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 year ended December 31, 1997
Commission file number 1-7911
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
JAMES RIVER CORPORATION OF VIRGINIA
STOCKPLUS INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
FORT JAMES CORPORATION
1650 LAKE COOK ROAD, DEERFIELD, ILLINOIS 60015-4753
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA
STOCKPLUS INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTAL SCHEDULES, AND EXHIBITS
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Pages
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Report of independent accountants 3
Financial statements:
Statements of net assets available for benefits, with fund information as of December 31, 1997
and December 31, 1996 4-7
Statement of changes in net assets available for benefits, with fund information
for the year ended December 31, 1997 8-9
Notes to financial statements 10-17
Supplemental schedules:
Assets held for investment purposes as of December 31, 1997 18
Loans or fixed income obligations in default for the year ended December 31, 1997 *
Leases in default or classified as uncollectible for the year ended December 31, 1997 *
Nonexempt transactions for the year ended December 31, 1997 *
Reportable transactions for the year ended December 31, 1997 19
Exhibits to Annual Report on Form 11-K 20
Signatures 21
</TABLE>
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* There were no such transactions during the period specified.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Fort James Corporation:
We have audited the accompanying statements of net assets available for
benefits, with fund information, of the James River Corporation of Virginia
StockPlus Investment Plan (the "Plan") as of December 31, 1997, and December 31,
1996, and the related statement of changes in net assets available for benefits,
with fund information, for the year ended December 31, 1997. These financial
statements are the responsibility of the Plan's management. 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
management, 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 net assets available for benefits, with fund
information, of the Plan as of December 31, 1997, and December 31, 1996, and the
changes in net assets available for benefits, with fund information, for the
year ended December 31, 1997, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1997, and reportable transactions for
the year ended December 31, 1997, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for benefits, with fund information, and the statement of changes in
net assets available for benefits, with fund information, is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
COOPERS & LYBRAND L.L.P.
Richmond, Virginia
May 15, 1998
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA STOCKPLUS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------
Fort James Crown Fidelity IDS New
Stock Vantage Balanced Dimensions
ASSETS Fund Stock Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Cash equivalents $ 5,875,914 $ 55,791 $ 24,748
Investments, at fair value
Fort James Common Stock (historical cost: $199,149,449) 337,523,546
Crown Vantage Common Stock (historical cost: $7,922,998) 4,163,964
Mutual funds (historical cost: $114,245,698) $ 16,610,190 41,810,403
Loans receivable from participants
- -----------------------------------------------------------------------------------------------------------------------------
Total investments 337,523,546 4,163,964 16,610,190 41,810,403
- -----------------------------------------------------------------------------------------------------------------------------
Receivables
Employer's contributions 204,843
Accrued dividends 833,045 3,086,105
Accrued interest 14,933 285
- -----------------------------------------------------------------------------------------------------------------------------
Total receivables 219,776 285 833,045 3,086,105
- -----------------------------------------------------------------------------------------------------------------------------
Total assets 343,619,236 4,220,040 17,443,235 44,921,256
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Fund transfers in transit (53,028) 151 (34,311) (314,787)
Due to broker for securities purchased 2,599,974 867,355 3,379,988
Other 103,154
- -----------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,546,946 151 936,198 3,065,201
- -----------------------------------------------------------------------------------------------------------------------------
Net assets available for benefits $ 341,072,290 $ 4,219,889 $ 16,507,037 $ 41,856,055
=============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA STOCKPLUS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------
Masterworks JPM Pierpont JPM Pierpont Loans
S&P 500 Bond Money Market to
ASSETS Stock Fund Fund Fund Participants Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Cash equivalents $ 5,956,453
Investments, at fair value
Fort James Common Stock
(historical cost: $ 199,149,449) 337,523,546
Crown Vantage Common Stock
(historical cost: $7,922,998) 4,163,964
Mutual funds (historical cost: $114,245,698) $ 32,456,434 $ 6,842,090 $ 28,658,354 126,377,471
Loans receivable from participants $ 17,884,235 17,884,235
- ----------------------------------------------------------------------------------------------------------------------------------
Total investments 32,456,434 6,842,090 28,658,354 17,884,235 485,949,216
- ----------------------------------------------------------------------------------------------------------------------------------
Receivables
Employer's contributions 204,843
Accrued dividends 815,669 377,909 212,012 5,324,740
Accrued interest 15,218
- ----------------------------------------------------------------------------------------------------------------------------------
Total receivables 815,669 377,909 212,012 5,544,801
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Total assets 33,272,103 7,219,999 28,870,366 17,884,235 497,450,470
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Fund transfers in transit (9,961) 333,556 78,380
Due to broker for securities purchased 801,508 44,354 133,633 7,826,812
Other 27,454 15,805 188,794 335,207
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 819,001 393,715 400,807 8,162,019
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets available for benefits $ 32,453,102 $ 6,826,284 $ 28,469,559 $ 17,884,235 $ 489,288,451
==================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA STOCKPLUS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1996
<TABLE>
<CAPTION>
Fund Information
-------------------------------------------------------------
Fort James Crown Fidelity IDS New
Stock Vantage Balanced Dimensions
ASSETS Fund Stock Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Cash equivalents $ 4,332,649 $ 54,544
Investments, at fair value
Fort James Common Stock (historical cost: $216,695,052) 329,330,671
Crown Vantage Common Stock (historical cost: $9,837,829) 6,270,756
Mutual funds (historical cost: $68,090,382) $ 8,398,054 $ 23,346,268
Loans receivable from participants
- ---------------------------------------------------------------------------------------------------------------------------------
Total investments 329,330,671 6,270,756 8,398,054 23,346,268
- ---------------------------------------------------------------------------------------------------------------------------------
Receivables
Employer's contributions 508,133 3,352 6,493
Participants' contributions 456,068 35,200 136,189
Accrued interest 6,926 333
- ---------------------------------------------------------------------------------------------------------------------------------
Total receivables 971,127 333 38,552 142,682
- ---------------------------------------------------------------------------------------------------------------------------------
Total assets 334,634,447 6,325,633 8,436,606 23,488,950
- ---------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Fund transfers in transit 332,020 1,734 (206,440)
Other 130,755 321,602
- ---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 332,020 1,734 130,755 115,162
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets available for benefits $334,302,427 $ 6,323,899 $ 8,305,851 $ 23,373,788
=================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA STOCKPLUS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1996 (continued)
<TABLE>
<CAPTION>
Fund Information
-------------------------------------------------------------------------------
Masterworks JPM Pierpont JPM Pierpont Loans
S&P 500 Bond Money Market to
ASSETS Stock Fund Fund Fund Participants Total
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Cash equivalents $ 162,392 $ 4,549,585
Investments, at fair value
Fort James Common Stock
(historical cost: $216,695,052) 329,330,671
Crown Vantage Common Stock
(historical cost: $9,837,829) 6,270,756
Mutual funds (historical cost: $68,090,382) $ 12,064,722 $ 3,660,458 $ 25,101,176 72,570,678
Loans receivable from participants 15,236,307 15,236,307
- ------------------------------------------------------------------------------------------------------------------------------
Total investments 12,064,722 3,660,458 25,101,176 15,236,307 423,408,412
- ------------------------------------------------------------------------------------------------------------------------------
Receivables
Employer's contributions 3,924 810 1,513 524,225
Participants' contributions 74,584 9,616 11,248 722,905
Accrued interest 7,259
- ------------------------------------------------------------------------------------------------------------------------------
Total receivables 78,508 10,426 12,761 1,254,389
- ------------------------------------------------------------------------------------------------------------------------------
Total assets 12,143,230 3,670,884 25,113,937 15,398,699 429,212,386
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Fund transfers in transit (12,577) (114,737)
Other 98,651 26,801 352,547 930,356
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities 86,074 26,801 237,810 930,356
- ------------------------------------------------------------------------------------------------------------------------------
Net assets available for benefits $ 12,057,156 $ 3,644,083 $ 24,876,127 $ 15,398,699 $428,282,030
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA STOCKPLUS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
Fund Information
------------------------------------------------------------------------------
Fort James Crown Fidelity IDS New Masterworks
Stock Vantage Balanced Dimensions S&P 500
Fund Stock Fund Fund Fund Stock Fund
- -----------------------------------------------------------------------------------------------------------------------------------
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Additions to net assets attributable to:
Investment income:
Cash dividends on Fort James Common Stock $ 5,518,296 $ 1,881,275 $ 3,068,472 $ 1,045,905
and mutual funds
Interest on mutual funds
Interest on cash equivalents $ 2,836
Interest on loans to participants
- -----------------------------------------------------------------------------------------------------------------------------------
Total investment income 5,518,296 2,836 1,881,275 3,068,472 1,045,905
- -----------------------------------------------------------------------------------------------------------------------------------
Net appreciation (depreciation) in fair value of
investments 50,937,019 (920,104) 656,029 3,590,688 4,708,358
- -----------------------------------------------------------------------------------------------------------------------------------
Contributions and deposits:
Deposits by participating employees 14,432,841 444 1,335,001 4,987,774 3,208,359
Contributions by employer, before reduction for
forfeitures 13,706,664 83,583 151,363 113,386
Rollover contributions 98,784 90,305 144,930 145,889
Final recovery of investment writedown,
net (Note 3)
- -----------------------------------------------------------------------------------------------------------------------------------
Total contributions and deposits 28,238,289 444 1,508,889 5,284,067 3,467,634
- -----------------------------------------------------------------------------------------------------------------------------------
Total additions (deductions) 84,693,604 (916,824) 4,046,193 11,943,227 9,221,897
- -----------------------------------------------------------------------------------------------------------------------------------
Deductions from net assets attributable to:
Distributions to participants (34,018,155) (638,442) (1,604,324) (3,038,694) (1,799,406)
Administrative costs (166,047) (670) (893) (585) (338)
- -----------------------------------------------------------------------------------------------------------------------------------
Total deductions (34,184,202) (639,112) (1,605,217) (3,039,279) (1,799,744)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) prior to interfund transfers 50,509,402 (1,555,936) 2,440,976 8,903,948 7,422,153
- -----------------------------------------------------------------------------------------------------------------------------------
Transfers between funds:
Transfers between investment funds (42,287,128) (463,277) 5,921,485 9,900,733 13,087,755
Loans to participants (7,488,458) (84,808) (371,417) (1,155,280) (760,445)
Loan repayments 6,036,047 11 210,142 832,866 646,483
- -----------------------------------------------------------------------------------------------------------------------------------
Total transfers between funds (43,739,539) (548,074) 5,760,210 9,578,319 12,973,793
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets available
for benefits 6,769,863 (2,104,010) 8,201,186 18,482,267 20,395,946
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets available for benefits:
Beginning of year 334,302,427 6,323,899 8,305,851 23,373,788 12,057,156
- -----------------------------------------------------------------------------------------------------------------------------------
End of year $ 341,072,290 $ 4,219,889 $ 16,507,037 $ 41,856,055 $ 32,453,102
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA STOCKPLUS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1997 (continued)
<TABLE>
<CAPTION>
Fund Information
-------------------------------------------------------------------------------
JPM Pierpont JPM Pierpont Executive Life Loans
Bond Money Market Fixed Income to
Fund Fund Fund Participants Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Additions to net assets attributable to:
Investment income:
Cash dividends on Fort James Common Stock and $ 331,435 $ 532,790 $ 12,378,173
mutual funds
Interest on mutual funds 25,402 921,760 947,162
Interest on cash equivalents 2,836
Interest on loans to participants $ 1,420,201 1,420,201
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment income 356,837 1,454,550 1,420,201 14,748,372
- ------------------------------------------------------------------------------------------------------------------------------------
Net appreciation (depreciation) in fair value of
investments 144,719 59,116,709
- ------------------------------------------------------------------------------------------------------------------------------------
Contributions and deposits:
Deposits by participating employees 370,562 434,146 24,769,127
Contributions by employer, before reduction for
forfeitures 56,575 69,754 14,181,325
Rollover contributions 8,296 148,967 637,171
Final recovery of investment writedown, net
(Note 3) $ 519,658 519,658
- ------------------------------------------------------------------------------------------------------------------------------------
Total contributions and deposits 435,433 652,867 519,658 40,107,281
- ------------------------------------------------------------------------------------------------------------------------------------
Total additions (deductions) 936,989 2,107,417 519,658 1,420,201 113,972,362
- ------------------------------------------------------------------------------------------------------------------------------------
Deductions from net assets attributable to:
Distributions to participants (681,307) (9,796,769) (1,218,428) (52,795,525)
Administrative costs (60) (1,823) (170,416)
- ------------------------------------------------------------------------------------------------------------------------------------
Total deductions (681,367) (9,798,592) (1,218,428) (52,965,941)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) prior to interfund transfers 255,622 (7,691,175) 519,658 201,773 61,006,421
- ------------------------------------------------------------------------------------------------------------------------------------
Transfers between funds:
Transfers between investment funds 2,934,448 11,425,642 (519,658)
Loans to participants (93,076) (209,807) 10,163,291
Loan repayments 85,207 68,772 (7,879,528)
- ------------------------------------------------------------------------------------------------------------------------------------
Total transfers between funds 2,926,579 11,284,607 (519,658) 2,283,763
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets available for
benefits 3,182,201 3,593,432 2,485,536 61,006,421
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets available for benefits:
Beginning of year 3,644,083 24,876,127 15,398,699 428,282,030
- ------------------------------------------------------------------------------------------------------------------------------------
End of year $ 6,826,284 $ 28,469,559 $ 17,884,235 $ 489,288,451
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA
STOCKPLUS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan:
(a) General
The following description of the James River Corporation of
Virginia StockPlus Investment Plan amended and restated
effective September 1, 1996 (the "Plan"), provides only
general information on the Plan in effect as of December 31,
1997. The Plan as in effect before September 1, 1996, is
referred to as the "Prior Plan." The Plan is a stock purchase
plan and generally full-time employees of Fort James
Corporation, formerly known as James River Corporation of
Virginia, ("Fort James," the "Company," or the "Employer") and
its domestic subsidiaries are eligible to participate.
Eligible employees who elect to participate in the Plan are
referred to as "Participants." The Plan offers seven
investment options to Participants, including the Company's
common stock, $.10 par value ("Fort James Common Stock") and
Crown Vantage Inc. common stock, no par ("Crown Vantage Common
Stock"). The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
(b) Contributions
Participants in the Plan may elect to contribute from 1% to
10% of their compensation through payroll deductions; all
contributions are made as before-tax contributions under
Section 401(k) of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code"). Contributions are
invested by The Bank of New York, the Plan's Trustee, into
investment funds at the direction of each Participant. Prior
to September 1, 1996, in order to receive matching
contributions from the Company, before-tax contributions made
by Participants who had not reached age 57 were required to be
invested in the Fort James Stock Fund, as defined in Note
1(e).
<PAGE>
Prior to September 1, 1996, the Company made matching
contributions on behalf of the eligible Participants pursuant
to the following schedule:
Participant Contribution Company Contribution
as a Percentage as a Percentage of
of Compensation Participant's Total Contribution
--------------- --------------------------------
1% 120%
2% 100%
3% 90%
4% 80%
5% 70%
6% 60%
Effective September 1, 1996, the Company makes matching
contributions to the Fort James Stock Fund equal to 60% of
employee contributions up to 6% of compensation, regardless of
the fund in which they are invested. The Company makes no
matching contributions with respect to the portion of a
Participant's contributions that exceeds 6% of the
Participant's compensation.
Also effective September 1, 1996, the Company may make
discretionary contributions to all eligible Participants'
accounts of up to 1% of compensation, which are invested in
the Fort James Stock Fund.
(c) Participant Accounts
Each Participant's account is credited with the Participant's
contributions and allocations of the Company's matching and
discretionary contributions and Plan earnings. Allocations of
contributions and earnings are based on the Participant's
contributions or account balances, as defined in the Plan.
Participant's accounts are charged with an allocation of
administrative expenses in the form of a quarterly fee and
certain transaction fees, as applicable.
(d) Vesting
Each Participant is 100% vested in all of his Plan accounts. A
Participant's vested accounts may not be forfeited or
refunded, except to meet anti-discrimination requirements as
described in Note 1(i).
(e) Investment Options
The following investment funds have been established for the
investment of Plan assets: (i) an investment fund consisting
primarily of Fort James Common Stock (the "Fort James Stock
Fund"), (ii) the Crown Vantage Stock Fund, (iii) the Fidelity
Balanced Fund, (iv) the IDS New Dimensions Fund, (v) the
Masterworks S&P 500 Stock Fund, (vi) the JPM Pierpont Bond
Fund, and (vii) the JPM Pierpont Money Market Fund. An
investment fund consisting primarily of Crown Vantage Common
Stock (the "Crown Vantage Stock Fund") was created in 1995 as
a result of the Company's spin-off of Crown Vantage Inc. The
Fidelity Balanced Fund is a mutual fund which is invested in a
broadly diversified portfolio of high-yielding securities,
including common stocks, preferred stocks and bonds. The IDS
New Dimensions Fund is a mutual fund which is invested
primarily in common stocks of U.S. and foreign companies
showing potential for significant growth; the fund also
invests in preferred stocks, debt securities and money market
instruments. The Masterworks S&P 500 Stock Fund is a mutual
fund which is invested in substantially the same percentages
of common stocks as the Standard & Poor's 500 Composite Stock
Price Index. The JPM Pierpont Bond Fund is a mutual fund which
is invested primarily in fixed income securities, including
U.S. government and agency securities, corporate bonds,
private placements, and asset-backed and mortgage-backed
securities. The JPM Pierpont Money Market Fund is a mutual
fund which is invested in high quality U.S. dollar denominated
securities which have effective maturities of not more than 13
months.
As described below, Participants have the right to direct the
investment of certain of their Plan accounts and contributions
into any of the Plan's available investment funds.
Effective September 1, 1996, a Participant may elect to invest
his before-tax contributions into any of the available
investment funds. All employee contributions may be
transferred or reinvested without restriction into any of the
Plan's available investment funds. The Company's matching and
discretionary contributions are invested in the Fort James
Stock Fund and must remain in that fund until the Participant
attains age 57. Participants who have attained age 57 may
direct the investment of all funds in their accounts,
including matching and discretionary contributions, into any
of the Plan's available investment funds.
Each Participant may direct the investment of the portion of
his account that is invested in the Crown Vantage Stock Fund
into any of the other available investment funds. However,
Participants may not transfer assets from other investment
funds to the Crown Vantage Stock Fund. Participants may
transfer certain assets previously held under another
tax-qualified plan into the Plan. Such assets are held in a
rollover account as defined in the Plan. Participants may also
elect to have certain distributions transferred out of the
Plan and paid directly to an eligible tax-qualified plan.
(f) Participant Loans
Participants are permitted to borrow from the Plan amounts up
to one-half of the Participants' vested interest, subject to a
minimum of $1,000 and a maximum of $50,000. Prior to September
1, 1996, a loan could not be made from a Participant's
before-tax contributions that were made on or after July 1,
1994, that were matched by Company contributions, and that had
not been held in the Plan for 24 months. For accounting
purposes, Plan assets attributable to a Participant's
individual account will be liquidated to provide the funds to
be loaned (see Note 2(e)). Loans are repayable over a period
of up to five years, except for loans to purchase a primary
residence, which may be repaid over a period of up to ten
years. Loans bear interest at the prime rate in effect on the
first day of the month in which the loan application is
received plus 1%. All principal and interest payments made by
a Participant are credited to the investment funds in which
the Participants' account is invested. As of December 31,
1997, there were 4,118 Participants with outstanding loans.
(g) Distributions and Withdrawals
Distributions are recorded when paid. If a Participant
retires, dies, terminates employment, or incurs a permanent
disability, the Participant's accounts will be distributed in
one of the following forms selected by the Participant: (i) a
lump sum payment or (ii) monthly installments over a certain
period of time. Distributions from Participants' accounts
invested in the Fort James Stock Fund are payable either in
whole shares of Fort James Common Stock, with the value of
fractional shares paid in cash, or entirely in cash. The
portion of a Participant's accounts that is invested in other
investment funds is payable in cash. If a Participant's
account balance has ever exceeded $3,500, a distribution will
not be made to the Participant before age 70 without the
Participant's consent, and the Participant may elect to
postpone commencement of his benefits to a date not later than
his 70th birthday. In addition, the portion of a Participant's
account that is transferred from another plan to the Plan and
that is subject to the qualified joint and survivor annuity
rules of Sections 401(a) (11) and 417 of the Internal Revenue
Code (known as the "J&S Account") shall be paid through an
annuity from the Plan or a purchased commercial annuity for a
Participant whose vested account balance has ever exceeded
$3,500, unless the Participant and his spouse (if applicable)
elect otherwise.
With limited exceptions, withdrawals may be made from a
Participant's account attributable to after-tax contributions,
the portion of Company after-tax matching contributions, and
rollover contributions. A Participant who reaches age 59-1/2
may elect a one-time withdrawal of the entire balance in his
accounts. Participants who have not attained age 59-1/2 can
only access these contributions in the event of financial
hardship.
(h) Voting, Tender and Exercise of Other Rights
If timely instructions are not received from a Participant,
the Trustee shall vote, tender or exercise similar rights with
respect to shares of Fort James Common Stock in the
Participant's account in such manner as the Trustee deems
appropriate.
(i) Anti-Discrimination Requirements
The Plan is required to meet the anti-discrimination
requirements for highly compensated employees as set forth in
Section 401(k) of the Internal Revenue Code. For years in
which the Plan does not meet these requirements, the
provisions of the Plan require that a refund of employee
contributions be made to highly compensated employees within
two and one-half months after the close of the Plan year.
Refunds made during the Plan year ended December 31, 1997,
have been reflected as a reduction of contributions and
deposits on the statement of changes in net assets available
for benefits, with fund information.
(j) Number of Participants
There were 18,884 and 16,368 Participants in the Plan as of
December 31, 1997 and December 31, 1996, respectively. The
number of Participants investing in each of the Plan's funds
as of those dates was as follows (Participants may be included
in more than one fund, as applicable):
1997 1996
------ ------
Fort James Stock Fund 15,418 15,879
Crown Vantage Stock Fund 10,199 12,526
Fidelity Balanced Fund 2,019 1,516
IDS New Dimensions Fund 3,884 3,002
Masterworks S&P 500 Stock Fund 3,246 2,046
JPM Pierpont Bond Fund 836 540
JPM Pierpont Money Market Fund 1,369 1,328
2. Summary of Significant Accounting Policies:
(a) Basis of Accounting
The financial statements of the Plan are prepared under the
accrual method of accounting, in accordance with generally
accepted accounting principles.
(b) Cash Equivalents
All deposits of contributions to the Plan are initially
invested in an interest-bearing account pending their
investment in the available investment funds. Interest earned
on such investments is credited to the individual
Participant's accounts based on each Participant's account
balance. Cash equivalents are stated at cost which
approximates market value.
(c) Investment Valuation
The investments in Fort James Common Stock and Crown Vantage
Common Stock are stated at market value, based on their
closing prices on the New York Stock Exchange Composite Tape
on the last trading day of the period. The number of shares of
Fort James Common Stock held by the Plan was 8,824,145 and
9,942,058 on December 31, 1997, and December 31, 1996,
respectively. The closing market price per share of James
River Common Stock was $38.25 and $33.125 on December 31,
1997, and December 31, 1996, respectively. The Plan also held
Crown Vantage Common Stock of 594,852 shares at $7.00 per
share and 737,736 shares at $8.50 per share on December 31,
1997, and December 31, 1996, respectively.
Investments held in the Fidelity Balanced Fund, the
Masterworks S&P 500 Stock Fund, the JPM Pierpont Bond Fund and
the JPM Pierpont Money Market Fund are stated at the market
value of shares held by the Plan as of year end. Investments
in the IDS New Dimensions Fund are reported at market value or
a reasonable approximation thereof, except for securities
maturing in 60 days or less which are valued at amortized
cost.
Loans receivable from Participants are valued at the balance
of amounts due from Participants, plus accrued interest
thereon, which approximates fair value.
As of December 31, 1997, the assets of the Plan were held
under an Agreement of Trust with The Bank of New York, New
York, New York (the "Trustee"). State Street Global Advisors,
Bloomington, Minnesota, serves as recordkeeper for the Plan.
(d) Security Transactions and Related Investment Income
Security transactions are accounted for as of the trade date,
and dividend income is recorded as of the dividend record
date. Interest income is recorded on the accrual basis.
Dividend income is allocated to the individual Participant's
accounts based on each Participant's share of fund
investments. The cost of securities sold is determined on an
average cost basis.
(e) Realized Gains (Losses) on Common Stock
When a Participant (i) borrows funds, (ii) makes a transfer
between funds, or (iii) receives a distribution from his
account, current cash contributions to the Plan are used to
provide the funds to be distributed or transferred. For
accounting purposes, the average cost basis of shares which
would have been sold by the Plan to provide funds for the
borrowing, transfer, or distribution is deducted from the
account of that Participant, and the value of such shares is
reallocated to the current Participants' contributions.
Accordingly, the Plan realizes a gain or loss for the
difference between the average cost basis of shares which
would have been sold and the fair value of such shares on the
distribution date.
(f) Contributions and Deposits
Employee contributions are recorded as of the date the
contributions are withheld from employees' compensation.
Employer contributions are based on amounts withheld from
participating employees' wages and are therefore recorded as
of the date the employees' contributions are withheld.
Employee and employer contributions are transferred to the
Trustee within one week after employee contributions are
withheld from compensation.
<PAGE>
(g) Withdrawals
Withdrawals from the Plan by Participants are presented at the
fair value of the distributed investments, plus cash paid in
lieu of fractional shares where applicable. Withdrawals are
recorded when paid.
(h) Net Appreciation (Depreciation) in Fair Value of Investments
Net appreciation or depreciation in the fair value of the
investments consists of (i) unrealized appreciation or
depreciation of investments held by the Plan, (ii) realized
gains or losses on the sale of Plan investments (see Note
2(e)) and (iii) unrealized appreciation or depreciation
resulting from investments distributed to Participants. Such
amounts are allocated to the individual Participant's accounts
based on each Participant's share of fund investments.
(i) Use of Estimates
Financial statements prepared in conformity with generally
accepted accounting principles require management to make
estimates and assumptions that significantly affect amounts
reported therein. Actual results could differ from those
estimates.
3. Investment in Executive Life Guaranteed Investment Contract:
On April 11, 1991, the California Insurance Commissioner obtained a
court order placing Executive Life in conservatorship and under his
exclusive control. Part of the court order imposed a moratorium upon
surrenders, policy loans, transfers of account balances, and similar
cash disbursement transactions. Accordingly, as a result of the court
mandated moratorium, Participants holding balances in the Executive
Life Fixed Income Fund who had not transferred such balances to other
eligible funds within the Plan prior to January 1, 1991, were
prohibited from making withdrawals, loans, fund transfers, or final
distributions from this fund until such time as the California court
permitted cash withdrawals. The Plan accrued interest income under the
Executive Life guaranteed investment contract at the stated contract
rate through April 10, 1991, after which date no additional investment
income has been recorded. Based upon information available, an
adjustment of $1,294,373 was recorded as of December 31, 1993, for the
impairment of value of the Plan's investment in the Executive Life
guaranteed investment contract. As a result of a favorable decision by
the California Supreme Court in 1995, an annual distribution schedule
was put in place beginning in 1995 and continuing until the assets of
the estate were distributed in full. Actual distributions received by
the Plan from Executive Life as of December 31, 1997, totaled
$7,959,013. A portion of this distribution reflects a recovery of
$624,231 of the 1993 valuation adjustment. The final distribution of
$594,104 was received from Executive Life in April 1997. All funds
received from Executive Life were allocated to the appropriate
Participant accounts, including $74,446 transferred out of the Plan to
former Participants.
4. Plan Termination:
Although it has not expressed any intent to do so, the Company has
the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA.
<PAGE>
5. Separate Investment Fund Option Information:
Nonparticipant-directed net assets available for benefits in the Fort
James Stock Fund were approximately $181,182,000 and $181,799,000 as of
December 31, 1997, and December 31, 1996, respectively.
Nonparticipant-directed activity in the Fort James Stock Fund for 1997
included investment income of approximately $2,890,000, net
appreciation in fair value of investments of approximately $38,799,000,
contributions of approximately $12,197,000, distributions of
approximately $11,906,000, and assets transferred to other plans of
approximately $394,000. Only the Fort James Stock Fund includes such
nonparticipant-directed amounts.
6. Units and Unit Values:
The following funds are accounted for on a unitized, daily-valued fund
basis. The number of units, calculated daily by the recordkeeper, and
unit values of net assets as of December 31, 1997, were:
Units Unit Values
---------- -----------
Fort James Stock Fund 8,944,985 $ 38.13
Crown Vantage Stock Fund 597,718 $ 7.06
Fidelity Balanced Fund 1,081,011 $ 15.27
IDS New Dimensions Fund 1,754,088 $ 23.86
Masterworks S&P 500 Stock Fund 1,591,619 $ 20.39
JPM Pierpont Bond Fund 653,233 $ 10.45
JPM Pierpont Money Market Fund 28,469,409 $ 1.00
7. Investments:
Investments that represent more than 5% of the Plan's net assets are as
follows:
1997 1996
------------ -------------
Fort James Stock Fund $337,523,546 $329,330,671
IDS New Dimensions Fund 41,810,403 23,346,268
Masterworks S&P 500 Stock Fund 32,456,434
JPM Pierpont Money Market Fund 28,658,354 25,101,176
8. Tax Status:
The Plan is intended to be a qualified profit sharing plan under
Sections 401(a) and 401(k) of the Internal Revenue Code, and as such is
not subject to federal income taxes. The Company has received a
favorable determination letter from the Internal Revenue Service, dated
March 25, 1998, with respect to the qualification of the Plan. The Plan
administrator and the Plan's tax counsel believe that the Plan is
designed and operated in accordance with the applicable requirements of
the Internal Revenue Code.
<PAGE>
9. Administrative Expenses:
Significant expenses of administering the Plan are borne by Fort James,
which are partially offset by certain fees charged to the Participants'
accounts including but not limited to: (i) a $2.50 quarterly fee per
Participant, (ii) a $35 Participant loan origination fee and a $10
annual maintenance fee related to Participant loans and (iii) a $35
transaction fee for certain withdrawals and distributions.
10. Concentration of Credit Risk:
Financial instruments which potentially subject the Plan to
concentrations of credit risk consist of temporary cash investments
held by the Trustee in excess of the Federal Deposit Insurance
Corporation insurance limit and investments in the Fort James Stock
Fund, the Crown Vantage Stock Fund, the Fidelity Balanced Fund, the IDS
New Dimensions Fund, the Masterworks S&P 500 Stock Fund, the JPM
Pierpont Bond Fund, the JPM Pierpont Money Market Fund. Credit and
market risk associated with these instruments relates to the
performance of the underlying investments. The Plan has no formal
policy requiring collateral to support the financial instruments
subject to credit risk.
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA STOCKPLUS INVESTMENT PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
<TABLE>
<CAPTION>
Identity of Issue Description of Investment Cost Current Value
- ------------------------------------ ----------------------------------------- ----------------------- ------------------------
<S> <C>
Cash equivalents Interest rate - variable $5,956,453 $5,956,453
*Fort James Corporation Common 8,824,145 shares 199,149,449 337,523,546
Stock, $.10 par value
Crown Vantage Inc. 594,852 shares 7,922,998 4,163,964
Common Stock, no par value
Fidelity Balanced Fund Interest in mutual funds 15,692,269 16,610,190
at $15.27 per unit
IDS New Dimensions Fund Interest in mutual funds 36,225,692 41,810,403
at $23.86 per unit
Masterworks S&P 500 Stock Fund Interest in mutual funds 26,940,314 32,456,434
at $20.39 per unit
JPM Pierpont Bond Fund Interest in mutual funds 6,729,069 6,842,090
at $10.45 per unit
JPM Pierpont Money Market Fund Interest in mutual funds 28,658,354 28,658,354
at $1.00 per unit
*Participant loans Interest rate -- 6% to 13%; various -- 17,884,235
maturity dates
</TABLE>
* Party in interest to the Plan.
<PAGE>
JAMES RIVER CORPORATION OF VIRGINIA STOCKPLUS INVESTMENT PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Expense
Identity of Party Number of Incurred with Net Gain
Involved/Description of Asset Purchase Price Selling Price Transactions Transactions Cost (Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
I. Single transaction in excess of 5%:
None
II. Series of transactions other than
securities in excess of 5%:
None
III. Series of transactions involving
securities in excess of 5%:
*Fort James Corporation Common Stock $17,932,575 -- 22 $36,420 $17,932,575 --
-- $50,200,456 73 -- 43,798,146 $6,402,310
*Bank of New York Collective Short Term 61,290,693 -- 188 -- 61,290,693 --
Investment Fund -- 59,250,531 327 -- 59,250,531 --
IV. Security transactions with a party
involved in a single reportable
transaction:
None
</TABLE>
* Party in interest to the Plan.
<PAGE>
TO ANNUAL REPORT ON FORM 11-K
The exhibits listed below are filed as part of this Annual Report on Form 11-K.
Each exhibit is listed according to the number assigned to it in the Exhibit
Table of Item 601 of Regulation S-K.
Exhibit
Number Description
- --------- -----------
23 Consent of Independent Accountants, filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Committee which administers the Plan have duly caused this annual
report to be signed by the undersigned hereunto duly authorized.
JAMES RIVER CORPORATION OF VIRGINIA
STOCKPLUS INVESTMENT PLAN
June 15, 1998 /s/Clifford A. Cutchins, IV
- ------------- ---------------------------
Committee Member - Clifford A. Cutchins, IV
June 15, 1998 /s/Daniel J. Girvan
- ------------- ---------------------------
Committee Member - Daniel J. Girvan
June 15, 1998 /s/Ernst A. Haberli
- ------------- ---------------------------
Committee Member - Ernst A. Haberli
June 15, 1998 /s/R. Michael Lempke
- ------------- ---------------------------
Committee Member - R. Michael Lempke
June 15, 1998 /s/William A. Paterson
- ------------- ---------------------------
Committee Member - William A. Paterson
June 15, 1998 /s/Michael T. Riordan
- ------------- ---------------------------
Committee Member - Michael T. Riordan
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
James River Corporation of Virginia on Form S-8 (File No. 33-54491) of our
report dated May 15, 1998, on our audits of the financial statements of the
James River Corporation of Virginia StockPlus Investment Plan as of December 31,
1997 and 1996, and for the year ended December 31, 1997, which report is
included in this Annual Report on Form 11-K.
COOPERS & LYBRAND, L.L.P.
Richmond, Virginia
June 16, 1998
