UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the year ended December 31, 1999
Commission file number 1-7911
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
Fort James 401 (k) PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
FORT JAMES CORPORATION
1650 Lake Cook Road, Deerfield, Illinois 60015-4753
<PAGE>
FORT JAMES 401 (k) plan
INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTAL SCHEDULES, AND EXHIBITS
Page No.
Report of independent accountants 3
Financial statements:
Statements of net assets available for benefits as of
December 31, 1999 and December 31, 1998 4
Statement of changes in net assets available for benefits
for the year ended December 31, 1999 5
Notes to financial statements 6
Supplemental schedule:
Assets held for investment purposes as of December 31, 1999 13
Exhibits to Annual Report on Form 11-K 14
Signatures 15
Note: Supplemental schedules required by the Employee Retirement
Income Act of 1974 that have not been included herein are
not applicable.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of the
Fort James 401(k) Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Fort James 401(k) Plan (the "Plan") at December 31, 1999 and December 31,
1998, and the changes in net assets available for benefits for the Plan for the
year ended December 31, 1999 in conformity with accounting principles generally
accepted in the United States. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes as of December 31, 1999 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PRICEWATERHOUSECOOPERS LLP
Chicago, Illionis
May 26, 2000
<PAGE>
FORT JAMES 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
------------------------------------
<S> <C> <C>
1999 1998
-------------------------------------------------------------------------------
Assets:
Cash equivalents $ 6,954,282 $ 8,328,427
-------------------------------------------------------------------------------
Investments, (See Note 2(d)) 1,439,248,979 508,213,224
Loans receivable from participants 32,394,029 18,070,818
-------------------------------------------------------------------------------
Total investments 1,471,643,008 526,284,042
-------------------------------------------------------------------------------
Receivables:
Accounts receivable from brokers 3,836,214 -
Accrued dividends - 5,545,810
Accrued interest 415,948 15,087
-------------------------------------------------------------------------------
Total receivables 4,252,162 5,560,897
-------------------------------------------------------------------------------
Total assets 1,482,849,452 540,173,366
-------------------------------------------------------------------------------
Liabilities:
Accrued expenses 98,654 -
Due to broker for securities purchased - 5,545,810
-------------------------------------------------------------------------------
Total liabilities 98,654 5,545,810
-------------------------------------------------------------------------------
Net assets available for benefits $ 1,482,750,798 $ 534,627,556
===============================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FORT JAMES 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
<S> <C>
December 31, 1999
--------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Cash dividends $ 6,820,637
Net appreciation in fair value value
of investments (See Note 2(d)) 11,575,506
Interest 2,462,131
--------------------------------------------------------------------------------
Total investment income 20,858,274
--------------------------------------------------------------------------------
Contributions:
Participants' 55,907,599
Employer's 28,473,948
Rollover contributions 2,210,444
Transfers from other plans 999,698,185
--------------------------------------------------------------------------------
Total contributions 1,086,290,176
--------------------------------------------------------------------------------
Total additions 1,107,148,450
--------------------------------------------------------------------------------
Deductions from net assets attributed to:
Distributions to participants (154,006,311)
Administrative costs (5,018,897)
--------------------------------------------------------------------------------
Total deductions (159,025,208)
--------------------------------------------------------------------------------
Net increase in net assets available for benefits 948,123,242
--------------------------------------------------------------------------------
Net assets available for benefits:
Beginning of year 534,627,556
--------------------------------------------------------------------------------
End of year $ 1,482,750,798
================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FORT JAMES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan:
Effective January 1, 1999, the James River Corporation of Virginia Stock
Plus Investment Plan was merged with the Fort Howard Corporation Profit
Sharing Retirement Plan and the Harmon Associates Corporation Profit
Sharing Plan and was renamed the Fort James 401(k) Plan (the "Plan" or
"Fort James Plan"). Approximately 6,100 participants with net assets
available for benefits of approximately $873.6 million were added to the
Plan as a result of the Plan merger.
The following description of the Fort James 401(k) Plan as amended and
restated effective January 1, 1999 (the "Plan" or"Fort James Plan"),
provides only general information on the Plan in effect as of December 31,
1999. Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
(a) General
The Plan is a 401(k) plan and full-time employees of Fort James
Corporation ("Fort James," the "Company" or the "Employer") and its
domestic subsidiaries are eligible to participate. Eligible employees who
elect to participate are referred to as "Participants". The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
(b) Contributions
Participants may contribute up to 15% of their Annual Base Pay, as
defined in the Plan. Participants may transfer into the Plan certain assets
previously held under another tax-qualified plan.
Matching contributions made by the Company vary by employee group, but
generally are equal to 60% of employee contributions up to 10% of Annual
Base Pay for salaried employees and 6% of Annual Base Pay for members of
collective bargaining units. The Company does not match Participant
contributions in excess of these percentages. The Plan also allows for
employer discretionary contributions. Company contributions and
discretionary contributions are made to the Fort James Common Stock Fund,
but may be transferred to other investment funds at any time.
Participant and Company contributions are subject to certain statutory
limitations.
(c) Participant Accounts
Each Participant account is credited with the Participant's contributions
and allocations of the Company's matching contribution, the Company's
discretionary contribution, and Plan earnings. Allocations of Company
contributions and investment earnings are based on Participant
contributions or account balances, as provided by the Plan. Participant
accounts are charged with an allocation of administrative expenses
including a quarterly fee and certain transaction fees, as applicable. The
net appreciation (depreciation) in fair value of investments is also
allocated to the individual Participant accounts based on each
Participant's share of fund investments.
(d) Vesting
Each Participant is 100% vested in their Plan account. A Participant's
vested accounts may not be forfeited or refunded, except to meet
anti-discrimination requirements.
<PAGE>
(e) Investment Options
Effective January 1, 1999, the investment funds listed below have been
established for the investment of Fort James Plan assets. An investment
fund consists of a variety of investments selected by a professional
manager to meet specific objectives of return and risk.
The Fort James Plan provides for investments in the following core
funds:
Investment Fund Objective Primary Investments
-------------------------------------------------------------------------------
Money Market Fund Preserve capital Cash instruments with
maturities of less than one
year such as U.S. Treasury
bills, commercial paper,
and bankers' acceptances
Fixed Income Fund Maximize income Bonds and other types of debt
returns while instruments that typically pay
attempting to income in the form of interest
preserve capital
U.S. Equity Fund Maximize returns Common stock issued by and
through both income U.S.-based companies
capital appreciation
Non U.S. Equity Fund Maximize returns Common stock issued by companies
through capital based in countries and regions
appreciation outside the U.S.
Fort James Stock Fund Growth through Common stock of Fort James
capital appreciation
without regard to
diversification
===============================================================================
Participants may also elect to invest in any of following combination funds
which are premixed portfolios made up of selected proportions of the Fixed
Income Fund, the U.S. Equity Fund, and the Non-U.S. Equity Fund.
Investment Fund Objective Core Investment Mix
-------------------------------------------------------------------------------
Conservative Fund Generation of current income 60% Fixed Income Fund
from investment in fixed income 30% U.S.Equity Fund
securities and capital growth 10% Non-U.S.Equity
through investment in equity Fund
securities of companies
worldwide
Moderate Fund Capital growth through 40% Fixed Income Fund
investment in equity securities 45% U.S.Equity Fund
worldwide and the generation 15% Non-U.S.Equity
of current income from Fund
investment in fixed income
securities
Aggressive Fund Capital growth through 20% Fixed Income Fund
investment in equity securities 60% U.S. Equity Fund
worldwide 20% Non-U.S.Equity
Fund
===============================================================================
<PAGE>
Prior to January 1, 1999, Participants were able to invest in the following
James River Corporation of Virginia StockPlus Investment Plan options
listed below. With the exception of the Fort James Stock Fund and the Crown
Vantage Stock Fund, each of the funds is a mutual fund.
Investment Fund Primary investments
-------------------------------------------------------------------------------
Fort James Stock Fund Fort James Common Stock
Crown Vantage Stock Fund Crown Vantage Common Stock and cash
Fidelity Balanced Fund Broadly diversified portfolio of high-yielding
securities, including common stocks, preferred
stocks, and bonds
IDS New Dimensions Fund Common stocks of U.S. and foreign companies
showing potential for significant growth,
preferred stocks, debt securities and money
market instruments
Masterworks S&P 500 Stock Substantially the same percentages of common
Fund stocks as the Standard & Poor's 500
Composite Stock Price Index
JPM Pierpont Bond Fund Fixed income securities, including U.S.
government and agency securities, corporate
bonds, private placements, and asset-backed and
mortgage-backed securities
JPM Pierpont Money Market High quality U.S. dollar denominated securities
Fund which have effective maturities of not more
than 13 months
===============================================================================
Prior to January 1, 1999, all Participant contributions could be
transferred or reinvested without restriction into any of the James River
Corporation of Virginia StockPlus Investment Plan available investment
funds except the Crown Vantage Stock Fund. The Company's matching and
discretionary contributions were invested in the Fort James Stock Fund and
had to remain in that fund until the Participant reached age 57.
(f) Participant Loans
A Participant is permitted to borrow up to the lesser of one-half of
their account balance or $50,000. The minimum loan is $1,000. The maximum
loan repayment term is five years, except for loans to purchase a primary
residence which have a maximum repayment term of ten years. Loans bear
interest at a minimum of the prime rate in effect on the first day of the
month in which the loan application is received plus 1%. All principal and
interest payments are credited to the investment funds from which the loan
was made. As of December 31, 1999 and 1998, there were 3,335 and 2,779
Participants, respectively, with outstanding loans.
(g) Distributions
If a Participant retires, dies, terminates employment, or becomes
permanently disabled, distributions of their account will be made either in
a lump sum payment or in monthly installments over a period not to exceed
the Participant's, or their beneficiary's, life expectancy. The timing and
form of distributions are subject to certain minimum balance and age
restrictions as provided by the Plan.
Distributions from the Fort James Stock Fund are payable either in whole
shares of Fort James Common Stock, with the value of fractional shares paid
in cash, or entirely in cash. Distributions from the remaining investment
funds are payable in cash.
<PAGE>
(h) Withdrawals
The Plan provides for both hardship and non-hardship withdrawals. With
limited exceptions, after-tax and rollover contributions may be withdrawn
at any time. Before-tax contributions may only be withdrawn without penalty
at age 59 1/2 or in the event of retirement, death, disability, termination
or financial hardship. Financial hardship includes certain medical
expenses, purchase of a primary residence, tuition and related education
fees, or to prevent eviction from, or foreclosure on the mortgage on, the
primary residence.
(i) Administrative Expenses
Investment manager fees and broker commissions are paid out of Plan assets
and recorded as a reduction of the net income allocation. Beginning January
1, 1999, Administrative expenses, including administrative service, trust
legal and accounting fees and other miscellaneous expenses, are paid by the
Plan. Prior to that time, expenses of administering the Plan were paid by
the Company.
(j) Trustee and Recordkeeper
Beginning January 1, 1999, the assets of the Plan were held under an
Agreement of Trust with Northern Trust Company, Chicago, Illinois. Northern
Trust Retirement Consulting, L.L.C., Atlanta, Georgia, serves as
recordkeeper for the Plan.
Prior to January 1999, the assets of the Plan were held under an Agreement
of Trust with The Bank of New York, New York, New York. State Street Global
Advisors, Bloomington, Minnesota, served as recordkeeper for the Plan.
(k) Voting, Tender and Exercise of Other Rights
Each Participant is entitled to exercise voting rights attributable to
the shares allocated to their account and is notified by the trustee prior
to the time that such rights are to be exercised. If timely instructions
are not received from a Participant, the trustee is entitled to vote,
tender or exercise similar rights with respect to shares of Fort James
Common Stock in the Participant's account as the trustee deems appropriate.
(l) Anti-Discrimination Requirements
The Plan is required to meet the anti-discrimination requirements for
highly compensated employees as set forth in Section 401(k) of the Internal
Revenue Code. For years in which the Plan does not meet these requirements,
a refund of Participant contributions made by highly compensated employees
and the related Company matching contributions must be made within two and
one-half months after the close of the Plan year. Refunds made to highly
compensated employees are reflected as a reduction of contributions on the
statement of changes in net assets available for benefits.
2. Summary of Significant Accounting Policies:
(a) Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting, in accordance with generally accepted accounting principles.
(b) Cash Equivalents
Cash equivalents are stated at cost, which approximates market value.
<PAGE>
(c) Investment Valuation
Investments funds are stated at the market value of shares held by the Plan
as of year-end. The Fort James stock fund is valued at its quoted market
price at year-end.
At December 31, 1998, investments held in the Fidelity Balanced Fund, the
Masterworks S&P 500 Stock Fund, the JPM Pierpont Bond Fund and the JPM
Pierpont Money Market Fund are stated at the market value of shares held by
the Plan. Investments in the IDS New Dimensions Fund are reported at market
value or a reasonable approximation thereof, except for securities maturing
in 60 days or less which are valued at amortized cost.
Loans to Participants are valued at the balance of amounts due, plus
accrued interest thereon, which approximates fair value.
(d) Investments
The following presents investments that represent 5 percent or more of the
Plan's net assets:
<TABLE>
<CAPTION>
December 31,
--------------------------
<S> <C> <C>
1999 1998
-------------------------------------------------------------------------------
Assets:
Fort James Stock Fund, 13,103,112 and $358,697,691 $341,346,840 *
8,533,671 shares, respectively
Fixed Income Fund, 217,765,602 shares 272,915,612 -
Money Market Fund, 86,719,925 shares 86,719,925 -
U.S. Equity Fund, 287,082,498 shares 552,859,175 -
Non U.S. Equity Fund, 128,588,320 shares 168,056,576 -
IDS New Dimensions Fund, 1,766,487 shares - 50,954,300
Masterworks S&P 500 Stock Fund 1,884,905 shares - 46,387,499
JPM Pierpont Money Market Fund, 34,365,032 shares - 34,365,032
-------------------------------------------------------------------------------
</TABLE>
* In 1998, the Fort James Stock Fund included certain nonparticipant-directed
amounts.
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $11,575,506 as follows:
Investment funds $ 140,657,853
Common Stock (129,082,347)
______________
Net appreciated value $ 11,575,506
(e) Security Transactions and Related Investment Income
Security transactions are accounted for as of the trade date and dividend
income is recorded as of the dividend record date. Interest income is
recorded on the accrual basis. The cost of securities sold is determined on
an average cost basis.
(f) Realized Gains (Losses) on Common Stock
When a Participant borrows funds, makes a transfer between funds, or
receives a distribution, available cash from the Fort James Stock Fund is
used. For accounting purposes, the Participants average cost basis of
shares which would have been sold by the Plan to provide funds for the
borrowing, transfer, or distribution is deducted from the Particpant's
account, and the value of such shares is reallocated to Participants'
contributions. Accordingly, the Participant realizes a gain or loss for the
difference between their average cost basis of shares which would have been
sold and the fair value of such shares on the distribution date.
<PAGE>
(g) Net Appreciation (Depreciation) in Fair Value of Investments
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
(h) Contributions and Deposits
Both Participant and Company contributions are recorded as of the date the
Participant contributions are withheld from the Participant's compensation.
All contributions are transferred to the trustee as of the date the
Participant contributions are withheld from compensation.
(i) Withdrawals and Distributions
Withdrawals and distributions from the Plan are recorded at the fair value
of the distributed investments, plus cash paid in lieu of fractional shares
where applicable. Withdrawals and distributions are recorded when paid.
(j) Use of Estimates
Financial statements prepared in conformity with generally accepted
accounting principles require management to make estimates and assumptions
that significantly affect amounts reported therein. Actual results could
differ from those estimates.
(k) Accounting Pronouncements
In 1999, the Plan adopted Statement of Position 99-3, "Accounting for
and Reporting of Certain Defined Contribution Benefit Plan Investments and
Other Disclosure Matters," which simplifies disclosures for certain
investments. As a result, prior year amounts in the Plan financial
statements and supporting footnotes have been reclassified to conform to
the current year's presentation.
3. Plan Termination:
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
4. Separate Investment Fund Option Information:
Effective January 1, 1999, all funds in the Fort James Plan were
participant-directed. Prior to that time, the Fort James Stock Fund
included certain nonparticipant-directed amounts. Nonparticipant-directed
net assets available for benefits were $178,569,142 as of December 31,
1998.
<PAGE>
5. Number of Participants
There were 21,545 Participants in the Plan as of December 31, 1999 and
18,287 Participants as of December 31, 1998. The number of Participants
investing in each of the Plan's funds as of those dates was as follows
(Participants may be included in more than one fund, as applicable):
1999 1998
-------------------------------------------------------------------------------
Money Market Fund 9,325
Fixed Income Fund 2,381
U.S. Equity Fund 5,902
Non U.S.Equity Fund 1,153
Conservative Fund 460
Moderate Fund 5,857
Aggressive Fund 3,919
Fort James Stock Fund 20,767 14,610
Crown Vantage Stock Fund 8,721
Fidelity Balanced Fund 2,364
IDS New Dimensions Fund 4,057
Masterworks S&P 500 Stock Fund 3,881
JPM Pierpont Bond Fund 1,104
JPM Pierpont Money Market Fund 1,478
================================================================================
6. Units and Unit Values:
The following funds are accounted for on a unitized, daily-valued fund
basis. The number of units and unit value of net assets as of December 31,
1999, were:
Units Unit
Values
--------------------------------------------------------------------------------
Fort James Stock Fund 13,103,112 $27.38
Money Market Fund 86,719,925 1.00
Fixed Income Fund 217,765,602 1.25
U.S. Equity Fund 287,082,498 1.93
Non U.S. Equity 128,588,320 1.31
================================================================================
7. Tax Status:
The Plan is intended to be a qualified profit sharing plan under Sections
401(a) and 401(k) of the Internal Revenue Code, and as such is not subject
to federal income taxes. The Company has received a favorable determination
letter from the Internal Revenue Service, dated March 25, 1998, with
respect to the qualification of the Plan. The Plan administrator and the
Plan's tax counsel believe that the Plan is designed and operated in
accordance with the applicable requirements of the Internal Revenue Code.
8. Concentration of Credit Risk:
Financial instruments which potentially subject the Plan to concentrations
of credit risk consist of cash investments in excess of the Federal Deposit
Insurance Corporation insurance limit and investments in the various funds.
Credit and market risk associated with these instruments relates to the
performance of the underlying investments. The Plan has no formal policy
requiring collateral to support the financial instruments subject to credit
risk.
<PAGE>
FORT JAMES 401(k) PLAN
SCHEDULE H,4(I) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
Identity of Issue Description of Investment Current Value
---------------------------------------------------------------------------------------------
Cash equivalents Interest rate - variable $ 6,954,282
Fort James Corporation Common
Stock, $0.10 par value* 13,103,112 shares 358,697,691
Money Market Fund Interest in mutual funds at $1.00 per unit 86,719,925
Fixed Income Fund Interest in mutual funds at $1.25 per unit 272,915,612
U.S. Equity Fund Interest in mutual funds at $1.93 per unit 552,859,175
Non U.S. Equity Fund Interest in mutual funds at $1.31 per unit 168,056,576
Participant loans * Interest rate - 6% to 10.5%; various maturities 32,394,029
==============================================================================================
</TABLE>
* Party in interest to the Plan
<PAGE>
EXHIBITS TO ANNUAL REPORT ON FORM 11-K
The exhibits listed below are filed as part of this Annual Report on Form
11-K. Each exhibit is listed according to the number assigned to it in the
Exhibit Table of Item 601 of Regulation S-K.
Exhibit
Number Description
______ ____________
23 Consent of Independent Accountants, filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Committee which administers the Plan have duly caused this
annual report to be signed by the undersigned hereunto duly authorized.
FORT JAMES CORPORATION 401(k) PLAN
June 26, 2000 /s/Clifford A. Cutchins, IV
Committee Member - Clifford A. Cutchins, IV
June 26, 2000 /s/Daniel J. Girvan
Committee Member - Daniel J. Girvan
June 26, 2000 /s/Ernst A. Haberli
Committee Member - Ernst A. Haberli
Committee Member - Diana S. Ferguson
June 26, 2000 /s/Catherine M. Freeman
Committee Member - Catherine M.Freeman
June 26, 2000 /s/Jane R. Lateer
Committee Member - Jane R. Lateer
June 26, 2000 /s/Joseph W. McGarr
Committee Member - Joseph W. McGarr
