), William T. Comfort, Jr., Bruce C. Gottwald, Miles L. Marsh and Anne
Marie Whittemore, met on two occasions during 1996. This committee recommends to
the Board of Directors the candidates for election as directors of the Company.
The Board of Directors also considers candidates recommended by shareholders
entitled to vote for the election of directors. Shareholder recommendations
(including the nominee's name, biographical data and written consent to serve as
a director if elected) should be submitted to the Nominating Committee of the
Company.
COMPENSATION OF DIRECTORS
During 1996, each director, other than Mr. Marsh, received an annual fee of
$30,000 for serving as a director, plus reimbursement of expenses incurred in
connection with attending meetings. In addition, each director, other than Mr.
Marsh, received a fee of $2,000 for each Board meeting attended, $1,000 for each
Committee meeting attended, and $600 for participating in each meeting held by
telephone. Directors who are employees of the Company do not receive any
additional compensation for membership on, or attending meetings of, the Board
of Directors or its committees.
Effective as of April 1996, the Company adopted the Director Stock
Ownership Plan which automatically pays 50 percent of the retainer fee for
non-employee directors in Common Stock ("automatic award") and also provides
each non-employee director with a means of electing to receive the remaining 50
percent of the retainer fee in Common Stock ("elective award"). The automatic
award will be the greater of (i) 250 shares of Common Stock or (ii) the number
of shares of Common Stock at its fair market value on an award date that equals
50 percent of the retainer fees payable for the "annual service period" (as
defined below). The elective award will be equal to the number of shares of
Common Stock at its fair market value on an award date that equals the remaining
50 percent of the retainer fees payable for that annual service period. These
shares of Common Stock are restricted until the end of the annual service period
when they become vested, nonforfeitable and transferable. An annual service
period is the period from the date of the annual shareholders meeting to the day
preceding the next annual shareholders meeting. In addition, each director may
elect to defer the receipt of Common Stock awarded under this plan beyond the
vesting date. These deferred shares do not have voting rights until distributed
and are
3
<PAGE>
recorded in a "deferred stock account" as hypothetical shares to be paid out as
defined by such director's deferral election. When a director becomes entitled
to payment of his deferred stock account, the Company will distribute the number
of shares of Common Stock equal to the number of hypothetical shares credited to
the director's deferred stock account. During 1996, each of the nine
non-employee directors received 50 percent of the retainer fee in Common Stock,
except for Mr. Coughlan, who received 100 percent of the retainer fee in Common
Stock.
Effective as of May 1, 1983, the Company adopted the Deferred Compensation
Plan for Outside Directors (the "Deferred Plan") under which each non-employee
director could elect to defer not less than $10,000 of his annual director's
fees for a period of at least four years. This plan was frozen upon the adoption
of the Director Stock Ownership Plan. Under the Deferred Plan, the Company used
the deferred director's fees to purchase life insurance policies on the
directors' lives and, in each case, agreed to make deferred payments which, in
the aggregate, were intended at the time the policy was purchased to be
generally equal, on an after-tax basis, to the proceeds of the policy. The plan
provides participating directors with benefits according to schedules set forth
in the plan or in individual agreements between the Company and each director.
The minimum benefit that a director may earn was a return of his deferred fees,
plus interest accrued at the six-month certificate of deposit rate in effect
from time to time. Under the Deferred Plan, the Company will pay the deferred
benefits beginning on dates selected by the participants at the time the
deferral elections were made and will pay death benefits to the beneficiary of a
participant who dies before beginning to receive the deferred benefits. Benefits
under the plan will generally be paid over a ten-year period. As of December 29,
1996, there were three directors who had previously elected to defer their cash
compensation under the Deferred Plan through June 1997, at which time the
ability to defer director's fees under this plan will cease. The plan
participants are unsecured creditors of the Company and have no right to any
specific assets of the Company.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
The Company adopted the Stock Option Plan for Outside Directors in June
1989 and amended and restated the plan as of April 11, 1991. The plan, which
operates automatically according to its terms, provides for the grant of
non-statutory options with terms of ten years to directors of the Company who
are not full-time employees of the Company or a subsidiary ("Outside Director").
The Board of Directors is responsible for the plan's implementation but may not
exercise any discretion concerning its administration. The plan provides for an
initial grant of stock options of 3,000 shares of Common Stock to each person
who first becomes a member of the Board of Directors as an Outside Director
after June 8, 1989. The plan also provides for the grant of an option to
purchase 1,000 shares of Common Stock as of each April 15th to each Outside
Director who has been an Outside Director for at least nine months. All options
under the plan are granted at exercise prices equal to the fair market value of
the Common Stock on the date of grant and are exercisable immediately.
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
The Company adopted a Retirement Plan for Outside Directors effective as of
December 16, 1993, and amended the plan on February 18, 1994. The plan will
provide benefits for Outside Directors who complete at least five years of
eligible service. Eligible service is service as an Outside Director and
includes service as a director of a predecessor company. An Outside Director who
meets these requirements will receive an annual retirement benefit from the
Company beginning on the later of (i) the date on which the Outside Director
attains age 65 or (ii) the date on which the Outside Director ceases to be a
director. The annual benefit will be equal to the annual retainer in effect on
the date the Outside Director ceases to be a director. The annual benefit will
be paid for a period of years equal to the lesser of (i) the Outside Director's
period of eligible service or (ii) ten years. An Outside Director may elect to
have the retirement benefit paid as a joint and 50 percent survivor form of
payment during such period. The plan is unfunded, and the Outside Directors are
unsecured creditors of the Company.
4
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table lists the number of shares of Common Stock beneficially
owned by each director, certain executive officers, and all current directors
and executive officers as a group as of February 20, 1997. No directors or
executive officers held any shares of preferred stock of the Company as of that
date.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED (1)(2) CLASS (12)
---- ------------------------- ----------
<S> <C>
Directors(3):
Barbara L. Bowles....................................................... 3,500 *
William T. Burgin....................................................... 61,078(4) *
Worley H. Clark, Jr..................................................... 8,645 *
William T. Comfort, Jr.................................................. 12,128 *
Gary P. Coughlan........................................................ 5,130 *
William V. Daniel....................................................... 10,016(5) *
Bruce C. Gottwald....................................................... 109,693 *
Miles L. Marsh.......................................................... 244,976(6) *
Robert M. O'Neil........................................................ 9,993 *
Richard L. Sharp........................................................ 4,000 *
Anne Marie Whittemore................................................... 5,564 *
Other Named Executive Officers:
Clifford A. Cutchins, IV................................................ 138,718(7) *
James K. Goodwin........................................................ 156,392(8) *
Ernst A. Haberli........................................................ 60,754(9) *
John F. Lundgren........................................................ 87,311(10) *
All directors and executive officers as a group (21 persons).............. 1,318,817(11) 1.5%
</TABLE>
- - ---------------
* Less than 1% of Class.
(1) Each person has sole voting and investment power over all of the shares
listed, except as set forth below.
(2) The James River StockPlus Investment Plan (the "StockPlus Plan") reports
plan information on a unitized basis rather than a per share basis. For
purposes of calculating the number of shares beneficially owned for Mr.
Marsh and the other named executive officers, an estimate of the number of
shares held in the StockPlus Plan has been calculated based on the closing
stock price of $34.00 as of December 29, 1996.
(3) The number of shares for each of Messrs. Burgin, Comfort, Daniel, Gottwald
and O'Neil includes 9,128 shares that may be acquired within 60 days
through the exercise of stock options. Ms. Bowles', Mr. Clark's, Mr.
Coughlan's, Mr. Sharp's and Ms. Whittemore's beneficial ownership includes
3,000, 6,080, 3,000, 3,000 and 5,064 shares, respectively, that may be
acquired within 60 days through the exercise of stock options. The number
of shares for Messrs. Clark, Coughlan, Gottwald and O'Neil also includes
565, 1,130, 565 and 565 shares, respectively, of restricted stock issued
under the Director Stock Ownership Plan; shares deferred by directors under
this plan do not have voting rights and are therefore excluded from the
number of shares beneficially owned.
(4) Includes 3,000 shares held by his former spouse as custodian for their
children as to which he disclaims any beneficial interest.
(5) Includes 84 shares held by his spouse for which voting and investment power
is shared.
(6) Includes 83,333 shares that may be acquired within 60 days through the
exercise of stock options, 150,000 shares of restricted stock for which he
has voting rights and 566 shares held in the StockPlus Plan.
(7) Includes 72,644 shares that may be acquired within 60 days through the
exercise of stock options, 50,000 shares of restricted stock for which he
has voting rights, 4,201 shares held in the StockPlus Plan and 900 shares
held by his children for which voting and investment power is shared.
(8) Includes 85,225 shares that may be acquired within 60 days through the
exercise of stock options, 60,000 shares of restricted stock for which he
has voting rights, 2,461 shares held in the StockPlus Plan and 100 shares
held by his children for which voting and investment power is shared.
(9) Includes 8,333 shares that may be acquired within 60 days through the
exercise of stock options, 50,000 shares of restricted stock for which he
has voting rights and 512 shares held in the StockPlus Plan.
(10) Includes 24,616 shares that may be acquired within 60 days through the
exercise of stock options, 55,000 shares of restricted stock for which he
has voting rights and 5,557 shares held in the StockPlus Plan.
(11) Includes 430,309 shares that may be acquired within 60 days through the
exercise of stock options, 637,825 shares of restricted stock with voting
rights, 35,264 shares held in the StockPlus Plan and 5,232 shares held in
trust or by spouse and children for which voting and investment power is
shared.
5
<PAGE>
(12) Any Common Stock not outstanding but which can be acquired through the
exercise of stock options within 60 days by a shareholder named in the
table is deemed outstanding for the purpose of computing the percentage of
outstanding Common Stock owned by such shareholder but is not deemed
outstanding for the purpose of computing the percentage of Common Stock
owned by any other shareholder.
PRINCIPAL SHAREHOLDERS
The following table lists shareholders known by the Company to be the
beneficial owners of more than five percent of the outstanding Common Stock and
Series P Preferred Stock depositary shares as of the most recent practicable
date, which is based on information derived from Schedules 13G filed by such
beneficial owners with the Securities and Exchange Commission ("SEC").
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT
TITLE NAME AND ADDRESS BENEFICIALLY OF
OF CLASS OF BENEFICIAL OWNER OWNED CLASS (7)
- - ------------------- ----------------------------------------------- --------- ---------
<S> <C>
Common Stock The Bank of New York, as Trustee for the 9,942,958(1) 11.5%
James River StockPlus Investment Plan
One Wall Street
New York, New York 10286
Common Stock The Capital Group Companies, Inc. 9,281,760(2) 10.4%
333 South Hope Street
Los Angeles, California 90071
Common Stock Equinox Capital Management, Inc. 4,594,200(3) 5.3%
590 Madison Avenue
New York, New York 10022
Common Stock Dodge & Cox 4,485,772(4) 5.2%
One Sansome St., 35th Floor
San Francisco, California 94104
Series P Preferred College Retirement Equities Fund 2,600,000(5) 15.6%
Stock depositary 730 Third Avenue
shares New York, New York 10017
Series P Preferred The Capital Group Companies, Inc. 2,490,000(6) 15.0%
Stock depositary 333 South Hope Street
shares Los Angeles, California 90071
</TABLE>
- - ---------------
(1) Shares are voted by the Trustee as directed by the plan participant to whose
account such shares are credited. If no instructions are received from a
participant, the Trustee will vote the shares in such manner as it deems
appropriate. The Bank of New York had shared voting and investment power for
all of these shares which it held as Trustee for the Company's StockPlus
Plan. The Bank of New York disclaimed beneficial ownership of these shares.
(2) The Capital Group Companies, Inc. ("The Capital Group") beneficially owned
9,281,760 shares of Common Stock, which included 195,690, 1,049,880 and
2,292,290 shares of Common Stock obtained through the assumed conversion of
the Series K $3.375 Cumulative Convertible Exchangeable Preferred Stock,
Series L $14.00 Cumulative Convertible Exchangeable Preferred Stock and
Series P Preferred Stock of the Company. The Capital Group is the parent
holding company of a group of investment management companies that hold
investment power and, in some cases, voting power over these shares. Of the
shares reported, 4,417,290 shares were beneficially owned by Capital
Research and Management Company, an investment adviser and wholly owned
subsidiary of The Capital Group, as a result of its acting as investment
adviser to various investment companies. The remaining shares reported were
beneficially owned by other subsidiaries of The Capital Group, none of which
by itself owned more than 5% or more of the shares. The Capital Group
Companies, Inc., through its subsidiaries, had sole voting power for
3,066,900 shares, sole investment power for all 9,281,760 shares and
disclaimed beneficial ownership of all shares.
(3) Equinox Capital Management, Inc. had sole voting and investment power over
2,707,100 shares; shared voting power over 1,887,100 shares; investment
power for all shares and disclaimed beneficial ownership of all shares.
6
<PAGE>
(4) Dodge & Cox, through its clients, which include investment companies,
employee benefit plans, pension funds and other institutional clients, had
sole voting power over 3,992,172 shares; shared voting power over 493,600
shares; sole investment power over 4,462,572 shares; and shared investment
power over 23,200 shares.
(5) The College Retirement Equities Fund had sole voting and investment power
for all of these shares.
(6) All of these shares are beneficially owned by Capital Research and
Management Company, an investment adviser and wholly owned subsidiary of The
Capital Group, as a result of acting as investment adviser to various
investment companies. Of these shares, 1,665,000 are beneficially owned by
The Income Fund of America, Inc., an investment company, which is advised by
the Capital Research and Management Company. Both The Capital Group and the
Capital Research and Management Company had investment power for the
2,490,000 shares, no voting power for these shares and disclaimed beneficial
ownership of all shares. The Income Fund of America, Inc., had sole voting
power for the 1,665,000 shares and had investment power for all 1,665,000
shares.
(7) Common Stock and convertible Preferred Stock not outstanding which can be
acquired through conversion privileges within 60 days by a shareholder named
in the table is deemed outstanding for the purpose of computing the
percentage of outstanding Common Stock owned by such shareholder but is not
deemed outstanding for the purpose of computing the percentage of Common
Stock owned by any other shareholder.
7
<PAGE>
EXECUTIVE COMPENSATION
------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
AWARDS
---------------------------
ANNUAL COMPENSATION SECURITIES
------------------------------------------ RESTRICTED UNDERLYING
NAME AND OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1)(2) AWARD(S) (3) SARs COMPENSATION (4)
- - ---------------------------- ---- ------- ------- ------------------- ------------ ---------- ----------------
($) ($) ($) ($) (#) ($)
<S> <C>
Miles L. Marsh 1996 858,462 900,000 575,888 3,966,000 100,000 30,905
Chairman, President and 1995 184,615 150,000 0 1,606,250 250,000 6,858
Chief Executive Officer 1994 0 0 0 0 0 0
John F. Lundgren 1996 317,308 282,750 160,922 1,454,200 30,000 12,531
President, European Consumer 1995 255,287 65,000 107,930 463,125 40,000 8,083
Products 1994 199,615 80,000 127,217 0 0 7,056
Ernst A. Haberli 1996 287,404 310,960(5) 0 1,697,000 50,000 5,511
Senior Vice President, 1995 0 0 0 0 0 0
Strategy 1994 0 0 0 0 0 0
James K. Goodwin 1996 400,000 195,000 0 1,586,400 30,000 18,071
President, North American 1995 371,154 175,155 46,802 0 50,800 10,451
Consumer Products 1994 326,154 33,000 0 0 25,400 11,644
Clifford A. Cutchins, IV 1996 308,077 231,210 0 1,322,000 25,000 11,969
Senior Vice President, 1995 290,769 129,730 35,106 0 25,400 11,096
General Counsel and 1994 250,769 39,000 0 0 20,320 7,891
Corporate Secretary
</TABLE>
- - ---------------
(1) The amount disclosed herein for the fiscal year ended December 29, 1996, for
Mr. Marsh represents reimbursement of relocation costs. The amounts
disclosed for Mr. Lundgren for all years presented represent international
assignment equalization payments.
(2) The amounts disclosed herein for the fiscal year ended December 31, 1995,
for Mr. Goodwin and Mr. Cutchins represent the tax reimbursement associated
with distributions for annuity purchases made in 1995. These annuities were
purchased pursuant to the Supplemental Benefit Plan which is discussed
herein under the heading "Pension Plan."
(3) The number and value ($34.00 per unit) as of December 29, 1996, of the
restricted Common Stock holdings for the named executive officers were:
Miles L. Marsh, 184,354 units, $6,268,036; John F. Lundgren, 70,359 units,
$2,392,206; Ernst A. Haberli, 65,265 units, $2,219,010; James K. Goodwin,
75,558 units, $2,568,972; and Clifford A. Cutchins, IV, 58,609 units,
$1,992,706. These units are either restricted shares of Common Stock or
hypothetical shares of Common Stock that are currently subject to vesting
restrictions under the 1996 Stock Incentive Plan or the Deferred Stock Plan,
respectively.
Under the Deferred Stock Plan, the grantee's interest in the hypothetical
shares of Common Stock becomes vested in equal annual increments over a
period of time established for each grantee by the Compensation Committee;
the vesting schedules established for the named executive officers range
from two to eight years. At the end of each fiscal year, dividends which
would have accrued on such shares are credited to each grantee's account in
the form of additional hypothetical shares. In 1996, Mr. Haberli received
15,000 units and in 1995, Mr. Marsh and Mr. Lundgren received 50,000 and
15,000 units, respectively, under this plan. Upon irrevocable election of
the grantee at the time of the award, awards are paid either (i) as amounts
become vested or (ii) in installments upon retirement or after age 65. Each
of the named executive officers elected a pre-retirement payout for his
grants.
Under the 1996 Stock Incentive Plan, the grantee's interest in restricted
shares of Common Stock becomes vested in annual vesting percentages, which
vary by quartile, ranging from zero to 40 percent based upon the Company's
Total Shareholder Return performance as ranked with its peer group companies
defined herein under the heading "Performance Graph." These shares will vest
after eight years, except in the case of Mr. Marsh, whose shares are
forfeited after seven years if they have not vested prior to the term date.
In July 1996, Messrs. Marsh, Lundgren, Haberli, Goodwin and Cutchins
received a grant of 150,000, 55,000, 50,000, 60,000, and 50,000 restricted
shares of Common Stock, respectively, under the Company's 1996 Stock
Incentive Plan.
8
<PAGE>
(4) These amounts include Company contributions to the StockPlus Plan, the
Supplemental Deferral Plan and an enhanced life insurance plan. Company
contributions allocated to the named executive officers for 1996 under the
StockPlus Plan and the Supplemental Deferral Plan were: Miles L. Marsh,
$5,400 and $25,505; John F. Lundgren, $5,400 and $7,131; Ernst A. Haberli,
$5,511 and $0; James K. Goodwin, $5,400 and $9,000; and Clifford A.
Cutchins, IV, $3,420 and $7,047, respectively. The remainder of the amounts
disclosed for 1996, if any, represents the Company contributions allocated
to these individuals under an enhanced life insurance plan offered to
certain officers as an alternative to the group universal life insurance
plan.
(5) Includes $83,125 for a signing bonus.
EMPLOYMENT AGREEMENTS
To ensure the continuing dedication of the service of its executives,
notwithstanding the possibility of a change of control, the Company entered into
certain employment agreements on August 22, 1996, with those executive officers
named in the Summary Compensation Table. Each agreement provides the named
officer with a base salary, subject to annual review and upward adjustment; an
annual bonus under the Management Incentive Plan; participation in the Company's
incentive, savings and retirement plans, practices, policies and programs; and
eligibility in employee benefits plans, applicable generally to other peer
executives of the Company. The employment agreements are effective for a three
year period and extend annually for additional one year periods unless notice to
the contrary is given.
Each employment agreement generally provides that, if an officer is
terminated without cause, a lump sum cash payment shall be paid to him. The
payment shall be an amount equal to two times the sum of such executive's base
salary and his prior year's target bonus amount under the Management Incentive
Plan (the "Minimum Bonus"). In the event that termination of employment follows
a change of control, each employment agreement generally provides for a lump sum
cash payment within 30 days of termination in an aggregate amount equal to three
times the sum of such executive's base salary and Minimum Bonus amount plus
earnings credits under the Company's retirement plan which would have been
earned over the three years after termination. The related fringe benefits will
also be continued during the three years after such termination. In addition,
upon a change of control, each agreement provides for the immediate vesting of
all stock options, restricted stock and other stock incentives held by the
executive. The agreements provide that executives are to be made whole on an
after-tax basis with respect to certain excise taxes which may be imposed upon
payments under the agreements.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES % OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS/SARS PRICE APPRECIATION
OPTIONS/ GRANTED TO EXERCISE FOR OPTION TERM (3)
SARS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED (1)(2) FISCAL YEAR PER SHARE DATE 5% 10%
- - ------------------------- -------------- ------------ ----------- ---------- --------- ---------
(#) ($) ($)
<S> <C>
Miles L. Marsh 100,000 7.31% $26.44 6/30/06 1,662,797 4,213,855
John F. Lundgren 30,000 2.19% $26.44 6/30/06 498,839 1,264,157
Ernst A. Haberli 25,000 1.83% $26.44 6/30/06 415,699 1,053,464
Ernst A. Haberli 25,000 1.83% $24.75 1/26/06 389,129 986,128
James K. Goodwin 30,000 2.19% $26.44 6/30/06 498,839 1,264,157
Clifford A. Cutchins, IV 25,000 1.83% $26.44 6/30/06 415,699 1,053,464
</TABLE>
- - ---------------
(1) The option grants under the 1996 Stock Incentive Plan become exercisable in
two equal cumulative annual amounts beginning one year after the grant date.
The option grants under the 1987 Stock Option Plan become exercisable in
three equal cumulative annual amounts beginning one year after the grant
date. The exercise price for each option under both plans is equal to the
fair market value per share of the Common Stock on the grant date. The
Company's stock option plans provide for the acceleration of the vesting of
options in certain circumstances, including a merger, sale of assets or
liquidation of the Company or the participant's retirement, permanent
disability or death.
(2) The holders of options have the right to exchange previously owned mature
shares of Common Stock (defined as owned for at least six months), valued at
the current market price, to pay the exercise price of the options.
9
<PAGE>
(3) These options are granted for a term of ten years and one day. The amounts
disclosed are the result of calculations at five and ten percent assumed
rates of appreciation permitted by the Securities and Exchange Commission;
therefore, these amounts are not intended to forecast potential future
appreciation of the Company's Common Stock price. The amounts disclosed are
based on assumed rates of appreciation of the Company's Common Stock price
over a ten-year period. A zero percent gain in stock price appreciation from
the date of grant will result in zero dollars for the optionee.
AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AS OF 12/29/96 AS OF 12/29/96 (1)
SHARES ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------- --------------- -------- ----------- ------------- ----------- -------------
(#) ($) (#) (#) ($) ($)
<S> <C>
Miles L. Marsh 0 0 83,333 266,667 145,833 1,047,667
John F. Lundgren 0 0 53,916(2) 56,667 318,225(2) 265,200
Ernst A. Haberli 0 0 0 50,000 0 420,250
James K. Goodwin 0 0 85,225 72,334 1,040,978 642,014
Clifford A. Cutchins, IV 0 0 72,644 48,707 775,378 311,727
</TABLE>
- - ---------------
(1) The value of unexercised in-the-money Options/SARs as of December 29, 1996,
is equal to the fair market value of Common Stock on that date ($34.00 per
share) minus the exercise price.
(2) Includes 29,300 shares related to Jamont N.V., the Company's European
Consumer Products Business, book value based SAR's, valued as of December
29, 1996, at $226,258.
PENSION PLAN
The Company provides a defined benefit pension plan for salaried employees.
This plan is 100 percent employer paid for all service after December 31, 1996.
Prior to 1997, participating employees contributed 1 percent of their
pensionable earnings. Pensionable earnings include base salary, overtime
compensation, profit sharing, bonuses and commissions. In 1996, under Internal
Revenue Service regulations, pensionable earnings over $150,000 will not be
taken into account for purposes of calculating plan benefits. The maximum annual
benefit which may be paid to any retiree from the plan, attributable to employer
contributions, is $120,000. Effective in 1997, the limit on eligible pensionable
earnings and the maximum annual benefit attributable to employer contributions
will increase to $160,000 and $125,000, respectively. These amounts may be
increased to take into account increases in the cost of living.
Annual benefits payable under the plan are currently equal to the product
of the participant's years of service while participating in the plan, up to 35
years, multiplied by the sum of 1.05 percent of the participant's "Average Pay"
(the average of a participant's highest five consecutive years of pensionable
earnings) plus .65 percent of a participant's Average Pay in excess of covered
compensation (the average of the taxable Social Security wage bases during a
participant's work lifetime, up to 35 years). A participant will be vested in
the portion of benefits attributable to Company contributions (i) after five
years of service or (ii) if the participant had made contributions to the plan
which remained in the plan until retirement.
An alternative pension benefit formula may be used to calculate the pension
benefit for service through December 31, 1988, for employees who participated in
the plan prior to January 1, 1989. However, if the current formula provides a
greater benefit at retirement for such service, that formula will apply.
10
<PAGE>
In 1996, the plan was amended to provide an enhanced retirement benefit for
certain Consumer Products business participants who were age 55 with ten years
of service as of January 1, 1996, pursuant to a voluntary separation program.
The benefit formula equates to augmenting age and service by five years,
provided however that age and service do not exceed 65 years or 35 years,
respectively, and includes the recognition of years of service for an employee's
service with any previous company acquired by James River. A safe harbor
calculation was used as a benefit ceiling for highly compensated employees.
The Company also maintains the Supplemental Benefit Plan which provides
eligible individuals with the difference between the benefits they actually
accrue under the pension plan and the benefits they would have accrued under
such plan but for the maximum benefit and compensation limitations imposed by
law. The Supplemental Benefit Plan also provides eligible individuals with a
benefit that approximates the additional benefit that would have been payable
under the pension plan had the benefit formula in effect on December 31, 1988,
continued in effect. The Supplemental Benefit Plan also provides an additional
benefit for certain Company executives representing the benefit for the
officer's service with a predecessor company, reduced by the total benefit
payable to the officer from James River's pension plans and pension plans of
such predecessor companies. Participants in the Supplemental Benefit Plan are
general creditors of the Company. The supplemental benefits are to be paid by
the Company as the benefits become payable. The Supplemental Benefit Plan
provides that the accrued benefits under the plan may be distributed at the
discretion of the Company.
Miles L. Marsh accrues benefits under a separate supplemental benefit plan
based on a benefit formula of 50 percent of total compensation upon reaching age
55, offset by Social Security and benefits under the Company's pension plan at
his earliest retirement age, which is currently estimated to be approximately
$700,000 at the seventh year of service. This benefit will be reduced
proportionately for service less than seven years.
The Company maintains a supplemental benefit trust for the exclusive
purpose of providing supplemental benefits to all participants in the
Supplemental Benefit Plan. The assets of the trust are subject to the claims of
the Company's creditors in the event of bankruptcy or insolvency.
APPROXIMATE ANNUAL PENSION BENEFIT AT AGE 65
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE -------------------------------------------------------------------------
PAY 10 15 20 25 30 35
- - ------------- -------- -------- -------- -------- -------- --------
<S> <C>
$ 200,000 $ 32,210 $ 48,310 $ 64,420 $ 80,520 $ 96,620 $112,730
400,000 66,210 99,310 132,420 165,520 198,620 231,730
600,000 100,210 150,310 200,420 250,520 300,620 350,730
800,000 134,210 201,310 268,420 335,520 402,620 469,730
1,000,000 168,210 252,310 336,420 420,520 504,620 588,730
1,200,000 202,210 303,310 404,420 505,520 606,620 707,730
1,400,000 236,210 354,310 472,420 590,520 708,620 826,730
</TABLE>
The pensionable earnings for each of the named executive officers are not
materially different from the amounts disclosed as salary and bonus under annual
compensation in the Summary Compensation Table. The estimated years of benefit
service, as of normal retirement at age 65, for the named executive officers
are: Miles L. Marsh, 17 years; John F. Lundgren, 34 years; Ernst A. Haberli, 18
years; James K. Goodwin, 20 years; and Clifford A. Cutchins, IV, 23 years.
The above table shows the approximate annual pension benefit which would be
provided to salaried employees, under the benefit formula effective January 1,
1989, upon retirement at age 65 assuming that a single life annuity has been
elected, except for Mr. Marsh as described above. The amounts in the table are
not subject to reduction for Social Security or other offset amounts. The
pension table includes benefits under the Supplemental Benefit Plan, some of
which will be provided by annuities purchased in 1995.
11
<PAGE>
PERFORMANCE GRAPH
James River is subject to SEC rules which require all public companies to
present a graph of total investment return in their annual proxy statement. The
rules require a line graph which compares James River's five-year cumulative
shareholder return on its Common Stock with the Standard & Poor's ("S&P") 500
Stock Index and either a published industry index or an index of peer companies
selected by the Company. During 1995 and 1996, James River restructured to
sharpen its focus on core businesses and brands through non-strategic business
divestitures; therefore, the S&P Paper and Forest Products Industry Index is no
longer representative of the Company's current lines of business. The Company
selected a peer group comprised of the following companies: American Greetings
Inc., Boise Cascade Corporation, Champion International Corporation, Chesapeake
Corporation, The Clorox Company, Colgate-Palmolive Company, Fort Howard
Corporation, Georgia-Pacific Corporation, International Paper Corporation,
Jefferson Smurfit Corporation, Kimberly Clark Corporation, Mead Corporation, The
Procter & Gamble Company, Tambrands, Inc. and Westvaco Corporation. Prior to
1996, James River had used the S&P Paper and Forest Products Industry index (a
published industry index) in the graph of total investment return.
The graph below presents a comparison of James River's performance with the
S&P 500 Stock Index, the Peer Group, and the S&P Paper and Forest Products
Industry Index, assuming investments of $100 were made on December 31, 1991, and
that dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
JAMES RIVER CORPORATION OF VIRGINIA, S&P 500 STOCK INDEX,
PEER GROUP AND S&P PAPER AND FOREST PRODUCTS INDUSTRY INDEX
[Insert Graph Here]
1991 1992 1993 1994 1995 1996
James River $100.00 $ 95.38 $102.28 $110.94 $135.11 $189.53
S&P 500 Stock Index $100.00 $107.62 $118.46 $120.03 $165.13 $203.05
Peer Group $100.00 $113.09 $121.88 $132.36 $166.93 $206.76
S&P Paper & Forest $100.00 $114.34 $126.01 $131.30 $144.57 $159.92
Products Industry Index
12
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for ensuring that the design, development and approval of the
Company's executive compensation program is based primarily on objective
measures of performance at the corporate, business unit and individual executive
level. The Committee believes compensation should vary on the basis of
individual and Company performance, should be aligned to comparable peer groups,
and should ultimately be driven by the long-term interests of shareholders. The
Committee's executive compensation principles are as follows:
o In general, base compensation will be aligned to median base
compensation levels at comparable organizations; salaries will,
however, exceed comparable levels when individuals exceed expected
performance levels.
o As executives assume greater responsibilities, their compensation
packages will emphasize equity (stock options and stock) and
variable cash compensation.
o Executives will be rewarded for both financial and individual
performance on the basis of clearly defined goals and objectives.
The executive compensation program consists of specific elements that, in
the aggregate, are market comparative and are aligned to short and long-term
business objectives. For fiscal 1996, the compensation elements consist of base
compensation, management short-term cash incentives, stock options and
performance shares.
Section 162(m) of the Internal Revenue Code of 1986, as amended, which was
enacted in 1993, imposes a $1,000,000 limit on the amount of compensation that
is deductible by the Company with respect to the Chief Executive Officer and
each of the four named executive officers, unless specified plan design and
administration parameters are met. Currently, the Company's stock option plan
complies with Section 162(m). The Compensation Committee and management are
reviewing several alternatives for the management short-term cash incentive plan
for plan year 1998.
To determine the Company's comparative position on each of the specified
compensation elements, the Company participates in and uses various published
survey sources. Many of the companies which participate in these published
surveys are included in the S&P 500 Stock Index. Several of the surveyed
companies are included in James River's peer group referred to under the heading
"Performance Graph."
BASE COMPENSATION
Base compensation is the base salary program that provides executives with
annual salaries which are, on average, at the median of consumer products and
forest paper industries' base salary information for jobs of similar scope and
responsibility. The executive salaries are reviewed annually and are adjusted
periodically when survey information shows that executive salaries have fallen
below median salary information.
MANAGEMENT SHORT-TERM CASH INCENTIVES
The 1996 Management Incentive Plan is the short-term cash incentive
component of the executive compensation program. This plan is designed to
provide an added incentive to plan participants for aligning their decisions,
efforts and results to the Company's business objectives. Eligibility in the
plan, as approved by the Compensation Committee, is determined by organizational
salary grades and comparable market practices for positions with similar scope
and responsibility. A target award percentage is assigned to each management
level salary grade. Target awards under this plan range from 15 to 70 percent of
base salary depending on a participant's salary grade level. Participants may
earn awards up to a maximum of 200 percent of their target awards. The named
executive officers, depending on organizational responsibilities, may earn
awards based on Company performance that is determined within a matrix that
combines earnings per share ("EPS") and/or Business Unit operating income to
plan. Executives earned awards in 1996 as a result of meeting and, in some
instances, exceeding pre-established Business objectives.
STOCK OPTIONS
Stock options granted under the 1996 Stock Incentive Plan are used to align
executive efforts and rewards with Company performance and shareholder value. By
design, grants under this plan provide value to executives when shareholders
benefit from stock price appreciation.
Key employees, including the executive officers, are eligible to
participate in this plan. Options are generally granted on a biennial basis,
with terms of ten years, and generally vest in equal installments over a period
of two years. Options usually
13
<PAGE>
may not be exercised unless the individual remains an employee of the Company
for at least one year after the grant date. All stock options are granted with
an exercise price equal to the fair market value of the Company's Common Stock
on the date of grant.
Individual awards granted under this plan are within ranges established for
each salary grade and are specifically determined by individual performance. The
target awards established at each salary grade reflect published general
industry survey data.
During 1996, the Compensation Committee authorized stock option grants to
key employees, including the executive officers. The number of options granted
to executives was based on average option grant face values awarded to consumer
products, forest paper and general industry executives with positions of similar
scope and responsibility.
PERFORMANCE SHARES
Performance shares were granted under the 1996 Stock Incentive Plan. The
intent of this plan is described in the Stock Options section above. Key
employees, including the executive officers, are eligible to receive performance
shares under this plan. Shares granted under this plan will vest after eight
years, except in the case of Mr. Marsh, whose shares are forfeited after seven
years if they have not vested prior to the term date. Share vesting may be
accelerated if the Company performs in the top three quartiles of the Company's
peer group. Annual vesting percentages, which vary by quartile, range from zero
to 40 percent. Company performance, for vesting purposes, is defined as Total
Shareholder Return ("TSR") quartile ranking against the TSR ranking of other
peer group companies.
CEO COMPENSATION
BASE COMPENSATION
Mr. Marsh's annual base salary is $880,000. The Committee, having reviewed
comparative salary information from published surveys representing consumer
products, forest paper and general industry organizations believes Mr. Marsh's
salary is comparable to other salaries of positions with similar scope and
responsibility found in the consumer products and forest paper industries.
MANAGEMENT SHORT-TERM CASH INCENTIVES
Mr. Marsh received an incentive award of $900,000 under the 1996 Management
Incentive Plan as a result of the Company having exceeded its pre-established
EPS objectives and the Committee's assessment of Mr. Marsh's performance.
STOCK OPTIONS/PERFORMANCE SHARES
The Committee granted Mr. Marsh 100,000 stock options at a grant price of
$26.44 on July 1, 1996. The stock options will vest in equal installments over a
two year period. In addition, Mr. Marsh received 150,000 performance shares at
the same grant price of $26.44 on July 1, 1996. These shares will vest only if
the Company performs in the top three quartiles of the Company's peer group.
Annual vesting percentages, which vary by quartile, range from zero to 40
percent. Company performance, for vesting purposes, is defined as Total
Shareholder Return ("TSR") quartile ranking against the TSR ranking of other
peer group companies. Mr. Marsh will forfeit any such shares that have not
vested by the end of the seventh year.
Submitted by the Compensation Committee of the Board of Directors:
Robert M. O'Neil (Committee Chairman)
William T. Burgin
Worley H. Clark, Jr.
William V. Daniel
Richard L. Sharp
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and SEC regulations
require the Company's directors, certain officers and greater than ten percent
shareholders to file initial reports of ownership on Form 3 and changes in
ownership on Forms 4 or 5 with the SEC. The Company undertakes to file such
forms for its directors and officers pursuant to powers of attorney given to
certain attorneys-in-fact. Such directors, officers and ten percent shareholders
are also required by SEC rules to furnish the Company with copies of all Section
16(a) reports they file.
14
<PAGE>
Based on its filing of such reports and on written representations from
such officers, directors and ten percent shareholders, the Company believes
that, during the fiscal year ended December 29, 1996, all applicable Section
16(a) filing requirements were met, except for two late filings. These filings
were for an initial filing on Form 3 for Mr. Haberli, which was six days late,
and for a filing on Form 4 for Mr. Goodwin to report the transfer of shares.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P. served as the Company's independent accountants
during the Company's fiscal year ended December 29, 1996. Upon the
recommendation of the Audit Committee, the Board of Directors has appointed
Coopers & Lybrand L.L.P. to serve as the independent accountants of the Company
for its fiscal year ending December 28, 1997. A representative of Coopers &
Lybrand L.L.P. is expected to be present at the Annual Meeting of Shareholders.
He will have an opportunity to make a statement if he so desires and will be
available to answer appropriate questions from shareholders.
REPORTS
A copy of the Annual Report of the Company for the fiscal year ended
December 29, 1996, is being mailed to you with this Notice and Proxy Statement.
No part of the Annual Report shall be regarded as proxy soliciting material. A
copy of the Equal Opportunity Report may be obtained by any shareholder after
May 15, 1997, free of charge, upon written request to James River Corporation of
Virginia, Attention: Corporate Secretary, P. O. Box 2218, Richmond, Virginia
23218.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
The Company has no present knowledge of any other matters to be presented
at the Annual Meeting of Shareholders. If any other matters should properly come
before the meeting, and any adjournment thereof, it is the intention of the
persons named in the accompanying proxy to vote such proxy with respect to any
such other matter in accordance with their best judgment.
PROPOSALS FOR 1998 ANNUAL MEETING
Any shareholder desiring to make a proposal to be acted upon at the 1998
Annual Meeting of Shareholders must present such proposal to Clifford A.
Cutchins, IV, the Corporate Secretary of the Company, whose address is P.O. Box
2218, Richmond, Virginia 23218, not later than November 17, 1997, in order for
the proposal to be considered for inclusion in the Company's Proxy Statement.
Any such proposal must meet the applicable requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder.
The Company's Bylaws prescribe the procedure that a shareholder must follow
to nominate directors or to bring other business before shareholders' meetings.
For a shareholder to nominate a candidate for director at the 1998 Annual
Meeting of Shareholders, notice of nomination must be given to the Corporate
Secretary of the Company not earlier than December 1, 1997, but before January
1, 1998. The notice must describe various matters regarding the nominee,
including the name, address, and occupation and the number of shares of Common
Stock held by such person. For a shareholder to bring other business before the
1998 Annual Meeting of Shareholders, notice must be given to the Corporate
Secretary of the Company between December 1, 1997, and January 1, 1998, and must
include a description of the proposed business, the reasons therefore, and other
specified matters. However, if the shareholder wishes a proposal to be
considered for inclusion in the Company's Proxy Statement, such proposal must be
presented not later than November 17, 1997, as explained above. Any shareholder
may obtain a copy of the Company's Bylaws, without charge, upon written request
to the Corporate Secretary.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 29, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
MAY BE OBTAINED BY ANY SHAREHOLDER AFTER APRIL 15, 1997, FREE OF CHARGE, UPON
WRITTEN REQUEST TO JAMES RIVER CORPORATION OF VIRGINIA, ATTENTION: INVESTOR
RELATIONS, P.O. BOX 2218, RICHMOND, VIRGINIA 23218, OR BY CALLING (804)
343-4900.
15
<PAGE>
[James River Logo] JAMES RIVER CORPORATION
James River Corporation has two programs for
shareholders which you may find of interest:
DIVIDEND REINVESTMENT PLAN This plan is available to holders of record of
Common Stock. It allows your dividends to be
reinvested in additional shares of the Company's
stock on a commission-free basis.
DIRECT DEPOSIT PROGRAM This program allows your dividends to be
automatically deposited into your account at the
financial institution you designate, and it is
available to holders of record of both common and
preferred stock. Many shareholders find this to be a
convenient method to obtain quick access to dividend
payments.
For additional information on either of these programs, contact
our transfer agent, Norwest Bank, at (800) 468-9716.
**********************************PROXY CARD************************************
PROXY
JAMES RIVER CORPORATION OF VIRGINIA
PROXY SOLICITED BY THE BOARD OF DIRECTORS
THE UNDERSIGNED APPOINTS MICHAEL J. ALLAN, CLIFFORD A. CUTCHINS, IV AND DANIEL
J. GIRVAN, EACH WITH POWER TO ACT ALONE AND WITH POWER OF SUBSTITUTION, AS
PROXIES AND AUTHORIZES THEM TO REPRESENT AND VOTE, AS DIRECTED, ALL VOTING
SECURITIES OF JAMES RIVER CORPORATION OF VIRGINIA HELD OF RECORD BY THE
UNDERSIGNED ON FEBRUARY 20, 1997 UPON ALL MATTERS PROPERLY COMING BEFORE THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 24, 1997, AND ANY ADJOURNMENT
THEREOF.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
1. Election of Directors FOR [ ] WITHHELD [ ]
Nominees: Bowles, Burgin, Clark, Comfort, Coughlan, Daniel, Gottwald,
Marsh, O'Neil, Sharp and Whittemore
FOR, except vote WITHHELD from the following nominees:
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2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Please date and sign the reverse side)
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(continued from other side)
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD
OF DIRECTORS' RECOMMENDATIONS.
Please sign exactly as name appears at left. When
signing as attorney, executor, trustee or other
representative capacity, state full title.
Date ________________________________ , 1997
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(Signature)
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(Signature)
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE
ENCLOSED ENVELOPE.
