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
(x ) 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):
(x ) $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, 1996
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 Hotel Inter-Continental, 111 East 48th Street, New York,
New York, on Tuesday, May 21, 1996, 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 22, 1996, 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 1995 is included in this package,
and we urge you to read it carefully.
Sincerely yours,
(sig of Arnold M. Nemirow appears here)
ARNOLD M. NEMIROW
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
<PAGE>
<PAGE>
BOWATER INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1996
The 1996 Annual Meeting of Shareholders of BOWATER
INCORPORATED (the "Company") will be held at the Hotel
Inter-Continental, 111 East 48th Street, New York, New York, on
Tuesday, May 21, 1996, 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, 1996; and
(3) To transact such other business as may properly
come before the Annual Meeting or any adjournments 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 22, 1996, 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, 1996
SHAREHOLDERS ARE URGED TO EXECUTE AND RETURN THE PROXY PROMPTLY
IN THE ENVELOPE PROVIDED.
<PAGE>
<PAGE>
BOWATER INCORPORATED
55 EAST CAMPERDOWN WAY
P.O. BOX 1028
GREENVILLE, SOUTH CAROLINA 29602
PROXY STATEMENT
DATED MARCH 31, 1996
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT 10:30 A.M. ON MAY 21, 1996
HOTEL INTER-CONTINENTAL
111 EAST 48TH STREET
NEW YORK, NEW YORK
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"). 38,369,387 shares of Common Stock and
1,223,404 shares of Series B Stock were outstanding on March 22, 1996, 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 22, 1996, 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 April 1, 1996.
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, 1996.
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 1996 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 1996 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
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<PAGE>
matters submitted for shareholder vote, abstentions have the same effect as a
vote against the matter. In the case of broker non-votes (which occur when a
broker or other nominee holding shares for a beneficial owner does not vote on a
proposal but votes on another proposal), the broker non-vote 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 III directors expires this year,
and the successors are to be elected at this Annual Meeting for a three-year
term expiring in 1999. The terms of the Class I and Class II directors do not
expire until 1997 and 1998, respectively.
The following information is provided for the three nominees who are the
Class III directors, and also for the Class I and Class II directors.
NOMINEES FOR DIRECTOR TO BE ELECTED AT THE 1996 ANNUAL MEETING
(CLASS III)
<TABLE>
<S> <C>
FRANCIS J. AGUILAR PROFESSOR EMERITUS, HARVARD UNIVERSITY GRADUATE SCHOOL OF BUSINESS -- Dr. Aguilar had been a
Age: 63 faculty member at the Harvard University Graduate School of Business from 1967 to 1995. He
Director since 1984 also 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 THERMION SYSTEMS INTERNATIONAL -- Mr. Rolls has
Age: 54 served as President and Chief Executive Officer of Thermion Systems International, an
Director since 1990 aerospace and industrial heating systems company, since February 1996. He served as
President and Chief Executive Officer of Deutsche Bank North America, an international
banking company, from 1992 to February 1996. Mr. Rolls was Executive Vice President and
Chief Financial Officer of United Technologies Corporation, a diversified aerospace and
industrial products company, from 1986 to 1992. Prior to that he was Senior Vice President
and Chief Financial Officer with RCA Corporation. Mr. Rolls is a director of MBIA Inc.
KENNETH M. CURTIS SENIOR MEMBER, CURTIS THAXTER STEVENS BRODER & MICOLEAU, LIMITED LIABILITY COMPANY,
Age: 65 P.A. -- Mr. Curtis was a partner in the Portland, Maine, law firm of Curtis Thaxter Stevens
Director since 1993 Broder & 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 WHOSE TERM ENDS AT THE 1997 ANNUAL MEETING OF SHAREHOLDERS
(CLASS I)
<TABLE>
<S> <C>
H. GORDON MACNEILL CHAIRMAN OF JANNOCK LIMITED -- Mr. MacNeill has been Chairman of Jannock Limited, a building
Age: 70 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 The Consumers'
Gas Company Ltd., Empire Company Limited and Anderson Exploration Ltd.
RICHARD BARTH CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF CIBA-GEIGY CORPORATION -- Mr. Barth
Age: 64 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. He was Chief Financial Officer from 1979 to 1986, Secretary from 1974 to 1986, and
General Counsel from 1970 to 1986. He is also a director of The Bank of New York.
</TABLE>
2
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<TABLE>
<S> <C>
JAMES L. PATE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF PENNZOIL COMPANY -- Mr. Pate became
Age: 60 Chairman of Pennzoil Company in 1994 and has served as President and Chief Executive Officer
Director since March 1, 1996 since 1990. Pennzoil Company is a producer, refiner and marketer of petroleum and petroleum
products.
</TABLE>
DIRECTORS WHOSE TERM ENDS AT THE 1998 ANNUAL MEETING OF SHAREHOLDERS
(CLASS II)
<TABLE>
<S> <C>
DONALD R. MELVILLE RETIRED CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF NORTON COMPANY -- Mr. Melville was Chief
Age: 69 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.
H. DAVID AYCOCK RETIRED PRESIDENT AND CHIEF OPERATING OFFICER OF NUCOR CORPORATION -- Mr. Aycock was
Age: 65 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.
ARNOLD M. NEMIROW CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE COMPANY -- Mr. Nemirow
Age: 53 became Chief Executive Officer of the Company on March 1, 1995, and became Chairman of the
Director since 1994 Board on March 31, 1996. He has served as President of the Company since September 1994 and
served as Chief Operating Officer of the Company from September 1994 through February 1995.
Mr. Nemirow served as President, Chief Executive Officer and a director of Wausau Paper
Mills Company, a pulp and paper company, from July 1990 through July 1994, as Chairman,
President, 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>
BOARD AND COMMITTEE MEETINGS
The Board of Directors met eight times during 1995. The Board has an Audit
Committee consisting of Messrs. Rolls, Barth and Curtis, a Nominating and
Governance Committee consisting of Messrs. Aguilar, Aycock, Curtis and Melville,
a Human Resources and Compensation Committee consisting of Messrs. Melville,
Aguilar and MacNeill, a Finance Committee consisting of Messrs. Barth, MacNeill
and Rolls, and an Executive Committee consisting of Messrs. Nemirow, Aycock and
MacNeill.
The Audit Committee, which met three times in 1995, 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 seven times in 1995,
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 of a director nominee proposed for election at the 1997 Annual Meeting
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 25, 1996. The Committee also serves in an oversight capacity
with respect to the Company's compliance with environmental, health and safety
regulations.
The Human Resources and Compensation Committee, which met six times in
1995, 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.
The Finance Committee, which met four times in 1995, 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
3
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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, which met once during 1995, 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 1995.
DIRECTOR COMPENSATION
Each director who was not an employee of the Company received in 1995 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. Effective January 1, 1996, the
annual retainer was increased to $24,000 and the other fees remained unchanged.
During 1995 Mr. Aycock was paid a consulting fee of $30,000 for his services in
connection with the Company's management transition and cost containment
program.
DIRECTORS' DEFERRED COMPENSATION PLAN
As amended and restated as of January 1, 1996, the Company's Directors'
Deferred Compensation Plan (the "Deferred Plan") permits members of the Board of
Directors 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. Compensation that a director has elected to defer under the
Deferred Plan can be allocated to a cash account, a Company Common Stock
account, or both accounts in increments of ten percent, as elected by the
director. On the date on which compensation to be deferred would have been
payable, a participating director who has elected to allocate all or part of his
deferred compensation to his Deferred Plan stock account will be credited with
the number of shares of Common Stock, including fractional shares, having a
value (with a 5% discount) equivalent to the amount of deferred compensation
allocated to his stock account. Deferred compensation that is allocated to a
cash account will be credited on the date on which such compensation would have
been payable. 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. Amounts credited to a Deferred Plan cash account will accrue interest on
the average monthly balance of that account at a rate equal to the rate for the
Fixed Income Fund maintained for the Company's Salaried Employees' Savings Plan.
All of the Company's Outside 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. The distribution may be in the form of a lump-sum payment or up to ten
annual installments. A director may elect to have his accounts distributed in
cash or in Common Stock. Conversion of account balances to shares of Common
Stock or cash, as the case may be, is based upon the closing market price of the
stock on the New York Stock Exchange on the date that the distribution is made.
Although a participant's stock 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. The Deferred Plan is administered by the person (who shall
not be a participant in the Deferred Plan) appointed as plan administrator by
the Officer Committee. The Officer Committee is composed of the Company's Chief
Executive Officer, Chief Financial Officer and Vice President -- Human
Resources.
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
The Company adopted a Retirement Plan for Outside Directors during 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
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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 the Employee Retirement Income Security Act of 1974, as amended.
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 is entitled to
the full early retirement benefits provided by the Plan regardless of age or
years of service.
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 22, 1996, 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>
Wellington Management Company(1) Common 3,949,080(1) 10.29%
75 State Street
Boston, Massachusetts 02109
Tiger Management Corporation(2) Common 3,860,000(2) 10.06%
Panther Partners L.P.
Panther Management Company, L.P.
101 Park Avenue
New York, New York 10178
The Capital Group Companies, Inc.(3) Common 2,212,700(3) 5.77%
333 South Hope Street Series B 121,250(3) 9.91%
Los Angeles, California 90071
Scudder, Stevens & Clark, Inc.(4) Series B 100,887(4) 8.25%
345 Park Avenue
New York, New York 10154
</TABLE>
(1) In a Schedule 13G dated March 5, 1996, Wellington Management Company ("WMC")
reported that it or its wholly-owned subsidiary Wellington Trust Company,
N.A. has shared voting power with respect to 7,000 of the shares shown and
shared dispositive power with respect to all of the shares shown. The
Schedule 13G reported that WMC serves as investment adviser to a number of
clients and that one of those clients, Vanguard Windsor Fund, has an
interest with respect to more than 5% of the outstanding shares of Common
Stock.
(2) Tiger Management Corporation ("TMC") reported in a Schedule 13G dated
February 12, 1996, that it has sole voting power with respect to none of
these shares and shared voting and dispositive power with respect to
3,649,600 of these shares, that each of Panther Partners, L.P. ("PPLP") and
Panther Management Company, L.P. ("PMCLP") has shared voting and dispositive
power with respect to 210,400 of the indicated shares, and that Julian H.
Robertson, Jr. is the ultimate controlling person of TMC and PMCLP and
therefore has shared voting and dispositive power with respect to all of the
shares shown. The Schedule 13G reported that PPLP is an investment company
and that TMC and PMCLP are investment advisers, and that The Jaguar Fund,
N.V., a Netherlands Antilles corporation, has an interest with respect to
more than 5% of the outstanding shares of Common Stock.
(3) The Company is informed that the number of shares of Common Stock shown
includes 397,700 shares of Common Stock which could be obtained upon
conversion of 121,250 shares of Series B Stock. In addition, The Capital
Group Companies, Inc. reported that its operating subsidiary, Capital
Research and Management Company, a registered investment adviser, exercised
as of December 29, 1995, investment discretion with respect to the shares
shown in the table, which were owned by various institutional investors, but
had no power to direct the vote of these shares.
(4) These shares are represented by 403,550 Depositary Shares. In an Amendment
dated February 7, 1996 to its Schedule 13G, Scudder, Stevens & Clark, Inc.
reported that it holds sole voting power with respect to 61,800 of the
shares, shared voting power with respect to 2,200 of the shares, and sole
dispositive power with respect to all of the shares. Scudder, Stevens &
Clark, Inc. informs the Company that it disclaims beneficial ownership with
respect to these shares.
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No officer or director owns any of the Company's LIBOR Preferred Stock,
Series A, or Series C Cumulative Preferred Stock. As of March 22, 1996,
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
BENEFICIAL
OWNERSHIP PERCENT OF AMOUNT AND NATURE
OF CLASS OF OF BENEFICIAL PERCENT OF CLASS
NAME OF SERIES OUTSTANDING OWNERSHIP OF OF OUTSTANDING
BENEFICIAL OWNER B STOCK SERIES B STOCK COMMON STOCK(1) COMMON STOCK(2)
<S> <C> <C> <C> <C>
A. P. Gammie 0 -- 76,547.27 (3) *
A. M. Nemirow 0 -- 125,000 (4) *
A. D. Fuller 0 -- 10,000 (4) *
R. J. Pascal 0 -- 61,139.24 (5) *
D. J. D'Antuono 0 -- 59,545.06 (6) *
F. J. Aguilar 0 -- 21,160.12 (7) *
H. D. Aycock 0 -- 9,738.64 (8) *
R. Barth 0 -- 6,695.63 (9) *
K. M. Curtis 0 -- 1,000 (10) *
H. G. MacNeill 150 (11) * 10,999.56 (12) *
D. R. Melville 0 -- 8,297.05 (13) *
J. A. Rolls 0 -- 7,843.81 (14) *
J. L. Pate 0 -- 1,000 *
Directors and Executive Officers
as a Group (23 persons) 150 (11) * 565,670.49 (15) 1.46%
</TABLE>
* Represents holdings of less than 1% of the outstanding shares of the series.
(1) Units in one or more Common Stock funds of the Bowater Salaried Employees
401(k) Savings Plan (the "Savings Plan") are allocated to the account of
officers of the Company. These funds hold Common Stock and relatively small
amounts of short-term investments. The number of shares of Common Stock
shown in the table is an approximation provided by the Savings Plan
administrator in a statement for the period ending December 31, 1995, based
on the market value of the applicable units. Additional shares of Common
Stock may have been allocated to the account of participants in the Savings
Plan since the date of the last statement from the Plan administrator. The
number of shares allocated to the account of officers of the Company 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").
(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 247.27 shares owned in the Savings Plan and 25,000 shares which
may be acquired under options currently exercisable.
(4) These shares may be acquired under options currently exercisable.
(5) Includes 1,939.24 shares owned in the Savings Plan and 58,900 shares which
may be acquired under options currently exercisable.
(6) Includes 1,535.06 shares owned in the Savings Plan and 54,900 shares which
may be acquired under options currently exercisable.
(7) Includes 1,546.75 shares held by Dr. Aguilar's daughter, Anne-Marie
Aguilar, as to which shares Dr. Aguilar disclaims beneficial ownership.
Also includes 7,329.46 shares allocated under the Directors' Deferred Plan,
10,300 shares held in an individual retirement account and 1,500 shares
held in a Keogh account.
(8) Includes 9,238.64 shares allocated under the Directors' Deferred Plan.
(9) These shares are allocated under the Directors' Deferred Plan.
(10) These shares are held in an individual retirement account.
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<PAGE>
(11) These shares are represented by 600 Depositary Shares.
(12) Includes 5,510.95 shares allocated under the Directors' Deferred Plan.
(13) Includes 7,797.05 shares allocated under the Directors' Deferred Plan.
(14) These shares are allocated under the Directors' Deferred Plan.
(15) This total includes 12,828 shares allocated to the accounts of those who
are executive officers under the Savings Plan, 44,415.54 shares allocated
under the Directors' Deferred Plan, and 431,350 shares that executive
officers have the right to acquire within 60 days of March 22, 1996, 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. Donald J. D'Antuono filed two
amendments to his Form 4 filings during 1995 to report two separate
dispositions of Common Stock. The dispositions were inadvertently omitted
from the original filings. Mr. Donald G. McNeil filed an amendment to a
Form 4 filing to attach the first page of his three-page form. The first
page was inadvertently omitted from the original filing.
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, 1995, 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
ANNUAL COMPENSATION AWARDS
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION OPTIONS COMPENSATION
DURING 1995 YEAR ($)(1) ($)(1) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
A. P. Gammie: 1995 597,280 684,483 (2) 50,000 35,837(3)
Chairman of the 1994 596,710 387,037 (2) 0 22,072
Board until March 31, 1996 1993 575,000 0 (2) 0 22,437
A. M. Nemirow: 1995 491,667 573,000 (2) 250,000(4) 1,860 (5)
Chairman, President and 1994(6) 150,000(6) 200,000 (7) (4) 186,250(7)
Chief Executive Officer
A. D. Fuller: 1995(8) 242,629 198,000 (2) 20,000 0
Senior Vice President and
President -- Newsprint
Division
R. J. Pascal: 1995 240,000 181,440 (2) 17,000 14,400(9)
Senior Vice President and 1994 227,859 100,042 31,906(10) 0 68,004
President -- Communication 1993 213,000 0 (2) 0 9,166
Papers Division
D. J. D'Antuono: 1995 215,000 162,540 (2) 17,000 12,900(11)
Vice President -- 1994 206,710 89,545 (2) 0 7,442
Corporate Development 1993 195,000 0 (2) 0 7,020
</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.
(3) Amounts included under "All Other Compensation" for Mr. Gammie for 1995
consist of Company contributions of $7,500 under the Savings Plan and
$28,337 under the Compensatory Benefits Plan.
7
<PAGE>
<PAGE>
(4) Options with respect to an aggregate of 250,000 shares of Common Stock were
granted during 1994. During 1995, the Human Resources and Compensation
Committee amended the exercise price to reflect a fair market value equal
to the average of the daily highest and lowest price of a share of Common
Stock on the New York Stock Exchange for the twenty business days preceding
the date of the original grant, as was permitted under the option plan. The
original grant was inadvertently made at the average of the highest and
lowest prices of a share of Common Stock on the New York Stock Exchange for
the date of grant rather than at the twenty-day average price. See "Report
on Repricing of Options."
(5) This sum is the amount that a third party would charge to provide Mr.
Nemirow with life insurance coverage in excess of that otherwise available
under the Company's standard group insurance plan. The Company is
self-insured with respect to its group life insurance.
(6) Mr. Nemirow joined the Company in September 1994.
(7) The Company's Proxy Statement dated March 31, 1995 (the "1995 Proxy
Statement"), reported an amount that, as of that date, was expected to be
paid in the future for reimbursement of taxes on a premium paid by the
Company for a certain life insurance policy owned by Mr. Nemirow and the
amount of premium paid. After the date of the 1995 Proxy Statement, the
Company decided that the policy would not be used to offset Mr. Nemirow's
retirement benefit, as was originally intended and described in the 1995
Proxy Statement. Accordingly, instead of proceeding as described in the
1995 Proxy Statement, the Company purchased the policy from Mr. Nemirow for
an amount less than the premiums previously paid or the cash value of the
policy, and returned it to the carrier for cancellation. The policy is no
longer in effect.
(8) Mr. Fuller joined the Company in January 1995.
(9) Amounts included under "All Other Compensation" for Mr. Pascal for 1995
consist of Company contributions of $6,000 under the Savings Plan and
$8,400 under the Compensatory Benefits Plan.
(10) This amount was paid for reimbursement of taxes on a premium paid by the
Company for a certain life insurance policy owned by Mr. Pascal. The policy
subsequently was returned to the carrier for cancellation and is no longer
in effect.
(11) Amounts included under "All Other Compensation" for Mr. D'Antuono for 1995
consist of Company contributions of $9,000 under the Savings Plan and
$3,900 under the Compensatory Benefits Plan.
STOCK OPTIONS
The following table sets forth information regarding option grants with
respect to Common Stock made by the Company to the Named Executive Officers
during 1995.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
% OF
TOTAL FAIR MARKET
OPTIONS VALUE PER
NUMBER OF GRANTED SHARE OF GRANT
SECURITIES TO COMMON STOCK DATE
UNDERLYING EMPLOYEES AT TIME OF EXERCISE PRESENT
OPTIONS IN GRANT PRICE EXPIRATION VALUE
NAME GRANTED (#) 1995 ($/SH)(1) ($/SH)(2) DATE(3) ($)(4)
<S> <C> <C> <C> <C> <C> <C>
A. P. Gammie 50,000 (5) 4.81% 28.6875 28.0875 01/25/05 452,000
A. M. Nemirow 250,000 (6) 24.06% 28.6875 (6) 27.2656 09/09/04 2,325,000
A. D. Fuller 20,000 (7) 1.92% 28.1875 26.8625 01/12/05 181,000
R. J. Pascal 17,000 (5) 1.64% 28.6875 28.0875 01/25/05 153,680
D. J. D'Antuono 17,000 (5) 1.64% 28.6875 28.0875 01/25/05 153,680
</TABLE>
(1) The number shown is the average of the highest and lowest price of a share
of Common Stock on the New York Stock Exchange on the date of grant.
(2) The exercise price in each case is the lower of (i) the average of the
highest and lowest prices at which a share of Common Stock traded on the New
York Stock Exchange on the date of grant (the "Daily Price") or (ii) the
average of the Daily Price for the twenty business days immediately
preceding the date of grant.
(3) The plan pursuant to which the options were granted sets forth certain
earlier expiration dates upon the option holder's termination of employment.
8
<PAGE>
<PAGE>
(4) The present value of these options was calculated using the Black-Scholes
option pricing model and assuming volatility of 25.9%, a risk free return
rate of 7.78%, dividends at the rate of $.60 per share and an option term of
ten years. The value was discounted by approximately 13.3% to reflect the
probability of forfeiture due to termination prior to vesting, and
approximately 12.4% to reflect the probability of a shortened option term
due to termination of employment prior to the option expiration date. The
ultimate values of the options will depend on the future market price of the
Common Stock. The actual value, if any, an optionee will realize upon
exercise of an option will depend on the excess of the market value of the
Common Stock over the exercise price on the date the option is exercised.
(5) Options with respect to 50% of the shares of Common Stock covered thereby
became exercisable on January 25, 1996, and options with respect to the
remaining 50% of the shares of Common Stock become exercisable on January
25, 1997 (March 31, 1996, in the case of Mr. Gammie), if certain conditions
are met. In addition, the stock option plan pursuant to which the options
were granted provides that the exercisability date is accelerated and the
Company is required to repurchase outstanding options at a defined
acceleration price upon the occurrence of a "change in control" event as
defined in the stock option plan.
(6) These options were granted during 1994. During 1995, the Human Resources and
Compensation Committee amended the exercise price to reflect a fair market
value equal to the average of the Daily Price for the twenty business days
preceding the date of the original grant, as was permitted under the option
plan. The original grant was inadvertently made at the Daily Price. See
"Report on Repricing of Options." For purposes of this table, the amendment
is treated as a new grant. Options with respect to 125,000 shares of Common
Stock covered thereby became 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. In
addition, the stock option plan pursuant to which the options were granted
provides that the exercisability date is accelerated and the Company is
required to repurchase outstanding options at a defined acceleration price
upon the occurrence of a "change in control" event as defined in the stock
option plan.
(7) Options with respect to 10,000 shares of Common Stock covered thereby became
exercisable on January 12, 1996, and options with respect to the remaining
10,000 shares of Common Stock covered thereby become exercisable on January
12, 1997, if certain conditions are met. In addition, the stock option plan
pursuant to which the options were granted provides that the exercisability
date is accelerated and the Company is required to repurchase outstanding
options at a defined acceleration price upon the occurrence of a "change in
control" event as defined in the stock option plan.
REPORT ON REPRICING OF OPTIONS
Set forth below is a table showing information with respect to all
repricings of options during the past ten years.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH
MARKET OF
PRICE ORIGINAL
NUMBER OF OPTION
OF STOCK EXERCISE TERM
SECURITIES AT PRICE REMAINING
UNDERLYING TIME AT TIME NEW AT
OPTIONS OF OF EXERCISE DATE
REPRICED REPRICING REPRICING PRICE OF
NAME DATE (#) ($)(1) ($) ($) REPRICING
<S> <C> <C> <C> <C> <C> <C>
Arnold M. Nemirow, 1/25/95 250,000 28.6875 27.625 27.2656 9
Chairman, President and yrs,
Chief Executive Officer 8
mths
Phillip A. Temple, 1/25/95 23,000 28.6875 23.9375 21.9875 8
Former Vice President -- yrs,
Human Resources and 2
Administration mths
Richard F. Frisch, 1/25/95 5,000 28.6875 24.8750 24.2438 9
Vice President -- yrs,
Human Resources 6
mths
</TABLE>
(1) The number shown is the average of the highest and lowest price of a share
of Common Stock on the New York Stock Exchange on the date of grant.
The Bowater Incorporated 1992 Stock Incentive Plan permits options to be
granted based upon either (i) the average of the highest and lowest prices at
which a share of Common Stock traded on the New York Stock Exchange on the date
of grant (the "Daily Price"); or (ii) the average of the Daily Price over the
twenty business days immediately preceding the date of grant (the "20 Day
Average Price"). During 1995, the Human Resources and Compensation Committee
amended a number of options that had been inadvertently granted with an exercise
price equal to the Daily Price to change the per share exercise
9
<PAGE>
<PAGE>
price to the 20 Day Average Price. These adjustments resulted in a decrease in
exercise price of $.36, $1.95, and $.63 for options held by Messrs. Nemirow,
Temple and Frisch, respectively.
All members of the Human Resources and Compensation Committee concur in
this report.
D. R. Melville (Chairman)
F. J. Aguilar
H. G. MacNeill
OPTION EXERCISES
The following table sets forth information concerning option exercises
during 1995 and the value at the end of 1995 of unexercised options held by the
Named Executive Officers to purchase the Company's Common Stock. Three of the
Named Executive Officers (Messrs. Gammie, Pascal, and D'Antuono) exercised stock
options during 1995.
AGGREGATED OPTION EXERCISES IN 1995 YEAR
AND 1995 YEAR-END OPTION VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
SHARES UNDERLYING
ACQUIRED VALUE UNEXERCISED VALUE OF UNEXERCISED
ON REALIZED OPTIONS AT IN-THE-MONEY OPTIONS
NAME EXERCISE ($) 12/31/1995 AT 12/31/1995 ($)(1)
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
A. P. Gammie 440,000 9,718,936 0/50,000 0/364,500
A. M. Nemirow 0 -- 125,000/125,000 1,013,987/1,013,987
A. D. Fuller 0 -- 0/20,000 0/170,300
R. J. Pascal 39,000 1,006,890 50,400/17,000 486,841/123,930
D. J. D'Antuono 26,100 442,106 46,400/17,000 573,331/123,930
</TABLE>
(1) Based on the difference between the option exercise price and the average of
the highest and lowest prices per share of the Company's Common Stock on the
New York Stock Exchange on December 29, 1995, of $35.3750. No value was
calculated for options whose exercise price exceeds the closing price of the
Common Stock on December 29, 1995.
STOCK RETENTION PROGRAM
The Company has established stock ownership guidelines for executive
officers as a way to help better align the financial interests of its officers
with those of shareholders. These officers are expected to make continuing
progress towards compliance with these guidelines and to comply fully with the
guidelines by January 1999. Officers are required, as a condition of eligibility
for future bonus payments, to own stock with a value equal to a specified
percentage of their base salary. Stock owned directly or through qualified
Company stock plans and vested stock options count toward meeting this goal. The
guidelines are as follows:
<TABLE>
<CAPTION>
POSITION MULTIPLE OF BASE SALARY
<S> <C>
Chief Executive Officer Three times base salary
Senior Vice Presidents Two times base salary
Corporate Vice Presidents One times base salary
Division Vice Presidents One-half base salary
and other officers
</TABLE>
LONG-TERM CASH INCENTIVE PLAN
The following table sets forth information concerning awards made under the
Company's Long-Term Cash Incentive Plan.
10
<PAGE>
<PAGE>
LONG-TERM CASH INCENTIVE PLAN AWARDS
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS(1) UNDER NON-STOCK PRICE-BASED PLANS
THRESHOLD TARGET MAXIMUM
PERFORMANCE APPLICABLE APPLICABLE APPLICABLE
PERIOD UNTIL NUMBER ESTIMATED NUMBER NUMBER
NUMBER OF MATURATION OR OF DOLLAR OF ESTIMATED DOLLAR OF
NAME UNITS (#) PAYOUT UNITS VALUE($)(2) UNITS VALUE($)(2) UNITS
<S> <C> <C> <C> <C> <C> <C> <C>
A. P. Gammie 42,100 (3) January 1, 10,525 281,758 (4) 42,100 1,127,032 (4) 105,250
1994 to
December 31,
1996
A. M. Nemirow 32,700 (3) January 1, 8,175 291,797 32,700 1,167,187 81,750
1994 to
December 31,
1996
A. D. Fuller 13,600 January 1, 3,400 80,906 (5) 13,600 323,624 (5) 34,000
1994 to
December 31,
1996
R. J. Pascal 13,600 (3) January 1, 3,400 121,359 13,600 485,436 34,000
1994 to
December 31,
1996
D. J. D'Antuono 12,000 (3) January 1, 3,000 107,081 12,000 428,326 30,000
1994 to
December 31,
1996
</TABLE>
<TABLE>
ESTIMATED DOLLAR
NAME VALUE($)(2)
<S> <C>
A. P. Gammie 2,817,579 (4)
A. M. Nemirow 2,917,968
A. D. Fuller 809,059 (5)
R. J. Pascal 1,213,589
D. J. D'Antuono 1,070,814
</TABLE>
(1) Payouts, if any, under the Long-Term Cash Incentive Plan will be made in
cash in 1997.
(2) The Estimated Dollar values of payouts under the plan are based upon the
average of the daily highest and lowest prices of a share of the Company's
Common Stock on the New York Stock Exchange during December 1995 ($35.6938)
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.
(3) These awards were made during 1994.
(4) The amount shown reflects the fact that the ultimate payout to Mr. Gammie
will be reduced by 25% to reflect his retirement from the Company on March
31, 1996.
(5) The amount shown reflects the fact that the ultimate payout to Mr. Fuller
will be reduced by 33.33% to reflect the fact that he joined the Company in
January 1995.
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 18, with the exception
of Federal Paper Board Company, Inc. and Mead Corporation, and the addition of
Abitibi-Price, Inc., Chesapeake Corp., P.H. Glatfelter Company, 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 CHANGE IN CONTROL 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, retirement 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 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 either in the course of his employment or which has
a material adverse effect on the Company or the Executive's ability to perform
his duties adequately and effectively), the Agreements provide for payments
equal to two years of annual base salaries and
11
<PAGE>
<PAGE>
bonus, plus a pro rata share of their bonuses for the year of termination in the
cases of Mr. Nemirow, Mr. Fuller, and Mr. D'Antuono, and three years of base
salary and bonus, plus a pro rata share of their bonuses for the year of
termination in the cases of Mr. Gammie and Mr. Pascal. In the event of a change
in control, as defined in the CIC Agreements described below, 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" (also as
defined in the CIC Agreements).
Each of the Executives also is a party to a change in control agreement
with the Company (collectively, the "CIC Agreements"). The CIC Agreements
generally provide that, in the event of a change in control (as defined below),
the term of the CIC 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 described above, an
amount equal to: (i) three times the Executive's annual base salary in effect
when the Executive is terminated or, if higher, the Executive's annual base
salary in effect immediately prior to the change in control; plus (ii) three
times 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) three times 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 Savings 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; plus (iv)
thirty percent of the Executive's annual base salary in effect when the
Executive is terminated, or, if higher, the Executive's annual base salary in
effect 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). In addition, each of the CIC Agreements provides that the Executive
will be entitled to a pro rata portion of the annual bonus calculated in the
manner specified in (ii) above for the year in which the termination occurred.
During the fourteen-day period following each anniversary of the date of the CIC
Agreements, an Executive may elect whether to receive the amount of all payments
due under the CIC Agreements in a lump sum or in equal annual installments (not
to exceed ten installments). An election may not be made or revoked after a
change in control or at a time when the Company determines that a change in
control may occur within sixty days of the election period.
The CIC Agreements define a change in 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 a Schedule 13G); (ii) less than two-thirds of the total membership of the
Board shall be continuing directors (as defined in the CIC Agreements); or (iii)
the shareholders of the Company approve a merger, consolidation, complete
liquidation, or sale of all or substantially all of the Company's assets. The
CIC 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 CIC 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.
The CIC Agreements also generally provide a terminated Executive with
outplacement assistance, and a grossed up reimbursement of certain excise taxes.
In addition, the CIC Agreements generally provide that the Company will pay or
provide the Executives, their surviving spouses, 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
until the third anniversary of the effective date of the termination of the
Executive's employment or until the Executive's normal retirement date,
whichever is earlier.
In addition, Mr. Nemirow's Employment Agreement 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 and entitles him
to receive certain minimum annual benefits upon his retirement from the Company
if certain conditions are met.
12
<PAGE>
<PAGE>
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 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 $120,000
(applicable in 1995), 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
1994-1995) 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 in 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 $120,000 annual limit on Plan
benefits under the Code. The table assumes retirement at the end of 1995. 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. Nemirow, $150,000, 1 year;
Mr. Gammie, $201,504, 41 years; Mr. Pascal, $199,408, 9 years; and Mr.
D'Antuono, $186,552, 23 years. Mr. Fuller was not eligible to participate in the
Retirement Plan during 1995.
RETIREMENT PLAN BENEFITS
<TABLE>
<CAPTION>
FINAL 10
AVERAGE 5 YEARS 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.
BENEFITS EQUALIZATION PLAN
The Bowater Incorporated Benefits Equalization Plan (the "Benefits
Equalization Plan") is not qualified under the Code and provides benefits for
those salaried employees who are eligible to participate in the Retirement Plan.
The Benefits Equalization Plan pays to employees those benefits that would have
been payable to an employee under the Retirement Plan but for the limits on
maximum annual benefit payable and maximum compensation that can be taken into
account in determining
13
<PAGE>
<PAGE>
benefits under the Retirement Plan. The provisions for payment of benefits and
vesting of interests under the Benefits Equalization Plan are identical to the
provisions of the Retirement Plan except that the Benefits Equalization Plan
does not provide for acceleration of vesting in the event of a change in control
as is the case in the Retirement Plan. The Benefits Equalization Plan is
administered by the Executive Committee of the Board. Because all Named
Executive Officers participate in the Supplemental Benefit Plan described below,
none of the Named Executive Officers will receive any additional benefits
because of participation in the Benefits Equalization Plan.
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.
Participants are eligible to receive benefits under this plan when they have
terminated employment (except for cause) and have commenced receiving benefits
under their applicable qualified defined benefit pension plan. The Supplemental
Benefit Plan provides for retirement benefits beginning at age 60 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 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 of 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 followed by termination of employment of a covered
employee not for cause.
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 1995. 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. Nemirow, $707,334, 1 year; Mr. Gammie, $946,837, 41 years;
Mr. Pascal, $324,900, 9 years; and Mr. D'Antuono, $294,424, 23 years. Mr.
Fuller, whose 1995 annual salary and bonus on an annualized basis were $448,000,
had eleven months of credited service under the Supplemental Benefit Plan at
December 31, 1995.
SUPPLEMENTAL BENEFIT PLAN BENEFITS
<TABLE>
<CAPTION>
30 OR
FINAL MORE
AVERAGE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 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.
14
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<PAGE>
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.
HUMAN RESOURCES AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources and Compensation Committee develops and administers the
compensation programs for the Company's executive officers. The Committee's goal
is to develop executive compensation programs that are consistent with strategic
business objectives.
The Committee is composed entirely of independent, nonemployee directors
who have not served as officers of the Company and have no interlocking
relationships as defined by the Securities and Exchange Commission.
KEY ELEMENTS AND POLICIES FOR COMPENSATION OF EXECUTIVE OFFICERS
The Company's basic policy for executive officers is that compensation
should vary depending on the Company's success in the following areas:
-- Performance versus the Company's financial and strategic objectives,
and
-- Creation of shareholder value.
(Bullet) The key elements of the Company's 1995 executive compensation program
are base salary, the Annual Bonus Plan, stock options, and the
Long-Term Cash Incentive Plan.
(Bullet) To determine appropriate compensation levels within each pay component,
the Committee considers all elements of the executive compensation
program. If targeted incentive levels are achieved, executive officers
will be paid near the median of comparable executives in the paper and
wood products industry. Actual compensation may range above or below
this level, depending on the Company's performance.
(Bullet) Competitive market data is provided by an independent compensation
consultant. The Company reviews the pay practices of companies in the
paper products industry, as well as other general industry companies
with similar annual revenues to the Company. The Committee believes
this criteria provides reasonable pay comparisons, enabling the Company
to assure that executives are being paid fairly, while assuring
shareholders and the Company that executive pay levels are reasonable.
In addition to compensation surveys, the Company reviews the proxy
statements of peer companies in the paper and wood products industry.
The proxy analysis group consists of the same companies used as the
comparison group in the Long-Term Cash Incentive Plan described below.
(Bullet) The group of companies used for independent compensation comparisons
includes many of the Company's peer companies. The list is expanded,
however, to include other paper products companies and similar-sized
general industry companies that are not a part of the Dow Jones Paper
Products Group used for shareholder return comparisons. The Committee
believes that the recruitment of executive talent should not
necessarily be limited to the companies used in the Dow Jones group.
(Bullet) 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.
15
<PAGE>
<PAGE>
BASE SALARY
Executive officers' salaries are generally set to place them near the
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.
(Bullet) 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 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.
ANNUAL BONUS PLAN
The Annual Bonus Plan for 1995 used two performance measures: Return on
Capital Employed (weighted 65%) and cost reduction 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 COST REDUCTION AND 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 75% on total Company
results and 25% on corporate headquarters results, while awards for
those in business units were based 75% on unit results and 25% on total
Company results. The award to the Chief Executive Officer was based
100% on total Company results. The inclusion of this measure reflects
the strategic importance the Company has placed on managing costs.
LONG-TERM CASH INCENTIVE PLAN
The Long-Term Cash Incentive Plan measures performance over three-year
periods. The current cycle covers 1994 through 1996. This plan also uses Return
on Capital Employed as the primary performance measure, but it provides rewards
based on the Company's performance over the period relative to a peer group of
companies.
Payouts are based on the Company's ranking within the comparison group in
1996, with an improvement in ranking required over the three-year period for any
payout to occur.
(Bullet) To increase the linkage between executive compensation and shareholder
value, payouts for the 1994-1996 performance cycle will be affected by
the Company's stock price performance, as well as its Return on Capital
Employed versus peer companies.
(Bullet) Each participant was awarded "units" at the beginning of the cycle. 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.
Return on Capital Employed performance relative to the peer companies
will determine the number of units earned relative to target.
(Bullet) At the end of the performance period, the value to the executive will
equal the number of units earned times the Company's average daily
stock price during December 1996. Payouts will be made in cash in early
1997, following the determination of the Company's Return on Capital
Employed ranking for 1996.
The paper products industry is cyclical, with broad price swings
influencing all market participants. For this reason, the Committee believes it
is important to evaluate the Company's Return on Capital Employed performance in
a competitive context to adjust for market-driven results (both positive and
negative) that are beyond the Company's control.
The peer comparison group includes the companies in the Dow Jones Paper
Products Group used in the Total Shareholder Return graph, with the exception of
Federal Paper Board Company, Inc. (acquired by International Paper Company) and
Mead Corporation, and the addition of Abitibi-Price, Inc., Chesapeake Corp.,
P.H. Glatfelter Company, and Stone Container Corporation.
16
<PAGE>
<PAGE>
STOCK OPTIONS
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. During 1995, stock options were granted at a price
equal to the fair market value on the date of grant. Accordingly, the options
have value to the executive only if the stock price appreciates. The Committee
believes this design will focus executives on the creation of shareholder wealth
over the longer term.
Stock option award sizes are based on competitive practice. The Committee's
objective is to deliver a competitive award opportunity based on the dollar
value of the award granted. As a result, the number of shares underlying the
stock option grant is dependent on stock price as well as competitive practice
and may change from year to year.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
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 1995
Based on a competitive review by an independent compensation consultant,
Mr. Nemirow's annualized 1995 salary of $500,000 was compared with compensation
for CEOs at other paper and wood product companies and similar-sized general
industry organizations. The Committee annually reviews Mr. Nemirow's salary
level, and will consider such factors as tenure, individual performance, and
contribution to the Company's success when contemplating future salary
adjustments.
Mr. Nemirow's payout under the Annual Bonus Plan was $573,000, which
represents 114.6% of base salary and was determined by formula using the Return
on Capital Employed, cost reduction and productivity measures described earlier.
Mr. Nemirow did not receive a stock option grant in 1995; in January 1996 he
received a grant of 50,000 stock options. He participates in the Long-Term Cash
Incentive Plan for the 1994-1996 performance cycle.
All members of the Human Resources and Compensation Committee concur in
this report.
D. R. Melville (Chairman)
F. J. Aguilar
H. G. MacNeill
17
<PAGE>
<PAGE>
TOTAL SHAREHOLDER RETURN
THE COMPANY VS. DOW JONES PAPER PRODUCTS GROUP* AND S&P 500
1990-1995
The table below compares the cumulative shareholder returns 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,
1990.
(Performance Graph appears here. Plot points are listed in table below.)
Dow Jones Paper
Date Bowater S&P 500 Products Group*
1990 $100 $100 $100
1991 $108 $130 $128
1992 $126 $140 $129
1993 $123 $154 $139
1994 $146 $156 $156
1995 $198 $215 $177
*Companies include: Boise Cascade Corporation, Champion International
Corporation, Consolidated Papers, Inc., Federal Paper Board Company, Inc.,
International Paper Company, Mead Corporation, Union Camp Corporation, and
Westvaco Corporation.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Kenneth M. Curtis, a director of the Company, is a senior member of the law
firm of Curtis Thaxter Stevens Broder & Micoleau, Limited Liability Company,
P.A., which performed a research project for the Company during 1995. The fees
for this project were less than 5% of the law firm's gross revenues for its last
fiscal year.
Fidelity Management Trust Company ("FMTC"), pursuant to a trust agreement
dated July 1, 1994 (the "Agreement"), by and between the Company and FMTC,
provides directed trustee services to the six qualified retirement plans
maintained by the Company and its subsidiaries. In addition, Fidelity
Institutional Retirement Services Company ("FIRSCO"), a company affiliated with
FMTC, provides administrative recordkeeping services to the plans also in
accordance with the terms of the Agreement. FMTC and FIRSCO are subsidiaries of
FMR, Corp. During 1995, the Company paid to these entities approximately $26,000
for providing services to the plans. The Company expects that similar amounts
will be paid in the future. The Company believes that its arrangements with
these entities are on terms as favorable as could be obtained from a non-
shareholder.
FMR, Corp., through its mutual funds, owned 4,421,200 shares of Common
Stock and 98,359 shares of Series B Stock during the month ending January 31,
1995. This was the highest number of shares of Company stock held by the mutual
funds at any time during 1995. FMR, Corp. has since reduced its holdings to less
than 5% of the outstanding shares of Common Stock or Series B Stock.
18
<PAGE>
<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, 1996, 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 and other 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 1997
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 25, 1996, 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 has requested that
brokerage houses and other custodians, nominees and fiduciaries forward
soliciting materials to their principals, the beneficial owners of Common Stock
and Depositary Shares of the Company, and will reimburse them for their
reasonable out-of-pocket expenses in so doing. 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 1995 ANNUAL REPORT IS ENCLOSED HEREWITH. THE COMPANY WILL
PROVIDE WITHOUT CHARGE TO ANY SHAREHOLDER OF RECORD AS OF MARCH 22, 1996, WHO SO
REQUESTS IN WRITING, A COPY OF THE 1995 ANNUAL REPORT OR THE COMPANY'S 1995
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,
(sig of Wendy C. Shiba appears here)
WENDY C. SHIBA
SECRETARY
March 31, 1996
19
<PAGE>
<PAGE>
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
(Bowater logo appears here)
DATE AND TIME
TUESDAY, MAY 21, 1996
AT 10:30 A.M.
PLACE
HOTEL INTER-CONTINENTAL
111 EAST 48TH STREET
NEW YORK, NEW YORK
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.
<PAGE>
<PAGE>
******************************************************************************
APPENDIX
******************************************************************************
<PAGE>
BOWATER INCORPORATED
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P OF THE COMPANY FOR ANNUAL MEETING MAY 21, 1996
R
The undersigned hereby appoints David G. Maffucci and Wendy C. Shiba,
or any one of them, each with full power of substitution, as proxies for the
undersigned, to vote, as designated below, all the shares of 7% PRIDES
Series B Convertible Preferred Stock, par value $1 per share, of Bowater
O Incorporated held of record by the undersigned on March 22, 1996, at the
annual meeting of shareholders to be held May 21, 1996, 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:
X
Francis J. Aguilar,
Kenneth M. Curtis,
Y John A. Rolls
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>
<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 [ ]
LISTED BELOW (to vote for all nominees below)
<S> <C>
1. ELECTION OF DIRECTORS EXCEPTIONS* [ ] (as indicated
to the contrary below)
</TABLE>
Francis J. Aguilar, Kenneth M. Curtis, John A. Rolls
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, 1996.
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 , 1996
(Please be sure to insert date)
Signed
Votes MUST be indicated
(x) in Black or Blue ink. [ ]
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
<PAGE>
BOWATER INCORPORATED
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P OF THE COMPANY FOR ANNUAL MEETING MAY 21, 1996
R
The undersigned hereby appoints David G. Maffucci and Wendy C. Shiba,
or any one of them, each with full power of substitution, as proxies for the
undersigned, to vote, as designated below, all the shares of common stock
of Bowater Incorporated held of record by the undersigned on March 22, 1996,
O at the annual meeting of shareholders to be held May 21, 1996, 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:
X
Francis J. Aguilar,
Kenneth M. Curtis,
Y John A. Rolls
COMMENTS (change of address) [ ]
Bowater Incorporated
PO Box 11468
New York, NY
10203-0468
(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>
<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>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY [ ]
LISTED BELOW (to vote for all nominees below)
<S> <C>
1. ELECTION OF DIRECTORS EXCEPTIONS* [ ] (as indicated
to the contrary below)
</TABLE>
Francis J. Aguilar, Kenneth M. Curtis, John A. Rolls
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, 1996.
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.
Change of Address
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 , 1996
(Please be sure to insert date)
Signed
Votes MUST be indicated
(x) in Black or Blue ink. [ ]
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
