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-b(e)(2))
(X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Bowater Incorporated
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) 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: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
(Bowater logo appears here) Bowater Incorporated
55 East Camperdown
Way
Post Office Box 1028
Greenville, SC 29602
March 31, 1995
To All Shareholders:
You are cordially invited to attend the Annual Meeting of
Shareholders of Bowater Incorporated (the "Company"), which will be held
at the Omni Hotel, 222 East Third Street, Charlotte, North Carolina, on
Wednesday, May 24, 1995, at ten thirty a.m. All holders of the Company's
outstanding Common Stock and Depositary Shares, each representing a
one-fourth interest in the Company's 7% PRIDES, Series B Convertible
Preferred Stock, of record at the close of business on March 27, 1995,
are entitled to notice of and to vote at the Annual Meeting.
Time will be set aside for discussion of each item of business
described in the accompanying Notice of Annual Meeting and Proxy
Statement. A current report on the business operations of the Company
will be presented at the Annual Meeting and shareholders will have an
opportunity to ask questions.
Upon adjournment of the Annual Meeting, a number of the directors
and officers will be available to confer informally with shareholders.
We hope that you will attend the Annual Meeting. Whether or not you
plan to attend, please sign, date and return your proxy promptly in the
envelope provided in order to make certain that your shares will be
represented at the Annual Meeting.
The Company's Annual Report for 1994 is included in this package,
and we urge you to read it carefully.
Sincerely yours,
(signature of A. P. Gammie appears here)
A. P. GAMMIE
CHAIRMAN OF THE BOARD
(recycle logo appears here)
PRINTED ON RECYCLED PAPER MANUFACTURED BY THE COMPANY
AND CONTAINING AT LEAST 10% RECOVERED FIBER
<PAGE>
BOWATER INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 24, 1995
The 1995 Annual Meeting of Shareholders of BOWATER
INCORPORATED (the "Company") will be held at the Omni Hotel, 222
East Third Street, Charlotte, North Carolina, on Wednesday, May
24, 1995, at ten thirty a.m. for the following purposes:
(1) To elect three directors, each for a term of three
years;
(2) To vote on the ratification of the appointment of
KPMG Peat Marwick LLP as the Company's independent auditors
for the year ending December 31, 1995; and
(3) To transact such other business as may properly
come before the Annual Meeting or any adjournment(s)
thereof.
Holders of Common Stock and Depositary Shares, each
representing a one-fourth interest in the Company's 7% PRIDES,
Series B Convertible Preferred Stock, of record at the close of
business on March 27, 1995, are entitled to notice of and to
vote at the Annual Meeting.
By order of the Board of
Directors,
(sig of Wendy C. Shiba appears here)
WENDY C. SHIBA
SECRETARY
Greenville, South Carolina
March 31, 1995
SHAREHOLDERS ARE URGED TO EXECUTE AND RETURN THE PROXY PROMPTLY
IN THE ENVELOPE PROVIDED.
<PAGE>
BOWATER INCORPORATED
55 EAST CAMPERDOWN WAY
P.O. BOX 1028
GREENVILLE, SOUTH CAROLINA 29602
PROXY STATEMENT
DATED MARCH 31, 1995
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT 10:30 A.M. ON MAY 24, 1995
OMNI HOTEL
222 EAST THIRD STREET
CHARLOTTE, NORTH CAROLINA
The only securities of Bowater Incorporated (the "Company") eligible to
vote at the Annual Meeting are the shares of its common stock, par value $1 per
share (the "Common Stock"), and 7% PRIDES, Series B Convertible Preferred Stock,
par value $1 per share ("Series B Stock"). 36,930,919 shares of Common Stock and
1,223,404 shares of Series B Stock were outstanding on March 27, 1995, the
record date for the Annual Meeting. Each share of Series B Stock is deposited
with Trust Company Bank, as depositary, and is represented by four depositary
shares (each a "Depositary Share"). Each share of Common Stock outstanding on
the record date will be entitled to one vote at the Annual Meeting and each
share of Series B Stock outstanding on the record date will be entitled to 3 1/5
votes at the Annual Meeting (this equates to 4/5 of a vote at the Annual Meeting
for each Depositary Share outstanding on the record date). Only holders of
record at the close of business on March 27, 1995, will be eligible to vote at
the Annual Meeting. One-third of the outstanding shares of stock entitled to
vote at the Annual Meeting will constitute a quorum. The enclosed form of proxy
is solicited on behalf of the Company and has been approved by the Board of
Directors. The approximate date of mailing of this Proxy Statement and the
accompanying Notice of Annual Meeting and proxy card is March 31, 1995.
Shares represented by proxies in the accompanying form will be voted in
accordance with instructions indicated thereon. If no contrary instruction is
indicated, shares represented by the proxies will be voted FOR the election of
the three nominees named below to serve as directors for the three-year term
indicated, and FOR ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the year ending December 31, 1995.
Should any nominee named herein for the office of director become unable or
unwilling to accept nomination or election, and if the size of the Board of
Directors is not thereupon reduced, it is intended that the persons acting under
the proxy will vote for the election of another person recommended by the
Nominating and Governance Committee of the Board and nominated by the Board of
Directors. The Company has no reason to believe that any of the three nominees
will be unable or unwilling to serve if elected to office.
Aside from the election of three directors and ratification of the
selection of the Company's independent auditors, the Company does not know of
any other matters that will be presented at the Annual Meeting. However, if any
other matters properly come before the Annual Meeting, or any adjournments
thereof, the person or persons voting the proxies will vote them in accordance
with their best judgment on those matters.
Execution of the enclosed proxy will not affect a shareholder's right to
attend the Annual Meeting and vote in person. Any shareholder giving a proxy has
the right to revoke it by giving written notice of revocation to the Secretary
of the Company at any time before the proxy is voted, or by executing and
delivering to the Company a later-dated proxy at any time before the earlier
proxy is voted, or by attending the Annual Meeting and voting his or her shares
in person (although attendance at the Annual Meeting will not, in and of itself,
constitute revocation of a proxy). No such notice of revocation or later-dated
proxy, however, will be effective until received by the Secretary of the Company
at or prior to the Annual Meeting.
Directors are elected by a plurality of votes of the shares present in
person or represented by proxy at the 1995 Annual Meeting. The affirmative vote
of the holders of a majority of the shares that are present in person or
represented by proxy at the 1995 Annual Meeting is required to approve the
ratification of the selection of independent auditors and to act on any other
matters properly brought before the Annual Meeting. In the election of
directors, votes may be cast for or votes may be withheld from each nominee.
Abstentions may not be specified with respect to the election of directors. As
to the other
1
<PAGE>
matters submitted for shareholder vote, abstentions have the same effect as a
vote against the matter. Broker non-votes (shares voted on one but not all of
the matters on proxies returned by brokers or others) will have no effect upon
the vote on any of the matters submitted for shareholder approval.
ITEM NO. 1
ELECTION OF DIRECTORS
INFORMATION ON NOMINEES AND DIRECTORS
The Board of Directors of the Company is divided into three classes: Class
I, Class II and Class III. Each class consists as nearly as possible of
one-third of the total number of directors, and one class is elected each year
for a three-year term. The term of the Class II directors expires this year, and
the successors are to be elected at this Annual Meeting for a three-year term
expiring in 1998. The terms of the Class I and Class III directors do not expire
until 1997 and 1996, respectively.
The following information is provided for the three nominees who are the
Class II directors, and also for the Class I and Class III directors.
NOMINEES FOR DIRECTOR TO BE ELECTED AT THE 1995 ANNUAL MEETING
(CLASS II)
<TABLE>
<S> <C>
HUGH D. AYCOCK RETIRED PRESIDENT AND CHIEF OPERATING OFFICER OF NUCOR CORPORATION -- Mr. Aycock was
Age: 64 President and Chief Operating Officer of Nucor Corporation, a steel and steel products
Director since 1987 company, from 1984 to 1991. He previously held various management positions, including that
of General Manager, at Nucor Corporation operating units. Mr. Aycock serves as a director of
Nucor Corporation. Since retiring from Nucor Corporation, Mr. Aycock has been engaged in
managing family investments in various entrepreneurial activities.
DONALD R. MELVILLE RETIRED CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF NORTON COMPANY -- Mr. Melville was Chief
Age: 68 Executive Officer of Norton Company, a diversified manufacturing company, from 1980 until
Director since 1984 his retirement at the end of 1987. He was Chairman from 1985 to 1987, President from 1979 to
1986 and Executive Vice President from 1971 to 1979. He is a director of The Perkin-Elmer
Corporation and Acme-Cleveland Corporation.
ARNOLD M. NEMIROW PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE COMPANY -- Mr. Nemirow became Chief Executive
Age 52 Officer of the Company on March 1, 1995. He has served as President of the Company since
Director since September 1994 September 1994 and served as Chief Operating Officer of the Company from September 1994
through February 1995. Mr. Nemirow served as President and Chief Executive Officer and a
director of Wausau Paper Mills Company, a pulp and paper company, from July 1990 through
July 1994, and as Chairman, President and Chief Executive Officer and a director of Nekoosa
Papers, Inc., the business papers division of Great Northern Nekoosa Corporation, from 1988
to March 1990, and as Vice President of Great Northern Nekoosa Corporation from 1984 to
March 1990. Mr. Nemirow is also a director of WPL Holdings, Inc.
</TABLE>
DIRECTORS SERVING UNTIL THE 1996 ANNUAL MEETING OF SHAREHOLDERS
(CLASS III)
<TABLE>
<S> <C>
FRANCIS J. AGUILAR PROFESSOR, HARVARD UNIVERSITY GRADUATE SCHOOL OF BUSINESS -- Dr. Aguilar has been a faculty
Age: 62 member at the Harvard University Graduate School of Business since 1967. Dr. Aguilar also
Director since 1984 has served as Executive Director of the Management Education Alliance, a non-profit
educational corporation, since May 1994. Dr. Aguilar is a director of Dynamics Research
Corporation and Burr-Brown Corporation, and also acts as an independent business consultant.
JOHN A. ROLLS PRESIDENT AND CHIEF EXECUTIVE OFFICER OF DEUTSCHE BANK NORTH AMERICA -- Mr. Rolls has served
Age: 53 as President and Chief Executive Officer of Deutsche Bank North America, an international
Director since 1990 banking company, since 1992. Mr. Rolls was Executive Vice President and Chief Financial
Officer of United Technologies Corporation, an aerospace and climate control systems
company, from July 1986 to 1992. Prior to that he was Senior Vice President and Chief
Financial Officer with RCA Corporation.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
KENNETH M. CURTIS MEMBER, CURTIS THAXTER STEVENS BRODER & MICOLEAU, LIMITED LIABILITY COMPANY, P.A. -- Mr.
Age: 64 Curtis was a partner in the Portland, Maine, law firm of Curtis Thaxter Stevens Broder &
Director since 1993 Micoleau from 1975 to January 1, 1995, when the firm became a limited liability company, of
which he currently is a member. Mr. Curtis also served as President of Maine Maritime
Academy from October 1986 to September 1994. He was formerly Secretary of State of Maine
from 1965 to 1966, Governor of Maine from 1967 to 1975, and U.S. Ambassador to Canada from
1979 to 1981. Mr. Curtis is a director of Key Corp.
</TABLE>
DIRECTORS SERVING UNTIL THE 1997 ANNUAL MEETING OF SHAREHOLDERS
(CLASS I)
<TABLE>
<S> <C>
ANTHONY P. GAMMIE CHAIRMAN OF THE BOARD OF THE COMPANY -- Mr. Gammie became Chairman of the Board in January
Age: 60 1985. He served as Chief Executive Officer of the Company from January 1983 to March 1,
Director since 1979 1995. He was President from January 1983 to July 1992. He was President of the Company's
Pulp and Paper Group from August 1981 to December 1982, and Executive Vice President of the
Company from 1979 to 1982. He was a director of Bowater plc* until July 1984 and, prior to
being transferred to the United States at the end of 1978, he was Chairman and Managing
Director of Bowater United Kingdom Limited. He is also a director of Alumax Inc. and The
Bank of New York.
H. GORDON MACNEILL CHAIRMAN OF JANNOCK LIMITED -- Mr. MacNeill has been Chairman of Jannock Limited, a building
Age: 69 products company, since 1990, prior to which he had served as President and Chief Executive
Director since 1986 Officer since 1976. Mr. MacNeill is also Chairman of the Board of IPL Energy Inc. (formerly
Interprovincial Pipe Lines System, Inc.) and Wajax Limited and a director of Home Oil
Company Limited.
RICHARD BARTH CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF CIBA-GEIGY CORPORATION -- Mr. Barth
Age: 63 became Chairman of Ciba-Geigy Corporation, a diversified chemical products company, in July
Director since 1991 1990. He has been President and Chief Executive Officer of Ciba-Geigy Corporation since
1986, Chief Financial Officer from 1979 to 1986 and Secretary and General Counsel from 1974
to 1986 and from 1970 to 1986, respectively. He is also a director of The Bank of New York.
</TABLE>
* Bowater plc is the former parent company of the Company, but since 1984 the
two companies have not been affiliated.
BOARD AND COMMITTEE MEETINGS
The Board of Directors met eight times during 1994. The Board has an Audit
Committee consisting of Messrs. Rolls and Curtis, a Nominating and Governance
Committee consisting of Messrs. Aguilar, Aycock and Richard Laster, a Human
Resources and Compensation Committee consisting of Messrs. Melville, Barth and
Laster, a Finance Committee consisting of Messrs. Barth, MacNeill and Rolls, and
an Executive Committee consisting of Messrs. Gammie, Aguilar and MacNeill. Mr.
Laster currently serves as a Class II director. Mr. Laster has served as a
director of the Company since 1984 and will retire as a director after the
Annual Meeting.
The Audit Committee, which met three times in 1994, reviews the scope and
results of the annual audit of the Company, approves the non-audit services
rendered by the independent auditors to the Company and considers the effect of
such services on the independence of such auditors, recommends to the Board
independent auditors for the ensuing year (subject to ratification by the
shareholders), and reviews the accounting policies of the Company and the
Company's systems of internal controls and internal auditing procedures.
The Nominating and Governance Committee, which met six times in 1994,
recommends nominees for election to the Board and addresses issues of corporate
governance for Board consideration. Recommendations for director nominees from
shareholders will be considered by the Nominating and Governance Committee.
Shareholders desiring to make a recommendation to the Nominating and Governance
Committee should submit the name and business background of each proposed
nominee to the attention of the Secretary of the Company at the Company's
principal office no later than November 28, 1995. The Committee also serves in
an oversight capacity with respect to the Company's compliance with
environmental and health and safety regulations.
The Human Resources and Compensation Committee, which met five times in
1994, recommends to the Board proposals for adoption, amendment or termination
of the Company's employee benefits programs; administers executive bonus plans
and awards and stock option plans and grants thereunder; reviews programs
followed by management in developing executive resources for current and future
operations; and reviews and approves the compensation of officers and certain
other executives of the Company.
3
<PAGE>
The Finance Committee, which met two times in 1994, reviews and oversees
the financial affairs of the Company. The Committee also provides financial
oversight and direction of the Company's pension plans, savings plans and other
benefit plans, including recommending to the Board the selection of trustees and
the amount of contributions to be made by the Company under these plans. In
addition the Committee reviews and approves the adoption of actuarial or
accounting methods or assumptions under these plans, and reviews the action of
management in establishing investment policy, approving investment managers, and
general administration of the plans.
The Executive Committee meets from time to time to make decisions between
meetings of the Board pursuant to authority delegated by the Board of Directors.
All directors attended at least 75% of the aggregate of the meetings of the
Board of Directors and of Board committees on which they served in 1994.
DIRECTOR COMPENSATION
Each director who is not an employee of the Company received in 1994 an
annual retainer of $20,000, a fee of $1,000 for each Board meeting attended, and
a fee of $800 for each Board committee meeting attended. Each director was
reimbursed for reasonable expenses, including but not limited to transportation
and lodging, incurred in attending meetings. In addition, during 1994 Mr. Aycock
was paid a consulting fee of $2,000 for his services in connection with the
Company's cost-reduction efforts.
DIRECTORS' DEFERRED COMPENSATION PLAN
In February 1989, the Company adopted a Directors' Deferred Compensation
Plan (the "Deferred Plan"), which permits members of the Board of Directors of
the Company who are not employees of the Company ("Outside Directors") to elect
irrevocably to defer receipt of all or a part of their annual retainer and
meeting fees. On the date on which this compensation would have been payable, a
participating Director will have his Deferred Plan account credited with the
number of shares of Common Stock, including fractional shares, having a value
(with a 5% discount) equivalent to the amount of compensation deferred on that
date. Whenever dividends are paid on shares of Common Stock, each participant's
account will be credited with additional shares having an undiscounted value
equal to the amount of the dividend paid on a single share of such stock,
multiplied by the number of shares of Common Stock, including fractional shares,
credited to the participant's account on the dividend record date. All of the
Company's directors except for Mr. Curtis have accounts under the Deferred Plan.
A participant in the Deferred Plan may elect at the time of deferral to
have the balance of his Deferred Plan Account distributed to him (i) as soon as
possible, or (ii) in a stated number of years, after he ceases to be an Outside
Director.
Although a participant's account will be credited with shares of stock,
there is no requirement that the Company acquire, hold or identify shares of
Common Stock or any other specific asset, nor will amounts credited to a
participant's account under the Deferred Plan be segregated or be deemed to be
in any form of trust. Distribution to a participant shall consist of the number
of whole shares of Common Stock credited to the participant's account on the
date of distribution, and cash in the amount of the value of fractional shares
(if any) credited to the account on that date. The Deferred Plan is administered
by the person (who shall not be a participant in the Deferred Plan) appointed as
plan administrator by the Executive Committee of the Board of Directors.
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
The Company has adopted a Retirement Plan for Outside Directors, effective
July 1, 1988 (the "Outside Directors Retirement Plan", or "Plan"). All of the
Company's current Outside Directors participate in the Plan. The Plan provides
for normal retirement benefits equal to 10% of the participant's annualized
retainer at the termination of service multiplied by the participant's years of
service as an Outside Director of the Company up to a maximum of ten years.
Normal retirement benefits may begin at age 65 after the completion of five or
more years of service, although early retirement is permitted in certain cases.
Participants who elect early commencement of benefit payments after early
retirement receive a reduced benefit.
The Outside Directors Retirement Plan is not a qualified plan that must be
funded under ERISA. The Plan provides that a participant who was an Outside
Director immediately prior to a change in control of the Company and who is
removed from or not renominated to his directorship following such change in
control shall be entitled to early retirement benefits under the Plan regardless
of age or years of service.
4
<PAGE>
CERTAIN INFORMATION CONCERNING STOCK OWNERSHIP
The Company knows of no person who, or group that, owns beneficially more
than 5% of the outstanding shares of Series B Stock or Common Stock of the
Company as of March 28, 1995, except as set forth below:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER TITLE OF CLASS BENEFICIAL OWNERSHIP CLASS
<S> <C> <C> <C>
FMR Corp.(1),(2) Common 4,827,700(1) 13.1%
82 Devonshire Street Series B 120,000(2) 9.8%
Boston, Massachusetts 02109
Franklin Resources, Inc.(3) Common 2,998,900(3) 8.1%
777 Mariners Island Boulevard
San Mateo, California 94404
Norwest Corporation(4) Common 1,913,925(4) 5.2%
Norwest Center
Sixth & Marquette
Minneapolis, Minnesota 55479-1026
Massachusetts Financial Services Series B 114,000(5) 9.3%
Company(5)
500 Boylston Street
Boston, MA 02116
The Prudential Insurance Company Series B 86,450(6) 7.1%
of America(6)
Prudential Plaza
Newark, NJ 07102-3777
Scudder, Stevens & Clark, Inc.(7) Series B 202,137(7) 16.5%
345 Park Avenue
New York, New York 10154
</TABLE>
(1) In an Amendment No. 4 to the Schedule 13G dated February 13, 1995, FMR Corp.
reported that: (i) Fidelity Management & Research Company ("Fidelity"), 82
Devonshire Street, Boston, MA 02109, a wholly-owned subsidiary of FMR Corp.,
is the beneficial owner of 3,687,326 of the shares shown, as a result of
acting as investment adviser to several investment companies registered
under Section 8 of the Investment Company Act of 1940 and as a result of
acting as sub-adviser to Fidelity American Special Situations Trust
("FASST"), a unit trust established and authorized by the laws of England;
the number of shares shown as owned by the investment companies includes
282,326 shares of Common Stock which could be obtained upon conversion of
the 86,075 shares of Series B Stock held by the investment companies. See
footnote (2) below; (ii) the investment adviser of FASST is Fidelity
Investment Services Limited, an English company and a subsidiary of Fidelity
International Limited ("FIL"); (iii) FIL, FMR Corp., through its control of
Fidelity, and FASST each has sole power to vote and to dispose of 49,000
shares held by FASST; (iv) Fidelity Capital Appreciation Fund, an investment
company, 82 Devonshire Street, Boston, MA 02109, owns 2,000,000 of the
shares shown; (v) Edward C. Johnson, 3d, Chairman of FMR Corp., and FMR
Corp., through its control of Fidelity, and the funds each has sole power to
dispose of 3,638,326 of the shares owned by the funds; (vi) the power to
direct the voting with respect to these 3,638,326 shares resides in the
Board of Trustees of the funds which own such shares; (vii) Fidelity
Management Trust Company ("Trust"), 82 Devonshire Street, Boston, MA 02109,
a bank which is a wholly-owned subsidiary of FMR Corp., is the beneficial
owner of 1,140,374 of the shares shown, as the result of its serving as
investment manager of institutional accounts; this number includes 111,274
shares of Common Stock which could be acquired upon conversion of the 33,925
shares of Series B Stock owned by the institutional accounts; see footnote
(2) below; (viii) Edward C. Johnson, 3d, and FMR Corp., through its control
of Trust, has sole dispositive power over 1,140,374 shares and sole power to
vote or to direct the voting of 1,119,218 shares owned by institutional
accounts; (ix) Edward C. Johnson, 3d, and Abigail P. Johnson each own 24.9%
of the outstanding voting common stock of FMR Corp. Various Johnson family
members and trusts for the benefit of Johnson family members own FMR Corp.
voting common stock. These Johnson family members, through their ownership
of voting common stock and the execution of a family shareholders' voting
agreement, form a controlling group with respect to FMR Corp.; (x) FIL,
Pembroke Hall, 42 Crowlane, Hamilton, Bermuda, and various foreign-based
subsidiaries provide investment advisory and management services to a number
of non-U.S. investment companies and certain institutional investors. FIL is
also the beneficial owner of the 49,000 shares of Common Stock owned by
FASST. A partnership controlled by Edward C. Johnson, 3d, and members of his
family owns shares of FIL voting stock with approximately 47.22% of the
voting power of FIL.
5
<PAGE>
(2) These shares are represented by 480,000 Depositary Shares. In the Amendment
No. 4 to the Schedule 13G dated February 13, 1995, FMR Corp. reported that:
(i) the investment companies advised by Fidelity own an aggregate of 86,075
shares of Series B Stock; and (ii) the institutional accounts for which
Trust serves as institutional manager own an aggregate of 33,925 shares of
Series B Stock. The shares of Common Stock that can be acquired upon
conversion of these shares of Series B Stock are included in the total
number of shares of Common Stock beneficially owned by FMR Corp. shown
above. See footnote (1).
(3) Franklin Resources, Inc. reported in an Amendment No. 1 to Schedule 13G
dated February 10, 1995, that it has sole voting power with respect to
2,902,500 of these shares, shared voting power with respect to 96,400 of
these shares, and shared dispositive power with respect to all of these
shares. The Amendment to Schedule 13G reported that these shares are held by
Franklin Resources, Inc., its subsidiaries, and investment companies advised
by such subsidiaries.
(4) In a Schedule 13G dated January 31, 1995, Norwest Corporation reported that:
(i) it has sole voting power with respect to 1,794,425 of the shares shown,
shared voting power with respect to 10,500 of the shares shown, and sole
dispositive power with respect to 1,912,925 of the shares shown; (ii) its
subsidiaries, Norwest Colorado, Inc. and Norwest Bank Colorado, National
Association, each have sole voting power with respect of 1,768,125 of the
shares shown, shared voting power with respect to 10,500 of the shares
shown, and sole dispositive power with respect to 1,886,625 of the shares
shown. The address of Norwest Colorado, Inc. is Norwest Bank Building, 1740
Broadway, Denver, CO 80274-8620, and the address of Norwest Bank Colorado,
National Association is 1740 Broadway, Denver, CO 80274-8677; and (iii)
persons other than Norwest Corporation and its subsidiaries have the right
to receive, or the power to direct the receipt of, dividends from, or the
proceeds from the sale of, the shares shown but, to the knowledge of Norwest
Corporation, no interest of any such person represents more than 5% of the
class.
(5) These shares are represented by 456,000 Depositary Shares. In a Schedule 13G
dated February 6, 1995, Massachusetts Financial Services Company reported
that it has sole voting and dispositive power with respect to the shares
shown and that the shares are also owned by certain non-reporting entities
as well as Massachusetts Financial Services Company.
(6) These shares are represented by 345,800 Depositary Shares. In a Schedule 13G
dated February 9, 1995, The Prudential Insurance Company of America reported
that it may have direct or indirect voting and/or investment discretion over
these shares which are held for the benefit of its clients. The Schedule 13G
also reported that The Prudential Insurance Company of America has shared
dispositive power and shared voting power with respect to an aggregate of
85,725 of the shares shown.
(7) These shares are represented by 808,550 Depositary Shares. In a Schedule 13G
dated February 3, 1995, Scudder, Stevens & Clark reported that it holds sole
voting power with respect to 87,875 of the shares, shared voting power with
respect to 17,225 of the shares, and sole dispositive power with respect to
all of the shares. In addition, the Schedule 13G reported that some of these
shares may be held by Scudder, Stevens & Clark of Canada Ltd. and Scudder,
Stevens & Clark Du Canada Ltee., 220 Bay Street, Suite 802, Toronto,
Ontario, Canada.
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<PAGE>
No officer or director owns any of the Company's LIBOR Preferred Stock,
Series A, or Series C Cumulative Preferred Stock. As of March 28, 1995,
ownership of Common Stock and Series B Stock by each of the directors and
nominees for director, by each of the executive officers named in the Summary
Compensation Table, and by all directors and executive officers of the Company,
as a group, was as follows:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF AMOUNT AND NATURE
BENEFICIAL CLASS OF OF BENEFICIAL PERCENT OF CLASS
OWNERSHIP OF OUTSTANDING OWNERSHIP OF COMMON OF OUTSTANDING
NAME OF BENEFICIAL OWNER SERIES B STOCK SERIES B STOCK STOCK(1) COMMON STOCK(2)
<S> <C> <C> <C> <C>
A. P. Gammie 0 -- 471,787.95(3) 1.3%
A. M. Nemirow 0 -- 0 --
D. E. McIntyre 0 -- 99,038.14(4) *
R. J. Pascal 0 -- 91,472.24(5) *
R. C. Lancaster 0 -- 79,591.82(6) *
F. J. Aguilar 0 -- 20,068.59(7) *
H. D. Aycock 0 -- 8,724.43(8) *
R. Barth 0 -- 5,696.14(9) *
K. M. Curtis 0 -- 1,000.00(10) *
R. Laster 0 -- 8,251.66(11) *
H. G. MacNeill 150 (12) * 9,990.95(13) *
D. R. Melville 0 -- 8,181.34(14) *
J. A. Rolls 0 -- 6,816.47(15) *
Directors and Executive Officers
as a Group (22 persons) 150 (12) * 1,005,538.14(16) 2.7%
</TABLE>
* Represents holdings of less than 1% of the outstanding shares of the series.
(1) In addition, amounts may have accrued to the accounts of the officers under
the Company's Salaried Employees Savings Plan (the "Savings Plan") since
December 31, 1994, the date of the last Savings Plan statement.
(2) Pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended, percentages of total outstanding shares have been
computed on the assumption that shares of Common Stock that can be acquired
within 60 days upon the exercise of options by a given person are
outstanding, but no other shares similarly subject to acquisition by other
persons are outstanding.
(3) Includes 23,487.95 shares owned in the Savings Plan and 420,000 shares
which may be acquired under options exercisable within 60 days. The number
of shares allocated to his account in the Savings Plan is subject to
revision in order to comply with requirements respecting discrimination
standards and limitations on contributions under the Internal Revenue Code
of 1986, as amended (the "Code").
(4) Includes 4,438.14 shares owned in the Savings Plan and 94,600 shares which
may be acquired under options exercisable within 60 days. The number of
shares allocated to his account in the Savings Plan is subject to revision
in order to comply with requirements respecting discrimination standards
and limitations on contributions under the Code.
(5) Includes 1,772.24 shares owned in the Savings Plan and 89,400 shares which
may be acquired under options exercisable within 60 days. The number of
shares allocated to his account in the Savings Plan is subject to revision
in order to comply with requirements respecting discrimination standards
and limitations on contributions under the Code.
(6) Includes 3,472.39 shares owned in the Savings Plan, 72,000 shares which may
be acquired under options exercisable within 60 days, and 119.43 shares
owned by Mr. Lancaster's daughter. The number of shares allocated to his
account in the Savings Plan is subject to revision in order to comply with
requirements respecting discrimination standards and limitations on
contributions under the Code.
(7) Includes 1,523.79 shares held by Dr. Aguilar's daughter, Anne-Marie
Aguilar, as to which shares Dr. Aguilar disclaims beneficial ownership.
Also includes 6,268.07 shares owned in the Directors' Deferred Plan, 10,300
shares held in an individual retirement account and 1,500 shares held in a
Keogh account.
(8) Includes 8,224.43 shares owned in the Directors' Deferred Plan.
(9) These shares are owned in the Directors' Deferred Plan.
(10) These shares are held in an individual retirement account.
7
<PAGE>
(11) Includes 7,651.66 shares owned in the Directors' Deferred Plan.
(12) These shares are represented by 600 Depositary Shares.
(13) Includes 4,571.69 shares owned in the Directors' Deferred Plan.
(14) Includes 7,681.34 shares owned in the Directors' Deferred Plan.
(15) These shares are owned in the Directors' Deferred Plan.
(16) This total includes 44,767.14 shares allocated to the accounts of
those who are executive officers under the Savings Plan, 46,909.80
shares allocated under the Directors' Deferred Plan, and 852,200
shares that executive officers have the right to acquire within 60
days of March 28, 1995, upon the exercise of stock options. The number
of shares allocated to the accounts of certain executive officers in
the Savings Plan is subject to revision in order to comply with
requirements respecting discrimination standards and limitations on
contributions under the Code. The beneficial ownership stated above
represents sole voting and investment power, except as indicated in
footnotes above. Mr. Aubrey Rogers, an officer of the Company, filed
on September 26, 1994, a Form 4 that was due on September 10, 1994, to
report a transaction in the Company's Common Stock.
EXECUTIVE COMPENSATION
The following table sets forth information concerning all compensation paid
by the Company and its subsidiaries, during the last three fiscal years ended
December 31, 1994, to the Chief Executive Officer and to each of the four most
highly compensated executive officers other than the CEO (such officers are
referred to collectively as the "Named Executive Officers") for services
rendered in all capacities to the Company and its subsidiaries during these
fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION BONUS OTHER ANNUAL UNDERLYING COMPENSATION
DURING 1994 YEAR SALARY ($)(1) ($)(1) COMPENSATION ($) OPTIONS (#) ($)
<S> <C> <C> <C> <C> <C> <C>
A. P. Gammie:
Chairman of the 1994 596,710 387,037 (2) 0 22,072(3)
Board and Chief 1993 575,000 0 (2) 0 22,437
Executive Officer 1992 550,000 0 (2) 135,000 21,937
A. M. Nemirow:
President and Chief 1994(4) 150,000 (4) 200,000 106,826(5) 250,000 186,250(6)
Operating Officer
D. E. McIntyre: Senior
Vice President -- Pulp 1994 229,710 99,481 148,723(7) 0 271,006(8)
and Paper 1993 217,000 0 (2) 0 8,647
Manufacturing 1992 207,000 19,872 (2) 39,000 8,968
R. J. Pascal: Senior
Vice President and 1994 227,859 100,042 31,906(9) 0 68,004(10)
President -- 1993 213,000 0 (2) 0 9,166
Communication 1992 206,000 12,360 (2) 39,000 9,553
Papers Group
R. C. Lancaster: Senior
Vice President and 1994 221,710 96,025 59,148(11) 7,000 112,676(12)
Chief Financial 1993 210,000 0 (2) 0 8,437
Officer 1992 176,000 16,016 (2) 27,000 9,529
</TABLE>
(1) The totals shown in this column include amounts that have been deferred
pursuant to the Company's Deferred Compensation Plan.
(2) Perquisites and other personal benefits did not exceed the lesser of $50,000
or 10% of the total salary and bonus of the Named Executive Officer for the
year shown.
8
<PAGE>
(3) Amounts included under "All Other Compensation" for Mr. Gammie for 1994
consist of Company contributions of $21,502 under the Compensatory Benefits
Plan and $570 in premiums paid for medical plan coverage to obtain a level
of coverage not otherwise available under the Company's standard health
plan.
(4) Mr. Nemirow joined the Company in September 1994.
(5) This amount may be paid for reimbursement of taxes on the life insurance
policy described in footnote 6 below.
(6) Amounts included under "All Other Compensation" for Mr. Nemirow for 1994
consist of $186,250 in premiums paid by the Company for a life insurance
policy on the life of Mr. Nemirow. The owner of this policy is Mr. Nemirow
and he and/or members of his immediate family are the beneficiaries under
the policy. The Company is in the process of entering into an agreement with
Mr. Nemirow to provide that the Company will be reimbursed an amount up to
the cash value of the policy for the premiums paid by it on the policy and,
if the Company continues to pay premiums on the policy, that, at Mr.
Nemirow's retirement, the net cash value payable to him after reimbursement
of the Company for all premiums paid will be offset against his benefits
under the Company's Supplemental Benefit Plan.
(7) This amount may be paid for reimbursement of taxes on the life insurance
policy described in footnote 8 below.
(8) Amounts included under "All Other Compensation" for Mr. McIntyre for 1994
consist of Company contributions of $8,270 under the Savings Plan, $2,870
under the Compensatory Benefits Plan, $570 in premiums paid to maintain a
level of coverage not otherwise available under the Company's standard
health plan and $259,296 in premiums paid by the Company for a life
insurance policy on the life of Mr. McIntyre. The owner of this policy is
Mr. McIntyre and he and/or members of his immediate family are the
beneficiaries under the policy. The Company is in the process of entering
into an agreement with Mr. McIntyre to provide that the Company will be
reimbursed an amount up to the cash value of the policy for the premiums
paid by it on the policy and, if the Company continues to pay premiums on
the policy, that, at Mr. McIntyre's retirement, the net cash value payable
to him after reimbursement of the Company for all premiums paid will be
offset against his benefits under the Company's Supplemental Benefit Plan.
(9) This amount was paid in reimbursement of taxes on the life insurance
premiums described in Note 10 below.
(10) Amounts included under "All Other Compensation" for Mr. Pascal for 1994
consist of Company contributions of $6,400 under the Savings Plan, $2,937
under the Compensatory Benefits Plan, $570 in premiums paid for medical
plan coverage to obtain a level of coverage not otherwise available under
the Company's standard health plan, and $58,097 in premiums paid by the
Company for a life insurance policy on the life of Mr. Pascal. Mr. Pascal
is the owner of the policy and Mr. Pascal and/or members of his immediate
family are the beneficiaries under the policy. The Company is in the
process of entering into an agreement with Mr. Pascal to provide for a
restrictive endorsement that will limit Mr. Pascal's ability to cash in the
policy. The agreement will provide that, if the Company continues to pay
premiums on the policy, at Mr. Pascal's retirement, the cash value of the
policy will be offset against his benefits under the Company's Supplemental
Benefit Plan.
(11) This amount may be paid for reimbursement of taxes on the life insurance
policy described in footnote 12 below.
(12) Amounts included under "All Other Compensation" for Mr. Lancaster for 1994
consist of Company contributions of $6,400 under the Savings Plan, $2,582
under the Compensatory Benefits Plan, $570 in premiums to maintain a level
of coverage not otherwise available under the Company's standard health
plan and $103,124 in premiums paid by the Company for a life insurance
policy on the life of Mr. Lancaster. The owner of this policy is Mr.
Lancaster and he and/or members of his immediate family are the
beneficiaries under the policy. The Company is in the process of entering
into an agreement with Mr. Lancaster to provide that the Company will be
reimbursed an amount up to the cash value of the policy for the premiums
paid by it on the policy and, if the Company continues to pay premiums on
the policy, that, at Mr. Lancaster's retirement, the net cash value payable
to him after reimbursement of the Company for all premiums paid will be
offset against his benefits under the Company's Supplemental Benefit Plan.
9
<PAGE>
STOCK OPTIONS
The following table sets forth information regarding option grants with
respect to Common Stock made by the Company to the Named Executive Officers
during 1994.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (#) 1994 ($/SH) DATE ($)
<S> <C> <C> <C> <C> <C>
A. P. Gammie 0 -- -- -- --
A. M. Nemirow 250,000 (1) 30.75% 27.2656 9/9/2004 1,620,739(2 )
D. E. McIntyre 0 -- -- -- --
R. J. Pascal 0 -- -- -- --
R. C. Lancaster 7,000 (3) .86% 22.8750 1/26/2004 39,066(4 )
</TABLE>
(1) Options with respect to 125,000 shares of Common Stock covered thereby
become exercisable on September 9, 1995, and options with respect to the
remaining 125,000 shares of Common Stock covered thereby become exercisable
on September 9, 1996, if certain conditions are met.
(2) The present value of these options was calculated using the Black-Scholes
option pricing model and assuming volatility of 27%, a risk free return rate
of 6.3%, a dividend yield of 4.3% and an exercise date seven years from the
date of grant. The value was discounted by 3% per year for each year of
vesting to reflect the risk of forfeiture.
(3) Options with respect to 3,500 shares of Common Stock covered thereby became
exercisable on January 26, 1995, and options with respect to the remaining
3,500 shares of Common Stock covered thereby become exercisable on January
26, 1996, if certain conditions are met.
(4) The present value of these options was calculated using the Black-Scholes
option pricing model and assuming volatility of 30%, a risk free return rate
of 6.6%, a dividend yield of 4.8% and an exercise date seven years from the
date of grant. The value was discounted by 3% per year for each year of
vesting to reflect the risk of forfeiture.
The following table sets forth information concerning the value at the end
of 1994 of unexercised options held by the Named Executive Officers to purchase
the Company's Common Stock. None of the Named Executive Officers exercised any
stock options during 1994.
AGGREGATED OPTION EXERCISES IN 1994 YEAR
AND 1994 YEAR-END OPTION VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
VALUE UNDERLYING VALUE OF UNEXERCISED
SHARES ACQUIRED REALIZED UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NAME ON EXERCISE ($) AT 12/31/1994 AT 12/31/1994 ($)(1)
<S> <C> <C> <C> <C>
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
A. P. Gammie 0 -- 407,150/32,850 1,011,405/164,250
A. M. Nemirow 0 -- 0/250,000 0/0
D. E. McIntyre 0 -- 84,790/9,810 244,115/49,050
R. J. Pascal 0 -- 79,650/9,750 240,640/48,750
R. C. Lancaster 0 -- 65,600/13,900 178,208/60,750
</TABLE>
(1) Based on the difference between the option exercise price and the closing
price of the Company's Common Stock on the New York Stock Exchange on
December 30, 1994, of $26.6250. No value was calculated for options whose
exercise price exceeds the closing price of the Common Stock on December 30,
1994.
10
<PAGE>
LONG-TERM CASH INCENTIVE PLAN
The following table sets forth information concerning awards made in 1994
under the Company's Long-Term Cash Incentive Plan.
LONG-TERM CASH INCENTIVE PLAN --
AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS(1) UNDER NON-STOCK PRICE-BASED PLAN
PERFORMANCE THRESHOLD TARGET MAXIMUM
PERIOD UNTIL APPLICABLE ESTIMATED APPLICABLE ESTIMATED APPLICABLE ESTIMATED
NUMBER OF MATURATION OR NUMBER OF DOLLAR NUMBER OF DOLLAR NUMBER OF DOLLAR
NAME UNITS (#) PAYOUT UNITS VALUE(2) UNITS VALUE (2) UNITS VALUE(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A. P. Gammie 42,100 January 1, 10,525 $272,334 42,100 $1,089,337 105,250 $2,723,344
1994 to
December 31,
1996
A. M. Nemirow 32,700 January 1, 8,175 $211,528 32,700 $ 846,112 81,750 $2,115,281
1994 to
December 31,
1996
D. E. McIntyre 13,600 January 1, 3,400 $ 87,975 13,600 $ 351,900 34,000 $ 879,750
1994 to
December 31,
1996
R. J. Pascal 13,600 January 1, 3,400 $ 87,975 13,600 $ 351,900 34,000 $ 879,750
1994 to
December 31,
1996
R. C. Lancaster 13,600 January 1, 3,400 $ 87,975 13,600 $ 351,900 34,000 $ 879,750
1994 to
December 31,
1996
</TABLE>
(1) Payouts, if any, under the Long-Term Cash Incentive Plan will be made in
cash in early 1997.
(2) The Estimated Dollar values of payouts under the plan are based upon the
daily average price of a share of the Company's Common Stock during December
1994 ($25.875) and are solely for illustrative purposes. The actual value of
the payout may be higher or lower than the amount shown as a result of the
actual daily average price of a share of the Company's Common Stock during
December 1996. See the description of the plan below.
The number of units shown in the target column of the table above
represents the target number of performance units awarded pursuant to the
Company's Long-Term Cash Incentive Plan for the 1994-1996 cycle. The Company's
performance ranking on Return on Capital Employed relative to the Company's peer
group will determine the number of units actually earned relative to the target.
The peer group used consists of the companies in the Dow Jones Paper Products
Group used in the Total Shareholder Return graph on page 17, with the exception
of Mead Corporation and the addition of Abitibi-Price, Inc., Chesapeake Corp.,
and Stone Container Corporation. The actual value to the executive at the end of
the cycle of any award will equal the number of units earned times the daily
average price of a share of the Company's Common Stock during December 1996.
EMPLOYMENT AND SEVERANCE AGREEMENTS
Each of the Named Executive Officers (collectively, the "Executives") is
party to an employment agreement (collectively, the "Agreements"). Each
Agreement continues until death, disability, or written notice of termination by
either the Company or the Executive. The Agreements provide for payment to each
Executive of an annual base salary and for the Executive's participation in the
Company's various bonus and benefit plans as in effect from time to time while
the Employment Agreements are in effect. In the event the Executive's employment
is involuntarily terminated for reasons other than death, disability, retirement
or cause (defined in the Agreements as gross negligence or willful misconduct by
the Executive in the course of his employment or which has a material adverse
effect on the Company or the Executive's ability to adequately and effectively
perform his duties), the Agreements provide for payments equal to two years of
annual base salaries and bonus, plus a pro rata share for the year of
termination of their bonuses in the cases of Mr. Nemirow, Mr. McIntyre, and Mr.
Lancaster, and three years of base salary and bonus, plus a pro rata share for
the year of termination of their bonuses in
11
<PAGE>
the cases of Mr. Gammie and Mr. Pascal. In the event of a change in control, the
term of the Agreements continues for not less than three years thereafter unless
the termination is at the Executive's election for other than "good reason". The
Severance Agreements (as defined below) define a change of control as occurring
if: (i) any person becomes a beneficial owner of securities of the Company
representing 20% or more of the Company's outstanding voting securities (unless
that person has filed Schedule 13G); (ii) less than two-thirds of the total
membership of the Board shall be Continuing Directors; or (iii) the shareholders
of the Company approve a merger, consolidation, complete liquidation, or sale of
all or nearly all of the Company's assets. The Severance Agreements define "good
reason" as an adverse change in the Executive's status, duties or
responsibilities as in effect immediately prior to the change in control; or
failure of the Company to pay or provide the Executive the salary or benefits to
which he is entitled; or the reduction of the Executive's salary as in effect on
the date of the change in control; or the taking of any action by the Company
that would substantially diminish the value of the Executive's awards or
benefits under the Company's benefit plans in which the Executive was
participating at the time of the change in control; or the Company's failure to
obtain from any successor assent to the Severance Agreement; or the relocation
of the Executive's principal office to a location more than thirty-five miles
from its location immediately prior to the change in control or a substantial
increase in the Executive's travel obligations subsequent to the change in
control.
Each of the Executives also is a party to a severance agreement with the
Company (collectively, the "Severance Agreements"). The Severance Agreements
generally provide that, in the event of a change in control (as defined above),
the term of the Severance Agreements is extended for three years. In addition,
following a change in control of the Company, if an Executive's employment is
terminated by the Company (except for a termination due to death, disability, or
retirement, or for cause (defined as gross negligence, willful misconduct or
conviction of a felony, which action has a material adverse effect upon the
Company)) or if the Executive elects to terminate his employment under certain
specified circumstances, the Executive may elect to receive, in lieu of any
severance payments provided in his Employment Agreement, an amount that varies
from two to three times: (i) the Executive's annual base salary (as determined
under the Severance Agreement); plus (ii) the largest annual bonus awarded to
the Executive during the five fiscal years immediately preceding the year in
which the change in control occurred or, if higher, the amount the Executive
would have been awarded under the bonus plan had he continued in the Company's
employ on the same basis as immediately before the change in control; plus (iii)
the largest annual contribution made by the Company to the Savings Plan on the
Executive's behalf during the five fiscal years immediately preceding the change
in control or, if higher, the contribution the Company would have made to the
plan on the Executive's behalf for the fiscal year in which the change in
control occurred had he continued in the Company's employ at the same base
salary and with the same contribution level as immediately prior to the change
in control. In addition each of the Severance Agreements provides that the
Executive will be entitled to a pro rata portion of the bonus in the manner
specified in (ii) above for the year in which the termination occurred. The
Severance Agreements provide that Mr. Gammie, Mr. Nemirow and Mr. Pascal shall
receive three times the specified items and Mr. McIntyre and Mr. Lancaster shall
receive two times the specified items.
In addition, the Severance Agreements provide that Mr. Gammie, Mr. Nemirow
and Mr. Pascal will be entitled to 30% and Mr. McIntyre and Mr. Lancaster to 20%
of their respective base salaries on the effective date of the termination, or,
if higher, on the date immediately prior to the change in control, as
compensation for medical, life insurance, and other benefits lost as a result of
the termination of employment. The Severance Agreements also generally provide a
terminated Executive with out-placement assistance, and a gross-up reimbursement
of certain excise taxes. In addition, the Severance Agreements generally provide
that the Company will pay or provide the Executives, their widows, or children,
the amounts and benefits, at the times and in the manner that these payments
would have been received, assuming certain conditions, under the Company's
Retirement Plan and Supplemental Benefit Plan in effect immediately prior to the
change in control and assuming the Executive had continued in the employ of the
Company for the term of the Severance Agreement.
In addition, Mr. Nemirow's Employment Agreement provides Mr. Nemirow an
initial bonus on his commencement of employment. Mr. Nemirow's Agreement also
provides that, for purposes of determining the benefits due under the Company's
benefits plans, he shall receive credit for continuous employment at an
accelerated rate. Mr. Nemirow's Agreement also entitles him to receive certain
minimum annual benefits upon his retirement from the Company. Mr. Nemirow's
Agreement further provides him with a relocation package similar to that
provided by the Company to salaried employees generally as well as reimbursement
for temporary housing and living expenses for up to twelve months.
EMPLOYEES' RETIREMENT PLAN
The Bowater Incorporated Salaried Employees' Retirement Plan (the
"Retirement Plan") provides defined retirement benefits for covered salaried
employees and is qualified under the Code. In order to participate in the
Retirement Plan, an employee must be at least 21 years old and have completed at
least one year of service with the Company. Participants
12
<PAGE>
become 100% vested after completion of five years of service or attainment of
age 65. The Retirement Plan provides for normal retirement benefits beginning at
age 65, while permitting early retirement in certain cases. Normal annual
retirement benefits are equal to .015 of the participant's average annual
earnings (defined as the average annual earnings for the best 60 consecutive
months in the 120 months preceding retirement or termination of employment)
multiplied by the participant's years of service up to a maximum of 35 years,
less 1/70 of the participant's annual primary Social Security benefit computed
as of the normal retirement date multiplied by the participant's years of
service up to a maximum of 35 years. Participants receive a reduced benefit if
they elect early retirement. The definition of earnings includes base salary,
overtime pay and bonuses awarded under the Annual Bonus Plan. Under current law,
the maximum annual benefit payable to a participant under the Retirement Plan is
$118,800 (applicable in 1994), subject to future cost of living adjustments to
be set forth in governmental regulations, and the maximum compensation that can
be taken into account under the Retirement Plan is $150,000 (applicable in 1994)
and $235,840 (applicable in 1990-1993).
The Retirement Plan provides that, unless the Board of Directors determines
otherwise, on the tenth day following the public announcement of a change in
control, as defined in the Retirement Plan, each participant will become 100%
vested in his accrued benefits. The Retirement Plan also provides that the Board
of Directors may revise or repeal this provision at any time prior to ten days
following the public announcement of a change of control, or terminate the
Retirement Plan, subject to certain provisions of the Retirement Plan, as the
interests of the holders of the Company's Common Stock may require.
The following table illustrates the total annual normal retirement benefits
that would be provided under the benefit formula in the Retirement Plan in
specified remuneration and years of service classifications on a life annuity
basis with five years guaranteed. The amounts in the table have not been reduced
by any Social Security benefit or to reflect the $118,800 annual limit on Plan
benefits under the Code. The table assumes retirement at the end of 1994. At
that time, the individuals named in the Summary Compensation Table above will
have had the following final average compensation credited for purposes of the
Retirement Plan* and number of years of service: Mr. Gammie, $218,672, 40 years;
Mr. McIntyre, $218,414, 8 years; Mr. Pascal, $216,576, 8 years; and Mr.
Lancaster, $195,728, 10 years. Mr. Nemirow is not yet eligible to participate in
the Retirement Plan.
RETIREMENT PLAN BENEFITS
<TABLE>
<CAPTION>
FINAL AVERAGE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
COMPENSATION* SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE
<S> <C> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 7,500 $ 15,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500
125,000 9,375 18,750 28,125 37,500 46,875 56,250 65,625
150,000 11,250 22,500 33,750 45,000 56,250 67,500 78,750
175,000 13,125 26,250 39,375 52,500 65,625 78,750 91,875
200,000 15,000 30,000 45,000 60,000 75,000 90,000 105,000
225,000 16,875 33,750 50,625 67,500 84,375 101,250 118,125
250,000 18,750 37,500 56,250 75,000 93,750 112,500 131,250
300,000 22,500 45,000 67,500 90,000 112,500 135,000 157,500
350,000 26,250 52,500 78,750 105,000 131,250 157,500 183,750
400,000 30,000 60,000 90,000 120,000 150,000 180,000 210,000
450,000 33,750 67,500 101,250 135,000 168,750 202,500 236,250
500,000 37,500 75,000 112,500 150,000 187,500 225,000 262,500
</TABLE>
* Average annual earnings for best 60 consecutive months in the 120 months
preceding retirement.
SUPPLEMENTAL BENEFIT PLAN
The Supplemental Benefit Plan (as amended and restated to date, referred to
as the "Supplemental Benefit Plan"), benefits key employees designated by the
Human Resources and Compensation Committee of the Board of Directors. The
Supplemental Benefit Plan provides for retirement benefits beginning at age 60
after 20 or less years of continuous service calculated at 50% of an employee's
average earnings (defined as the average annual earnings for the best 36
consecutive months in the 60 months preceding retirement or termination of
employment) subject to a reduction of 5/24 of 1% of those earnings for each
month less than 20 years of continuous service by which the employee shall have
been in the employ of the Company or an affiliate. This benefit is payable in
monthly installments reduced each month by any amount which may be payable in
such month to the employee under the Retirement Plan and the Bowater
Incorporated Benefits Equalization Plan
13
<PAGE>
("Benefits Equalization Plan") or any affiliate's pension plan, but is not
reduced by amounts payable under Social Security. The term "earnings" is defined
as base salary, overtime pay and bonuses awarded under the Annual Bonus Plan.
Benefits for employees retiring after more than 20 years of continuous service
are calculated under the same formula but using 60% of the employee's average
earnings (as defined in the plan) subject to a reduction of 2/24 of 1% of such
earnings for each month less than 30 years of continuous service. Those who
elect to retire between the ages 50 and 60 receive a pension benefit reduced by
1/2 of 1% for each month that the retirement age is less than age 60. The
Supplemental Benefit Plan provides for vesting of accrued benefits in the event
of a change in control, termination or modification of the plan, or termination
of employment of a covered employee not for cause, provided that benefits are
vested under the Retirement Plan.
The following table illustrates the total annual retirement benefits which
would be provided under the Supplemental Benefit Plan in specified remuneration
and years of service classifications on a straight life annuity basis. The
amounts in the table have not been reduced by any benefits payable under the
Company's Retirement Plan or Benefits Equalization Plan. This table assumes
retirement in 1994. At such time, the individuals listed in the Summary
Compensation Table above had the following final average earnings* and number of
years of service: Mr. Gammie, $643,752, 40 years; Mr. McIntyre, $239,087, 8
years; Mr. Pascal, $269,593, 8 years; and Mr. Lancaster, $211,389, 10 years. Mr.
Nemirow, whose 1994 annual salary and bonus on an annualized basis were
$650,000, had four months of credited service under the Supplemental Benefit
Plan at December 31, 1994.
SUPPLEMENTAL BENEFIT PLAN BENEFITS
<TABLE>
<CAPTION>
FINAL AVERAGE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 OR MORE YEARS
EARNINGS* SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 12,500 $ 25,000 $ 37,500 $ 50,000 $ 55,000 $ 60,000
125,000 15,625 31,250 46,875 62,500 68,750 75,000
150,000 18,750 37,500 56,250 75,000 82,500 90,000
175,000 21,875 43,750 65,625 87,500 96,250 105,000
200,000 25,000 50,000 75,000 100,000 110,000 120,000
225,000 28,125 56,250 84,375 112,500 123,750 135,000
250,000 31,250 62,500 93,750 125,000 137,500 150,000
300,000 37,500 75,000 112,500 150,000 165,000 180,000
350,000 43,750 87,500 131,250 175,000 192,500 210,000
400,000 50,000 100,000 150,000 200,000 220,000 240,000
450,000 56,250 112,500 168,750 225,000 247,500 270,000
500,000 62,500 125,000 187,500 250,000 275,000 300,000
600,000 75,000 150,000 225,000 300,000 330,000 360,000
700,000 87,500 175,000 262,500 350,000 385,000 420,000
800,000 100,000 200,000 300,000 400,000 440,000 480,000
900,000 112,500 225,000 337,500 450,000 495,000 540,000
</TABLE>
* Average annual earnings for best 36 consecutive months in the 60 months
preceding retirement.
The Supplemental Benefit Plan also provides certain additional disability
and death benefits and for the continuation, after retirement, of certain
amounts of life insurance and medical insurance coverage.
In November 1990 the Company entered into a Benefits Conversion Agreement
with Mr. Gammie. The Agreement converts benefits payable under the Supplemental
Benefit Plan and the Benefits Equalization Plan from a series of monthly
payments for the life of Mr. Gammie and his spouse to an actuarially equivalent
single sum payment determined at the time of his retirement, by reference to his
actuarial life expectancy, calculated pursuant to tables then in use under the
Retirement Plan, and a then-current rate of interest, as specified in the
Agreement.
14
<PAGE>
HUMAN RESOURCES AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources and Compensation Committee determines and administers
the compensation of the Company's executive officers. The Committee is composed
entirely of directors who have never served as officers of the Company.
POLICIES FOR COMPENSATION OF EXECUTIVE OFFICERS
The basic policy underlying the Company's compensation program for
executive officers is that their compensation should vary depending on the
Company's success in meeting its financial and strategic objectives and in
creating value for shareholders. In addition to salary, the compensation program
consists of the Annual Bonus Plan, stock option plans, and the Long-Term Cash
Incentive Plan.
At target incentive levels, executive officers would be paid close to the
median of comparable executives in comparison companies in the paper products
industry. Actual compensation could range from well below to well above this
level, depending on the Company's performance. Analysis of surveys of
competitive pay practices as well as proxy statement disclosures of comparable
companies are used to assess the Company's pay positioning. The proxy analysis
group consists of the same companies used as the comparison group in the
Long-Term Cash Incentive Plan described below.
The cyclical nature of the paper products industry, combined with the major
new strategic initiatives undertaken by the Company in recent years, argue for a
heavy weighting of performance measured over more than a one-year period. As a
result, the executive officers' target and maximum compensation opportunities
under the two long-term incentive programs (stock options and Long-Term Cash
Incentive Plan) combined are greater than their annual incentive opportunities.
Executive officers' salaries are generally set to place them near or
slightly below median levels of paper industry salaries using the competitive
analyses described above, considering the scope of the individual's
responsibilities relative to the responsibilities of executives at the
comparison companies. Competitive considerations form the primary basis for
setting salary levels, since performance plays such a large role in determining
annual and long-term incentives. However, in setting base salary levels the
Committee also considers to a smaller extent the officer's performance against
individual objectives during the preceding year, the profits of the individual's
business unit relative to plan during the preceding year for business unit
executives, and the profits of the Company and its Return on Capital Employed
relative to plan during the preceding year for officers with corporate-wide
responsibilities. For the named officers who were with the Company in both 1993
and 1994, the financial results that were considered in setting salary increases
were at the corporate level for Mr. Gammie, for the pulp and paper business unit
for Mr. McIntyre, and for the communications business unit for Mr. Pascal.
The Annual Bonus Plan for 1994 used two performance measures: Return on
Capital Employed (weighted 65%) and productivity goals (weighted 35%):
(Bullet) Return on Capital Employed was measured at the corporate level for
all participants, with awards based on performance relative to
goals established at the beginning of the year. The capital
intensive nature of the Company's business means that it is
critical to evaluate earnings in the context of the resources
required to generate them. In addition, there has been a strong
historical relationship between Return on Capital Employed and
market valuation for companies in the paper products industry.
(Bullet) Specific productivity goals were established at the corporate and
business unit levels, and actual results were compared to these
goals when determining individual awards. For this measure, awards
for those in corporate positions were based 100% on corporate
results, while awards for those in business units were based 75%
on unit results and 25% on corporate results. The inclusion of
this measure reflects the strategic importance the Company has
placed on managing costs.
The Long-Term Cash Incentive Plan measures performance over three-year
periods. This plan also uses Return on Capital Employed as the performance
measure, but it rewards for the Company's performance relative to a group of
comparison companies by linking awards to the Company's rank positioning. The
paper products industry is cyclical, with broad price swings influencing all
market participants. As a result, the Committee believes it is important to
evaluate the Company's financial performance in a competitive context to adjust
for market-driven results (both positive and negative) that are beyond the
Company's control. The comparison group includes the companies in the Dow Jones
Paper Products Group used in the Total Shareholder Return graph on page 17, with
the exception of Mead Corporation and the addition of Abitibi-Price, Inc.,
Chesapeake Corp., and Stone Container Corporation.
15
<PAGE>
Several changes were made to the Long-Term Cash Incentive Plan in 1994.
First, the 1992-1994 cycle of the plan was canceled and the next cycle was
started to cover the period 1994 through 1996, rather than waiting to start the
new cycle in 1995 as was originally contemplated. The Committee took this action
so that the plan cycle would correspond to the new three-year financial plan
that the Board approved to streamline the organization and reduce costs. Payouts
will be based on the Company's rank position within the comparison group in
1996, with improvements from rank positioning in recent years required for there
to be any payouts. In addition, regardless of the Company's rank, 1996 Return on
Capital Employed must be positive in order for there to be any payouts. There
were no payouts for the canceled 1992-1994 cycle.
In order to increase the linkage between executive compensation and the
performance of the Company's Common Stock, payouts for the 1994-1996 cycle of
the Long-Term Cash Incentive Plan will be affected by the Company's Common Stock
performance in the period from December 1993 to December 1996, as well as its
Return on Capital Employed rank. Each participant was awarded "units" at the
beginning of the cycle, where the number of units was equal to the individual's
target award divided by the daily average price of the Company's Common Stock in
December 1993. Performance on the Return on Capital Employed measure relative to
the Company's peer group will determine the number of units earned relative to
target. The value to the executive at the end of the cycle will equal the number
of units earned times the daily average price of a share of the Company's Common
Stock during December 1996. Payouts will be made in cash in early 1997,
following the determination of the Company's ranking on Return on Capital
Employed during 1996.
Stock options continue to play an important role in linking executives'
compensation to the Company's Common Stock performance and thus to the interests
of shareholders. Large stock option grants, equivalent to what would have been
granted in 1992, 1993, and 1994 combined, were made to the Company's senior
executives in 1992. These large grants were intended to provide additional
incentives to promote shareholder interests and to maintain and continue to
improve the Company's favorable cost positioning. Because recipients of these
awards are not eligible for additional stock option grants until 1995, no
additional grants were made to them in 1994, with the exception of Mr.
Lancaster, who received an option grant in connection with his promotion to
Senior Vice President and Chief Financial Officer. The 1994 stock option grant
to Mr. Nemirow was made in conjunction with his joining the Company.
The Committee generally intends to administer the executive compensation
program in such a way that compensation for executive officers will be fully
deductible under Section 162(m) of the Code, including submitting plans for
shareholder approval and determining payouts on an objective basis. However, if,
in the Committee's judgment, the Company's compensation objectives could be
better met through compensation that does not meet the criteria for
deductibility, it may allow for non-deductible compensation.
COMPENSATION OF THE CEO DURING 1994
The Committee approved a 3.9% increase in Mr. Gammie's salary in 1994, from
$575,000 to $597,280, based on competitive findings that market salaries were
increasing by approximately 4% during the year and taking into account financial
performance at the corporate level. His bonus under the Annual Bonus Plan was
$387,037, representing 65% of his salary. This bonus award was determined by
formula using the Return on Capital Employed and productivity measures described
earlier.
Since Mr. Gammie had participated in the three-year option program
described above, he did not receive additional option grants in 1994. He
participated in the Long-Term Cash Incentive Plan for the canceled 1992-1994
cycle and was made a participant in 1994-1996 cycle.
All members of the Human Resources and Compensation Committee concur in
this report.
D. R. Melville (Chairman)
R. Barth
R. Laster
16
<PAGE>
TOTAL SHAREHOLDER RETURN
THE COMPANY VS. DOW JONES PAPER PRODUCTS GROUP* AND S&P 500
1989-1994
The table below compares the cumulative shareholder return of the Common
Stock for the last five years with the cumulative total return of the Dow Jones
Paper Products Group and the S&P 500, assuming a $100 investment on December 31,
1989.
(Graphic of Performance Chart appears here, plot points below)
1989 1990 1991 1992 1993 1994
Bowater 100.00 80.96 88.23 103.63 102.79 122.71
Peers 100.00 87.96 114.15 116.69 127.10 142.02
S&P500 100.00 96.89 126.30 135.91 149.55 151.56
* Companies include: Boise Cascade Corporation, Champion International
Corporation, Consolidated Papers, Inc., Federal Paper Board Company, Inc., P.H.
Glatfelter Company, International Paper Company, Mead Corporation, Union Camp
Corporation, and Westvaco Corporation.
TRANSACTIONS WITH MANAGEMENT
The Company relocated its headquarters from Connecticut to Greenville,
South Carolina, in 1993. In order to retain the services of Mr. Ecton Manning
(Vice President and General Counsel of the Company since 1988), the Company and
Mr. Manning modified his Employment and Severance Agreements (the "Agreements").
The modifications were in lieu of the relocation benefits made available to all
other relocating employees.
The modifications to the Agreements provide, among other things, that the
Company will furnish to Mr. Manning, or reimburse him for his cost of,
comparable residential facilities in South Carolina during his employment there
by the Company, net of any applicable income taxes. This arrangement was
implemented by the Company in January 1994. The amount paid to Mr. Manning in
connection with this arrangement during 1994 was $51,840. From this amount, he
paid the Company $18,000 as rent based on the fair market value of the
residential facilities owned and provided by the Company, and also paid
maintenance, utility and other costs of upkeep. As part of the same arrangement
the Company provides Mr. Manning with the use of a car in South Carolina. The
Company estimates that the value of the personal use of this car in 1994 was
$6,350. These arrangements are expected to continue during Mr. Manning's
employment by the Company in South Carolina.
Under the modified Agreements Mr. Manning has agreed to remain employed as
Vice President and General Counsel at the Company's headquarters in South
Carolina until at least April 1, 1996, and thereafter may continue to provide
legal services to the Company for an additional two years as provided in the
Agreements. Upon his retirement at that time, the modifications provide for him
to receive certain minimum annual retirement benefits under the Supplemental
Benefit Plan which might exceed that to which he would otherwise have been
entitled under the Supplemental Benefit Plan.
17
<PAGE>
ITEM NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee of the Board of Directors, the
Board of Directors has appointed KPMG Peat Marwick LLP as independent auditors
for the Company to audit its consolidated financial statements for the year
ended December 31, 1995, and has requested that the shareholders ratify the
appointment. KPMG Peat Marwick LLP currently serves the Company and its
subsidiaries as independent auditors and from time to time advises the Company
on tax matters. Representatives of KPMG Peat Marwick LLP will be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions from shareholders.
PROPOSALS BY SHAREHOLDERS
A shareholder who wishes to present a proposal for inclusion in the proxy
materials relating to the Annual Meeting of Shareholders to be held in 1996
should submit his or her proposal to the Secretary of the Company, 55 East
Camperdown Way, Post Office Box 1028, Greenville, South Carolina 29602. Any
proposal must be received on or before November 28, 1995, and the proponent must
comply with the proxy rules under the Securities Exchange Act of 1934, as
amended.
EXPENSES OF SOLICITATION
The Company will bear the cost of soliciting proxies. In addition to
soliciting proxies by mail, it is expected that some of the Company's officers
and regular employees may solicit, without additional compensation, proxies by
telephone, telegraph, or oral communication. The Company will reimburse persons
holding shares in their names or those of their nominees for their reasonable
expenses in sending proxy materials to principals. Further, the firm of Morrow &
Co., Inc. has been retained to assist in the soliciting of proxies for a fee of
$5,500, plus expenses.
FINANCIAL INFORMATION
THE COMPANY'S 1994 ANNUAL REPORT IS ENCLOSED HEREWITH. THE COMPANY WILL
PROVIDE WITHOUT CHARGE TO ANY SHAREHOLDER OF RECORD AS OF MARCH 27, 1995, WHO SO
REQUESTS IN WRITING, A COPY OF SUCH FISCAL 1994 ANNUAL REPORT OR THE COMPANY'S
1994 ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE COMPANY, 55 EAST
CAMPERDOWN WAY, POST OFFICE BOX 1028, GREENVILLE, SOUTH CAROLINA 29602,
ATTENTION: INVESTOR RELATIONS DEPARTMENT.
By order of the Board of Directors,
(Signature of Wendy C. Shiba appears here)
WENDY C. SHIBA
SECRETARY
March 31, 1995
18
<PAGE>
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
(Bowater logo appears here)
DATE AND TIME
WEDNESDAY, MAY 24, 1995
AT 10:30 A.M.
PLACE
OMNI HOTEL
222 EAST THIRD STREET
CHARLOTTE, NORTH CAROLINA
PLEASE SIGN YOUR PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOU MAY
BE REPRESENTED AT THE MEETING IF YOU DO NOT PLAN
TO ATTEND PERSONALLY.
***************************************************************************
APPENDIX
****************************************************************************
<PAGE>
BOWATER INCORPORATED
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
OF THE COMPANY FOR ANNUAL MEETING MAY 24, 1995
R
The undersigned hereby appoints Robert C. Lancaster, Ecton R. Manning
O and Wendy C. Shiba, or any one or more of them, each with full power of
substitution, as proxies for the undersigned, to vote, as designated below,
X all the shares of 7% PRIDES Series B Convertible Preferred Stock, par value
$1 per share, of Bowater Incorporated held of record by the undersigned on
Y March 27, 1995, at the annual meeting of shareholders to be held May 24,
1995, or any adjournment(s) thereof and in their discretion,
to vote upon any other matters which may properly come before the meeting.
Election of Directors, Nominees:
Hugh D. Aycock,
Donald R. Melville,
Arnold M. Nemirow
COMMENTS (change of address)
(If you have written in the above
space, mark the corresponding box on
the reverse side of this card.)
You are encouraged to specify your choices by marking the
appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if
you wish to vote in accordance with the Board of Directors'
recommendations. The Proxy Committee cannot vote your shares unless you
sign and return this card.
SEE REVERSE
SIDE
<PAGE>
*
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2 AND PROXYHOLDERS WILL VOTE, IN THEIR DISCRETION,
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
POSTPONEMENT OR ADJOURNMENT THEREOF.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR ALL NOMINEES WITHHOLD AUTHORITY (to
LISTED BELOW vote for all nominees below)
EXCEPTIONS (as indicated
to the contrary below)
</TABLE>
Hugh D. Aycock, Donald R. Melville, Arnold M. Nemirow
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE MARK THE
"EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
Exceptions
2. Proposal to ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the year ending December 31, 1995.
FOR AGAINST ABSTAIN
3. At their discretion upon such other matters as may properly come before the
annual meeting and any postponement or adjournment thereof.
PROXY DEPARTMENT
NEW YORK, N.Y. 10203 0468 Address Change
Mark Here
Change of address comments on reverse
side.
(Signature should conform exactly as
name shown on this proxy. Executors,
administrators, guardians, trustees,
attorneys and officers signing for
corporations should give full title.)
Dated , 1995
(Please be sure to insert date)
Signed
Votes MUST be indicated
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
(x) in Black or Blue ink.
<PAGE>
BOWATER INCORPORATED
Proxy Solicited on Behalf of the Board of Directors
of the Company for Annual Meeting May 24, 1995
P The undersigned hereby appoints Robert C. Lancaster, Ecton R. Manning
and Wendy C. Shiba, or any one or more of them, each with full power of
R substitution, as proxies for the undersigned, to vote, as designated below,
all the shares of common stock of Bowater Incorporated held of record by
O the undersigned on March 27, 1995, at the annual meeting of shareholders
to be held May 24, 1995, or any adjournment(s) thereof and in their
X discretion, to vote upon any other matters which may properly come before
the meeting.
Y
Election of Directors, Nominees: Hugh D. Aycock, Donald R. Melville,
Arnold M. Nemirow
COMMENTS (change of address) (X)
BOWATER INCORPORATED
P.O. BOX 11468
NEW YORK, N.Y. 10203-0468
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxy Committee
cannot vote your shares unless you sign and return this card.
SEE REVERSE SIDE
<PAGE>
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, the proxy will be
voted FOR Proposals 1 and 2 and proxy holders will vote, in their discretion,
upon such other business as may properly come before the annual meeting or any
postponement or adjournment thereof.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS FOR ALL NOMINEES (X) WITHHOLD AUTHORITY (to (X) EXCEPTIONS (X)
LISTED BELOW vote for all nominees below)
</TABLE>
Hugh D. Aycock, Donald R. Melville, Arnold M. Namirow
(INSTRUCTIONS: To withhold authority to vote for any individual nominee mark
the "Exceptions" box and write that nominee's name on space provided below.)
* Exceptions
2. Proposal to ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the year ending December 31, 1995.
FOR (X) AGAINST (X) ABSTAIN (X)
3. At their discretion upon such other matters as may properly come before
the annual meeting and any postponement or adjournment thereof.
Address Changed
Mark Here (X)
Change of address comments on
reverse side. (Signature should
conform exactly as name shown on
this proxy. Executors,
administrators, guardians,
trustees, attorneys and officers
signing for corporations should
give full title.)
Dated , 1995
Signed
Votes MUST be indicated
Sign, Date and Return the Proxy Card (X) in Black or Blue Ink.
Promptly Using the Enclosed Envelope.
