<PAGE>
Filed with the Securities and Exchange Commission on March 10, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Fort James Corporation
(Exact Name of Registrant as Specified in its Charter)
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<CAPTION>
<S> <C>
Commonwealth of Virginia 54-0848173
(State or Other Jurisdiction of Incorporation) (I.R.S. Employer Identification Number)
</TABLE>
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75 Tri-State International Office Center
Suites 100 and 175
Lincolnshire, Illinois 60069
(847) 317-5000
(Address, including Zip Code, and Telephone Number,
including Area Code, of Registrant's Principal Executive Offices)
CLIFFORD A. CUTCHINS IV, ESQ.
Senior Vice President and General Counsel
Fort James Corporation
75 Tri-State International Office Center
Suites 100 and 175
Lincolnshire, Illinois 60069
(847) 317-5000
(Name, Address, including Zip Code, and Telephone Number,
including Area Code, of Agent of Service)
With a Copy to:
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<S> <C> <C> <C>
Marshall H. Earl, Jr., Esq. Patricia A. Vlahakis, Esq. David W. Hirsch, Esq. Danielle Carbone, Esq.
McGuire, Woods, Battle & Wachtell, Lipton, Rosen & Katz Cleary, Gottlieb, Steen & Shearman & Sterling
Boothe LLP 51 West 52nd Street Hamilton 599 Lexington Avenue
One James Center New York, New York 10019 One Liberty Plaza New York, New York 10022
901 East Cary Center (212) 403-1000 New York, New York 10006 (212) 848-4000
Richmond, Virginia 23219 (212) 225-2000
(804) 775-1000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Proposed Maximum Proposed Maximum
Securities to Amount to Be Aggregate Price Aggregate Offering Amount of
Be Registered (1) Registered (2) Per Share (3) Price (3) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $.10 par value 9,562,554 Shares $ 44.719 $427,627,852 $126,150
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</TABLE>
(1) Includes one attached preferred share purchase right per share of Common
Stock. Prior to the occurrence of certain events, the preferred share
purchase rights will not be exercisable and will not be evidenced
separately from the Common Stock.
(2) The Registration Statement relates to the sale from time to time by
Purchaser of a maximum of 9,562,554 shares of Common Stock that may be
acquired by the Purchaser either (1) upon the conversion of the
Registrant's Series K $3.375 Cumulative Convertible Exchangeable Preferred
Stock (the "Series K Preferred Stock"), the conversion of all of the
shares of the Registrant's Series L $14.00 Cumulative Convertible
Exchangeable Preferred Stock (the "Series L Preferred Stock") or the
conversion of all of the shares of the Registrant's Series N $14.00
Cumulative Convertible Exchangeable Preferred Stock (the "Series N
Preferred Stock"), the Series L Preferred Stock and the Series N Preferred
Stock being represented by 3,998,700 depositary shares and 1,056,168
depositary shares, respectively (collectively, the "Depositary Shares"),
or (2) pursuant to the standby arrangements described in the Prospectus.
(3) Estimated solely for the purpose of calculating the registration fee. Such
estimates have been calculated in accordance with Rule 457(c) under the
Securities Act of 1933 and are based upon the average of the high and low
prices per share of the Registrant's Common Stock on the New York Stock
Exchange Composite Transaction Tape on March 5, 1998, as reported in The
Wall Street Journal.
---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
P R O S P E C T U S
FORT JAMES(icon)
9,562,554 Shares
Fort James Corporation
Common Stock
---------------
This Prospectus relates to the sale from time to time by Smith Barney Inc.
(the "Purchaser") of a maximum of 9,562,554 shares of Common Stock, $.10 par
value per share ("Common Stock"), of Fort James Corporation, a Virginia
corporation ("Fort James" or the "Company"), that may be acquired by the
Purchaser either (1) upon conversion of all of the outstanding Series K $3.375
Cumulative Convertible Exchangeable Preferred Stock (the "Series K Preferred
Stock"), par value $10.00 per share, of the Company, all of the outstanding
Series L $14.00 Cumulative Convertible Exchangeable Preferred Stock, par value
$10.00 per share, of the Company (the "Series L Preferred Stock") and all of
the outstanding Series N $14.00 Cumulative Convertible Exchangeable Preferred
Stock, par value $10.00 per share, of the Company (the "Series N Preferred
Stock," and together with the Series K Preferred Stock and Series L Preferred
Stock, the "Preferred Stock"), the Series L Preferred Stock and Series N
Preferred Stock being represented by depositary shares (the "Depositary
Shares") of the Company, with each Depositary Share representing ownership of
1/4 of a share of Series L Preferred Stock or 1/4 of a share of Series N
Preferred Stock, as the case may be, and the conversion or redemption of the
Series L Preferred Stock and the Series N Preferred Stock being described in
this Prospectus in terms of the conversion or redemption of the Depositary
Shares, or (2) pursuant to the standby arrangements described herein. The
transfer, sale or purchase of depositary receipts evidencing the Depositary
Shares is referred to herein as the transfer, sale or purchase of Depositary
Shares.
The Company has called for redemption on April 10, 1998 (the "Redemption
Date") (1) all Series K Preferred Stock at a redemption price of $50 per share,
plus accrued and unpaid dividends of $.64688 per share, for a total redemption
price of $50.64688 per share, and (2) all Depositary Shares representing Series
L Preferred Stock and Series N Preferred Stock, each at a redemption price of
$50 per share, plus accrued and unpaid dividends of $.09722 per share, for a
total redemption price of $50.09722 per share. No dividends will accrue on the
Preferred Stock or the Depositary Shares from and after the Redemption Date.
Prior to 5:00 p.m. New York City time (the "Close of Business") on the
Redemption Date, at the option of the holder, shares of Series K Preferred
Stock may be converted into shares of Common Stock at the rate of 1.3376 shares
of Common Stock for each share of Series K Preferred Stock and Depositary
Shares may be converted into shares of Common Stock at the rate of 1.3626
shares of Common Stock for each Depositary Share. Cash will be paid in lieu of
any fractional shares of Common Stock. After the Redemption Date, the Preferred
Stock and Depositary Shares will no longer be deemed to be outstanding and all
rights of the holders of the Preferred Stock and Depositary Shares will cease,
except the right to receive the applicable redemption price, without interest,
upon surrender of the Preferred Stock or Depositary Shares, as the case may be.
The Common Stock is traded on the New York Stock Exchange ("NYSE") under
the symbol "FJ." On March 9, 1998, the reported closing price of the Common
Stock on the NYSE Composite Tape was $45.56 per share. A holder of Series K
Preferred Stock who converted such Preferred Stock on that date would have
received Common Stock having a market value, based on such price on that date,
of approximately $60.94 for each share of Preferred Stock converted, and a
holder of Depositary Shares who converted such Depositary Shares on that date
would have received Common Stock having a market value, based on such price on
that date, of approximately $62.08 for each Depositary Share converted (in each
case, including cash, if any, received in lieu of fractional shares). If such
Series K Preferred Stock were surrendered for redemption on the Redemption
Date, such holder would receive $50.64688 in cash for each share of Preferred
Stock and if such Depositary Shares were surrendered for redemption on the
Redemption Date, such holder would receive $50.09722 in cash for each
Depositary Share.
AS LONG AS THE MARKET PRICE OF THE COMMON STOCK REMAINS AT OR ABOVE $37.86
PER SHARE, THE HOLDERS OF SERIES K PREFERRED STOCK WHO ELECT TO CONVERT WILL
RECEIVE, UPON CONVERSION, COMMON STOCK (INCLUDING CASH, IF ANY, RECEIVED IN
LIEU OF FRACTIONAL SHARES) HAVING A GREATER MARKET VALUE THAN THE AMOUNT OF
CASH RECEIVABLE UPON REDEMPTION. AS LONG AS THE MARKET PRICE OF THE COMMON
STOCK REMAINS AT OR ABOVE $36.77 PER SHARE, THE HOLDERS OF DEPOSITARY SHARES
WHO ELECT TO CONVERT WILL RECEIVE, UPON CONVERSION, COMMON STOCK (INCLUDING
CASH, IF ANY, RECEIVED IN LIEU OF FRACTIONAL SHARES) HAVING A GREATER MARKET
VALUE THAN THE AMOUNT OF CASH RECEIVABLE UPON REDEMPTION. IT SHOULD BE NOTED,
HOWEVER, THAT THE PRICE OF THE COMMON STOCK RECEIVED UPON CONVERSION WILL
FLUCTUATE IN THE MARKET. NO ASSURANCE CAN BE GIVEN AS TO THE PRICE OF THE
COMMON STOCK AT ANY FUTURE TIME, AND THE HOLDERS SHOULD EXPECT TO INCUR VARIOUS
EXPENSES OF SALE IF SUCH COMMON STOCK IS SOLD.
The conversion right expires at the Close of Business on the Redemption
Date, time being of the essence. From and after that date and time, holders of
Preferred Stock and holders of Depositary Shares will be entitled only to the
applicable redemption price, without interest.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
(Cover continued on next page)
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Salomon Smith Barney
March 10, 1998
<PAGE>
(Continued from previous page)
The Company has declared a dividend on its Common Stock of $.15 per share,
payable to its stockholders of record on March 17, 1998. Holders of Preferred
Stock or Depositary Shares who convert prior to the Close of Business on that
date will receive Common Stock entitled to that dividend.
In the event of conversion, no payment or adjustment in respect of accrued
and unpaid dividends on the Preferred Stock or the Depositary Shares will be
made. However, if conversion occurs on or after the payment date for a dividend
with respect to the Preferred Stock or the Depositary Shares, the holder of
record as of the record date will receive the dividend. The record date for the
next dividend on the Series K Preferred Stock is April 17, 1998, with a payment
date of May 1, 1998, which is after the Redemption Date. The record date for
the next dividend on the Depositary Shares is March 18, 1998, with a payment
date of April 1, 1998. See "Alternatives Available to Holders of Preferred
Stock or Depositary Shares."
The Company has entered into a standby purchase agreement with the
Purchaser pursuant to which the Purchaser has agreed, subject to certain
conditions, to purchase from the Company such number of shares of Common Stock
as would have been issuable upon the conversion of any shares of Preferred Stock
or Depositary Shares which have not been duly surrendered for conversion by the
Close of Business on the Redemption Date. The Purchaser may also acquire shares
of Preferred Stock or Depositary Shares in the open market or otherwise prior to
the Close of Business on the Redemption Date. The Purchaser has agreed to
convert into Common Stock all shares of Preferred Stock and all Depositary
Shares owned by it or so acquired. See "Standby Arrangements" for a description
of the Purchaser's compensation and indemnification arrangements with the
Company.
---------------
Prior to and after the Redemption Date, the Purchaser may offer shares of
Common Stock, including shares of Common Stock acquired pursuant to the standby
arrangements or upon the conversion of shares of Preferred Stock or Depositary
Shares, directly to the public at prices set from time to time by the
Purchaser. The Purchaser may also make sales to dealers at prices which
represent a concession from the prices at which such shares of Common Stock are
then being offered to the public. In effecting such transactions, the Purchaser
may realize profits or losses independent of the compensation described under
"Standby Arrangements."Any shares of Common Stock will be offered by the
Purchaser when, as and if accepted by the Purchaser and subject to the
Purchaser's right to reject orders in whole or in part.
---------------
IN CONNECTION WITH THIS OFFERING, THE PURCHASER MAY PURCHASE SHARES OF THE
PREFERRED STOCK OR THE DEPOSITARY SHARES, WHICH MAY MAINTAIN OR OTHERWISE
AFFECT THE PRICE OF THE COMMON STOCK. SEE "STANDBY ARRANGEMENTS."
<PAGE>
AVAILABLE INFORMATION
Fort James is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements, and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy and information statements, and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and New York Regional Office, 7 World Trade Center, Suite 1300,
New York, New York 10048. Copies of such material can also be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such information may also be
accessed electronically by means of the Commission's website on the Internet
(http://www.sec.gov). The Common Stock is listed on the NYSE and such reports,
proxy and information statements, and other information concerning the Company
can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
This Prospectus does not contain all the information set forth in the
registration statement to which this Prospectus relates (the "Registration
Statement") and the exhibits thereto which the Company has filed with the
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are hereby incorporated
by reference into this Prospectus:
(a) the Annual Report of the Company on Form 10-K for the fiscal year
ended December 29, 1996;
(b) the Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 30, 1997, June 29, 1997 and September 28, 1997;
(c) the Current Reports of the Company on Form 8-K dated May 4, 1997 (two
reports), June 29, 1997, July 2, 1997, August 7, 1997, August 8, 1997, August
12, 1997, August 13, 1997 (four reports), September 15, 1997, October 23, 1997,
February 3, 1998, March 2, 1998 and March 9, 1998; and
(d) the description of the Rights to Purchase Series M Cumulative
Participating Preferred Stock included in the Company's Registration Statement
on Form 8-A dated March 3, 1989, as amended by Amendment No. 1 to Application
or Report on Form 8 dated July 28, 1992.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14,
or 15(d) of the Exchange Act subsequent to the date of the Registration
Statement on Form S-3 of which this Prospectus is a part and prior to the
effectiveness thereof or subsequent to the date of the final prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained herein or
in a document all or any portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus. As used herein, the
terms "Prospectus" and "herein" mean this Prospectus, including the documents
incorporated by reference, as the same may be amended, supplemented, or
otherwise modified from time to time. Statements contained in this Prospectus
as to the contents of any contract or other document referred to herein do not
purport to be complete and are qualified in all respects by reference to all of
the provisions of such contract or other document.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents which are not specifically incorporated by reference in such
documents. Requests for such copies should be directed to Celeste Gunter, Vice
President, Investor Relations, Fort James Corporation, 120 Tredegar Street,
Richmond, Virginia 23219 (telephone (804) 649-4307 or (888) 649-4362).
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized. This Prospectus does not constitute
an offer to sell or the solicitation of an offer to buy any securities other
than the Common Stock or any offer to sell or the solicitation of an
3
<PAGE>
offer to buy such Common Stock in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus nor any sale
thereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof or
thereof or that the information contained herein or therein is correct as of
any time subsequent to its date.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference herein contain
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. These statements are based on
management's beliefs and assumptions, relying on information currently
available to management, and are subject to risks and uncertainties.
Forward-looking statements include the information concerning possible or
assumed future results of operations of the Company set forth (1) under "The
Company" and "Fort James and Consolidated Subsidiaries Summary Historical
Consolidated Financial and Other Data" herein, (2) under "Business" and
"Management's Discussion and Analysis" in the Company's Annual Report on Form
10-K and in each Quarterly Report on Form 10-Q, and in certain Current Reports
on Form 8-K and under "The Company," "Recent Developments" and "Risk Factors"
in certain Current Reports on Form 8-K, incorporated by reference herein and
(3) in this Prospectus and the documents incorporated by reference herein
preceded by, followed by or that include the words "believes," "expects,"
"anticipates," "intends," "plans," "estimates" or similar expressions.
Forward-looking statements are not guarantees of performance as they
involve risks, uncertainties and assumptions. The future results of the Company
may differ materially from those expressed in these forward-looking statements.
Many of the factors that will determine these results are beyond the Company's
ability to control or predict. Purchasers of Common Stock are cautioned not to
put undue reliance on any forward-looking statements. The Company claims the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Purchasers of Common Stock should understand that certain risks and
uncertainties, in addition to those discussed herein and elsewhere in the
documents which are incorporated by reference herein, could affect the future
results of the Company and could cause results to differ materially from those
expressed in such forward-looking statements. Such risks and uncertainties
include, but are not limited to, general business and economic conditions;
competitive pricing pressures for the Company's products; changes in raw
material, energy and other costs; opportunities that may be presented to and
pursued by the Company; determinations by regulatory and governmental
authorities; the ability to successfully integrate the businesses of the former
James River Corporation of Virginia ("James River") and the former Fort Howard
Corporation ("Fort Howard"); and the ability to achieve synergistic and other
cost reductions and efficiencies.
4
<PAGE>
THE COMPANY
Fort James is a preeminent worldwide manufacturer and marketer of
paper-based consumer products, including towel and tissue products as well as
disposable tabletop and foodservice products. The Company's principal towel and
tissue products include bathroom tissue, paper towels, table napkins, boxed
facial tissue and wipers. Disposable tabletop and foodservice products include
paper and plastic cups, paper plates and plastic cutlery. Fort James also
produces and markets paper-based packaging for food and pharmaceuticals and
communications papers.
Fort James is the result of the merger of a wholly owned subsidiary of
James River into Fort Howard in August 1997 (the "Merger"). In connection with
the Merger, James River was renamed "Fort James Corporation."
Fort James' principal U.S. retail tissue brands include QUILTED NORTHERN
bathroom tissue, BRAWNY paper towels, MARDI GRAS printed napkins and paper
towels, VANITY FAIR premium dinner napkins, NORTHERN paper napkins, SOFT'N
GENTLE bath and facial tissue, SO-DRI paper towels and GREEN FOREST recycled
tissue products. The Company's principal retail tabletop brand is its DIXIE
brand of disposable cups and plates. Fort James also believes it is the leading
supplier of private label tissue products and the leading supplier of both
tissue and disposable tabletop products to the growing warehouse club channel.
The U.S. away-from-home channel, where the Company sells its products to
food service, janitorial supply and sanitary paper distributors for use in
restaurants, offices, factories, hospitals, schools and hotels, is also an
important distribution channel for the Company. The Company is a leading
producer of tissue products for the U.S. away-from-home channel and is also one
of the largest producers of disposable cups, plates and related products for
the away-from-home foodservice industry.
In Europe, sales into retail channels are supported by both branded and
private label product offerings. European branded products include LOTUS
bathroom tissue and VANIA feminine hygiene products, sold primarily in France,
COLHOGAR bathroom tissue, sold in Spain, TENDERLY bathroom tissue, sold in
Italy and KITTENSOFT and INVERSOFT bathroom tissue, sold in the British Isles.
The Company believes that it is among the lowest-cost producers of tissue
products in North America. The Company believes its cost advantage in North
America is derived from a number of factors, including the size and scale of
certain of its manufacturing plants, the competitive state of its tissue-making
manufacturing assets and the benefits it realizes from the Fort Howard
proprietary deinking technology.
Fort James' near-term business initiatives are focused in three primary
areas: leveraging revenue growth opportunities, pursuing aggressive cost
reduction and achieving financing cost savings through both refinancing
activities and debt reduction.
For certain recent information concerning the Company, see the Current
Report of the Company on Form 8-K dated March 2, 1998. See "Incorporation of
Certain Documents by Reference" and "Available Information."
The Company's principal executive offices are currently located at 75
Tri-State International Office Center, Suites 100 and 175, Lincolnshire,
Illinois 60069, telephone (847) 317-5000. In the spring of 1998, the Company's
principal executive offices will be located at 1650 Lake Cook Road, Deerfield,
Illinois 60015-4753.
USE OF PROCEEDS
The net proceeds, if any, received by the Company from the sale of Common
Stock to the Purchaser pursuant to the standby arrangements described under
"Standby Arrangements" will be used to fund the redemption of any Preferred
Stock and Depositary Shares not surrendered for conversion. Any other amounts
received by the Company from the Purchaser pursuant to the standby arrangements
will be used for general corporate purposes. The amount of the proceeds to be
received by the Company from the Purchaser is not determinable at this time,
because neither the number of shares, if any, that will be sold to the
Purchaser nor the amount of profit, if any, that the Purchaser may realize upon
resale of such shares can be determined at this time. The Company will not
receive any cash proceeds from the issuance of Common Stock upon conversion of
the Preferred Stock or the Depositary Shares.
5
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization
of Fort James as of December 28, 1997 and as adjusted to give effect to the
assumed conversion of all of the outstanding Preferred Stock and Depositary
Shares and the issuance of 9,562,554 shares of Common Stock, net of certain
expenses associated therewith.
<TABLE>
<CAPTION>
December 28, 1997
-----------------------------
Actual As Adjusted(1)
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(in millions)
<S> <C> <C>
CURRENT MATURITIES OF LONG-TERM DEBT:
Total current maturities of long-term debt .................................... $ 34.4 $ 34.4
LONG-TERM DEBT:
New Bank Credit Facility ...................................................... 1,312.0 1,312.0
Revolving credit facilities ................................................... 452.6 452.6
Senior Notes .................................................................. 718.3 718.3
Fort James notes and debentures ............................................... 1,230.7 1,230.7
Fort Howard Notes ............................................................. 188.2 188.2
Revenue bonds ................................................................. 107.7 107.7
Capital lease obligations ..................................................... 180.4 180.4
---------- ----------
Total debt .................................................................. 4,189.9 4,189.9
Less current maturities of long-term debt ................................... 34.4 34.4
---------- ----------
Total long-term debt, net of current maturities ............................ 4,155.5 4,155.5
---------- ----------
MINORITY INTERESTS ............................................................. 10.4 10.4
SHAREHOLDERS' EQUITY:
Preferred stock:
Series K ...................................................................... 100.0 0.0
Series L ...................................................................... 199.9 0.0
Series N ...................................................................... 52.8 0.0
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Total preferred stock ...................................................... 352.7 0.0
Common stock -- $.10 par value--209.3 million shares issued and outstanding..... 20.9 21.9
Additional paid-in capital ..................................................... 2,807.9 3,159.0
Retained deficit ............................................................... (2,597.2) (2,597.2)
---------- ----------
Total shareholders' equity ................................................. 584.3 583.7
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Total capitalization ...................................................... $ 4,784.6 $ 4,784.0
========== ==========
</TABLE>
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(1) To the extent that shares of Preferred Stock or Depositary Shares are not
converted into shares of Common Stock, the Company may incur additional
expenses, including underwriting fees. See "Standby Arrangements."
The retirement of the Preferred Stock and the Depositary Shares through
conversion into Common Stock or redemption will result in a reduction in the
Company's annual preferred stock dividend requirements of approximately $24.4
million (without giving effect to any dividends payable on any Common Stock
issued upon conversion of the Preferred Stock or the Depositary Shares).
6
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Common Stock is listed on the NYSE under the symbol "FJ." The
following table sets forth, for the periods indicated, which correspond to the
Company's quarterly fiscal periods for financial reporting purposes, the high
and low reported sale prices per share of the Common Stock on the NYSE
Composite Transactions Tape (the "NYSE Composite Tape") and cash dividends paid
per share of Common Stock.
<TABLE>
<CAPTION>
Market Price Dividends
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Period High Low
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<S> <C> <C> <C>
1995
First Quarter .................................. $25 5/8 $20 $.15
Second Quarter ................................. 28 5/8 23 1/4 .15
Third Quarter .................................. 37 3/8 25 3/8 .15
Fourth Quarter ................................. 33 3/4 22 1/4 .15
1996
First Quarter .................................. 28 1/8 22 3/8 .15
Second Quarter ................................. 27 3/8 24 3/4 .15
Third Quarter .................................. 27 1/4 24 5/8 .15
Fourth Quarter ................................. 34 1/4 27 5/8 .15
1997
First Quarter .................................. 36 1/4 29 1/4 .15
Second Quarter ................................. 38 7/8 27 1/4 .15
Third Quarter .................................. 45 1/16 36 5/8 .15
Fourth Quarter ................................. 47 1/8 36 1/16 .15
1998
First Quarter (through March 9, 1998). ......... 46 1/8 34 .15
</TABLE>
On March 9, 1998, the reported last sales price of the Common Stock on the
NYSE Composite Tape was 45 9/16 per share. Prospective purchasers of shares of
Common Stock are urged to obtain current quotations for the market price of the
Common Stock.
The Company currently pays regular quarterly cash dividends and, while
future dividends will be subject to the discretion of the Company's Board of
Directors, the Board of Directors currently intends to continue this policy.
Future dividends will depend on the Company's results of operations, financial
condition, capital expenditure program, debt repayment requirements and other
factors, some of which are beyond the Company's control. There can be no
assurance as to whether or when the Company's Board of Directors will change
the current policy regarding dividends.
7
<PAGE>
FORT JAMES AND CONSOLIDATED SUBSIDIARIES
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA
The following sets forth summary historical consolidated financial and
other data for Fort James for the dates and periods indicated. The summary
historical consolidated balance sheet data as of December 28, 1997 and December
29, 1996, and the historical statements of operations data, per share data and
other data for each of the three years in the period ended December 28, 1997,
have been derived from, and should be read in conjunction with, the Company's
audited consolidated financial statements included in its Current Report on
Form 8-K dated March 9, 1998, incorporated by reference herein. The summary
balance sheet data as of December 31, 1995 has been derived from, and should be
read in conjunction with, the Company's audited consolidated financial
statements included in the Company's Current Report on Form 8-K dated August
13, 1997 (filed February 3, 1998), incorporated by reference herein.
The consolidated financial statements give retroactive effect to the
Merger in a transaction accounted for as a pooling of interests. The pooling of
interests method of accounting requires the restatement of all periods
presented as if Fort Howard and James River had always been combined. All fees
and transaction expenses related to the Merger and the restructuring of the
combined companies have been expensed as required under the pooling of
interests accounting method.
The following summary historical and unaudited consolidated financial and
other data should be read in conjunction with the consolidated financial
statements of Fort James included in the Current Reports on Form 8-K dated
March 9, 1998 and August 13, 1997 (filed February 3, 1998). See "Incorporation
of Certain Documents by Reference" and "Available Information."
8
<PAGE>
Summary Historical Consolidated Financial and Other Data
(in millions, except per share data and ratios)
<TABLE>
<CAPTION>
Fiscal Year
---------------------------------------------------------
1995(a) 1996(b) 1997
------------------ ------------------------ -------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales ....................................................... $ 8,887.9 $ 7,707.1 $ 7,259.0
Restructure and other unusual items (income) expense(c) ......... 51.9 10.7 454.2
Income from operations .......................................... 783.4 909.3 602.7
Interest expense ................................................ 536.3 424.4 351.8
Income (loss) before extraordinary item ......................... 159.9 328.0(d) 104.5
Net income (loss)(e) ............................................ 141.1 319.9 (27.0)
Preferred dividend requirements ................................. 58.5 58.5 30.5
Weighted average number of common shares and common
share equivalents ............................................. 164.1 183.1 207.6
PER SHARE DATA:
Income (loss) before extraordinary item(c) ...................... $ .62(f) $ 1.47(d)(f) $ .35
Net income (loss)(e) ............................................ .50(f) 1.43(f) (.28)
Cash dividends .................................................. .60 .60 .60
BALANCE SHEET DATA:
Total assets .................................................... $ 8,911.3 $ 8,156.9 $ 7,733.2
Long-term debt .................................................. 5,406.3(f) 4,305.3(f) 4,155.5
Preferred stock ................................................. 740.3 738.4 352.7
Common shareholders' equity (deficit) ........................... (324.5)(f) 113.1(f) 231.6
OTHER DATA:
EBITDA(g) ....................................................... $ 1,462.6 $ 1,459.7 $ 1,571.8
Capital spending ................................................ 488.5 499.5 505.9
Depreciation and amortization ................................... 586.7 525.6 497.3
Ratio of earnings to fixed charges .............................. 1.45x 2.06x 1.64x
Ratio of EBITDA to interest expense ............................. 2.73x 3.44x 4.47x
</TABLE>
- ---------
(a) In August 1995, Fort James completed the spin-off of Crown Vantage which
had annual net sales of approximately $1 billion.
(b) In August 1996, Fort James completed the sale of its Flexible Packaging and
related Inks divisions which had annual net sales of approximately $500
million.
(c) The after-tax impact of the restructure and other unusual items was $32.1
million, or $.20 per diluted share in 1995; $12.9 million, or $.07 per
diluted share in 1996; and $335.0 million, or $1.62 per diluted share in
1997.
(d) Includes a credit of $36 million (or $.19 per diluted share) for the
reversal of previously accrued income taxes related to 1988 financing
transactions.
(e) Includes after tax extraordinary losses related to the early retirement of
debt.
(f) In 1995 and 1996, the Company issued 34.7 million and 14.5 million shares
of Common Stock, respectively. Net proceeds of the offerings of $284
million in 1995 and $204 million in 1996 were used to reduce debt.
(g) EBITDA is defined as income from operations before restructure and other
unusual items, depreciation and amortization, and including other income
and minority interests. Fort James believes that EBITDA is a measure
commonly used by analysts and investors. Accordingly, this information has
been disclosed herein to permit a more complete analysis of operating
performance. EBITDA should not be considered in isolation or as a
substitute for net income or other consolidated statement of operations or
cash flow data prepared in accordance with generally accepted accounting
principles as a measure of profitability or liquidity. EBITDA does not
take into account debt service requirements and other commitments and,
accordingly, is not necessarily indicative of amounts that may be
available for discretionary uses.
9
<PAGE>
REDEMPTION OF THE PREFERRED STOCK
AND EXPIRATION OF CONVERSION PRIVILEGES
The Company has called for redemption, on the Redemption Date (April 10,
1998), unless previously converted into Common Stock, all of the outstanding
Preferred Stock and Depositary Shares pursuant to the terms of the Company's
Articles of Incorporation, as amended (the "Articles"). As a result of the call
for redemption, upon redemption, holders of Series K Preferred Stock are
entitled to receive from the Company the sum of $50 per share, plus accrued and
unpaid dividends of $.64688 per share to and including the Redemption Date, for
a total Redemption Price of $50.64688 per share (the "Series K Redemption
Price"), and holders of Depositary Shares are entitled to receive from the
Company the sum of $50 per share, plus accrued and unpaid dividends of $.09722
per share to and including the Redemption Date, for a total Redemption Price of
$50.09722 per share (the "Series L/N Redemption Price" and each of the Series K
Redemption Price and the Series L/N Redemption Price, a "Redemption Price"), in
each case, unless such shares of Preferred Stock or Depositary Shares, as the
case may be, are previously converted into Common Stock. Prior to the Close of
Business on the Redemption Date, at the option of the holder, shares of Series
K Preferred Stock may be converted into shares of Common Stock at the rate of
1.3376 shares of Common Stock for each share of Series K Preferred Stock, and
Depositary Shares may be converted into shares of Common Stock at the rate of
1.3626 shares of Common Stock for each Depositary Share. After the Redemption
Date, the Preferred Stock and Depositary Shares will no longer be deemed to be
outstanding and all rights of the holders of the Preferred Stock and Depositary
Shares will cease, except the right to receive the applicable Redemption Price,
without interest, upon surrender of the Preferred Stock or Depositary Shares,
as the case may be.
ALTERNATIVES AVAILABLE TO HOLDERS OF
PREFERRED STOCK OR DEPOSITARY SHARES
Holders of Preferred Stock or Depositary Shares have the following
alternatives:
1. Conversion of Preferred Stock or Depositary Shares into Common Stock.
Prior to the Close of Business on the Redemption Date, at the option of the
holder, Series K Preferred Stock may be converted into shares of the Company's
Common Stock, at the rate of 1.3376 shares of Common Stock for each share of
Preferred Stock, and Depositary Shares may be converted into shares of the
Company's Common Stock, at the rate of 1.3626 shares of Common Stock for each
Depositary Share. Holders of Preferred Stock or Depositary Shares who elect to
convert their Preferred Stock or Depositary Shares, as the case may be, will
not be entitled to receive accrued dividends on their Preferred Stock or
Depositary Shares. Preferred Stock or Depositary Shares surrendered for
conversion prior to the Close of Business on the Redemption Date will not be
redeemed as described above. Holders of Preferred Stock or Depositary Shares
are referred to the Notice of Redemption issued by the Company for information
concerning how and where the Preferred Stock or Depositary Shares, as the case
may be, are to be surrendered for conversion.
THE RIGHT TO CONVERT PREFERRED STOCK OR DEPOSITARY SHARES INTO COMMON
STOCK EXPIRES AT THE CLOSE OF BUSINESS ON THE REDEMPTION DATE, TIME BEING OF
THE ESSENCE. FROM AND AFTER THAT DATE AND TIME, HOLDERS OF PREFERRED STOCK AND
HOLDERS OF DEPOSITARY SHARES WILL BE ENTITLED ONLY TO THE APPLICABLE REDEMPTION
PRICE, WITHOUT INTEREST.
The Common Stock is traded on the NYSE under the symbol "FJ." On March 9,
1998, the reported closing price of the Common Stock on the NYSE Composite Tape
was $45.56 per share. A holder of Series K Preferred Stock who converted such
Preferred Stock on that date would have received Common Stock having a market
value, based on such price on that date, of approximately $60.94 for each share
of Preferred Stock converted, and a holder of Depositary Shares who converted
such Depositary Shares on that date would have received Common Stock having a
market value, based on such price on that date, of approximately $62.08 for
each Depositary Share converted (in each case, including cash, if any, received
in lieu of fractional shares). If such Series K Preferred Stock were
surrendered for redemption on the Redemption Date, such holder would receive
$50.64688 in cash for each share of Preferred Stock and if such Depositary
Shares were surrendered for redemption on the Redemption Date, such holder
would receive $50.09722 in cash for each Depositary Share.
AS LONG AS THE MARKET PRICE OF THE COMMON STOCK REMAINS AT OR ABOVE $37.86
PER SHARE, THE HOLDERS OF SERIES K PREFERRED STOCK WHO ELECT TO CONVERT WILL
RECEIVE, UPON CONVERSION, COMMON STOCK (INCLUDING CASH, IF ANY, RECEIVED IN
LIEU OF FRACTIONAL SHARES) HAVING A GREATER MARKET VALUE THAN THE AMOUNT OF
CASH RECEIVABLE UPON REDEMPTION. AS LONG AS THE MARKET PRICE OF THE COMMON
STOCK REMAINS AT OR ABOVE $36.77 PER SHARE, THE HOLDERS OF DEPOSITARY SHARES
WHO ELECT TO CONVERT WILL
10
<PAGE>
RECEIVE, UPON CONVERSION, COMMON STOCK (INCLUDING CASH, IF ANY, RECEIVED IN
LIEU OF FRACTIONAL SHARES) HAVING A GREATER MARKET VALUE THAN THE AMOUNT OF
CASH RECEIVABLE UPON REDEMPTION. IT SHOULD BE NOTED, HOWEVER, THAT THE PRICE OF
THE COMMON STOCK RECEIVED UPON CONVERSION WILL FLUCTUATE IN THE MARKET. NO
ASSURANCE CAN BE GIVEN AS TO THE PRICE OF THE COMMON STOCK AT ANY FUTURE TIME,
AND THE HOLDERS SHOULD EXPECT TO INCUR VARIOUS EXPENSES OF SALE IF SUCH COMMON
STOCK IS SOLD.
In the event of conversion, no payment or adjustment in respect of accrued
and unpaid dividends on the Series K Preferred Stock or the Depositary Shares,
or in respect of any dividends on the Common Stock issued upon conversion, will
be made. Holders of Series K Preferred Stock and Depositary Shares should,
however, take into account the effect of conversion on the receipt of dividends
with respect to the Series K Preferred Stock or Depositary Shares converted and
the shares of Common Stock received on conversion, as follows:
Series K Preferred Stock
Dividends on Series K Preferred Stock. The record date for the next
dividend on the Series K Preferred Stock is April 17, 1998, with a payment date
of May 1, 1998. Holders will not receive such dividend regardless of when their
shares are converted.
Dividends on Common Stock Issuable on Conversion of Series K Preferred
Stock. The Company has declared a dividend on its Common Stock of $.15 per
share, payable to holders of record of Common Stock on March 17, 1998. Holders
of Series K Preferred Stock who convert prior to the Close of Business on that
date will receive Common Stock entitled to that dividend.
Depositary Shares
Dividends on Depositary Shares. If a holder of record of Depositary Shares
as of a dividend record date for the Depositary Shares converts on or after the
payment date for a dividend on the Depositary Shares, such holder will receive
the dividend. The record date for the next dividend on the Depositary Shares is
March 18, 1998, with a payment date of April 1, 1998.
Dividends on Common Stock Issuable on Conversion of Depositary Shares. The
Company has declared a dividend on its Common Stock of $.15 per share, payable
to holders of record of Common Stock as of March 17, 1998. Holders of
Depositary Shares who convert prior to the Close of Business on that date will
receive Common Stock entitled to that dividend.
Thus, holders of Depositary Shares who convert their shares prior to the
Redemption Date will receive (1) a dividend of $.15 per share of Common Stock
received on conversion (i.e., $.20439 per Depositary Share so converted) if
such conversion occurs prior to the Close of Business on March 17, 1998 or (2)
a dividend of $.875 per Depositary Share if such Depositary Shares are held of
record as of March 18, 1998, and converted on or after the April 1, 1998
payment date, but prior to the Close of Business on the Redemption Date.
Holders of Depositary Shares who convert after March 18, 1998 but before April
1, 1998 will not receive either dividend.
2. Redemption of Preferred Stock or Depositary Shares. Any shares of
Preferred Stock or Depositary Shares which have not been converted into Common
Stock on or prior to the Close of Business on the Redemption Date will be
redeemed for the applicable Redemption Price. From and after the Redemption
Date, dividends on the Preferred Stock and Depositary Shares will cease to
accrue and holders of Preferred Stock or Depositary Shares will not have any
rights as such holders other than the right to receive the applicable
Redemption Price without interest, upon surrender of their Preferred Stock or
Depositary Shares, as the case may be. Physical certificates for Preferred
Stock or Depositary Shares to be surrendered for redemption must be delivered
in accordance with the procedures in the Letter of Transmittal, in order to
receive payment of the applicable Redemption Price.
3. Sale of Preferred Stock or Depositary Shares Through Ordinary Brokerage
Transactions. Preferred Stock and Depositary Shares may be sold through open
market brokerage transactions, and if made sufficiently in advance of the
Redemption Date, buyers thereof may convert such Preferred Stock or Depositary
Shares into Common Stock in the manner described above. Holders of Preferred
Stock or Depositary Shares who wish to make such sales should consult with
their own brokers concerning if and when their Preferred Stock or Depositary
Shares should be sold and the consequences thereof. Holders of Preferred Stock
or Depositary Shares may incur fees and expenses in connection with such sales.
11
<PAGE>
The alternatives available to the holders of Series K Preferred Stock are
illustrated, in tabular form, below, based upon the Series K Redemption Price
of $50.64688. Reference is made to "Certain Federal Income Tax Considerations."
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Alternative with Respect Assumptions with Respect to Consideration Value/Received With
to 100 Shares of Preferred Stock 100 Shares of Preferred Stock Respect to 100 Shares of Preferred Stock
- ----------------------------------- ------------------------------------- -----------------------------------------
<S> <C> <C>
Convert Preferred Stock into Market price of Common Stock Common Stock (including cash in
Common Stock (1) greater than $37.86 lieu of any fractional share) having
($50.64688/1.3376) a market value greater than $5,065
Market price of Common Stock less Common Stock (including cash in
than $37.86 lieu of any fractional share) having
($50.64688/1.3376) a market value less than $5,065
- ------------------------------------------------------------------------------------------------------------------------
Redeem Preferred Stock All cases $5,065 (in cash)
- -----------------------------------------------------------------------------------------------------------------------
Sell Preferred Stock in the open All cases Market price on the date of sale,
market less commissions and other
expenses
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
The alternatives available to the holders of Depositary Shares are
illustrated, in tabular form, below, based upon the Series L/N Redemption Price
of $50.09722. Reference is made to "Certain Federal Income Tax Considerations."
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Alternative with Respect Assumptions with Respect Consideration Value/Received With
to 100 Depositary Shares to 100 Depositary Shares Respect to 100 Depositary Shares
- ------------------------------------- ------------------------------------- -------------------------------------
<S> <C> <C>
Convert Depositary Shares into Market price of Common Stock Common Stock (including cash in
Common Stock (1) (2) greater than $36.77 lieu of any fractional share) having
($50.09722/1.3626) a market value greater than $5,010
Market price of Common Stock less Common Stock (including cash in
than $36.77 lieu of any fractional share) having
($50.09722/1.3626) a market value less than $5,010
- -----------------------------------------------------------------------------------------------------------------------
Redeem Depositary Shares All cases $5,010 (in cash)
- -----------------------------------------------------------------------------------------------------------------------
Sell Depositary Shares in the open All cases Market price on the date of sale,
market less commissions and other
expenses
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------
(1) If such conversion occurs prior to the Close of Business on March 17, 1998,
the holder would also be entitled to receive a dividend of $.15 per share
of Common Stock received.
(2) If such conversion occurs on or after April 1, 1998 but prior to the Close
of Business on the Redemption Date, a holder of record as of March 18,
1998 would also be entitled to receive a dividend of $.875 per Depositary
Share. Holders of Depositary Shares who convert after March 18, 1998 but
before April 1, 1998 will not receive either the dividend on the Common
Stock or on the Depositary Shares.
12
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summarizes the principal federal income tax considerations,
under current law, relevant to the conversion of shares of Preferred Stock or
Depositary Shares into Common Stock and to the sale or redemption of shares of
Preferred Stock or Depositary Shares. It does not address all potentially
relevant federal income tax matters, including consequences to persons (such as
foreign persons, banks, life insurance companies, dealers in securities, and
tax-exempt organizations) subject to special provisions of federal income tax
law. The following discussion assumes that the shares of Preferred Stock or the
Depositary Shares are held as capital assets at the time of conversion, sale or
redemption. The following summary is for general information only, and holders
of Preferred Stock and holders of Depositary Shares should consult their own
tax advisors about the federal, state, local, and foreign tax consequences of
the conversion, sale or redemption of shares of Preferred Stock or Depositary
Shares
Conversion into Common Stock. Under current United States federal income
tax law, no taxable gain or loss will be recognized by any holder of Preferred
Stock or Depositary Shares on the conversion of such shares into Common Stock,
except with respect to any cash received in exchange for a fractional interest
in Common Stock. Holders receiving cash in lieu of fractional shares will be
treated as if such fractional shares had been redeemed by the Company for cash.
Unless such redemption is found to be essentially equivalent to a dividend as
discussed below, the holder will recognize gain or loss measured by the
difference between the holder's basis in the fractional share surrendered and
the amount of cash received. The tax basis for the shares of Common Stock
received upon conversion will be equal to the adjusted tax basis of the shares
of Preferred Stock or Depositary Shares converted, reduced by the portion of
such basis allocable to any fractional interest exchanged for cash. The holding
period of the shares of Common Stock received upon conversion will include the
holding period of the shares of Preferred Stock or Depositary Shares converted,
provided such Preferred Stock or Depositary Shares were held as a capital asset
at the time of conversion.
Redemption. Taxable income or loss will be recognized by any holder whose
shares of Preferred Stock or Depositary Shares are redeemed by the Company for
a cash payment. Generally, the redemption of all of a holder's Preferred Stock
or Depositary Shares for cash will result in capital gain or loss equal to the
difference between the amount of cash received (except for the portion of cash
received which is attributable to declared but unpaid dividends, which will be
taxable as dividend income to the extent of current or accumulated earnings and
profits, if any) and the shareholder's tax basis in the Preferred Stock or
Depositary Shares redeemed. Such gain or loss will be long-term capital gain or
loss if the holding period for the Preferred Stock or Depositary Shares exceeds
one year. In the case of an individual holder of Preferred Stock or Depositary
Shares, any such capital gain will be subject to tax at a maximum rate of 28%
if the holder's holding period in the Preferred Stock or Depositary Shares is
more than one year but not more than 18 months and at a maximum rate of 20% if
the holder's holding period in the Preferred Stock or Depositary Shares is more
than 18 months. Under certain circumstances involving a redemption by the
Company (such as where a holder's interest in the Company is not sufficiently
reduced), capital gain or loss treatment does not apply, and the entire amount
of the cash received upon redemption of the Preferred Stock or Depositary
Shares will be taxable as a dividend. However, if, as a result of a redemption
of the Preferred Stock or Depositary Shares, a holder completely terminates
such holder's interest in the Company or if the redemption is substantially
disproportionate as to such holder (taking into account shares deemed owned by
the holder by reason of certain constructive ownership rules), the redemption
proceeds will not be taxable as a dividend. Moreover, if, as a result of a
redemption of the Preferred Stock or Depositary Shares, a holder whose relative
stock interest in the Company is minimal and who exercises no control over the
Company's affairs experiences an actual reduction in such holder's
proportionate interest in the Company (taking into account the constructive
ownership rules mentioned above), then, based upon a published Internal Revenue
Service ruling, such holder should be exempt from dividend treatment because
such redemption should be treated as not essentially equivalent to a dividend.
Sale to Third Party. Upon a sale of Preferred Stock or Depositary Shares
for cash (other than a redemption as described above), a holder of Preferred
Stock or Depositary Shares will recognize capital gain or loss equal to the
difference between the amount of cash received and such holder's basis in the
Preferred Stock or Depositary Shares sold. Such gain or loss will be long-term
capital gain or loss if the holding period for the Preferred Stock or
Depositary Shares exceeds one year. In the case of an individual holder of
Preferred Stock or Depositary Shares, any such capital gain will be subject to
tax at a maximum rate of 28% if the holder's holding period in the Preferred
Stock or Depositary Shares is more than one year but not more than 18 months
and at a maximum rate of 20% in the holder's holding period in the Preferred
Stock or Depositary Shares is more than 18 months.
Backup Withholding. A holder of Preferred Stock, Depositary Shares or
Common Stock may be subject to backup withholding at the rate of 31% with
respect to dividends paid on, or the gross proceeds of a conversion, sale or
redemption of, Preferred Stock, Depositary Shares or Common Stock, as the case
may be, unless such holder (1) comes within certain exempt categories under the
applicable law and regulations and, when required, demonstrates this fact; or
(2) provides a
13
<PAGE>
taxpayer identification number (employer identification number or social
security number) and certifies that such number is correct, certifies as to no
loss of exemption from backup withholding, and otherwise complies with
applicable requirements of the backup withholding rules. Amounts paid as backup
withholding do not constitute as additional tax and will be credited against
the holder's federal income tax liability, provided that the required
information is furnished to the Internal Revenue Service.
The Company will report to the holders of Preferred Stock, Depositary
Shares or Common Stock, and to the Internal Revenue Service, the amount of any
"reportable payments" and any amount withheld with respect to the shares of
Preferred Stock, Depositary Shares and Common Stock during each calendar year.
DESCRIPTION OF CAPITAL STOCK
The following summary of certain provisions of the Company's Articles, the
Company's Bylaws (the "Bylaws") and the Rights Agreement (as defined below)
does not purport to be complete and is qualified in its entirety by reference
to such instruments, each of which is an exhibit to the Registration Statement
of which this Prospectus is a part.
Authorized Capital
The authorized capital stock of the Company consists of 500,000,000 shares
of Common Stock and 5,000,000 shares of preferred stock, par value $10 per
share. Each outstanding share of Common Stock currently has attached to it one
preferred share purchase right, as described under " -- Rights Plan."
As of March 6, 1998, there were 210,322,287 shares of Common Stock issued
and outstanding. The 1,999,695 shares of Series K Preferred Stock, the 999,675
shares of Series L Preferred Stock represented by 3,998,700 Depositary Shares
and the 264,042 shares of Series N Preferred Stock represented by 1,056,168
Depositary Shares, are the only shares of preferred stock currently
outstanding. The Company has also reserved for issuance 250,000 shares of
preferred stock for the issuance of shares of Series M preferred stock under
the Rights Agreement.
Common Stock
Subject to the prior rights of the holders of any Preferred Stock then
outstanding, holders of Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors out of funds legally available
therefor and, in the event of liquidation or dissolution, to receive the net
assets of the Company remaining after payment of all liabilities and after
payment to holders of all shares of Preferred Stock of the full preferential
amounts to which such holders are respectively entitled, in proportion to their
respective holdings.
Subject to the rights of the holders of any Preferred Stock then
outstanding, all voting rights are vested in the holders of the shares of
Common Stock, each share being entitled to one vote on all matters requiring
stockholder action and in the election of directors. Holders of Common Stock
have no preemptive, subscription or conversion rights. All of the outstanding
shares of Common Stock are fully paid and nonassessable.
Preferred Stock
The Board of Directors is authorized, without shareholder approval, to
issue the authorized and unissued shares of series preferred stock in one or
more series and, within certain limitations, to determine the relative rights,
preferences and limitations of any such class or series, including voting
rights, preference as to dividends and in liquidation, conversion and
redemption and other rights of each such series.
Rights Plan
Fort James has adopted the Amended and Restated Rights Agreement, dated as
of May 12, 1992, as amended, between the Company and NationsBank of Virginia,
N.A., as Rights Agent (the "Rights Agreement"). Norwest Bank Minnesota, N.A.
became successor Rights Agent as of January 31, 1996, by an amendment to the
Rights Agreement.
Pursuant to the Rights Agreement, a right (a "Right") is attached to each
share of Common Stock outstanding and entitles the registered holder thereof to
purchase from Fort James a unit (a "Unit") consisting of one one-thousandth of
a share of Series M Cumulative Participating Preferred Stock ("Series M
Preferred Stock"), at an initial purchase price of $150 per Unit (the "Purchase
Price"), subject to adjustment.
14
<PAGE>
Each share of Series M Preferred Stock, when issued will have a minimum
preferential quarterly dividend of $1.00 per share, but will be entitled to an
aggregate dividend of 1,000 times the Common Stock dividend. In the event of
any merger, consolidation or other transaction in which the Common Stock is
exchanged for other securities or assets, each share of Series M Preferred
Stock will be entitled to receive 1,000 times the amount received per share of
Common Stock. Each share of Series M Preferred Stock will have 1,000 votes,
voting together with the Common Stock and such other voting rights provided by
law. Additionally, in the event of liquidation, each share of Series M
Preferred Stock will entitle the holder thereof to receive a preferential
liquidation payment equal to the greater of $150,000 or 1,000 times the
liquidation value of a share of Common Stock, plus accrued and unpaid
dividends, or a ratable distribution in the event that the assets of Fort James
are insufficient to pay the liquidation preferences in full.
The Rights will separate from the corresponding shares of Common Stock
upon the earlier of (1) ten days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or has obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock and (2) ten business days after
the date of commencement of, or first public announcement of the intent of any
person (other than Fort James and certain related entities) to commence, a
tender or exchange offer, the consummation of which would result in a person or
group beneficially owning 15% or more of outstanding shares of Common Stock
(the earlier of (1) and (2), the "Distribution Date"). Until the Distribution
Date, (1) Rights will be evidenced by one or more certificates held by the
rights agent under the Rights Agreement, and will be represented by the related
Common Stock certificates, (2) Rights may be transferred with and only with
such Common Stock certificates, (3) new Common Stock certificates will contain
a notation incorporating the Rights Agreement by reference and (4) the
surrender for transfer of any certificates for Common Stock outstanding will
also constitute the transfer of Rights associated with the Common Stock
represented by such certificate. As soon as practicable after the Distribution
Date, rights certificates (the "Rights Certificates") will be mailed to holders
of record of the Common Stock as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone will represent the
Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 1, 1999, unless earlier exercised by the
holder thereof or redeemed by Fort James as described below. Until a Right is
exercised, the holder thereof, as such, will have no rights as a shareholder of
Fort James, including without limitation, the right to vote or to receive
dividends. While the distribution of Rights will not be taxable to Fort James
or to its shareholders, shareholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable.
Each holder of a Right will have the right to receive, upon exercise of a
Right, Common Stock (or, in certain circumstances, cash, property or other
securities of Fort James) having a value equal to two times the Purchase Price
then in effect, if after the Distribution Date, (1) Fort James is the surviving
company in a merger with an Acquiring Person and the shares of Common Stock are
not changed or exchanged, (2) an Acquiring Person consummates, with Fort James
or any subsidiary, any one of a number of transactions listed in the Rights
Agreement, examples of which include acquiring stock or convertible
securities except on a pro rata basis with other shareholders, obtaining any
assets except on an arm's-length basis, obtaining any assets having a fair
market value of more than $5 million or receiving certain financial benefits
such as loans, guarantees, tax benefits or compensation except as a full-time
employee at normal rates, (3) while there is an Acquiring Person, an event
occurs which results in such Acquiring Person's ownership interest being
increased by more than 1% (e.g., a reverse stock split), or (4) an Acquiring
Person becomes the beneficial owner of 15% or more of the Common Stock except
pursuant to a cash tender offer for all outstanding shares which is determined
to be fair by the Continuing Directors (as defined below) (each of which events
is popularly termed a "flip-in" event). Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by an Acquiring Person will be null and
void. The "Continuing Directors" are the directors on the Distribution Date or
new directors elected or nominated by a majority of the Continuing Directors in
office on the date of such election or nomination.
For example, if the Purchase Price is $150, upon exercise of a Right and
the payment of $150, a Right holder would receive $300 worth of Common Stock
(or other consideration, as noted above).
Each holder of a Right will have the right to receive, upon exercise,
common stock (or equivalent securities) of the acquiring entity having a value
equal to two times the Purchase Price then in effect, if after an announcement
that a person or group has become an Acquiring Person, (1) Fort James is
acquired in a merger or other business combination transaction (other than a
merger of the type described pursuant to certain flip-in events), or (2) 50% or
more of Fort James' assets or earning power is sold or transferred (each of
which events is popularly termed a "flip-over" event).
15
<PAGE>
If Fort James is not able to issue the Series M Preferred Stock or Common
Stock because of the absence of necessary regulatory approval, restrictions
contained in the Articles or for any other reason, a person exercising Rights
will be entitled to receive a combination of cash or property or other
securities having a value equal to the value of the Series M Preferred Stock or
the Common Stock which would otherwise have been issued upon exercise of the
Rights.
At any time until ten days after the announcement that a person or group
has become an Acquiring Person, Fort James may redeem the Rights in whole, but
not in part, at a price of $.01 per Right, payable in cash or Common Stock.
When the Board of Directors of Fort James orders a redemption of the Rights,
the Rights will terminate and the only right of the holders of Rights will be
to receive the redemption price.
After a person or group becomes an Acquiring Person and before the
Acquiring Person acquires 50% or more of the outstanding Common Stock, Fort
James, with the approval of a majority of the Continuing Directors, may require
a holder to exchange all or any portion of his Rights for one share of Common
Stock or one one-thousandth of a share of Series M Preferred Stock (or a share
of a class or series of Preferred Stock having equivalent rights), per Right.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors prior to the Distribution Date. After the Distribution Date,
the Rights Agreement may still be amended by the Board of Directors (under
certain circumstances only with the approval of a majority of the Continuing
Directors) in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement (including the time period for
redeeming the Rights); provided, however, that no amendment to adjust the time
period governing redemption shall be made if the Rights are not redeemable.
The Rights will not prevent a takeover of the Company. The Rights,
however, may cause substantial dilution to a person or group that acquires 15%
or more of Common Stock unless the Rights are first redeemed or terminated by
the Board of Directors. Nevertheless, the Rights should not interfere with a
transaction that is in the best interests of the Company and its shareholders
because the Rights can be redeemed or terminated, as hereinabove described,
before the consummation of such transaction.
The complete terms of the Rights are set forth in the Rights Agreement.
The Rights Agreement is incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part, and the foregoing
description is qualified in its entirety by reference thereto.
Other Provisions
In addition to the Rights Agreement, the Articles and Bylaws contain a
number of provisions which may be deemed to have the effect of discouraging or
delaying attempts to gain control of the Company. The Articles provide
generally that amendments to the Articles must be approved, subject to the
rights of holders of Preferred Stock, by a majority of the outstanding shares
entitled to vote on such an amendment. An amendment which has the effect of
reducing the vote required to approve a merger or certain other extraordinary
transactions, however, requires a two-thirds vote.
The Bylaws provide for "constitutive resolutions" of the Board of
Directors of the Company, which must be designated by the Board of Directors as
such and which must be adopted by a unanimous vote of the directors present and
voting when a quorum is present. Constitutive resolutions may be rescinded,
revoked, amended or modified only by the vote of all of the directors then in
office (subject to overriding action by the shareholders of the Company).
The Bylaws also include provisions setting forth specific conditions under
which: (1) business may be transacted at an annual or special meeting of
shareholders; and (2) persons may be nominated for election as directors of the
Company at an annual meeting of shareholders.
The Virginia "control share acquisition" statute allows corporations to
elect to either be covered or not be covered by such statute. The Company
elected not to be covered by such statute.
In addition to the foregoing, in certain instances the issuance of
authorized but unissued shares of Common Stock or Preferred Stock may have an
anti-takeover effect.
The existence of the foregoing provisions could result in the Company
being less attractive to a potential acquiror, and the Company's shareholders
receiving less for their shares of Common Stock than otherwise might be
available in the event of a take-over attempt.
16
<PAGE>
Registrar and Transfer Agent
Norwest Bank Minnesota, N.A. is the Registrar and Transfer Agent for the
Common Stock.
STANDBY ARRANGEMENTS
Under the terms and subject to the conditions in the Standby Agreement
dated March 10, 1998 between the Company and the Purchaser (the "Standby
Agreement"), the Purchaser has agreed to purchase from the Company, at the
Company's option, for settlement on April 13, 1998, such number of shares of
Common Stock as would have been issuable upon conversion of any shares of the
Series K Preferred Stock or Depositary Shares that were not surrendered for
conversion by the Close of Business on the Redemption Date for a purchase price
equal to the aggregate Redemption Price of such shares of Series K Preferred
Stock and Depositary Shares.
On or prior to the Redemption Date, the Purchaser may also purchase
Preferred Stock or Depositary Shares in the open market or otherwise. The
Purchaser has agreed to convert into Common Stock all Preferred Stock or
Depositary Shares owned by it. Such Common Stock may be used by the Purchaser
to cover any short position in the Common Stock established by the Purchaser.
The Company has been advised by the Purchaser that it proposes to offer
for resale to the public at prices set from time to time by the Purchaser any
shares of Common Stock purchased from the Company or acquired upon conversion
and not used to cover any short position. The Purchaser may also make sales of
such shares to certain securities dealers at prices that may reflect
concessions from the prices at which such shares are then being offered to the
public. The amount of such concessions will be determined from time to time by
the Purchaser.
Pursuant to the terms of the Standby Agreement and in consideration of its
obligations thereunder, the Company has agreed to pay the Purchaser the sum of
(1) $4,254,000 and (2)(A) an additional $1.136 per share for each share of
Common Stock purchased or received upon conversion by the Purchaser pursuant to
the Standby Agreement in respect of the Series K Preferred Stock or (B) an
additional $1.103 per share for each share of Common Stock purchased or received
upon conversion by the Purchaser pursuant to the Standby Agreement in respect of
the Series L Preferred Stock or the Series N Preferred Stock, but the fee
specified in clause (2) will be payable only if the Purchaser purchases or
receives, in the aggregate, more than 478,127 shares of Common Stock.
Additionally, the Purchaser has agreed to pay to the Company 50% of the excess,
if any, of (a) the aggregate proceeds received by the Purchaser from the sale of
shares of Common Stock purchased by it from the Company pursuant to the Standby
Agreement (net of selling concessions and other reasonable expenses of sale and
any transfer taxes) over (b) an amount equal to the aggregate number of shares
of Common Stock purchased by the Purchaser from the Company pursuant to the
Standby Agreement multiplied by the average price paid by the Purchaser for such
shares.
The Company has agreed to indemnify the Purchaser against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payments the Purchaser may be required to make in respect thereof.
The Company and its directors and officers have agreed, with certain
exceptions, from the date of the Standby Agreement through the Redemption Date
(and, if the Purchaser purchases or receives, in the aggregate, more than
478,127 shares, for an additional period of 90 days after the Redemption Date)
without the prior written consent of the Purchaser, not to offer, sell or
contract to sell, or otherwise dispose of (or enter into any transaction which
is designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or such individuals), directly or
indirectly, or announce the offering of, any other shares of Common Stock or
any securities convertible into, or exchangeable for, shares of Common Stock.
The Purchaser has performed investment banking services for the Company
from time to time in the ordinary course of its business. An affiliate of the
Purchaser, Salomon Brothers Inc ("Salomon Brothers"), acted as financial
advisor to the Company in connection with the Merger, and Salomon Brothers
acted as one of the underwriters in connection with an offering of Senior Notes
of the Company completed in September 1997 and on an offering of Common Stock
in February 1998. The Purchaser may assist the Company in providing information
regarding conversion of Preferred Stock or Depository Shares but will not
receive any compensation by the Company for any such assistance.
In connection with the sale of Common Stock to the Purchaser pursuant to
the Standby Agreement, the Purchaser may purchase shares of the Preferred Stock
or the Depositary Shares, which may result in the maintenance of the price of
the Common Stock at a level above that which might otherwise prevail in the
open market or may otherwise affect the market price of the Common Stock. Such
purchases are not required, and, if undertaken, may be discontinued at any
time.
17
<PAGE>
LEGAL MATTERS
Certain legal matters relating to the validity of the shares of Common
Stock issued hereby will be passed upon for the Company by McGuire, Woods,
Battle & Boothe LLP, Richmond, Virginia and for the Purchaser by Shearman &
Sterling, New York, New York and Cleary, Gottlieb, Steen & Hamilton, New York,
New York. Anne M. Whittemore, a director of the Company, is a partner of
McGuire, Woods, Battle & Boothe LLP. Lawyers of such firm who have performed
services in connection with the offering made hereby own an aggregate of
approximately 25,000 shares of the Common Stock.
EXPERTS
The consolidated balance sheets of James River and subsidiaries as of
December 29, 1996 and December 31, 1995, and the related consolidated
statements of operations, cash flows and changes in capital accounts for each
of the three years in the period ended December 29, 1996, included in James
River's 1996 Annual Report on Form 10-K, have been audited by Coopers & Lybrand
L.L.P., independent accountants, as set forth in their report thereon included
therein, and incorporated by reference herein. The supplemental consolidated
balance sheets of the Company as of December 29, 1996, and December 31, 1995,
and the supplemental consolidated statements of operations, cash flows and
changes in capital accounts for each of the three years in the period ended
December 29, 1996, contained in the Company's Current Report on Form 8-K dated
August 13, 1997 (filed on August 27, 1997), have been audited by Coopers &
Lybrand L.L.P., independent accountants, as set forth in their report thereon
(which contains an explanatory paragraph that describes the basis of
presentation which is a departure from generally accepted accounting
principles) included therein and incorporated by reference herein. The
consolidated balance sheets of Fort James as of December 29, 1996, and December
31, 1995, and the consolidated statements of operations, cash flows and changes
in capital accounts for each of the three years in the period ended December
29, 1996, contained in the Company's Current Report on Form 8-K dated August
13, 1997 (filed February 3, 1998), have been audited by Coopers & Lybrand
L.L.P., independent accountants, as set forth in their report thereon included
therein and incorporated by reference herein. The consolidated balance sheets
of Fort James as of December 28, 1997 and December 29, 1996, and the related
consolidated statements of operations, cash flows and changes in capital
accounts for each of the three years in the period ended December 28, 1997,
contained in the Company's Current Report on Form 8-K dated March 9, 1998, have
been audited by Coopers & Lybrand L.L.P., independent accountants, as set forth
in their report thereon included therein and incorporated by reference herein.
Such consolidated financial statements and supplemental consolidated financial
statements have been incorporated herein by reference in reliance on such
reports given on the authority of such firm as experts in accounting and
auditing.
The consolidated balance sheets of Fort Howard and subsidiaries as of
December 31, 1996 and December 31, 1995, and the related consolidated
statements of operations, cash flows and changes in capital accounts for each
of the three years in the period ended December 31, 1996, included in the
Company's Current Report on Form 8-K dated August 13, 1997 (filed on August 25,
1997), have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements have
been incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
18
<PAGE>
===============================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer contained herein, and, if given or
made, such information or representations must not be relied upon as having
been authorized by the Company or by the Purchaser. This Prospectus does not
constitute an offer of any securities other than those to which it relates or
an offer to sell, or a solicitation of an offer to buy, those to which it
relates in any state to any person to whom it is not lawful to make such offer
in such state. The delivery of this Prospectus at any time does not imply that
the information herein is correct as of any time subsequent to its date.
--------------------------
TABLE OF CONTENTS
Page
-----
Available Information .............................. 3
Incorporation of Certain Documents by
Reference ....................................... 3
Cautionary Statement Concerning Forward-
Looking Statements .............................. 4
The Company ........................................ 5
Use of Proceeds .................................... 5
Capitalization ..................................... 6
Price Range of Common Stock and
Dividend Policy ................................. 7
Fort James and Consolidated Subsidiaries
Summary Historical Consolidated
Financial and Other Data ........................ 8
Redemption of the Preferred Stock and
Expiration of Conversion Privileges. ............ 10
Alternatives Available to Holders of
Preferred Stock or Depositary Shares ............ 10
Certain Federal Income Tax Considerations .......... 13
Description of Capital Stock ....................... 14
Standby Arrangements ............................... 17
Legal Matters ...................................... 18
Experts ............................................ 18
==============================================================================
==============================================================================
9,562,554 Shares
Fort James
Corporation
Common Stock
--------------------------
FORT JAMES (icon)
-----------------
P R O S P E C T U S
March 10, 1998
-----------------
Salomon Smith Barney
===============================================================================
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
Registration Statement filing fee ......... $ 126,150
Legal fees and expenses ................... 400,000*
Blue Sky fees and expenses ................ 15,000*
Accounting fees and expenses .............. 75,000*
Printing and engraving costs .............. 25,000*
Miscellaneous ............................. 850*
----------
Total ................................. $ 642,000
==========
- ---------
* Estimated
ITEM 15. Indemnification of Directors and Officers.
Article 10 of the Virginia Stock Corporation Act (the "VSCA") sets forth
conditions and limitations governing the indemnification of officers,
directors, and other persons of the Registrant.
The Registrant's Articles of Incorporation, as amended (the "Registrant
Charter"), provide as follows:
(a) In every instance permitted by the VSCA, the liability of a director
or officer of the Registrant to the Registrant or its shareholders arising out
of a single transaction, occurrence or course of conduct is limited to one
dollar.
(b) The Registrant will indemnify any individual who is, was or is
threatened to be made a party to a proceeding (including a proceeding by or in
the right of the Registrant) because he is or was a director or officer of the
Registrant or because he is or was serving the Registrant or any other legal
entity in any capacity at the request of the Registrant while a director or
officer of the Registrant, against all liabilities and reasonable expenses
incurred in the proceeding except such liabilities and expenses as are incurred
because of his willful misconduct or knowing violation of the criminal law.
Service as a director or officer of a legal entity controlled by the Registrant
is deemed service at the request of the Registrant. The determination that
indemnification under this provision of the Registrant Charter is permissible
and the evaluation as to the reasonableness of expenses in a specific case will
be made, in the case of a director, as provided by law, and in the case of an
officer, as provided in paragraph (c) below, provided, however, that if a
majority of the directors of the Registrant has changed after the date of the
alleged conduct giving rise to a claim for indemnification, such determination
and evaluation shall, at the option of the person claiming indemnification, be
made by special legal counsel agreed upon by the board of directors and such
person. Unless a determination has been made that indemnification is not
permissible, the Registrant will make advances and reimbursements for expenses
incurred by a director or officer in a proceeding upon receipt of an
undertaking from him to repay the same if it is ultimately determined that he
is not entitled to indemnification. Such undertaking will be an unlimited,
unsecured general obligation of the director or officer and shall be accepted
without reference to his ability to make repayment. The termination of a
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent will not of itself create a presumption that a
director or officer acted in such a manner as to make him ineligible for
indemnification. The Registrant is authorized to contract in advance to
indemnify and make advances and reimbursements for expenses to any of its
directors or officers to the same extent provided in this paragraph (b).
(c) The Registrant may, to a lesser extent or to the same extent that it
is required to provide indemnification and make advances and reimbursements for
expenses to its directors and officers pursuant to paragraph (b) above, provide
indemnification and make advances and reimbursements for expenses to its
employees and agents, the directors, officers, employees and agents of its
subsidiaries and predecessor entities, and any person serving any other legal
entity in any capacity at the request of the Registrant and, if authorized by
general or specific action of the Board of Directors of the Registrant, may
contract in advance to do so. The determination that indemnification under the
provisions described in this paragraph (c) is permissible, the authorization of
such indemnification and the evaluation as to the reasonableness of expenses in
a specific case shall be made as authorized from time to time by general or
specific action of the Board of Directors of the Registrant, which action may
be taken before or after a claim for indemnification is made or as otherwise
provided by law. No person's rights under paragraph (b) above shall be limited
by the provisions in this paragraph (c).
(d) Every reference in the provisions described above to persons who are
or may be entitled to indemnification includes all persons who formerly
occupied any of the positions referred to and their respective heirs, executors
and administrators. Special legal counsel selected to make determinations under
these provisions may be counsel for the Registrant. Indemnification pursuant to
these provisions shall not be exclusive of any other right of indemnification
to which any person may be
II-1
<PAGE>
entitled, including indemnification pursuant to a valid contract,
indemnification by legal entities other than the Registrant and indemnification
under policies of insurance purchased and maintained by the Registrant or
others. However, no person will be entitled to indemnification by the
Registrant to the extent he is indemnified by another, including an insurer.
The Registrant is authorized to purchase and maintain insurance against any
liability it may have under these provisions or to protect any of the persons
named above against any liability arising from their service to the Registrant
or any other legal entity at the request of the Registrant regardless of the
Registrant's power to indemnify against such liability.
(e) The provisions described above apply to indemnification, advances and
reimbursement for expenses made after the Registrant Charter's adoption whether
arising from conduct or events occurring before or after such adoption. No
amendment, modification or repeal of these provisions will diminish the rights
provided thereunder to any person arising from conduct or events occurring
before the adoption of such amendment, modification or repeal.
The Registrant has insurance to indemnify its directors and officers,
within the limits of the Registrant's insurance policies, for those liabilities
in respect of which such indemnification insurance is permitted under the laws
of the State of Virginia.
ITEM 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ------------- ---------
<S> <C>
1 Form of Standby Agreement
4.1 Articles of Incorporation of the Registrant, as amended (Incorporated by reference to Exhibits 3(a)
through 3(d) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 28,
1997)
4.2 By-laws of the Registrant, as amended (Incorporated by reference to Exhibit 3(e) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 28, 1997)
4.3 Amended and Restated Rights Agreement (Incorporated by reference to Exhibits 2 and 3, respectively,
to the Registrant's filing of Amendment 1 dated July 28, 1992, to its Registration Statement on Form
8-A dated March 3, 1989)
5.1 Opinion of McGuire, Woods, Battle & Boothe LLP
23.1 Consent of McGuire, Woods, Battle & Boothe LLP (Included in Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Arthur Andersen LLP
24.1 Power of Attorney (Included on signature page)
</TABLE>
ITEM 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that the information required to be included in a
post-effective amendment by paragraphs (a)(1)(i) and (a)(1)(ii) above may be
contained in periodic reports filed by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise
(other than insurance), the Registrant has been advised that in the opinion of
the Securities and Exchange Commission (the "Commission") such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than insurance or the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Fort James Corporation certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Richmond, Commonwealth of Virginia,
as of March 10, 1998.
FORT JAMES CORPORATION
By: /s/ CLIFFORD A. CUTCHINS, IV
--------------------------------
Clifford A. Cutchins, IV
Senior Vice President and General Counsel
POWER OF ATTORNEY
Know All Men and Women By These Presents that each individual whose
signature appears below constitutes and appoints Ernst A. Haberli, Clifford
A. Cutchins, IV and R. Michael Lempke, and each of them, such individual's true
and lawful attorneys-in-fact and agents with full power of substitution, for
such individual and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement and any registration statement
related to the offering contemplated by this registration statement, and to
file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and as of the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
---------- ------- -----
<S> <C> <C>
/s/ MILES L. MARSH* Chairman of the Board, Chief Executive March 10, 1998
- ----------------------------------
Miles L. Marsh Officer and Director
/s/ MICHAEL T. RIORDAN* President and Chief Operating Officer March 10, 1998
- ----------------------------------
Michael T. Riordan and Director
/s/ ERNST A. HABERLI* Executive Vice President and Chief March 10, 1998
- ----------------------------------
Ernst A. Haberli Financial Officer (Principal Financial
and Accounting Officer)
/s/ BARBARA L. BOWLES* Director March 10, 1998
- ----------------------------------
Barbara L. Bowles
Director , 1998
- ----------------------------------
William T. Burgin
/s/ DR. JAMES L. BURKE* Director March 10, 1998
- ----------------------------------
Dr. James L. Burke
/s/ WORLEY H. CLARK, JR.* Director March 10, 1998
- ----------------------------------
Worley H. Clark, Jr.
II-4
<PAGE>
<CAPTION>
Signature Title Date
--------- ---------- ----
<S> <C> <C>
Director , 1998
- ----------------------------------
William T. Comfort, Jr.
/s/ GARY P. COUGHLAN* Director March 10, 1998
- ----------------------------------
Gary P. Coughlan
Director , 1998
- ----------------------------------
William V. Daniel
/s/ BRUCE C. GOTTWALD* Director March 10, 1998
- ----------------------------------
Bruce C. Gottwald
Director , 1998
- ----------------------------------
Robert H. Niehaus
/s/ ROBERT M. O'NEIL* Director March 10, 1998
- ----------------------------------
Robert M. O'Neil
/s/ RICHARD L. SHARP* Director March 10, 1998
- ----------------------------------
Richard L. Sharp
Director , 1998
- ----------------------------------
Frank V. Sica
Director , 1998
- ----------------------------------
Anne Marie Whittemore
*By: /s/ CLIFFORD A. CUTCHINS, IV March 10, 1998
------------------------------
Clifford A. Cutchins, IV, Attorney-in-fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
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<CAPTION>
Exhibit No. Exhibit
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<S> <C>
1 Form of Standby Agreement
4.1 Articles of Incorporation of the Registrant, as amended (Incorporated by reference to Exhibits 3(a)
through 3(d) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 28,
1997.)
4.2 By-laws of the Registrant, as amended (Incorporated by reference to Exhibit 3(e) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 28, 1997)
4.3 Amended and Restated Rights Agreement (Incorporated by reference to Exhibits 2 and 3, respectively,
to the Registrant's filing of Amendment 1 dated July 28, 1992, to its Registration Statement on
Form 8-A dated March 3, 1989)
5.1 Opinion of McGuire, Woods, Battle & Boothe LLP
23.1 Consent of McGuire, Woods, Battle & Boothe LLP (Included in Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Arthur Andersen LLP
24.1 Power of Attorney (Included on signature page)
</TABLE>
II-6
Fort James Corporation
Series K $3.375 Cumulative Convertible Exchangeable Preferred Stock
Series L $14.00 Cumulative Convertible Exchangeable Preferred Stock
Series N $14.00 Cumulative Convertible Exchangeable Preferred Stock
Standby Agreement
New York, New York
March 10, 1998
Smith Barney Inc.
As Representative of the several Purchasers
c/o Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Fort James Corporation, a Virginia corporation (the
"Company"), intends to call for redemption on April 10, 1998 (the "Redemption
Date") (i) all of the 1,999,695 outstanding shares of its Series K $3.375
Cumulative Convertible Exchangeable Preferred Stock (the "Series K Preferred
Stock"), par value $10.00 per share, at $50.00 per share, plus accrued and
unpaid dividends thereon, in the amount of $.64688 per share of Series K
Preferred Stock to and including the Redemption Date, for a total redemption
price of $50.64688 (the "Series K Redemption Price") per share of Series K
Preferred Stock, (ii) all of the 999,765 outstanding shares of its Series L
$14.00 Cumulative Convertible Exchangeable Preferred Stock (the "Series L
Preferred Stock"), par value $10.00 per share, at $50.00 per Series L Depositary
Share (as defined below), plus accrued and unpaid dividends thereon, in the
amount of $.09722 per Series L Depositary Share to and including the Redemption
Date, for a total redemption price of $50.09722 (the "Series L Redemption
Price") per Series L Depositary Share and (iii) all of the 264,042 outstanding
shares of its Series N $14.00 Cumulative Convertible Exchangeable Preferred
Stock (the "Series N Preferred Stock"), par value $10.00 per share, at $50.00
per Series N Depositary Share (as defined below), plus accrued and unpaid
dividends thereon, in the amount of $.09722 per Series N Depositary Share to and
including the Redemption Date, for a total redemption price of $50.09722 (the
"Series N Redemption Price") per Series N Depositary Share. The Series K
Preferred Stock, the Series L Preferred Stock and the Series N Preferred Stock
are collectively referred to herein as the "Redeemable Securities." Each of the
Series K Redemption Price, the Series L Redemption Price and the Series N
Redemption Price is referred to herein as a "Redemption Price." Shares of the
Redeemable Securities are convertible into shares of the Common Stock, $.10 par
value, of the Company ("Common Stock"), at any time prior to 5:00 P.M., New York
City time, on the Redemption Date.
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The Series L Preferred Stock may be represented by up to
3,998,700 depositary shares (the "Series L Depositary Shares") issued by the
Depositary (as defined herein) pursuant to the deposit agreement, dated as of
September 18, 1987 (the "Series L Deposit Agreement"), among the Company, Sovran
Bank, N.A., as depositary, or any successor depositary (the "Depositary") and
the holders from time to time of the Series L Depositary Shares, with each
Series L Depositary Share representing ownership of 1/4 of a share of Series L
Preferred Stock. The Series N Preferred Stock may be represented by up to
1,056,168 depositary shares (the "Series N Depositary Shares" and, together with
the Series L Depositary Shares, the "Depositary Shares") issued by the
Depositary pursuant to the deposit agreement, dated as of January 1, 1990 (the
"Series N Deposit Agreement" and, together with the Series L Deposit Agreement,
the "Deposit Agreements"), among the Company, the Depositary and the holders
from time to time of the Series N Depositary Shares, with each Series N
Depositary Share representing ownership of 1/4 of a share of Series L Preferred
Stock.
In order to ensure that the Company will have available
sufficient funds to redeem any Redeemable Securities not converted prior to or
on the Redemption Date, the Company desires to make arrangements pursuant to
which the purchasers named in Schedule I hereto (the "Purchasers"), for whom you
(the "Representative") are acting as Representative, will, following the
Redemption Date, purchase shares of Common Stock that would have been issuable
upon the conversion of the Redeemable Securities that have not been surrendered
for conversion prior to 5:00 P.M., New York City time, on the Redemption Date.
To the extent there are no additional Purchasers listed on Schedule I other than
you, the term Representative as used herein shall mean you, as Purchasers, and
the terms Representative and Purchasers shall mean either the singular or plural
as the context requires.
Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement, or the issue date of any Preliminary Prospectus or
the Prospectus, as the case may be, deemed to be incorporated therein by
reference. Certain terms used herein are defined in Section 17 hereof.
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, each Purchaser as set forth below
in this Section 1.
(a) The Company meets the requirements for use of Form
S-3 under the Act and has prepared and filed with the Commission a
registration statement (file number 333-_____) on Form S-3, including a
related preliminary prospectus, for the registration under the Act of
the issuance by the Company of the shares of Common Stock issuable upon
conversion by the Purchasers of Redeemable Securities and the sale by
the Purchasers of any shares of Common Stock that may be acquired by
them hereunder.
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The Company may have filed one or more amendments thereto, including a
related preliminary prospectus, each of which has previously been
furnished to you. The Company will next file with the Commission one of
the following: either (1) prior to the Effective Date of such
registration statement, a further amendment to such registration
statement, including the form of final prospectus, (2) after the
Effective Date of such registration statement, a final prospectus in
accordance with Rule 424(b) or (3) a final prospectus in accordance
with Rules 415 and 424(b). In the case of clause (2), the Company has
included in such registration statement, as amended at the Effective
Date, all information required by the Act and the rules thereunder to
be included in such registration statement and the Prospectus;
PROVIDED, HOWEVER, that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished herein or in
writing to the Company by or on behalf of any Purchaser through the
Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto). As filed, such
amendment and form of final prospectus, or such final prospectus, shall
contain all such required material information, and, except to the
extent the Representative shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond those contained in the latest Preliminary Prospectus)
as the Company has advised you, prior to the Execution Time, will be
included or made therein. If the Registration Statement contains the
undertaking specified by Regulation S-K Item 512(a), the Registration
Statement, at the Execution Time, meets the requirements set forth in
Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement
did or will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and, on the Redemption Date and on the
Closing Date (as defined herein), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any
filing pursuant to Rule 424(b), on the Redemption Date and on the
Closing Date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished herein or in writing to the Company by or on behalf of any
Purchaser through the Representative specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
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(c) Shares of Series K Preferred Stock are convertible
into Common Stock at a rate of 1.3376 shares of Common Stock per share
of Series K Preferred Stock. Series L Depositary Shares and Series N
Depositary Shares are convertible into Common Stock at a rate of 1.3626
shares of Common Stock per Series L Depositary Share or Series N
Depositary Share, as the case may be. At the Execution Time, there were
outstanding 1,999,695 shares of Series K Preferred Stock, 999,765
shares of Series L Preferred Stock represented by 3,998,700 Series L
Depositary Shares and 264,042 shares of Series N Preferred Stock
represented by 1,056,168 Series N Depositary Shares. The redemption of
all the outstanding Redeemable Securities and Depositary Shares has
been duly authorized by the Company. By the close of business on the
Business Day following the date of execution hereof, all of the
Redeemable Securities and Depositary Shares will have been duly called
for redemption in accordance with the Articles of Incorporation of the
Company, as amended (the "Articles of Incorporation"), or the terms of
the relevant Deposit Agreement, as the case may be; and the right to
convert the Redeemable Securities into shares of Common Stock will, as
a result of such call, expire at 5:00 P.M., New York City time, on the
Redemption Date. Copies of the forms of notice of redemption and the
related letters of transmittal (collectively, the "Notices of
Redemption") with respect to each series of Redeemable Securities have
been heretofore delivered to you by the Company. The Redeemable
Securities and the Depositary Shares have been duly and validly
authorized and issued and are fully paid and nonassessable.
(d) The Company has neither taken nor will take,
directly or indirectly, any action designed to cause or result in, or
that has constituted or that might be reasonably expected to cause or
result in, stabilization or manipulation of the price of any security
of the Company to facilitate the conversion of the Redeemable
Securities (provided that the Company does not make any representation
as to any actions that may be taken by any Purchaser); and the Company
has not distributed and will not distribute any prospectus or other
offering material in connection with the issue and sale of the
Securities other than the Registration Statement, any preliminary
prospectus filed with the Commission or the Prospectus or other
material permitted by the Act.
(e) The Company has neither paid or given, nor will pay
or give, directly or indirectly, any commission or other remuneration
for soliciting the conversion of Redeemable Securities into Common
Stock and cash.
(f) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement
is in effect; and no proceedings for such purpose are pending before
or, to the knowledge of the Company, threatened by the Commission.
(g) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition (financial or otherwise), earnings or business affairs
of the Company and its subsidiaries considered as one enterprise,
whether or not arising from transactions in the ordinary course of
business (a "Material Adverse
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Effect"), and (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise.
(h) This Agreement has been duly authorized, executed
and delivered by the Company.
(i) The authorized capital stock of the Company conforms
in all material respects as to legal matters to the description thereof
contained in the Prospectus.
(j) Fort James Operating Company (formerly James River
Paper Company, Inc.) ("FJOC"), Fort James N.V. ("FJNV"), Fort James
Fiber Company ("FJFC" and, together with FJOC and FJNV, the
"Significant Subsidiaries") and Fort James Maine, Inc. are the only
direct subsidiaries of the Company that are "significant subsidiaries"
of the Company (as such term is defined under Regulation S-X).
(k) The call of the Redeemable Securities for
redemption, the conversion or redemption thereof, the issue and sale of
the Securities (as hereinafter defined), the execution, delivery and
performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated herein and compliance by
the Company with its obligations hereunder do not and will not, whether
with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event
(as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or pursuant to any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company is a party or by which it may be bound, or to which any of
the property or assets of the Company is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will any such
action result in any violation of the provisions of the charter or
by-laws of the Company, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, known to the
Company having jurisdiction over the Company or any of its assets,
properties or operations which would result in a Material Adverse
Effect. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any subsidiary.
(l) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency by or on behalf of the Company is
necessary or required for the performance by the Company of its
obligations hereunder, in connection with the issue and sale of the
Securities hereunder or the consummation by the Company of the
transactions
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contemplated by this Agreement, except such as have been already
obtained, and except for such that would not reasonably be expected to
have a Material Adverse Effect or as may be required under the Act or
the applicable rules and regulations of the Commission thereunder or
state securities laws.
2. Purchase and Conversion of Redeemable Securities.
Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth:
(a) Each Purchaser, severally and not jointly, agrees to
surrender for conversion into Common Stock prior to 5:00 P.M., New York
City time, prior to or on the Redemption Date all Redeemable Securities
and Depositary Shares purchased by such Purchaser pursuant to Section 4
hereof or otherwise acquired by such Purchaser. The shares of Common
Stock issued to the Purchasers upon the conversion of Redeemable
Securities and Depositary Shares are referred to as the "Conversion
Securities."
(b) If any Redeemable Securities have not been
surrendered for conversion prior to 5:00 P.M., New York City time, on
the Redemption Date, at the option of the Company, exercisable by
giving notice in writing to the Representative not later than 8:00
P.M., New York City time, on the Redemption Date, the Company shall
sell to each Purchaser, and each Purchaser, severally and not jointly,
shall purchase from the Company, at a purchase price of $__________ per
share of Common Stock that would have been issuable upon conversion of
Series K Preferred Stock not surrendered for conversion and $__________
per share of Common Stock that would have been issuable upon conversion
of Series L Preferred Stock or Series N Preferred Stock not surrendered
for conversion, such number of shares of Common Stock as shall be
specified in such notice (but, in each case, not in excess of such
number of shares of Common Stock as would have been issuable upon the
conversion of all shares of Series K Preferred Stock, Series L
Preferred Stock or Series N Preferred Stock, as the case may be, not
surrendered for conversion) multiplied by the percentage set forth
opposite such Purchaser's name in Schedule I hereto (rounded to the
nearest whole number of shares). The shares of Common Stock to be
purchased pursuant to this Section 2(b) are referred to as the
"Purchased Securities" and, together with the Conversion Securities,
the "Securities."
(c) It is understood that the Purchasers intend to
resell the Securities from time to time at prices prevailing in the
open market. On or prior to the fifteenth day after the Redemption
Date, each Purchaser shall remit to the Company 50% of the excess, if
any, of (i) the aggregate proceeds received by such Purchaser from the
sale of Purchased Securities (net of selling concessions, transfer
taxes and other expenses of sale) over (ii) an amount equal to the
average cost to such Purchaser of purchasing the Purchased Securities
pursuant to paragraph (b) above multiplied by the number of Purchased
Securities. Upon completion of the sale of the Purchased Securities,
each Purchaser shall furnish to the Company a statement setting forth
the aggregate proceeds received on the sale thereof and the applicable
selling concessions, transfer taxes and other expenses of sale. For
purposes of the foregoing determination, any Purchased Securities not
sold by or for the account of the Purchaser prior to the close of
business on the tenth day after the
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Redemption Date shall be deemed to have been sold on such tenth day for
an amount equal to the last reported sale price of the Common Stock on
such day. Nothing contained herein shall limit the right of the
Purchasers, in their discretion, to determine the price or prices at
which, or the time or times when, any Securities shall be sold, whether
or not prior to the Redemption Date and whether or not for long or
short account.
Delivery of and payment for the Purchased Securities
shall be made at 10:00 A.M., New York City time, on April 13, 1998,
which date and time may be postponed by agreement between the
Representative and the Company (such date and time of delivery and
payment for the Purchased Securities being herein called the "Closing
Date"). Delivery of the Purchased Securities shall be made to the
Representative for the respective accounts of the several Purchasers
against payment by the several Purchasers through the Representative of
the purchase price thereof to or upon the order of the Company by wire
transfer payable in same-day funds to an account specified by the
Company. Delivery of the Purchased Securities shall be made through the
facilities of The Depository Trust Company unless the Representative
shall otherwise instruct. The closing of the purchase and sale of the
Purchased Securities shall be made at the office of Cleary, Gottlieb,
Steen & Hamilton, New York, New York.
3. Compensation. As compensation for the commitment of
the Purchasers hereunder, the Company will pay to the Representative for the
respective accounts of the several Purchasers an amount equal to the sum of (i)
$__________ plus (ii) if the aggregate number of the Securities exceeds 478,127
shares, an additional $__________ per share for the aggregate number of the
Securities.
Such compensation shall be paid to the Representative for the
respective accounts of the several Purchasers by wire transfer payable in
same-day funds to an account specified by the Representative, on (A) if the
Purchasers are required to purchase any Purchased Securities, the Closing Date,
or (B) otherwise, as soon as practicable after the Redemption Date (but in no
event later than two Business Days thereafter).
4. Additional Purchases. The Purchasers may purchase
Redeemable Securities, in the open market or otherwise, in such amounts and at
such prices as the Purchaser may deem advisable. All Redeemable Securities so
purchased will be converted by the Purchasers into Common Stock in accordance
with Section 2(a) hereof. The Common Stock acquired by the Purchasers upon
conversion of any Redeemable Securities acquired pursuant to this Section 4 may
be sold at any time or from time to time by the Purchasers. It is understood
that, for the purpose of stabilizing the price of the Common Stock or otherwise,
the Purchasers may make purchases and sales of Common Stock, in the open market
or otherwise, for long or short account, on such terms as they may deem
advisable and they may overallot in arranging sales.
5. Agreements. The Company agrees with the several Purchasers
that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any
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amendment of the Registration Statement or supplement to the Prospectus
unless the Company has furnished you a copy for your review prior to
filing and will not file any such proposed amendment or supplement to
which you reasonably object in writing; PROVIDED, HOWEVER, that the
preceding clause shall not apply to the filing of any document required
to be filed by the Company under the Exchange Act that upon filing is
deemed to be incorporated by reference in the Registration Statement,
except that the Company shall, to the extent practicable, furnish you a
copy of any such document a reasonable time prior to filing. Subject to
the foregoing sentence, if filing of the Prospectus is required under
Rule 424(b), the Company will cause the Prospectus, properly completed,
and any supplement thereto to be filed with the Commission pursuant to
the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representative
of such timely filing. The Company will promptly advise the
Representative (1) when the Registration Statement (and any amendment
thereto), if not effective at the Execution Time, shall have become
effective, (2) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b), (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement or for any
supplement to the Prospectus or for any additional information, (5) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (1) notify the
Representative of such event, (2) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or omission
or effect such compliance and (3) supply any supplemented Prospectus to
you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the Representative
an earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
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(d) The Company will furnish to the Representative and
counsel for the Purchasers, without charge, five signed copies of the
Registration Statement (including exhibits thereto) and to each other
Purchaser a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by a Purchaser or
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Representative may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the transactions contemplated hereby. The Company will pay all transfer
taxes as may be imposed on the Purchasers in connection with their
purchase of Redeemable Securities pursuant hereto.
(e) The Company will use its best efforts to qualify the
Securities for sale under the laws of such jurisdictions as the
Representative may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities;
PROVIDED that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to
execute a general consent to service of process in any state or to
otherwise subject itself to taxation (other than stock transfer taxes)
in connection with any such qualification.
(f) The Company will mail or cause to be mailed not
later than the Business Day following the date of execution hereof the
Notices of Redemption by first class mail to the registered holders of
the Redeemable Securities and the Depositary Shares as of the close of
business on the date of execution hereof, which mailing will conform to
the requirements of the Articles of Incorporation. The Company will not
withdraw or revoke the Notices of Redemption or attempt to do so.
(g) The Company will advise the Representative daily of
the amount of Redeemable Securities and Depositary Shares surrendered
in the previous day for redemption or for conversion.
(h) The Company will not take any action the effect of
which would be to require an adjustment in the conversion price of the
Redeemable Securities.
(i) The Company will not, prior to the Redemption Date
(and, if the aggregate number of the Securities exceeds 478,127 shares,
for an additional period of 90 days following the Redemption Date),
without the prior written consent of Salomon Smith Barney, offer, sell
or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the
Company) directly or indirectly, or announce the offering of, any other
shares of Common Stock (other than the Securities) or any securities
convertible into, or exchangeable for, shares of Common Stock (other
than any such sale or disposition of such securities pursuant to the
registration of such securities on Form S-4 or Form S-8 under the Act
or any successor forms or any such sale or disposition of such
securities in connection with any merger or consolidation involving the
Company or a subsidiary of
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the Company or the acquisition by the Company or a subsidiary of the
Company of the capital equity or substantially all of the assets of any
other person or entity); PROVIDED, HOWEVER, that the provisions of this
paragraph shall not (A) prevent the conversion or exchange pursuant to
their terms of any securities of the Company outstanding at the
Execution Time into or for other shares of Common Stock or any
securities convertible into, or exchangeable for, shares of Common
Stock or (B) apply to any issuance of securities under the Rights
Agreement (as defined in the Registration Statement).
6. Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers to convert Redeemable Securities and to purchase
any Purchased Securities shall be subject to the accuracy of the representations
and warranties on the part of the Company contained herein as of the Execution
Time, each Effective Date occurring after the Execution Time, the Redemption
Date and, as to the purchase of the Purchased Securities, the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the Representative agrees
in writing to a later time, the Registration Statement shall have
become effective not later than 6:00 P.M., New York City time, on the
date of execution hereof; if filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, shall have been filed in the
manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) On the date of this Agreement and on the Closing
Date, the Company shall have furnished to the Representative the
opinion of McGuire, Woods, Battle & Boothe LLP, counsel for the
Company, dated the date of this Agreement and the Closing Date,
respectively, to the effect that:
(i) the Company has been duly organized and is validly
existing and in good standing under the laws of the
Commonwealth of Virginia; each of FJOC and FJFC has been duly
organized and is validly existing and in good standing under
the laws of the jurisdiction of its incorporation; each of the
Company, FJOC and FJFC has corporate power and authority to
conduct its business as described in the Prospectus; each of
the Company, FJOC and FJFC is, if applicable, duly qualified
to do business and is, if applicable, in good standing in each
jurisdiction in which it owns or leases a material amount of
real property;
(ii) all of the outstanding shares of capital stock of
FJFC and FJOC have been duly authorized and validly issued,
are fully paid and non-assessable and are owned beneficially,
directly or indirectly (except as otherwise stated in the
Prospectus), by the Company subject to no perfected mortgage,
pledge, lien,
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encumbrance, charge or adverse claim and, to the knowledge of
such counsel, any other mortgage, pledge, lien, encumbrance,
charge or adverse claim;
(iii) the outstanding shares of Common Stock have been
duly and validly authorized and issued and are fully paid and
nonassessable; the outstanding Redeemable Securities and the
Depositary Shares have been duly and validly authorized and
issued and are fully paid and non-assessable; assuming the
mailing of the Notices of Redemption in accordance with
Section 1(c) hereof, all the Redeemable Securities will have
been duly called for redemption by the close of business on
the Business Day following the date of execution hereof and
the right to convert the Redeemable Securities into shares of
Common Stock will expire at 5:00 P.M., New York City time, on
April 10, 1998; the shares of Common Stock issuable upon
conversion of the Redeemable Securities have been duly and
validly authorized and, when issued and delivered upon
conversion of any Redeemable Securities pursuant to this
Agreement, will be fully paid and nonassessable; the Purchased
Securities have been duly and validly authorized and, when
issued and delivered to and paid for by the Purchasers
pursuant to this Agreement, will be fully paid and
nonassessable; the Converted Securities (and, for the opinion
to be delivered on the Closing Date only, the Purchased
Securities) are duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on the New
York Stock Exchange; the certificates for the Securities are
in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities or
the shares of Common Stock issuable upon conversion of the
Redeemable Securities; and, except as set forth in the
Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are
outstanding;
(iv) the descriptions in the Registration Statement and
the Prospectus of statutes, legal and governmental
proceedings, contracts and other documents (including in each
case the documents incorporated by reference therein) are
accurate in all material respects and fairly present the
information required to be shown; and such counsel does not
know of any statutes or legal or governmental proceedings
required to be described in the Prospectus that are not
described as required, or of any contracts or documents of a
character required to be described in the Registration
Statement or Prospectus (or required to be filed under the
Exchange Act if upon such filing they would be incorporated,
in whole or in part, by reference therein) or to be filed as
exhibits to the Registration Statement that are not described
and filed as required;
(v) such counsel has no reason to believe that on the
Effective Date or at the Execution Time the Registration
Statement contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading or
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<PAGE>
that the Prospectus as of its date and on the Closing Date
includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (in each case, other than
the financial statements and other financial information
contained therein, as to which such counsel need express no
opinion);
(vi) the statements in the Prospectus under the caption
"Description of Capital Stock," insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
(viii) the call of the Redeemable Securities for
redemption, the conversion or redemption thereof, the issue
and sale of the Securities, the execution, delivery and
performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated
herein and compliance by the Company with its obligations
hereunder will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any statute, any agreement or instrument known to such counsel
to which the Company or any Significant Subsidiary is a party
or by which it is bound or to which any of the property of the
Company or any Significant Subsidiary is subject, the
Company's or any Significant Subsidiary's Articles of
Incorporation, as amended to date, or by-laws, or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any Significant Subsidiary or any of their
respective properties; and no consent, approval, authorization
or order of, or filing with, any court or governmental agency
or body is required for the consummation of the transactions
contemplated by this Agreement, except such as have been
obtained under the Act and such as may be required under state
securities laws in connection with the purchase and
distribution of the Shares by the Purchasers; PROVIDED that no
opinion is called for with respect to any such consent,
approval, authorization or order required to be obtained under
the Act and the applicable rules and regulations of the
Commission thereunder that have been obtained or as may be
required under state securities laws or Blue Sky Laws of the
various states;
(ix) the Company is not and, after giving effect to the
issue and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be,
an "investment company" as defined in the Investment Company
Act of 1940, as amended; and
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(x) no holders of securities of the Company have rights
to the registration of such securities under the Registration
Statement, except for rights of Leeway & Company, as nominee
of the Long-Term Incentive Trust ("Leeway"), which have been
effectively waived.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Virginia or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion
of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Purchasers and (B) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to
the Prospectus in this paragraph (b) include any supplements thereto at
the Closing Date. The opinion of such counsel shall be rendered to the
Purchasers at the request of the Company and shall so state therein.
(c) On the date of this Agreement and on the Closing
Date, the Company shall have furnished to the Representative the
opinion of De Brauw Blackstone Westbroek, counsel for FJNV, dated the
date of this Agreement and the Closing Date, respectively, to the
effect that:
(i) FJNV has been duly organized and is validly existing
and, if applicable, in good standing under the laws of the
Netherlands; FJNV has corporate power and authority to conduct
its business as described in the Prospectus; and FJNV is, if
applicable, duly qualified to do business and is, if
applicable, in good standing in each jurisdiction in which it
owns or leases a material amount of real property; and
(ii) all of the outstanding shares of capital stock of
FJNV have been duly authorized and validly issued, are fully
and non-assessable and are owned beneficially, directly or
indirectly (except as otherwise stated in the Prospectus), by
the Company subject to no perfected mortgage, pledge, lien,
encumbrance, charge or adverse claim and, to the knowledge of
such counsel, any other mortgage, pledge, lien, encumbrance,
charge or adverse claim.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
Netherlands, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the
Purchasers and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials. References to the Prospectus in this paragraph (c)
include any supplements thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Purchasers at the request of the
Company and shall so state therein.
(d) On the date of this Agreement and on the Closing
Date, the Company shall have furnished to the Representative the
opinion of Wachtell, Lipton, Rosen & Katz,
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<PAGE>
counsel for the Company, dated the date of this Agreement and the
Closing Date, respectively, to the effect that:
(i) the authorized capital stock of the Company is as
set forth in the Prospectus; and the Shares conform to the
description of the Common Stock contained in the Prospectus;
(ii) the statements in the Registration Statement under
the caption "Certain Federal Income Tax Considerations" and in
the Notices of Redemption under the caption "Certain Federal
Income Tax Considerations," in each case insofar as such
statements constitute summaries of the legal matters referred
to therein, fairly present the information called for with
respect to such legal matters and fairly summarize the matters
referred to therein;
(iii) such counsel has been advised by the staff of the
Commission that the Registration Statement has become
effective under the Act on the date and at the time specified
in such opinion; the Prospectus was filed pursuant to the
subparagraph of Rule 424(b) under the Act specified in such
opinion on the date specified therein in the manner and within
the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement
under the Act has been issued and, to such counsel's
knowledge, no proceeding has been instituted or threatened;
(iv) the Registration Statement and the Prospectus, and
any further amendments or supplements thereto (other than the
financial statements and other financial data therein, as to
which such counsel need express no opinion), comply as to form
in all material respects with the requirements of the Act and
the rules and regulations of the Commission thereunder; and
the documents from which information is incorporated by
reference in the Prospectus, when they became effective or
were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of
the Act and of the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder (other than the
financial statements and other financial data therein, as to
which such counsel need express no opinion);
(v) such counsel has no reason to believe that on the
Effective Date or at the Execution Time (or, for the opinion
to be delivered on the Closing Date, at the latest Effective
Date) the Registration Statement contained or contains any
untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus as of its date (or, for the opinion to be
delivered on the Closing Date, as of the Closing Date)
includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (in
14
<PAGE>
each case, other than the financial statements and other
financial information contained therein, as to which such
counsel need express no opinion).
In rendering such opinion, such counsel may (A) state that their
opinion is limited to matters governed by the laws of the State of New
York or the Federal laws of the United States and (B) rely, as to
matters of fact, to the extent they deem proper, on the representations
made by the Company herein or on certificates of public officials.
References to the Prospectus in this paragraph (d) include any
supplements thereto at the Closing Date. The opinion of such counsel
shall be rendered to the Purchasers at the request of the Company and
shall so state therein.
(e) On the date of this Agreement and on the Closing
Date, the Representative shall have received from Cleary, Gottlieb,
Steen & Hamilton and Shearman & Sterling, counsel for the Purchasers,
such opinion or opinions, dated the date of this Agreement and the
Closing Date, respectively, and addressed to the Representative, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplements thereto) and
other related matters as the Representative may reasonably require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters. The
opinion or opinions of such counsel shall be rendered to the Purchasers
at the request of the Company and shall so state therein.
(f) On the date of this Agreement, on each Effective
Date occurring after the Execution Time and on the Closing Date, the
Company shall have furnished to the Representative a certificate of the
Company, signed by the Chairman of the Board, the Chief Executive
Officer, the Executive Vice President or the Senior Vice President and
the principal financial or accounting officer of the Company, dated the
date of delivery, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and to the effect
that, to the best of their knowledge based upon reasonable
investigation:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects
on and as of the date of such certificate as if made on the
date of such certificate and the Company has complied with all
the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the date of such
certificate;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
or development involving a prospective material adverse change
in the condition (financial or otherwise), earnings, business
or properties of the Company and its subsidiaries, considered
as one enterprise, whether or not arising
15
<PAGE>
from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
(g) At the Execution Time, on each Effective Date
occurring after the Execution Time on which financial information is
included or incorporated in the Registration Statement or the
Prospectus and on the Closing Date, Coopers & Lybrand L.L.P. shall have
furnished to the Representative a letter, dated respectively as of the
Execution Time, each such Effective Date and as of the Closing Date, in
form and substance satisfactory to the Representative, confirming that
they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and
regulations thereunder and containing statements and information of the
type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference in the
Registration Statement and Prospectus.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease in certain line items of the Company's financial statements
specified in the letter or letters referred to in paragraph (g) of this
Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representative, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(j) The Converted Securities (and, as to the purchase of
the Purchased Securities on the Closing Date, the Purchased Securities,
as well) shall have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance, and satisfactory
evidence of such action shall have been provided to the Representative.
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<PAGE>
(k) At the Execution Time, the Company shall have
furnished to the Representative a letter substantially in the form of
Exhibit A hereto addressed to the Representative from each of the
directors and officers of the Company listed on Schedule II hereto.
(l) The Company shall have provided to the
Representative a copy of a letter from Leeway waiving certain
registration rights.
(m) The Company shall have furnished to the
Representative such further information, certificates and documents as
the Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and counsel for the
Purchasers, this Agreement and all obligations of the Purchasers hereunder may
be canceled at, or at any time prior to, the Closing Date by the Representative.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cleary, Gottlieb, Steen & Hamilton, counsel for
the Purchasers, at One Liberty Plaza, New York, New York, on the due date for
delivery thereof.
7. Reimbursement of Purchasers' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Purchasers set forth in Section 6 hereof is not satisfied
other than by reason of a breach by any of Purchasers, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Purchasers, the Company will reimburse the Purchasers severally through Salomon
Smith Barney on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Purchaser, the directors, officers, employees
and agents of each Purchaser and each person who controls any Purchaser within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
17
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reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Purchaser through the Representative
specifically for inclusion therein; PROVIDED, FURTHER, that with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any Purchaser from whom the person asserting any such
loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Purchaser occurs
under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the Company
had previously furnished copies of the Prospectus to the Purchasers, (x)
delivery of the Prospectus was required by the Act to be made to such person,
(y) the untrue statement or omission of a material fact contained in the
Preliminary Prospectus was corrected in the Prospectus and (z) there was not
sent or given to such person, at or prior to the written confirmation of the
sale of such securities to such person, a copy of the Prospectus. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Purchaser, but only
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or omission, or alleged untrue statement or
omission or alleged omission made in the documents referred to in the foregoing
indemnity in reliance upon and in conformity with written information relating
to such Purchaser furnished to the Company by or on behalf of such Purchaser
through the Representative specifically for inclusion in the documents referred
to in the foregoing indemnity, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which any Purchaser may otherwise have. The Company acknowledges that
(i) the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities, (ii) the legend in block capital letters on page 2
related to stabilization and (iii) the sentences related to concessions and the
next to last paragraph related to stabilization under the heading "Standby
Arrangements" in any Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the several Purchasers
for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture
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by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. It is understood, however, that the Company shall, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of local counsel at any time for all such Purchasers and
controlling persons, which firm shall be designated in writing by Salomon Smith
Barney. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party. An indemnifying party shall not be liable
under this Section 8 to any indemnified party regarding any settlement or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent is consented to by such
indemnifying party, which consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Purchasers severally agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more
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<PAGE>
of the Purchasers may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and by the
Purchasers on the other from the offering of the Securities; PROVIDED, HOWEVER,
that in no case shall any Purchaser (except as may be provided in any agreement
among purchasers relating to the offering of the Securities) be responsible for
any amount in excess of the fees payable by the Company to such Purchaser
pursuant to Section 3 hereof. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Purchasers
severally shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on the
one hand and of the Purchasers on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the sum of (i) the aggregate Redemption Price for the Redeemable Securities
converted by the Purchasers pursuant to Section 2(a) hereof and (ii) the amount
paid by the Purchasers to the Company pursuant to Section 2(b) hereof (less the
total fees payable by the Company to the Purchasers pursuant to Section 3
hereof), and benefits received by the Purchasers shall be deemed to be equal to
the total fees payable by the Company to the Purchasers pursuant to Section 3
hereof. Relative fault shall be determined by reference to, among other things,
whether any untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Purchasers on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Promptly after receipt by a party entitled to contribution under this Section 8
of notice of the commencement of any action, such party will, if a claim for
contribution in respect thereof is to be made against another party or parties
under this paragraph (d), notify such party or parties in writing of the
commencement thereof; but the failure so to notify such party or parties (i)
will not relieve such party or parties from liability under this paragraph (d)
unless and to the extent it or they did not otherwise learn of such action and
such failure results in the forfeiture by such party or parties of substantial
rights and defenses and (ii) will not, in any event, relieve such party or
parties from any obligations to any party entitled to contribution other than
the contribution obligation provided in this paragraph (d). Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls a
Purchaser within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of a Purchaser shall have the same rights
to contribution as such Purchaser, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
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9. Soliciting Conversions. The Purchasers may assist
the Company in soliciting conversion of the Redeemable Securities by the holders
thereof but shall not be entitled to compensation by the Company for any such
assistance.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Company at any time prior to the Closing Date, if at any time prior to such
time (i) trading in the Company's Common Stock or in the Depositary Shares shall
have been suspended by the Commission or the New York Stock Exchange, trading in
the Redeemable Securities shall have been suspended by the Commission or trading
in securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Representative, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Purchasers set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Purchaser or the Company or any
of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive the conversion of any Redeemable Securities and the
delivery of and payment for any Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Representatives, will
be mailed, delivered or telefaxed to the Salomon Smith Barney General Counsel
(fax no.: (212) 816-7912 and confirmed to the General Counsel, Salomon Smith
Barney, at 388 Greenwich Street, New York, New York 10013, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Fort James Corporation, 120 Tredegar Street, Richmond, Virginia 23219, telefax
number: (804) 343-4609, attention of the Senior Vice President and General
Counsel.
13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
15. Counterparts. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
21
<PAGE>
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in
this Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement and any post-effective amendment or amendments
thereto became or become effective and each date after the date hereof
on which a document incorporated by reference in the Regulation
Statement is filed.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended.
"Rule 415" and "Rule 424" refer to such rules under the Act.
"Salomon Smith Barney" shall mean Smith Barney Inc. or Salomon
Brothers Inc, to the extent that either such party is a signatory to
this Agreement.
22
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Purchasers.
Very truly yours,
Fort James Corporation
By:___________________________________
Name: Clifford A. Cutchins, IV
Title: Senior Vice President and
General Counsel
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Smith Barney Inc.
By:
------------------------
Name:
Title:
<PAGE>
SCHEDULE I
Purchaser Percentage of Shares
to be Purchased
--------- ----------------
Smith Barney Inc. ................................... 100%
<PAGE>
SCHEDULE II
Directors and Officers
-----------------------
<PAGE>
EXHIBIT A
Fort James Corporation
Standby Underwriting of Common Stock
--------------------------------------
March 10, 1998
Smith Barney Inc.
As Representative of the several Purchasers
c/o Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Standby Agreement (the "Standby Agreement") between Fort James
Corporation, a Virginia corporation (the "Company"), and you as representative
(the "Representative") of a group of Purchasers named therein, relating to a
call for redemption by the Company of all of its outstanding Series K $3.375
Cumulative Convertible Exchangeable Preferred Stock, Series L $14.00 Cumulative
Convertible Exchangeable Preferred Stock and Series N $14.00 Cumulative
Convertible Exchangeable Preferred Stock. Shares of such Preferred Stock are
convertible into shares of the Common Stock, $.10 par value, of the Company
("Common Stock"), at any time prior to 5:00 P.M., New York City time, on the
Redemption Date (as defined in the Standby Agreement).
In order to induce you and the other Purchasers to enter into
the Standby Agreement, the undersigned hereby agrees that, without the prior
written consent of Smith Barney Inc. (which will not be unreasonably withheld),
the undersigned will not, prior to or on the Redemption Date [(and, if the
aggregate number of the Securities (as defined in the Standby Agreement) exceeds
478,127 shares, for an additional period of 90 days following the Redemption
Date)][1], offer, sell, contract to sell, pledge or otherwise dispose of, or
file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as
- --------
1 Bracketed language will be included only in lock-up letters signed by
officers or directors who beneficially own 50,000 or more shares of
Common Stock as of the date of the lock-up letter.
<PAGE>
amended, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable for
such capital stock, or publicly announce an intention to effect any such
transaction, other than shares of Common Stock disposed of as bona fide gifts
approved by Smith Barney Inc.[; PROVIDED, HOWEVER, that following the Redemption
Date, the undersigned may sell up to 15% of the number of shares of Common Stock
that are beneficially owned by the undersigned on the date of this
agreement.][2]
If for any reason the Standby Agreement shall be terminated
prior to the Closing Date (as defined in the Standby Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
-------------------------
[Name]
- ------------------
2 Bracketed language will be included only in lock-up letters signed by
officers or directors who beneficially own 50,000 or more shares of
Common Stock as of the date of the lock-up letter.
A-2
Exhibit 5.1
[LETTERHEAD OF MCGUIRE, WOODS, BATTLE & BOOTHE LLP]
March 10, 1998
Fort James Corporation
120 Tredegar Street
Richmond, Virginia 23219
Fort James Corporation
Gentlemen:
We are acting as counsel to Fort James Corporation, a Virginia
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (the "Registration Statement") you intend to file with the Securities
and Exchange Commission for the purpose of registering under the Securities Act
of 1933, as amended (the "Securities Act"), up to 9,562,554 shares of common
stock, par value $.10 per share of the Company (the "Common Stock"), including
preferred share purchase rights of the Company, issuable upon conversion of all
of the outstanding Series K $3.375 Cumulative Convertible Exchangeable Preferred
Stock (the "Series K Preferred Stock"), par value $10 per share, of the Company
and upon the conversion of all of the outstanding Series L $14 Cumulative
Convertible Exchangeable Preferred Stock, par value $10 per share, of the
Company (the "Series L Preferred Stock") and the Series N $14 Cumulative
Convertible Exchangeable Preferred Stock, par value $10 per share, of the
Company (the "Series N Preferred Stock," and together with the Series K
Preferred Stock and the Series L Preferred Stock, the "Preferred Stock"), the
Series L Preferred Stock and Series N Preferred Stock being represented by the
depositary shares (the "Depositary Shares") of the Company, with each Depositary
Share representing ownership of 1/4 of a share of Series L Preferred Stock or
1/4 of a share of Series N Preferred Stock, and the conversion of the Series L
Preferred Stock and the Series N Preferred Stock being described in the
Registration Statement in terms of the conversion of the Depositary Shares, or
under the standby arrangements described therein, and to the reoffering of any
Common Stock issued pursuant to such conversion by Smith Barney Inc. (the
"Purchaser") or otherwise pursuant to such standby arrangements.
We have participated in the preparation of the Registration Statement
and have examined the corporate records and documents, statements and
certificates of officers of the Company and such other material as we have
deemed necessary to the issuance of this opinion.
<PAGE>
Based upon the foregoing, we are of the opinion that:
(1) the shares of Common Stock to be issued upon conversion of the
Preferred Stock, as contemplated in the Registration Statement, will be, when so
issued, validly issued, fully paid and non-assessable; and
(2) the shares of Common Stock to be issued by the Company and
purchased by the Purchaser, as contemplated in the Registration Statement, will
be, when and if so issued and sold against payment duly made therefor, validly
issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the statement made in reference to our firm in the
related Prospectus under the heading "Legal Matters" and in any supplemented
versions of the Prospectus. We do not admit by giving this consent that we are
in the category of persons whose consent is required under Section 7 of the
Securities Act.
Very truly yours,
/s/ McGuire, Woods, Battle & Boothe LLP
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 (the "Registration Statement"), of our report dated January 23, 1997,
except as to the information presented in Note 17, for which the date is
February 21, 1997, on our audits of the consolidated financial statements of
James River Corporation of Virginia and Subsidiaries ("James River") as of
December 29, 1996, and December 31, 1995, and for each of the three fiscal years
in the period ended December 29, 1996, which report is included in the Annual
Report on Form 10-K of James River for the year ended December 29, 1996.
We also consent to the incorporation by reference in the Registration Statement
of our report dated August 13, 1997, on our audits of the supplemental
consolidated financial statements of Fort James Corporation and Subsidiaries
("Fort James") as of December 29, 1996, and December 31, 1995, and for each of
the three fiscal years in the period ended December 29, 1996, which report is
included in the Current Report on Form 8-K filed on August 27, 1997. The
supplemental consolidated financial statements give retroactive effect to the
merger of James River and Fort Howard Corporation on August 13, 1997, which has
been accounted for as a pooling of interests as described in Notes 1 and 2 to
the supplemental consolidated financial statements. These financial statements
did not extend through the date of consummation and were prepared prior to the
issuance of financial statements of Fort James covering the date of consummation
of the business combination. However, generally accepted accounting principles
proscribe giving effect to a consummated business combination accounted for by
the pooling of interests method in financial statements that do not include the
date of consummation.
We also consent to the incorporation by reference in the Registration Statement
of our report dated August 13, 1997, on our audits of the consolidated financial
statements of Fort James as of December 29, 1996, and December 31, 1995, and for
each of the three fiscal years in the period ended December 29, 1996, which
report is included in the Current Report on Form 8-K dated August 13, 1997
(filed on February 3, 1998).
We also consent to the incorporation by reference in the Registration Statement
of our report dated February 3, 1998, on our audits of the consolidated
financial statements of Fort James as of December 28, 1997, and December 29,
1996, and for each of the three fiscal years in the period ended December 28,
1997, which report is included in the Current Report on Form 8-K dated March 9,
1998.
We also consent to the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Richmond, Virginia
March 9, 1998
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 31, 1997,
included in Fort James Corporation's current report on Form 8-K dated August 13,
1997 (filed on August 25, 1997) and to all references to our Firm included in
this registration statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Milwaukee, Wisconsin,
March 9, 1998
