<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Fort James Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[FORT JAMES LOGO]
March 17, 2000
Dear Shareholder:
It is our pleasure to invite you to the Annual Meeting of
Shareholders of Fort James Corporation to be held at 10:30
a.m. Central Daylight Time on Thursday, April 27, 2000, in the
Botanic Gardens, 1000 Lake Cook Road, Glencoe, Illinois. A
Notice of this Annual Meeting and a Proxy Statement covering
the business of the meeting are enclosed, along with the
Company's Annual Report to Shareholders for the fiscal year
ended December 26, 1999. During the meeting, time will be
provided for a review of operations for the past year and
items of general interest about the Company.
It is important that your shares be represented at the
meeting whether or not you expect to attend; therefore, please
promptly sign, date, and return the proxy card in the
accompanying postage-paid envelope, or complete your proxy by
telephone.
We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Miles L. Marsh
Miles L. Marsh
Chairman and Chief Executive Officer
<PAGE>
[FORT JAMES LOGO]
- -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2000
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF
FORT JAMES CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders of Fort James
Corporation ("Fort James" or the "Company") will be held at 10:30 a.m. Central
Daylight Time on Thursday, April 27, 2000, in the Botanic Gardens, 1000 Lake
Cook Road, Glencoe, Illinois, for the following purposes:
1. To elect to the Board of Directors persons to serve until the next
Annual Meeting of Shareholders; and
2. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on February 28, 2000,
will be entitled to vote at the Annual Meeting.
It is important that your shares be represented and voted. Even if you plan
to attend the meeting, please vote your shares by proxy, either by dating,
signing, and returning the enclosed proxy card in the postage-paid envelope
provided, or by calling the telephone number and following the instructions
provided on your proxy card.
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 26, 1999, is being mailed to you with this Notice and the Proxy
Statement.
You are cordially invited to attend the meeting.
By order of the Board of Directors,
Clifford A. Cutchins, IV
Senior Vice President,
General Counsel and
Corporate Secretary
March , 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ABOUT THE MEETING........................................................... 1
Who Can Vote............................................................... 1
How to Vote................................................................ 1
Recommendation of Board of Directors....................................... 1
Vote Required for Election of Directors.................................... 1
Revocation of Proxy........................................................ 1
Quorum..................................................................... 1
Solicitation............................................................... 2
THE BOARD OF DIRECTORS...................................................... 2
Information on Nominees.................................................... 2
Board of Directors and Committees.......................................... 4
Compensation of Directors.................................................. 5
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS......................... 6
PRINCIPAL SHAREHOLDERS...................................................... 7
EXECUTIVE COMPENSATION...................................................... 7
Report of the Compensation Committee....................................... 7
Employment Agreements...................................................... 9
Executive Summary Compensation Table....................................... 11
Stock Options.............................................................. 12
Pension Benefits........................................................... 13
PERFORMANCE GRAPH........................................................... 15
ADDITIONAL INFORMATION...................................................... 16
Section 16(a) Beneficial Ownership Reporting Compliance.................... 16
Independent Accountants.................................................... 16
Other Matters That May Come Before the Meeting............................. 16
Proposals for 2001 Annual Meeting.......................................... 16
Annual Report.............................................................. 16
</TABLE>
<PAGE>
FORT JAMES CORPORATION
P.O. Box 89
Deerfield, Illinois 60015-0089
Proxy Statement
ABOUT THE MEETING
The Board of Directors of Fort James Corporation ("Fort James" or the
"Company") is soliciting proxies to be voted at the Annual Meeting of
Shareholders to be held at 10:30 a.m. Central Daylight Time on April 27, 2000,
in the Botanic Gardens, 1000 Lake Cook Road, Glencoe, Illinois, and any
adjournment thereof. This Proxy Statement and proxy card are being mailed to
shareholders on or about March 17, 2000.
Who Can Vote
Shareholders of record of the Company's Common Stock at the close of
business on February 28, 2000, (the "Record Date") are entitled to receive
notice of, and to vote at, the Annual Meeting and any adjournment thereof.
Each share of Common Stock is entitled to one vote on each matter presented to
the shareholders.
How to Vote
You may vote in person at the Annual Meeting or by proxy. There are two ways
to vote by proxy. You may vote by proxy by either (i) dating, signing, and
returning the enclosed proxy card, or (ii) calling the telephone number and
following the instructions provided on the proxy card. Your telephone vote
authorizes the persons named on the proxy card to vote your shares in the same
manner as if you dated, signed, and returned your proxy card. If your shares
are held in street name, you may want to contact your broker or nominee to
determine whether you will be able to vote by telephone. Execution of the
accompanying proxy will not affect a shareholder's right to attend the Annual
Meeting and vote in person.
Recommendation of Board of Directors
The Board of Directors recommends that you vote by proxy even if you plan to
attend the meeting. If you vote by proxy, you authorize the named proxies to
vote your shares in the manner you direct. If you do not specify how to vote,
the named proxies will vote your shares FOR the election of the nominated
directors. Proxies cannot be voted for a greater number of persons than the
number of nominees named.
Vote Required for Election of Directors
The director nominees who receive the highest number of votes will be
elected to the Board of Directors. If you withhold your vote as to one or more
directors, your shares will not be voted for the director or directors
indicated. Votes that are withheld will have no effect on the outcome.
Revocation of Proxy
You may revoke your proxy by delivering written notice prior to the time of
voting at the Annual Meeting. You may change your previously delivered vote by
submitting a new proxy card or by providing a new vote by telephone. If you
attend the meeting, you may also change your vote by voting in person.
Quorum
To carry on the business of the meeting, a quorum must be present. This
means a majority of the outstanding Common Stock on the Record Date must be
represented. As of the Record Date, 213,318,950 shares of Common Stock were
outstanding. If you elect to withhold or abstain the proxies' authority to
vote (including broker non-votes), your shares will count toward a quorum but
will have no effect on the action taken.
1
<PAGE>
Solicitation
The Company will pay the cost of soliciting proxies. Solicitation will be
made initially by mail; however, the directors, officers, and employees of the
Company and its subsidiaries, without additional compensation, may solicit
proxies by telephone, other methods of telecommunication, or personal
interview. The Company intends to engage Georgeson Shareholder Communications
Inc. to solicit proxies from brokers, banks, and other institutional holders
at an estimated fee of approximately $8,000 plus reimbursable expenses.
THE BOARD OF DIRECTORS
Information on Nominees
The Nominating Committee has nominated each of the nominees named below to
the Board of Directors. Each elected director will serve a one-year term,
which will run until the next Annual Meeting of Shareholders or until his or
her successor has been elected. Although the Company anticipates that all of
the nominees will be able to serve, if at the time of the meeting any nominees
are unable or unwilling to serve, your proxy will be voted at the discretion
of the persons named therein for such other person or persons as the Board of
Directors may designate.
<TABLE>
<CAPTION>
Business Experience and
Directorships
Name Age Principal Occupation In Other Public Companies
---- --- -------------------- -------------------------
<C> <C> <C> <S>
Barbara L. Bowles 52 President and Chief Has held present position
Executive Officer, more than five years.
Kenwood Group, Inc. Director of The Black &
(investment management Decker Corporation and
firm) Wisconsin Energy
Corporation.
William E. Bradford 65 Retired Chairman of Retired from Halliburton
Halliburton Company Company January 2000,
(energy services and where he had served as
engineering and Chairman since 1998.
construction company) Served Dresser
Industries, Inc. as
Chairman of the Board
from 1996 to 1998, as
Chief Executive Officer
from 1995 to 1998, and as
President from 1992 to
1996. Director of
Ultramar Diamond Shamrock
Corporation and Kerr-
McGee Corporation.
William T. Burgin 56 Partner, Bessemer Venture Has held present position
Partners (venture capital more than five years.
partnership) Director of 25 mutual
funds managed by Scudder
Kemper Investments, Inc.
James L. Burke 61 President and Chief Has held present position
Executive Officer of SP more than five years.
Newsprint Company
Worley H. Clark, Jr. 67 President, W.H. Clark Has held present position
Associates, Ltd. more than five years.
(consulting firm) Chairman Emeritus, Nalco
Chemical Company. Retired
from Nalco Chemical in
1994, where he served as
Chairman and Chief
Executive Officer.
Director of Merrill Lynch
& Co., Inc., USG
Corporation, Bethlehem
Steel Corporation,
Ultramar Diamond Shamrock
Corporation and
Millennium Chemicals,
Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Business Experience and
Directorships
In Other Public
Name Age Principal Occupation Companies
---- --- -------------------- -----------------------
<C> <C> <C> <S>
Gary P. Coughlan 56 Chief Financial Officer Has held present
and Senior Vice position more than five
President, Finance, years.
Abbott Laboratories
(diversified health care
company)
William V. Daniel 71 Retired Managing Retired from First Union
Director, First Union Securities, Inc. in June
Securities, Inc. 1999. Prior to that
(investment banking and time, served as Managing
financial services Director of First Union
company) Securities, Inc. for
more than five years.
Ernst A. Haberli 51 President, North American Has held present
Tissue Operations and position since January
Technology of the Company 2000. Executive Vice
President and Chief
Financial Officer of the
Company from 1997
through 1999, and Senior
Vice President, Strategy
from 1996 to 1997. From
1990 to 1995 served as
President of Pet
International. Director
of American Commercial
Lines Holdings LLC.
Miles L. Marsh 52 Chairman, President and Has held present
Chief Executive Officer position of Chief
of the Company Executive Officer since
1995, position of
Chairman since 1996, and
position of President
from 1995 to 1997, and
from 1998 to present.
From 1991 to 1995,
served as Chairman and
Chief Executive Officer
of Pet, Inc. Director of
GATX Corporation,
Whirlpool Corporation
and Morgan Stanley Dean
Witter & Co.
Robert M. O'Neil 65 Director, The Thomas Has held present
Jefferson Center for the position more than five
Protection of Free years.
Expression
Anne Marie Whittemore(/1/) 53 Partner, McGuire, Woods, Has held present
Battle & Boothe, LLP (law position more than five
firm) years. Director of Owens
& Minor, Inc., T. Rowe
Price Associates, Inc.
and Albemarle
Corporation.
</TABLE>
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(/1/)McGuire, Woods, Battle & Boothe serves as outside legal counsel to the
Company.
The Bylaws of the Company provide for a Board of Directors consisting of
twelve members. Proxies cannot be voted for a greater number of persons than
the eleven nominees named.
3
<PAGE>
Board of Directors and Committees
The Board of Directors met on nine occasions during 1999. All members of the
Board, except Ms. Bowles, attended at least 75 percent, in the aggregate, of
the meetings of the Board and committees on which they served. Ms. Bowles was
unable to attend a meeting of the Board and a Committee meeting due to a
conflict with the meeting of another board of directors on which she serves.
The following table shows certain committees of the Board of Directors and the
members who currently serve on those committees.
COMMITTEES
<TABLE>
<CAPTION>
DIRECTOR Audit Compensation Executive Finance Nominating
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Barbara L. Bowles X X
- ----------------------------------------------------------------------------------------
William E. Bradford X
- ----------------------------------------------------------------------------------------
William T. Burgin X X
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James L. Burke X X
- ----------------------------------------------------------------------------------------
Worley H. Clark, Jr. X X X*
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Gary P. Coughlan X X* X
- ----------------------------------------------------------------------------------------
William V. Daniel X* X X
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Ernst A. Haberli
- ----------------------------------------------------------------------------------------
Miles L. Marsh X* X
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Richard L. Sharp X X
- ----------------------------------------------------------------------------------------
Anne Marie Whittemore X X
</TABLE>
- --------
XCommittee Member
*Committee Chair
Audit Committee. This committee consists of only non-employee directors
("Outside Directors"). The Audit Committee met on three occasions during 1999.
The Audit Committee reviews accounting and auditing matters with management,
members of the Company's internal audit staff, and representatives of the
Company's independent accountants. The Audit Committee reviews the scope of
internal and external audit activities and the results of such audits and is
responsible for making the annual recommendation to the Board of Directors for
the firm of independent accountants to be retained by the Company.
Compensation Committee. This committee consists of only Outside Directors.
The Compensation Committee met on five occasions during 1999 and is
responsible for recommending the salaries and compensation programs for
executive officers to the Board of Directors. This committee is also
responsible for administering the Company's Management Incentive Plan, its
1996 Stock Incentive Plan, and other benefit programs. None of the members of
the Compensation Committee are entitled to participate in any of the Company's
employee benefit plans.
Executive Committee. This committee can exercise most of the powers and
authorities of the full Board of Directors in the management of the Company
between regularly scheduled meetings.
Finance Committee. This committee consists of only Outside Directors. The
Finance Committee meets periodically to review the financial strategy for the
Company, including balance sheet structure and overall capitalization and
related matters.
4
<PAGE>
Nominating Committee. This committee met on one occasion during 1999. The
Nominating Committee recommends candidates for election to the Board of
Directors. The Board of Directors also considers candidates recommended by
shareholders entitled to vote for the election of directors who follow the
procedures set forth under the section entitled "Additional Information--
Proposals for 2001 Annual Meeting."
Compensation of Directors
Fees. Outside Directors receive an annual retainer of $40,000 for serving as
a director, plus reimbursement of expenses incurred in connection with
attending meetings. In addition, each director receives a fee of $2,000 for
each Board meeting attended and $1,000 for each Committee meeting attended.
Directors who are employees of the Company do not receive any additional
compensation for service as directors.
Director Stock Ownership Plan. Under this plan, 50 percent of the annual
retainer is paid to the Outside Directors in Common Stock ("Automatic Award").
Outside Directors may elect to receive the remaining 50 percent of the
retainer in Common Stock ("Elective Award"). The Automatic Award is paid as
the greater of (i) 250 shares of Common Stock or (ii) the number of shares of
Common Stock that equals 50 percent of the retainer based on their fair market
value on the award date. Directors receiving the Elective Award receive the
number of shares of Common Stock that equal the remaining 50 percent of the
retainer based on their fair market value on the award date. These shares of
Common Stock generally are restricted until the end of the director's one-year
term. If a director elects to defer the receipt of Common Stock, cash
dividends and other distributions are credited to the director's deferred
stock account. Dr. Burke, Mr. Bradford and Mr. Coughlan elected to receive 100
percent of their retainer fee in Common Stock.
Stock Option Plan for Outside Directors. Under this plan, each Outside
Director is granted a one-time option to purchase 5,000 shares of Common
Stock. Prior to 2000, Outside Directors were granted a one-time option of
3,000 shares. The plan also grants an annual option to purchase 2,500 shares
of Common Stock to each director who has been an Outside Director for at least
nine months. All options are granted at exercise prices equal to the fair
market value of the Common Stock on the date of grant and are exercisable
immediately.
5
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The table below shows the number of shares of Common Stock beneficially
owned by each director, the executive officers named in the Summary
Compensation Table, and all directors and executive officers as a group as of
the Record Date.
<TABLE>
<CAPTION>
Included in Beneficially Owned Shares
Number of Shares Percent of -------------------------------------
Name Beneficially Ownes(/1/) Class(/2/) Options(/3/) DSOP(/4/) Restricted(/5/) 401(k) Plan(/6/)
---- ----------------------- ---------- ------------ --------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Directors:
Barbara L. Bowles...... 8,077 * 6,500 524 -- --
William E. Bradford.... 5,000 * 5,000 -- -- --
William T. Burgin...... 63,357(/7/) * 10,580 524 -- --
James L. Burke......... 9,948 * 5,500 1,049 -- --
Worley H. Clark, Jr.... 13,493 * 10,580 524 -- --
Gary P. Coughlan....... 12,433 * 7,500 1,049 -- --
William V. Daniel...... 11,468(/8/) * 10,580 -- -- --
Ernst A. Haberli....... 257,175 * 156,500 -- 44,125 1,580
Miles L. Marsh......... 1,075,749 * 712,500 -- 219,838 2,267
Robert M. O'Neil....... 11,616 * 9,564 524 -- --
Richard L. Sharp....... 8,500 * 7,500 -- -- --
Anne Marie Whittemore.. 10,064 * 9,564 -- -- --
Other Named Officers:
John F. Lundgren....... 277,138 * 174,500 -- 46,125 7,355
Joe R. Neil............ 197,066 * 116,028 -- 39,266 6,273
Clifford A. Cutchins,
IV.................... 290,705(/9/) * 194,587 -- 41,094 5,115
All directors and
executive officers as a
group (25 persons)..... 3,442,190(/10/) 1.6% 2,164,435 4,194 640,426 44,526
</TABLE>
- --------
* Less than 1% of Class.
(/1/) Each person has sole voting and investment power over all of the shares
listed, except as set forth below.
(/2/) Any Common Stock that can be acquired through the exercise of stock
options within 60 days of the Record Date is deemed outstanding for the
purpose of computing the percentage of outstanding Common Stock owned by
the shareholder listed in the table. However, such Common Stock is not
deemed outstanding for the purpose of computing the percentage of Common
Stock owned by any other shareholder.
(/3/) Consists of shares that may be acquired within 60 days of the Record Date
through the exercise of stock options.
(/4/) Consists of restricted stock issued under the Director Stock Ownership
Plan; shares deferred under this plan do not have voting rights and are
therefore excluded from the number of shares beneficially owned.
(/5/) Consists of performance and restricted shares issued under the 1996 Stock
Incentive Plan for which the executive officer has voting rights.
(/6/) The Fort James Corporation 401(k) Plan (formerly known as the "StockPlus
Plan") (the "401(k) Plan") reports stock information on a unitized basis
rather than a per share basis. For purposes of calculating the number of
shares beneficially owned, an estimate of the number of shares held in
the 401(k) Plan has been calculated based on the closing stock price of
$27.13 as of December 26, 1999.
(/7/) Includes 3,000 shares held by his former spouse as custodian for their
children as to which he disclaims any beneficial interest.
(/8/) Includes 84 shares held by his spouse for which voting and investment
power is shared.
(/9/) Includes 450 shares held by his child for which voting and investment
power is shared.
(/10/) Includes 4,714 shares held by spouses and children for which voting and
investment power is shared.
6
<PAGE>
PRINCIPAL SHAREHOLDERS
The table below shows the shareholders that beneficially own more than five
percent of the outstanding Common Stock as of the most recent practicable
date.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Class
------------------- ------------------ --------
<S> <C> <C>
Barrow, Hanley, Mewhinney & Strauss, Inc. 26,253,650(/1/) 11.9%
One McKinney Plaza
3232 McKinney Avenue, 15th Floor
Dallas, Texas 75204-2429
Capital Research and Management Company 17,953,300(/2/) 8.3%
333 South Hope Street
Los Angeles, California 90071
</TABLE>
- --------
(/1/)Barrow, Hanley, Mewhinney & Strauss, Inc. ("Barrow, Hanley") had sole
voting power for 5,602,360 shares, shared voting power for 20,651,290
shares, and sole dispositive power for 26,253,650 shares as of December
31, 1999. The beneficial ownership reported by Barrow, Hanley includes
18,728,600 shares for which the Vanguard Windsor Funds--Vanguard Windsor
II Fund ("Windsor II") also reported beneficial ownership. Windsor II
reports beneficial ownership of 18,728,600 shares over which it has
shared voting and dispositive power as of December 31, 1999. Windsor II's
address is P.O. Box 2600, Valley Forge, Pennsylvania 19482.
(/2/)The Capital Research and Management Company ("Capital Research") is an
investment adviser that manages The American Funds Group of mutual funds.
Capital Research had no voting power for the shares, and had sole
dispositive power for 17,953,300 shares as of December 31, 1999.
7
<PAGE>
Strategies
. Generally, total compensation is aligned at a seventy-fifth percentile
compensation target for positions of similar scope at other consumer
products, and paper and forest products companies, assuming the Company
meets the defined performance objectives.
. Annual incentives are used to align variable cash compensation with
short-term business objectives. Variable cash awards will increase as
business and individual results are above plan, and will decrease when
business and individual results fall below plan.
. Equity instruments (stock options, performance shares, and restricted
stock) are used to align a significant portion of the executives' total
compensation with the Company's long-term goal/objective of increasing
shareholder value.
The executive compensation programs consist of specific elements which, in
the aggregate, are aligned with the Company's short- and long-term business
strategies. For 1999, the executive compensation programs consisted of base
compensation, short-term cash incentives, and stock options. Restricted stock
was granted in 1999 on a selective basis.
Section 162(m) of the Internal Revenue Code imposes a $1,000,000 limit on
the amount of compensation that is deductible by the Company with respect to
the CEO and each of the executive officers named in the Summary Compensation
Table, unless specified plan design and administrative parameters are met.
Currently, the Company's 1996 Stock Incentive Plan complies with Section
162(m). The Committee continues to review design alternatives for the
Management Incentive Plan and the consequences of these alternatives.
To determine the Company's comparative position on each of the specified
compensation elements, the Committee uses surveys and reports prepared by
independent compensation consultants. Many of the companies participating in
these surveys are included in the S&P 500 Stock Index. Several of these
companies are also included in the Company's peer group described under the
section entitled "Performance Graph."
Base Compensation. Currently, the Committee evaluates executive officers'
base salaries by reviewing competitive market practices and by subjective
assessment of Company and individual performance. Base compensation is
reviewed annually and is adjusted periodically to be consistent with the
Company's compensation strategy to maintain competitive market positioning.
Short-Term Cash Incentives. The Management Incentive Plan is the short-term
cash incentive component of the executive compensation program. This plan is
designed to provide an added incentive to participants to align each
executive's efforts with the Company's business objectives. Eligibility is
determined by salary grade and compensation survey data. A target award is
assigned to each executive salary grade and consists of an individual
performance factor and a financial performance factor (generally weighted 50
percent each). In 1999, target awards ranged from 10 to 100 percent of base
compensation depending on a participant's salary grade. Participants may earn
awards up to 100 percent of target if plan is achieved and up to 200 percent
of target if maximum performance is achieved.
Financial performance goals for senior executives with corporate-wide
responsibilities generally is projected on corporate earnings-per-share
growth. Financial performance for executive officers with business unit
responsibility generally is based on a matrix that includes earnings-per-share
growth, income from operations, sales growth, and cost savings. In 1999, the
predetermined corporate growth in earnings-per-share goal was not achieved.
Business unit financial performance varied among units. Awards to corporate
and business unit executive officers reflected these considerations.
Stock Options. Stock options granted under the 1996 Stock Incentive Plan are
designed to encourage the Company's executives to enhance the value of the
Company, as reflected in the price of the Common Stock and the shareholders'
return. Key employees, including executive officers, are eligible to receive
stock options. Stock options generally have been granted on an annual basis,
for a term of ten years, and generally vest in equal installments over a
period of two years.
8
<PAGE>
The size of an individual's grant is determined by each individual's
performance and salary grade, as well as by compensation survey data. Stock
options are granted on the basis of the Committee's assessment of merit.
Performance Shares and Restricted Stock. The Committee, in its discretion,
may under the 1996 Stock Incentive Plan award restricted stock, performance
shares, and incentive stock, in addition to stock options. Key employees,
including the executive officers, are eligible to receive such awards.
Performance shares and restricted stock are not granted on a frequent or
regular basis; and in 1999, none of the executive officers received a
performance share grant. As discussed in more detail below, Mr. Marsh received
a restricted stock grant.
Mr. Marsh's Compensation
Base Compensation. The Committee determined that it was appropriate to
increase Mr. Marsh's base salary to $1,050,000 effective January 3, 2000, from
its April, 1998 level of $990,000. The Committee, having reviewed comparative
salary information from published surveys representing consumer products, and
paper and forest products industries, believes Mr. Marsh's salary is
comparable to other salaries of positions with similar scope and
responsibility found in the consumer products, and paper and forest products
industries. Additional information about the terms and conditions of Mr.
Marsh's employment and compensation are further described under the subsection
entitled "Employment Agreements."
Short-Term Cash Incentives. Mr. Marsh's short-term compensation in 1999 was
based 50 percent on individual performance and 50 percent on growth in
corporate earnings per share. Mr. Marsh received an award of $698,465 under
the Management Incentive Plan based on the Company's having failed to achieve
its target earnings-per-share goal, and the Committee's assessment of Mr.
Marsh's individual performance in 1999.
Stock Options. In 1999, the Committee granted Mr. Marsh an option to
purchase 225,000 shares of Common Stock. Stock options were granted to Mr.
Marsh based on the same criteria as the Committee used in granting stock
options to other executive officers of the Company.
Restricted Stock. Based on a competitive analysis of Mr. Marsh's total
compensation as compared to Chief Executive Officers of other consumer
products, and paper and forest products industries, the Committee determined
that, in order to bring Mr. Marsh's total compensation in line with
competitive market practice, it was appropriate to award Mr. Marsh 100,000
restricted shares. The restricted shares vest when Mr. Marsh reaches age 55.
Summary. As shown in the Executive Summary Compensation Table on page 12,
most bonuses for 1999 were significantly lower than those from 1998. This
reduction reflects one of the Compensation Committee's principles--"Executives
should be rewarded for the achievement of financial and individual results
measured against clearly defined goals and objectives." Since the projected
growth in corporate earnings in 1999 was not achieved, the Committee,
consistent with this principle, awarded only a portion of the bonuses that
could have been earned if the goal had been achieved.
Compensation Committee of the Board of Directors:
Robert M. O'Neil, Chairman
Barbara L. Bowles
William T. Burgin
Worley H. Clark, Jr.
William V. Daniel
Richard L. Sharp
Employment Agreements
The executive officers named in the Summary Compensation Table have
employment agreements. The employment agreements were revised as of January 1,
2000, with the exception of Mr. Neil's employment
9
<PAGE>
agreement. Under the agreements, the executive receives a base salary and an
opportunity for a bonus. The base salary as of December 26, 1999, is shown on
the Summary Compensation Table. The named executives also participate along
with peer officers in the Company's incentive, savings, retirement and other
employee benefits programs.
The revised employment agreements are effective for an initial three-year
period that began on January 1, 2000. Beginning January 1, 2001 and each year
thereafter, the revised agreements will be extended automatically for an
additional year to create a new three-year period unless either the executive
or the Company gives six-months notice that the agreement is not to be
renewed. Mr. Neil's agreement became effective on August 13, 1997 and will be
extended by its terms for an additional three years on August 13, 2000.
In the event of a "change of control," the revised agreements are extended
for a fixed three-year period with salary, bonus and other terms and
conditions no less favorable than those in effect before the change of
control. Additionally, the executives will be vested in all shares of
restricted stock, stock options and any other stock-based awards. The revised
agreements further provide that the executives will be made whole on an after-
tax basis with respect to certain excise taxes, which may be imposed after a
change in control.
If an executive elects to retire at or after age 55 but prior to normal
retirement age with twelve-months notice to the Company, the executive will
receive additional retirement benefits. The benefits are: (i) three years of
additional age (but not beyond a deemed age of 65) and three years of
additional service credit for determining retirement benefits, (ii) use of the
final salary and the highest annual bonus paid in the preceding five years to
calculate retirement benefits; (iii) eligibility for retiree medical plan
coverage; and (iv) a lump sum cash payment of $50,000 (the "Enhanced Early
Retirement Benefit"). This provision does not apply to Mr. Marsh or Mr. Neil.
Mr. Marsh's agreement provides for: (i) eligibility for retiree medical plan
coverage and (ii) a lump sum cash payment of $50,000. Mr. Neil's agreement
does not provide additional retirement benefits in these circumstances.
If the Company terminates an executive's employment other than for cause or
disability, or if the executive terminates his employment for good reason, the
executive receives a lump sum cash payment. The payment equals the sum of (i)
any accrued unpaid salary plus a prorated annual bonus based on the highest
bonus in the last five (three for Mr. Neil) years (the "Annual Bonus"), (ii)
three times the executive's salary and Annual Bonus (the "Termination
Payment"), and (iii) if the Executive is not age 55, a supplemental retirement
payment based on additional amounts he would have accrued had he remained
employed for three additional years ("Retirement Payment"). If the executive
(other than Mr. Marsh or Mr. Neil) is age 55 or older, he also receives the
Enhanced Early Retirement Benefit. In addition, the executive will be
automatically vested in all shares of restricted stock, stock options and any
other stock-based awards. The executive and his family also will receive
continued coverage under certain Company welfare benefit plans for three
years. If the termination is after 2002 and before a change in control (or in
the case of Mr. Neil, if the Company fails to renew his employment agreement),
the Termination Payment is two times salary and Annual Bonus, the Retirement
Payment is based on two additional years of employment and the welfare
benefits continue for only two years.
If the Company terminates the executive for cause or if the executive
terminates without good reason, the executive receives only salary and
benefits earned to the date of termination. Upon termination due to disability
or death, the executive (or his estate) would be entitled to any salary and
benefits earned to the date of termination and all shares of restricted stock,
stock options and any other stock-based awards would vest at that time.
10
<PAGE>
Executive Summary Compensation Table
The table below shows the compensation of the CEO and the four other most
highly compensated executive officers as of December 26, 1999, for the last
three years.
Summary Compensation Tables(/1/)
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
--------------------------------------- ------------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary(/1/) Bonus Compensation(/2/) Award(s)(/3/) Options Compensation(/4/)
------------------ ---- ----------- --------- ----------------- ------------- ---------- -----------------
($) ($) ($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Miles L. Marsh 1999 990,000 698,465 128,496 2,913,000 225,000 125,009
Chairman and 1998 1,014,615 1,329,606 198,473 0 250,000 101,710
Chief Executive Officer 1997 923,846 1,673,050 105,137 5,520,043 0 33,258
Ernst A. Haberli 1999 462,000 227,217 55,289 0 53,000 68,323
President, North
American 1998 432,462 516,476 -- 0 80,000 44,169
Tissue Operations and 1997 346,539 501,552 112,001 2,289,276 0 12,747
Technology
John F. Lundgren 1999 426,961 220,790 975,605 0 49,000 43,937
President, European 1998 425,000 441,853 372,767 0 80,000 35,235
Consumer Products 1997 362,077 537,192 126,566 2,289,276 0 12,975
Joe R. Neil 1999 304,923 323,505 -- 0 29,500 83,699
President,
Communications 1998 298,385 137,029 184,006 0 60,000 64,730
Papers 1997 278,808 246,950 -- 1,638,360 0 15,151
Clifford A. Cutchins, IV 1999 419,308 192,482 80,805 0 40,000 53,761
Senior Vice President, 1998 402,923 406,624 138,358 0 70,000 43,251
General Counsel and 1997 329,808 470,270 96,084 2,001,456 0 13,969
Corporate Secretary
</TABLE>
- --------
(/1/)Other than the long-term compensation awards which are reported on a
fiscal year basis, the compensation shown above reflects a calendar year
basis consistent with the Company's pay cycle. Salary earned for 1998
included an additional pay cycle (for all employees).
(/2/)The amount disclosed for Mr. Marsh for 1999 includes a payment of $80,000
related to the Company's buyout of future benefits under a car lease
program. This program had been available to certain executives, and is
being discontinued. The amounts for Mr. Marsh disclosed for 1998 and 1997
include reimbursement of relocation costs of $136,862, and $78,623
respectively. The amount disclosed for Mr. Haberli for 1999 includes
$25,621 for a car allowance. The amount disclosed for Mr. Haberli for
1997 includes reimbursement for membership fees of $62,556 and commuting
costs of $34,357. The amounts disclosed for Mr. Lundgren for 1999, 1998
and 1997 include international assignment equalization payments of
$940,564, $278,556, and $111,535, respectively. The amount disclosed for
Mr. Neil for 1998 includes $174,025 in relocation expenses. The amounts
disclosed for Mr. Cutchins for 1999 and 1998 include reimbursement for
membership fees of $49,295 and $91,117, respectively, and the amount
disclosed for 1997 includes relocation expenses of $76,443.
(/3/)The number and value ($27.13 per share) as of December 26, 1999 of the
restricted and performance shares of Common Stock for the named executive
officers were: Miles L. Marsh, 251,955 shares, $6,835,539; Ernst A.
Haberli 55,503 shares, $1,505,796; John F. Lundgren, 58,253 shares,
$1,580,404; Joe R. Neil, 50,291 shares, $1,364,395; and Clifford A.
Cutchins, IV, 51,984 shares, $1,410,326. In February 1999, Mr. Marsh
received a grant of 100,000 shares of restricted stock under the
Company's 1996 Stock Incentive Plan. In August 1997, Messrs. Marsh,
Haberli, Lundgren, Neil and Cutchins received a grant of 64,112, 25,850,
25,850, 18,500 and 22,600 shares of restricted stock, respectively, and a
grant of 64,112, 25,850, 25,850, 18,500 and 22,600 performance shares,
respectively, under the Company's 1996 Stock Incentive Plan.
11
<PAGE>
Except for Mr. Marsh, performance shares granted to the named executive
officers vest in three to eight years. Performance shares granted to Mr.
Marsh vest, and vesting of performance shares granted to others may be
accelerated, if the Company's financial performance is in one of the top
three quartiles of the Company's peer group. Annual vesting percentages,
which vary by quartile, range from zero to 40 percent. Company performance,
for vesting purposes, is defined as Total Shareholder Return (TSR) quartile
ranking against the TSR ranking of each peer group company. Dividend
equivalents accrue on the performance shares and are paid as the shares
vest. Shares of restricted stock vest in equal amounts over the first three
years after the grant date. Dividends on shares of restricted stock are
paid whether the shares are vested or unvested. Restricted stock and
performance share vesting may be accelerated in certain circumstances,
including a change in control of the Company or the participant's death or
disability.
(4) For 1999, these amounts include Company contributions to the 401(k) Plan,
the Supplemental Deferral Plan, and the Split Dollar Life Insurance Plan.
Split-dollar life insurance amounts represent the actuarial value of the
benefit to the executive of the current year's insurance premium paid by
the Company in excess of that required to fund the death benefit under the
policy. Company contributions allocated to the named executive officers
for 1999 under the 401(k) Plan, the Supplemental Deferral Plan, and the
Split Dollar Insurance Plan were: Miles L. Marsh, $6,000, $53,400 and
$65,609; Ernst A. Haberli, $4,001, $23,719 and $40,603; John F. Lundgren,
$6,000, $18,441 and $19,496; Joe R. Neil, $6,000, $12,295 and $65,404; and
Clifford A. Cutchins, IV, $6,000, $19,159 and $28,602; respectively.
Stock Options
The table below describes the stock options granted to each of the executive
officers named in the Summary Compensation Table during the Company's fiscal
year ended December 26, 1999.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Individual Grants Value at Assumed
---------------------------------------- Annual Rates of
Number of % of Total Stock
Securities Options Price Appreciation
Underlying Granted to Exercise For Option Term(/2/)
Options Employees in Price Expiration --------------------
Name Granted(/1/) Fiscal Year Per Share Date 5% 10%
---- ------------ ------------ --------- ---------- --------- ----------
(#) (%) ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Miles L. Marsh 225,000 9.2 39.25 1/6/09 5,553,926 14,074,738
Ernst A. Haberli 53,000 2.2 39.25 1/6/09 1,308,258 3,315,383
John F. Lundgren 49,000 2.0 39.25 1/6/09 1,209,522 3,065,165
Joe R. Neil 29,500 1.2 39.25 1/6/09 728,181 1,845,355
Clifford A. Cutchins, IV 40,000 1.6 39.25 1/6/09 987,365 2,502,176
</TABLE>
- --------
(/1/)The options were granted under the 1996 Stock Incentive Plan on January
6, 1999 and become exercisable in two equal amounts on the first and
second anniversary date of the grant date. The exercise price is equal to
the fair market value per share of the Common Stock on the grant date.
Vesting may be accelerated in certain circumstances, including a change
in control of the Company or the participant's retirement, disability or
death.
(/2/)The amounts disclosed are the result of calculations at five and ten
percent assumed rates of appreciation permitted by the Securities and
Exchange Commission (the "SEC"); therefore, these amounts are not
intended to forecast potential future appreciation of the Company's
Common Stock price. The amounts disclosed are based on assumed rates of
appreciation of the Company's Common Stock price over the option term. A
zero percent gain in stock price appreciation from the date of grant will
result in zero dollars for the optionee.
12
<PAGE>
The table below describes the options exercised by the executive officers
named in the Summary Compensation Table during fiscal 1999, and the year-end
value of those executives' unexercised stock options.
Aggregated Option Exercises in the Last Fiscal Year
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Securities Underlying Unexercised
Value of Unexercised In-the-Money
Options as of 12/26/99 Options as of 12/26/99(/1/)
Shares Acquired Value -------------------------- -----------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable(/2/)
---- --------------- -------- ----------- ------------- ----------- ------------------
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Miles L. Marsh 0 0 475,000 350,000 69,000 N/A
Ernst A. Haberli 0 0 90,000 93,000 76,750 N/A
John F. Lundgren 1,524 13,289 113,566 89,000 24,754 N/A
Joe R. Neil 0 0 71,278 59,500 83,565 N/A
Clifford A. Cutchins, IV 0 0 139,587 75,000 392,361 N/A
</TABLE>
- --------
(/1/)The value of unexercised in-the-money options as of December 26, 1999 is
equal to the fair market value of Common Stock on that date ($27.13)
minus the exercise price, times the number of shares subject to the
options.
(/2/)As of December 26, 1999, the unexercisable options were not in-the-money,
meaning that the exercise price of the option exceeds the fair market
value of the Common Stock.
Pension Benefits
Retirement Plan. During 1999, the Company provided a defined benefit pension
plan (the "Retirement Plan") to most of its domestic salaried employees,
including executive officers.
Pensionable earnings include base salary, overtime compensation, bonuses and
commissions. Currently, pensionable earnings over $160,000 per year are not
taken into account for purposes of calculating Retirement Plan benefits. The
maximum annual benefit, which may be paid to any retiree from the Retirement
Plan, attributable to employer contributions, is $130,000 per year.
The Retirement Plan in effect during 1999 provided benefits equal to the
product of the participant's years of service while participating in the Plan
(up to 35 years) multiplied by the sum of 1.05 percent of the participant's
"Average Pay" (the average of a participant's highest five consecutive years
of pensionable earnings) plus .65 percent of a participant's Average Pay in
excess of covered compensation (the average of the taxable Social Security
wage bases during a participant's work lifetime, up to 35 years). A
participant will be vested in the portion of benefits attributable to Company
contributions (i) after five years of service or (ii) if the participant had
made contributions to the Retirement Plan which remained in the Plan until
retirement.
An alternative pension benefit formula may be used to calculate the pension
benefit for service through December 31, 1988, for employees who participated
in the Retirement Plan prior to January 1, 1989. However, if the above formula
provides a greater benefit at retirement for such service, that formula will
apply.
Supplemental Benefit Plans. The Company also maintains the Supplemental
Benefit Plan that provides eligible individuals, including executive officers,
with the difference between the benefits they actually accrue under the
Retirement Plan and the benefits they would have accrued under such plan but
for the maximum benefit and compensation limitations imposed by law. The
Supplemental Benefit Plan also provides an additional benefit for certain
Company executives representing the benefit for the officer's service with a
predecessor company, reduced by the total benefit payable to the officer from
the Retirement Plan. Supplemental Benefit Plan distributions in either annuity
payments or as a lump sum are determined at the Company's discretion.
13
<PAGE>
Mr. Marsh participates in a separate supplemental benefit plan based on a
benefit formula of 50 percent of total compensation upon reaching age 55,
offset by Social Security and qualified pension plan benefits assuming the
earliest retirement age, which is currently estimated to be approximately
$1,000,000 at his seventh year of service. This benefit will be reduced for
service less than seven years.
The table below shows the approximate annual pension benefit which would be
provided to salaried employees upon retirement at age 65, under the benefit
formula effective January 1, 1989 through December 31, 1998, assuming that a
single life annuity has been elected (except for Mr. Marsh). The table amounts
are not subject to reduction for Social Security or other offset amounts. The
table amounts include benefits under the Supplemental Benefit Plan, some of
which will be provided by annuities purchased in 1995.
<TABLE>
<CAPTION>
Years of Service
------------------------------------------------------------
Final Average Pay 15 20 25 30 35
- ----------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 48,000 $ 64,000 $ 80,000 $ 96,000 $112,000
400,000 99,000 132,000 165,000 198,000 231,000
600,000 150,000 200,000 250,000 300,000 350,000
800,000 201,000 268,000 335,000 402,000 469,000
1,000,000 252,000 336,000 420,000 504,000 588,000
1,200,000 303,000 404,000 505,000 606,000 707,000
1,400,000 354,000 472,000 590,000 708,000 826,000
</TABLE>
The pensionable earnings for each of the named executive officers are not
materially different from the amounts disclosed as salary and bonus under
annual compensation in the Summary Compensation Table. The estimated years of
benefit service, as of normal retirement at age 65, for the named executive
officers who participate in the pension plan are: Miles L. Marsh, 17 years;
Ernst A. Haberli, 18 years; John F. Lundgren, 34 years; Joe R. Neil, 18 years;
and Clifford A. Cutchins, IV, 23 years.
14
<PAGE>
PERFORMANCE GRAPH
The graph below compares Fort James' five-year cumulative shareholder return
on its Common Stock with the Standard & Poor's ("S&P") 500 Stock Index and an
index of peer companies selected by the Company. The Company has selected a
peer group comprised of the following: American Greetings Inc., Boise Cascade
Corporation, Champion International Corporation, The Clorox Company, Colgate-
Palmolive Company, Georgia-Pacific Corporation, H.J. Heinz Company,
International Paper Corporation, Kimberly Clark Corporation, Mead Corporation,
The Procter & Gamble Company, Sara Lee Corporation, Smurfit-Stone Container
Corporation and Westvaco Corporation. The graph presents a comparison of Fort
James' performance with the S&P 500 Stock Index and the Peer Group, assuming
investments of $100 were made on December 31, 1994 and that dividends were
reinvested.
Comparison of Five-Year Cumulative Total Return Among
Fort James Corporation, S&P 500 Stock Index
and The Peer Group
[Performance Graph of Five-Year Return appears here]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Fort James ($) $100.00 $121.79 $170.84 $200.53 $212.86 $148.58
S&P 500 ($) $100.00 $137.58 $169.17 $225.60 $290.08 $351.12
Peer Group Only ($) $100.00 $127.46 $156.59 $217.66 $248.22 $289.21
</TABLE>
15
<PAGE>
ADDITIONAL INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers and shareholders who own more than ten percent of
the Company's equity securities to file initial reports of ownership on Form 3
and changes in ownership on Forms 4 or 5 with the SEC. SEC regulations require
such shareholders to furnish the Company with copies of all Section 16(a)
forms they file.
Based on its review of such forms and on written representations from such
officers and directors, the Company believes that, during the fiscal year
ended December 26, 1999, all applicable Section 16(a) filing requirements were
met.
Independent Accountants
PricewaterhouseCoopers LLP served as the Company's independent accountants
during the Company's fiscal year ended December 26, 1999. Upon the
recommendation of the Audit Committee, the Board of Directors has appointed
PricewaterhouseCoopers LLP to serve as the independent accountants of the
Company for its fiscal year ending December 25, 2000. A representative of
PricewaterhouseCoopers LLP is expected to be present at the Annual Meeting of
Shareholders. The representative will have an opportunity to make a statement
and answer appropriate questions.
Other Matters That May Come Before the Meeting
The Company has no present knowledge of any other matters to be presented at
the Annual Meeting of Shareholders. If any other matters should properly come
before the meeting, and any adjournment thereof, it is the intention of the
persons named in the accompanying proxy to vote such proxy with respect to any
such other matter in accordance with their best judgment.
Proposals for 2001 Annual Meeting
Any shareholder desiring to make a proposal to be acted upon at the 2001
Annual Meeting of Shareholders must present such proposal to Clifford A.
Cutchins, IV, the Corporate Secretary of the Company, whose address is 1650
Lake Cook Road, P.O. Box 89, Deerfield, Illinois 60015, not later than
November 16, 2000 in order for the proposal to be considered for inclusion in
the Company's Proxy Statement. Any such proposal must meet the applicable
requirements of the Securities Exchange Act of 1934 and the rules and
regulations thereunder.
The Company's Bylaws prescribe the procedure that a shareholder must follow
to nominate directors or to bring other business before shareholders'
meetings. For a shareholder to nominate a candidate for director at the 2001
Annual Meeting of Shareholders, notice of nomination must be given to the
Corporate Secretary of the Company not earlier than December 1, 2000, but
before January 1, 2001. The notice must describe various matters regarding the
nominee, including the name, address, occupation and the number of shares of
Common Stock held by such person. For a shareholder to bring other business
before the 2001 Annual Meeting of Shareholders, notice must be given to the
Corporate Secretary of the Company between December 1, 2000 and January 1,
2001, and must include a description of the proposed business, the reasons
therefore, and other specified matters. However, if the shareholder wishes a
proposal to be considered for inclusion in the Company's Proxy Statement, such
proposal must be presented not later than November 16, 2000, as explained
above. Any shareholder may obtain a copy of the Company's Bylaws, without
charge, upon written request to the Corporate Secretary.
16
<PAGE>
Annual Report
A copy of the Annual Report of the Company for the fiscal year ended
December 26, 1999 is being mailed to you with this Notice and Proxy Statement.
No part of the Annual Report shall be regarded as proxy soliciting material.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 26, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, MAY
BE OBTAINED BY ANY SHAREHOLDER AFTER APRIL 20, 2000, FREE OF CHARGE, UPON
WRITTEN REQUEST TO FORT JAMES CORPORATION, ATTENTION: INVESTOR RELATIONS
DEPARTMENT, 1650 LAKE COOK ROAD, P.O. BOX 89, DEERFIELD, ILLINOIS 60015, OR BY
CALLING (847) 317-5341.
17
<PAGE>
[FOR JAMES LOGO]
<PAGE>
[FORT JAMES LOGO]
This proxy and voting instruction card is solicited by the Board of Directors
for use at the Annual Meeting to be held on April 27, 2000.
REGISTERED SHAREHOLDERS
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify on the reverse. If no choice is specified,
the proxy will be voted FOR Item 1.
By signing this proxy all prior proxies are revoked and Clifford A. Cutchins, V,
Daniel J. Girvan and Kathleen M. Bennett are appointed as proxies (each with
power to act alone and with power of substitution) to vote, as directed, your
shares upon all matters properly coming before the Annual Meeting and all
adjournments.
PARTICIPANTS IN THE FORT JAMES 401(k) PLAN
By signing on the reverse, participants in the Fort James 401(k) Plan direct the
Trustee of the Plan to vote as directed all of the participant's interest in the
Plan. The shares of participants who return signed but unmarked cards and of
participants from whom voting instructions are not received will be voted by the
Trustee of the Plan in the same proportion, except as otherwise required by
applicable law, as the shares held for other participants for which proper
instructions have been received.
See reverse for voting instructions.
There are two ways to vote your Proxy
Your telephone vote authorizes the Named Proxies to vote your shares in the same
manner as if you properly executed and returned your proxy card.
VOTE BY PHONE--TOLL FREE--1-800-240-6326--QUICK***EASY***IMMEDIATE
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week,
until 5:00 p.m. on April 26, 2000.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
o Follow the simple recorded instructions.
