<PAGE>
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO
SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NABISCO HOLDINGS CORP.
(Name of Registrant as Specified in Its Charter)
NABISCO HOLDINGS CORP.
(Name of Person(s) Filing Proxy Statement)
<TABLE>
<CAPTION>
Payment of Filing Fee (Check the appropriate box):
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
/ / Fee paid previously with preliminary materials
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
</TABLE>
<PAGE>
[LOGO]
NABISCO HOLDINGS CORP.
7 CAMPUS DRIVE
PARSIPPANY, NEW JERSEY
07054-0311
March 16, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of Nabisco Holdings Corp. The meeting will be held at 10:30 a.m. (local time) on
Wednesday, April 15, 1998 at the Hotel DuPont, 11th and Market Streets,
Wilmington, Delaware 19801.
Please note that attendance at the Annual Meeting will be limited to
stockholders (or their authorized representatives) as of March 10, 1998, the
record date, and to guests of the company. If your shares are registered in your
name and you plan to attend the Annual Meeting, please mark the appropriate box
on the enclosed proxy card and you will be pre-registered for the meeting. If
your shares are held of record by a broker, bank or other nominee and you plan
to attend the meeting, you must also pre-register by returning the registration
card forwarded to you by your bank or broker. Stockholders who are not pre-
registered will only be admitted to the Annual Meeting upon verification of
stock ownership.
Please give these proxy materials careful attention. It is important that
your shares be represented and voted at the Annual Meeting regardless of the
size of your holdings. Accordingly, whether or not you plan to attend the Annual
Meeting, please complete, sign, date and return the accompanying proxy card in
the enclosed envelope in order to make certain that your shares will be
represented at the Annual Meeting.
Sincerely,
[LOGO]
STEVEN F. GOLDSTONE
Chairman
IMPORTANT: YOUR PROXY CARD IS ENCLOSED IN THE
ADDRESS WINDOW OF THE ENVELOPE CONTAINING THIS MATERIAL
<PAGE>
[LOGO]
NABISCO HOLDINGS CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 15, 1998
To the Stockholders:
The Annual Meeting of Stockholders of Nabisco Holdings Corp., a Delaware
corporation (the "Company"), will be held at the Hotel DuPont, 11th and Market
Streets, Wilmington, Delaware 19801 at 10:30 a.m. (local time) on Wednesday,
April 15, 1998 for the following purposes:
1. To elect six Directors to serve until the 1999 annual meeting of
stockholders and until their respective successors are duly elected and
qualified;
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the Company's 1998 fiscal year; and
3. To transact such other business as may be properly brought before
the meeting and any adjournments or postponements thereof.
Only holders of record of the Company's Class A Common Stock and Class B
Common Stock as of the close of business on March 10, 1998 are entitled to
notice of and to vote at the Annual Meeting and any adjournments or
postponements thereof. A list of such stockholders may be examined for any
purpose germane to the meeting during the ten-day period preceding the meeting
at the Hotel DuPont, 11th and Market Streets, Wilmington, Delaware 19801.
JAMES A. KIRKMAN III
Executive Vice President and Secretary
Parsippany, New Jersey
March 16, 1998
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY CARD WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING.
<PAGE>
NABISCO HOLDINGS CORP.
7 Campus Drive
Parsippany, New Jersey
07054-0311
PROXY STATEMENT
This Proxy Statement and enclosed form of proxy are being furnished
commencing on or about March 16, 1998 in connection with the solicitation by the
Board of Directors (the "Board") of Nabisco Holdings Corp., a Delaware
corporation (the "Company"), of proxies in the enclosed form for use at the
annual meeting of stockholders (the "Annual Meeting") to be held on April 15,
1998 for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. Any proxy given pursuant to this solicitation and received in time
for the Annual Meeting will be voted as specified in such proxy. If no
instructions are given, proxies will be voted FOR the election of the nominees
listed below under the caption "Election of Directors--Information Concerning
the Nominees," FOR the ratification of the appointment of Deloitte & Touche LLP
as independent auditors for the Company's 1998 fiscal year and in the discretion
of the proxies named on the proxy card with respect to any other matters
properly brought before the Annual Meeting and any adjournments or postponements
thereof. Any proxy may be revoked by written notice received by the Secretary of
the Company at any time prior to the voting thereof by submitting a subsequent
proxy or by attending the Annual Meeting and voting in person.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF THE
BOARD TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ACCOMPANYING
ENVELOPE, which is postage-paid if mailed in the United States.
Only holders of record of the Company's voting securities as of the close of
business on March 10, 1998 (the "Record Date") are entitled to notice of and to
vote at the Annual Meeting and any adjournments or postponements thereof. As of
the Record Date, the following shares of voting securities were outstanding:
51,819,653 shares of Class A Common Stock, par value $.01 per share ("Class A
Common Stock"), and 213,250,000 shares of Class B Common Stock, par value $.01
per share ("Class B Common Stock").
Class A Common Stock and Class B Common Stock (collectively, the "Common
Stock") vote as a single class on all matters properly brought before the Annual
Meeting. Holders of Class A Common Stock and Class B Common Stock are entitled
to one (1) vote and ten (10) votes per share, respectively. The presence of the
holders of a majority in voting power of the Common Stock, represented at the
meeting in person or by proxy, will constitute a quorum. Shares represented by
proxies that are marked "abstain" will be counted as shares present for purposes
of determining the presence of a quorum on all matters. Proxies relating to
"street name" shares that are voted by brokers on some but not all of the
matters will be treated as shares present for purposes of determining the
presence of a quorum on all matters, but they will not be treated as shares
entitled to vote at the Annual Meeting on those matters as to which authority to
vote is withheld by the broker ("Broker Non-Votes"). The six nominees receiving
the highest vote totals will be elected as Directors of the Company.
Accordingly, abstentions and Broker Non-Votes will not affect the outcome of the
election. All other matters to be voted on will be decided by a majority vote of
the shares represented at the Annual Meeting and entitled to vote. On any such
matter, an abstention will have the same effect as a negative vote, but, because
shares held by brokers will not be considered entitled to vote on matters as to
which the brokers withhold authority, a Broker Non-Vote will have no effect on
the outcome of the voting.
Securities and Exchange Commission (the "SEC") rules generally require that
an annual report precede or accompany proxy materials. However, if you are a
stockholder of record, have the same address as another stockholder of record
and do not hold shares in nominee name, you may wish to authorize the Company to
discontinue sending more than one annual report to the same address. You can
eliminate such duplicate mailings by marking the appropriate box on the proxy
card for any account for which you do not wish to receive annual reports. You
will, however, continue to receive proxy statements and proxy cards to vote the
shares for all of your accounts.
<PAGE>
ITEM 1 -- ELECTION OF DIRECTORS
INFORMATION CONCERNING NOMINEES
At the upcoming Annual Meeting, a board of six Directors will be elected to
hold office until the next Annual Meeting of stockholders and until their
successors have been elected and qualified. Directors are elected by a plurality
of the votes cast. Although management does not anticipate that any of the
persons named below will be unable or unwilling to stand for election, in the
event of such an occurrence, proxies may be voted for a substitute designated by
the Board. All of the Board's nominees are incumbent Directors of the Company
and its wholly-owned subsidiary, Nabisco, Inc. ("Nabisco") and all of them were
elected to their present terms by the stockholders in April 1997 except Mr.
Kilts, who was elected by the Board in January, 1998.
Background information about the Board's nominees for election is set forth
below. See "Security Ownership of Management" for information about the
nominees' holdings of equity securities issued by the Company and its
affiliates.
<TABLE>
<CAPTION>
YEAR
FIRST BUSINESS EXPERIENCE DURING PAST FIVE YEARS
NAME AGE ELECTED AND OTHER INFORMATION
- ------------------------------ ----------- ----------- ------------------------------------------------------------------
<S> <C> <C> <C>
Herman Cain................... 52 1995 Chairman of Godfather's Pizza, Inc. since 1988; Chief Executive
Officer of Godfather's Pizza from 1988 to December 1996. Chief
Executive Officer and President of National Restaurant Association
since December 1996. Member of the Boards of SUPERVALU, INC.,
UtiliCorp United and Whirlpool Corporation.
John T. Chain, Jr............. 63 1994 President of Quarterdeck Equity Partners, Inc., an investor in the
defense industry, since December 1996; Special Assistant to the
Chairman of Burlington Northern Santa Fe Corporation from November
1995 to March 1996; Executive Vice President of Burlington
Northern from 1991 to November 1995. For more than five years
prior thereto, General (Commander-in-Chief, Strategic Air Command)
in the United States Air Force. Member of the Boards of RJR
Nabisco Holdings Corp. ("RJRN Holdings"), RJR Nabisco, Inc.
("RJRN"), Northrop Grumman Corporation and The Thomas Group, Inc.
Steven F. Goldstone........... 52 1996 Chairman of the Company and Nabisco since January 1998; Chairman
of RJRN Holdings and RJRN since May 1996; Chief Executive Officer
of RJRN Holdings and RJRN since December 1995; President of RJRN
Holdings and RJRN since October 1995; General Counsel of RJRN
Holdings and RJRN from March to December 1995. Partner with the
law firm of Davis Polk & Wardwell until October 1995 and for more
than five years prior thereto.
David B. Jenkins.............. 67 1995 Director of J. Sainsbury International from January 1994 to
September 1995; Chairman and Chief Executive Officer of Shaw's
Supermarkets, Inc. from 1982 to December 1993. Member of the
Boards of Citizens Capital, Inc. and Relationship Marketing Group.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
YEAR
FIRST BUSINESS EXPERIENCE DURING PAST FIVE YEARS
NAME AGE ELECTED AND OTHER INFORMATION
- ------------------------------ ----------- ----------- ------------------------------------------------------------------
<S> <C> <C> <C>
James M. Kilts................ 50 1998 President and Chief Executive Officer of the Company and Nabisco
since January 1998; Executive Vice President, Worldwide Food, of
Philip Morris Companies from January 1994 to March 1997; President
of Kraft USA from 1989 to 1994.
Kay Koplovitz................. 52 1995 Founder, Chairman and Chief Executive Officer of USA Networks
since its establishment in 1977. Member of the Boards of General
Re Corporation and Liz Claiborne, Inc.
</TABLE>
The Board recommends that the stockholders vote FOR the election of each
nominee for Director named above.
MEETINGS AND COMMITTEES OF THE BOARD
The Board met eight times during the 1997 fiscal year. During 1997, all then
incumbent Directors attended at least 75% of the meetings of the Board and the
Board committees on which they served.
The standing committees of the Board are the Audit Committee and the
Compensation Committee. The Board does not have a nominating committee; its
customary functions are performed by the entire Board.
AUDIT COMMITTEE. The Audit Committee reviews the adequacy of the Company's
internal system of accounting controls, confers with the independent auditors
and the internal auditors concerning their examination of the books and records
of the Company and its subsidiaries, reviews actions taken to ensure compliance
with the Company's Code of Conduct, recommends to the Board the appointment of
independent auditors and considers other appropriate matters regarding the
financial affairs of the Company and its subsidiaries. The Audit Committee,
whose current members are Mr. Jenkins and Mr. John G. Medlin, Jr. (who is not a
nominee for re-election), held four meetings during the 1997 fiscal year.
COMPENSATION COMMITTEE. The Compensation Committee makes recommendations to
the Board with respect to compensation and grants of stock options to management
employees. In addition, the Compensation Committee administers plans and
programs relating to employee benefits, incentives and compensation. The
Compensation Committee, whose current members are Mr. Cain, General Chain and
Ms. Koplovitz, met five times during the 1997 fiscal year.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of March 10, 1998,
regarding the beneficial ownership of (i) Class A Common Stock and (ii) common
stock, par value $.01 per share, of RJRN Holdings ("RJRN Common Stock"), by each
director of the Company, by each of the five most highly compensated executive
officers of the Company during the last fiscal year and by all directors and
executive officers of the Company as a group. Most of these individuals have the
opportunity to become the beneficial owners of additional shares of Class A
Common Stock as a result of stock options vesting or becoming exercisable. See
"Executive Compensation--Stock-Based Awards" and "Directors' Compensation."
Otherwise, except as noted, the persons named in the table below do not own any
other capital stock
3
<PAGE>
of the Company or any of its affiliates and have sole voting and investment
power over all securities for which they are shown as beneficial owner.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
CLASS A
COMMON STOCK PERCENT OF NUMBER OF SHARES OF PERCENT OF
NAME OF BENEFICIALLY CLASS A RJRN COMMON STOCK RJRN COMMON
BENEFICIAL OWNER OWNED(1)(2)(3) COMMON STOCK BENEFICIALLY OWNED(1)(4) STOCK
- ----------------------------- ----------------------- --------------- ------------------------- ---------------
<S> <C> <C> <C> <C>
Herman Cain.................. 0 * 0 *
John T. Chain, Jr............ 8,600 * 11,933 *
Joseph W. Farrelly........... 106,760 * 4,771 *
Steven F. Goldstone(5)....... 14,981 * 792,475 *
David B. Jenkins............. 1,500 * 0 *
James M. Kilts(6)............ 0 * 0 *
Kay Koplovitz................ 7,700 * 0 *
John G. Medlin, Jr........... 8,600 * 10,799 *
C. Michael Sayeau............ 130,719 * 577 *
All Directors and Executive
Officers as a Group(7)..... 745,395 1.43% 879,661 *
- -----------------------------
Christopher J. Coughlin...... 1,000 * 125 *
H. John Greeniaus............ 990,707 1.88% 198,611 *
James J. Postl............... 46,919 * 523 *
</TABLE>
- ------------------------
* Less than 1%.
(1) For purposes of this table, a person is deemed to be the "beneficial owner"
of any shares that such person has the right to acquire within 60 days. For
purposes of computing the percentage of outstanding shares held by each
person named above, any security that such person has the right to acquire
within 60 days is deemed to be outstanding, but it is not deemed to be
outstanding for the purpose of computing the percentage ownership of any
other person.
(2) The number of shares of Class A Common Stock beneficially owned includes
shares subject to currently exercisable options in the following amounts:
(i) 7,600 shares for each of General Chain and Mr. Medlin; (ii) 106,759
shares for Mr. Farrelly; (iii) 880,606 shares for Mr. Greeniaus; (iv) 7,700
shares for Ms. Koplovitz; (v) 45,918 shares for Mr. Postl; (vi) 129,718
shares for Mr. Sayeau; and (vii) 712,369 shares for all directors and
executive officers as a group.
(3) The number of shares of Class A Common Stock beneficially owned does not
include units issued in the following amounts: (i) 3,332 units to Ms.
Koplovitz; (ii) 33 units to Mr. Medlin; (iii) 4,026 units to Mr. Greeniaus;
(iv) 50,000 units to Mr. Kilts; (v) 20,000 units to Mr. Farrelly; (vi)
22,000 units to Mr. Sayeau; (vii) 6,527 units to Mr. Postl; and (viii)
151,500 units to all directors and executive officers as a group. The units
issued to the directors are common stock equivalents and were received as
deferred compensation. The units issued to the officers are equivalent to
restricted stock grants and were received as deferred equity incentives.
(4) The number of shares of RJRN Common Stock beneficially owned includes shares
subject to currently exercisable options in the following amounts: (i) 9,933
shares for General Chain; (ii) 3,933 shares for Mr. Medlin; (iii) 575,800
shares for Mr. Goldstone; (iv) 132,000 shares for Mr. Greeniaus; and (v)
627,466 shares for all directors and executive officers as a group. The
number of shares of RJRN Common Stock beneficially owned also includes 146,
589, 226, 538, 249, 125 and 4,142 shares issuable on conversion of ESOP
Convertible Preferred Stock issued by RJRN Holdings and owned by Messrs.
Goldstone, Greeniaus, Farrelly, Sayeau, Postl, Coughlin and all directors
and executive officers as a group, respectively. The number of shares of
RJRN Common Stock beneficially owned
4
<PAGE>
does not include the following deferred units, which are common stock
equivalents received as equity incentives or as deferred fees and other
compensation: 2,155 units for General Chain and 4,514 units for Mr. Medlin.
(5) Mr. Goldstone's beneficial ownership reflects 14,981 shares of Class A
Common Stock purchased by him on May 15, 1996. Mr. Goldstone is also the
holder of options to purchase 360,000 shares of Class A Common Stock which
are not currently exercisable. Mr. Goldstone is also the holder of 200,000
performance stock units each equal in value to one share of RJRN Common
Stock which will be paid to Mr. Goldstone only if (i) Mr. Goldstone remains
employed by RJRN Holdings through December 31, 1998 (unless he is terminated
by RJRN Holdings without cause or he voluntarily terminates his employment
with good reason) and (ii) the market price for RJRN Common Stock averages
$43.75 or more for any consecutive 30-day period ending on or prior to
December 31, 1998.
(6) In addition to the 50,000 restricted stock units referred to in footnote 3,
Mr. Kilts is the holder of 415,000 options to purchase Class A Common Stock
and 250,000 options to purchase RJRN Common Stock which are not currently
exercisable.
(7) The phrase "All Directors and Executive Officers as a Group" does not
include Messrs. Coughlin, Greeniaus or Postl because they are no longer
directors or executive officers of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires
the Company's officers and directors and persons who own more than 10% of a
registered class of the Company's equity securities to file initial statements
of beneficial ownership (Form 3), and statements of changes in beneficial
ownership (Forms 4 or 5) of Common Stock and other equity securities of the
Company with the SEC and The New York Stock Exchange, Inc. Officers, directors
and greater than 10% stockholders are required by SEC regulation to furnish the
Company with copies of all such forms they file.
Based solely on a review of the copies of the forms that it has received,
and on written representations from certain reporting persons that no additional
forms were required, the Company believes that, except for Mr. Sayeau, its
officers, directors and greater than 10% beneficial owners complied with all of
these filing requirements in 1997. The required form for Mr. Sayeau's purchase
of 1,000 shares of Class A Common Stock on June 9, 1997 was not filed on a
timely basis.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information, as of March 10, 1998,
regarding the beneficial ownership of persons known to the Company to be the
beneficial owners of more than 5% of any class of the Company's voting
securities. The information was obtained from Company records and information
supplied by the stockholders, including information on Schedule 13G. Except as
otherwise noted, the persons named in the table below have sole voting and
investment power with respect to all shares shown as beneficially owned by them.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNED OF CLASS
- ----------------- ----------------------------------------------------------------- ----------------- -----------
<S> <C> <C> <C>
Class A Franklin Resources, Inc.(1) 5,738,200 11.07%
Common Stock 777 Mariners Island Boulevard
San Mateo, CA 94403-7777
Class A FMR Corp.(2) 4,186,219 8.08%
Common Stock 82 Devonshire Street
Boston, MA 02109
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNED OF CLASS
- ----------------- ----------------------------------------------------------------- ----------------- -----------
<S> <C> <C> <C>
Class A Morgan Stanley, Dean Witter, 2,996,622 5.78%
Common Stock Discover & Co.(3)
1585 Broadway
New York, New York 10036
Class B RJR Nabisco Holdings Corp. 213,250,000 100%
Common Stock RJR Nabisco, Inc.(4)
1301 Avenue of the Americas
New York, New York 10019-6013
</TABLE>
- ------------------------
(1) According to Amendment No. 1 dated February 10, 1998 to the Schedule 13G
filed by Franklin Resources, Inc. ("FRI"), Franklin Mutual Advisers, Inc.
("FMA"), Charles B. Johnson and Rupert H. Johnson, Jr., FRI is a parent
holding company, FMA is an investment adviser and Messrs. Johnson and
Johnson are the principal shareholders of FRI. The Schedule 13G reports that
the shares are beneficially owned by investment companies or other managed
accounts which are advised by subsidiaries of FRI. The applicable advisory
contracts indirectly give sole voting and investment power over the shares
to FMA.
(2) According to the Schedule 13G dated February 14, 1998 filed by FMR Corp.
("FMR"), Edward C. Johnson 3d and Abigail P. Johnson, FMR is a parent
holding company and Mr. Johnson and Ms. Johnson are respectively the
Chairman and a Director of FMR and may be deemed members of a group that
controls FMR. The Schedule 13G indicates that FMR, Mr. Johnson and Ms.
Johnson beneficially own 4,186,219 shares. These include (i) 3,902,800
shares beneficially owned by Fidelity Management & Research Company, a
registered investment advisor and a wholly-owned subsidiary of FMR
("Fidelity"), as a result of acting as an adviser to various registered
investment companies (the "Fidelity Funds"), and (ii) 283,419 shares
beneficially owned by Fidelity Management Trust Company, a bank and a
wholly-owned subsidiary of FMR ("Fidelity Trust"), as a result of serving as
investment manager of institutional accounts (the "Institutional Accounts").
According to the Schedule 13G, each of FMR, Mr. Johnson and the Fidelity
Funds has sole investment power over the Fidelity Funds shares, but neither
FMR nor Mr. Johnson has sole power to vote these shares, a power which
resides with the Fidelity Funds' Boards of Trustees. Each of FMR and Mr.
Johnson has sole investment power over the shares beneficially owned by
Fidelity Trust, sole power to vote 236,119 of the shares and no power to
vote the remaining 47,300 shares.
(3) According to the Schedule 13G filed on February 12, 1998 by Morgan Stanley,
Dean Witter, Discover & Co., a registered investment adviser ("MSDW"), MSDW
has shared investment power over the shares, shared voting power over
2,987,722 shares and no voting power over the remaining 8,900 shares.
(4) RJRN Holdings and RJRN, its wholly-owned subsidiary, are the beneficial
owners of all 213,250,000 outstanding shares of Class B Common Stock, which
account for approximately 80.5% of the economic interest in the Company and
97.6% of the combined voting power of its outstanding Common Stock. Because
each of these shares is immediately convertible into a share of Class A
Common Stock at the option of the holder, RJRN Holdings and RJRN are also
deemed to be the beneficial owners of the same number of shares of Class A
Common Stock. Upon such conversion, these shares would account for 80.5% of
the economic interest in the Company and 80.5% of the voting power of the
outstanding Common Stock. Together, RJRN Holdings and RJRN share voting and
investment power over these shares.
ITEM 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Subject to stockholder ratification, the Board has appointed the firm of
Deloitte & Touche LLP ("Deloitte & Touche") as independent auditors for the
fiscal year ending December 31, 1998 and until their successors are selected.
The appointment was made upon the recommendation of the Audit Committee, which
is comprised of Directors who are not employees of the Company or its
subsidiaries.
6
<PAGE>
A representative of Deloitte & Touche is expected to be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so and will be available to answer appropriate questions.
The Board considers Deloitte & Touche to be well qualified and recommends
that the stockholders vote FOR ratification of its appointment as independent
auditors of the Company for the upcoming fiscal year.
EXECUTIVE COMPENSATION
SUMMARY
The following pages describe the components of the total compensation of the
five most highly compensated executive officers (as defined under SEC rules) of
the Company at the end of the last completed fiscal year. The principal
components of such individuals' current cash compensation are the annual base
salary and bonus included in the Summary Compensation Table. The bonus amounts
represent amounts that the Compensation Committee and the Board approved for
each named individual based on Company performance for the applicable year. The
long-term compensation shown in the Summary Compensation Table was provided
under the Company's 1994 Long-Term Incentive Plan (the "Nabisco LTIP") and, in
some cases, under RJRN Holdings' 1990 Long-Term Incentive Plan (the "RJRN LTIP")
as described below. Also described below is the future compensation such
individuals may receive under RJRN's retirement plans or, following termination
of employment under certain circumstances, under private employment agreements.
SUMMARY COMPENSATION TABLE
The following table presents certain specific information regarding the
compensation of the five most highly compensated executive officers of the
Company. Mr. Greeniaus terminated employment with the Company as of January 1,
1998 due to disability under the Company's disability plans. Messrs. Postl and
Coughlin terminated employment with the Company on March 1, 1998.
ANNUAL COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RESTRICTED LONG- TERM
STOCK STOCK INCENTIVE
AGGREGATE BONUS OTHER ANNUAL AWARD(S) OPTIONS PAYOUTS
NAME & PRINCIPAL POSITION YEAR BASE SALARY (1) COMPENSATION (2) (#) (3) (4)
- ------------------------------------------- --------- ----------- --------- ------------- ----------- ---------- ---------
H. John Greeniaus.......................... 1997 $ 891,667 $ 620,000 $ 440,404(6) $ 0 190,000 $ 333,255
Chairman, President & CEO 1996 $ 850,000 $ 684,000 $ 430,809 $ 0 180,000 $ 661,317
1995 $ 837,500 $ 693,000 $ 1,896,714 $ 0 1,080,606 $ 699,627
James J. Postl............................. 1997 $ 450,000 $ 234,000 $ 64,864(7) $ 36,474 100,000 $ 790,000
President, Nabisco Biscuit Company 1996 $ 375,000 $ 400,000 $ 63,009 $ 978,125 70,000 $ 161,053
1995 $ 320,833 $ 404,000 $ 56,343 $ 0 45,918 $ 0
Christopher J. Coughlin.................... 1997 $ 370,833 $ 140,000 $ 56,749(7) $ 0 55,000 $ 0
President, Nabisco International 1996 $ 236,458 $ 169,000 $ 49,237 $ 860,750 75,000 $ 0
Joseph W. Farrelly......................... 1997 $ 300,000 $ 178,000 $ 51,409(7) $ 0 40,000 $ 711,000
Executive Vice President & Chief 1996 $ 280,000 $ 186,000 $ 150,990 $ 782,500 45,000 $ 239,875
Information Officer 1995 $ 275,000 $ 144,000 $ 158,159 $ 0 106,759 $ 347,659
C. Michael Sayeau.......................... 1997 $ 300,000 $ 177,000 $ 55,140(7) $ 0 55,000 $ 711,000
Executive Vice President & Chief 1996 $ 280,000 $ 191,000 $ 128,414 $ 860,750 45,000 $ 188,803
Personnel Officer 1995 $ 273,334 $ 144,000 $ 126,655 $ 0 129,718 $ 312,602
<CAPTION>
<S> <C>
ALL OTHER
COMPENSATION
NAME & PRINCIPAL POSITION (5)
- ------------------------------------------- -------------
H. John Greeniaus.......................... $ 115,467
Chairman, President & CEO $ 105,487
$ 54,628
James J. Postl............................. $ 25,500
President, Nabisco Biscuit Company $ 23,370
$ 23,125
Christopher J. Coughlin.................... $ 11,125
President, Nabisco International $ 7,094
Joseph W. Farrelly......................... $ 12,150
Executive Vice President & Chief $ 10,600
Information Officer $ 15,000
C. Michael Sayeau.......................... $ 14,730
Executive Vice President & Chief $ 12,720
Personnel Officer $ 17,920
</TABLE>
7
<PAGE>
- ------------------------
(1) The bonus amount shown in the table for Mr. Greeniaus was based solely on
Company performance during 1997 as determined using financial objectives
established early in 1997. The bonus amounts shown for the other named
executive officers were based on a combination of financial objectives and
individual performance objectives.
(2) The 1997 amount shown in the table for Mr. Postl represents a portion of his
1997 annual bonus that was paid to him in 1998 in the form of approximately
829 restricted stock units that are scheduled to vest on December 31, 1999.
In connection with his termination of employment, Mr. Postl became vested in
69 units and forfeited the remainder. In 1996, some of the named executive
officers were granted restricted stock units that vest five years from the
date of grant (subject to pro-rata vesting in certain circumstances) and are
payable in cash based on the price of Class A Common Stock on November 15,
2001. As of December 31, 1997, the value of the number of shares of Class A
Common Stock equal to the number of units granted was: for Mr. Postl (25,000
units)--$1,212,500; for Mr. Coughlin (22,000 units)--$1,067,000; for Mr.
Farrelly (20,000 units)--$970,000; and for Mr. Sayeau (22,000
units)--$1,067,000. Upon Mr. Postl's termination of employment on March 1,
1998, he became vested in 6,458 of these units and forfeited the remainder.
Mr. Coughlin forfeited all of his units upon his termination of employment
on March 1, 1998. Dividend equivalents are paid on the grant in the same
manner as dividends are paid on Class A Common Stock.
(3) The amounts shown in the table reflect the number of shares subject to
options to purchase Class A Common Stock granted to the named executive
officers, except that the number shown for Mr. Greeniaus for 1995 also
includes an option to purchase 200,000 shares of RJRN Common Stock granted
to Mr. Greeniaus under the RJRN LTIP.
(4) The 1997 amounts shown in the table represent long-term incentive payouts
under the 1995 Performance Unit Program of the LTIP (for Messrs. Postl,
Farrelly and Sayeau) and the Executive Equity Program of the RJRN LTIP (for
Mr. Greeniaus). Performance Unit awards, denominated in cash, were granted
in 1995. The amount earned was based on cumulative cash net income
objectives for the performance period 1995-1997. The Performance Unit payout
was made in cash in early 1998. The Executive Equity Program applies to
individuals who previously acquired RJRN Holdings' purchase stock under the
RJRN LTIP. Mr. Greeniaus received cash grants on four annual grant dates
beginning July, 1994 and ending July, 1997, each equal to the excess, if
any, of (i) 25% of the maximum amount he could have borrowed to acquire
purchase stock, over (ii) the then fair market value of the same percentage
of his purchase stock. The grant is increased by the amount necessary to
hold him harmless from income taxes due as a result of the grant.
(5) The amounts shown in the table reflect company contributions made on behalf
of the named individuals under RJRN's qualified and non-qualified defined
contribution plans. The following is a breakout of the 1997 amounts:
<TABLE>
<CAPTION>
COMPANY
COMPANY MATCHING CONTRIBUTION
CONTRIBUTION (NON-QUALIFIED
NAME (QUALIFIED PLAN) PLAN)
- ----------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
H. John Greeniaus...................................................... $ 4,500 $ 42,770
James J. Postl......................................................... $ 4,500 $ 21,000
Christopher J. Coughlin................................................ $ 4,500 $ 6,625
Joseph W. Farrelly..................................................... $ 3,750 $ 8,400
C. Michael Sayeau...................................................... $ 4,500 $ 10,230
</TABLE>
The 1997 amount shown in the table for Mr. Greeniaus also includes $68,197
which was the 1997 premium for certain Company-paid insurance policies.
(6) The amount shown in the table for Mr. Greeniaus for 1997 includes certain
income tax liabilities related to his life insurance policy and to his
participation in the Executive Equity Program (described in footnote (4)),
which liabilities were reimbursed to Mr. Greeniaus. The amount shown in the
table also reflects amounts attributable to his participation in the
Company's executive perquisite program, which provides him with supplemental
insurance, a leased automobile and an annual allowance ($54,750) which may
be used to reimburse miscellaneous expenses and, to the extent not so used,
is paid to him in cash. The supplemental insurance consists of medical,
dental, business travel accident and, to the extent elected, life, spousal
life, automobile and personal liability insurance.
(7) The amounts shown in the table for Messrs. Postl, Coughlin, Farrelly and
Sayeau for 1997 include amounts attributable to their participation in the
Company's executive perquisite program, which provides each of them with
supplemental insurance, a leased automobile and an annual allowance ($40,000
for Messrs. Coughlin, Farrelly and Sayeau; $47,500 for Mr. Postl) which may
be used to reimburse miscellaneous expenses and, to the extent not so used,
is paid in cash. The supplemental insurance consists of medical, dental,
business travel accident and, to the extent elected, life, spousal life,
automobile and personal liability insurance.
8
<PAGE>
STOCK-BASED AWARDS
The Company seeks to insure that a significant portion of executives'
compensation is tied to the price performance of Class A Common Stock and to
quantifiable measures of the Company's operational performance. The regular
long-term incentive grant for 1997 for all of the named participating executive
officers was made in the form of options to purchase Class A Common Stock.
Certain options previously granted to Mr. Greeniaus under the RJRN LTIP were
conditioned on the purchase by him of RJRN Common Stock. In connection with the
purchase of RJRN Common Stock under the RJRN LTIP, Mr. Greeniaus was permitted
to borrow on a secured basis from RJRN the purchase price for the shares of the
purchased stock, plus an additional amount to pay taxes due on any taxable
income recognized in connection with such purchases. The current annual interest
rate, which was set in July, 1993 at the then applicable federal rate for
long-term loans, is 6.37%. The indebtedness, plus accrued interest and taxes,
must be repaid upon the earlier of sale of the shares or termination of Plan
participation (which will continue during his period of disability). As of March
1, 1998, Mr. Greeniaus' outstanding indebtedness in connection with such loans
was $1,188,540. The largest amount of indebtedness since January 1, 1997 for Mr.
Greeniaus was $1,472,956.
During 1996, the Company permitted Mr. Greeniaus to purchase Class A Common
Stock under the Nabisco LTIP at a price equal to the fair market value of such
stock on the date of purchase. In connection with these purchases, Mr. Greeniaus
was permitted to borrow on a secured basis from the Company the purchase price
for the shares of the purchased stock. The current annual interest rates, which
were set at the then applicable federal rate for long-term loans, are: 6.0% for
$690,000 of indebtedness and 5.98% for $692,500 of indebtedness. The
indebtedness, plus accrued interest and taxes, must be repaid upon the earlier
of sale of the shares or termination of Plan participation (which will continue
during his period of disability). As of March 1, 1998, Mr. Greeniaus'
outstanding indebtedness to the Company in connection with such loans was
$1,554,658.
The following table identifies the grants of stock options made to the named
executive officers in 1997 under the Nabisco LTIP.
OPTION GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED TO EXERCISE GRANT DATE
UNDERLYING OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED (#)(1) FISCAL YEAR(2) ($/SHARE) DATE VALUE (3)
- ----------------------------------- ------------------- --------------------- ----------- ----------- ------------
Mr. Greeniaus...................... 190,000 6.90% $ 37.00 1/10/07 $ 2,323,700
Mr. Postl(4)....................... 100,000 3.63% $ 37.00 1/10/07 $ 1,223,000
Mr. Coughlin(5).................... 55,000 2.00% $ 37.00 1/10/07 $ 672,650
Mr. Farrelly....................... 40,000 1.45% $ 37.00 1/10/07 $ 489,200
Mr. Sayeau......................... 55,000 2.00% $ 37.00 1/10/07 $ 672,650
</TABLE>
- ------------------------
(1) These stock options were granted on January 10, 1997 and become vested over
three years in accordance with the following schedule: 33% on each of the
first and second January 1 following the date of grant and 34% on the third
January 1 following the date of grant. The stock options are not exercisable
until the third anniversary of the date of grant. The stock options have
terms of 10 years from the date of grant but are subject to earlier
cancellation in certain circumstances.
(2) The percentages shown in this column represent the percentage of all options
to purchase Class A Common Stock granted in 1997 under the Nabisco LTIP.
(3) The grant date present values shown in the table were determined pursuant to
the Black-Scholes option valuation model using the following assumptions:
stock price volatility of .2358, dividend yield of 1.62%; a 7 year term and
an interest rate of 6.25%.
(4) Mr. Postl forfeited 34,000 shares in connection with his termination of
employment on March 1, 1998.
(5) Mr. Coughlin forfeited 36,850 shares in connection with his termination of
employment on March 1, 1998.
The following table provides information relating to the number and value of
shares of Class A Common Stock subject to options held by the named executive
officers as of December 31, 1997. There were no stock option exercises during
1997 by any of the named individuals.
9
<PAGE>
AGGREGATED OPTION VALUES AT FISCAL
YEAR-END (12/31/97)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS HELD IN-THE-MONEY
AT FY-END OPTIONS HELD AT FY-END
(#)(1) ($)(2)
-------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
NAME TYPE(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------- ----------- ----------- ------------- ------------- -------------
Mr. Greeniaus................................. NA 0 1,250,606 $ 0 $ 25,929,544
RN 132,000 68,000 $ 1,237,500 $ 637,500
Mr. Postl..................................... NA 0 215,918 $ 0 $ 3,267,032
Mr. Coughlin.................................. NA 0 130,000 $ 0 $ 1,963,750
Mr. Farrelly.................................. NA 0 191,759 $ 0 $ 3,674,716
Mr. Sayeau.................................... NA 0 229,718 $ 0 $ 4,398,232
</TABLE>
- ------------------------
(1) Some of the unexercisable stock options are vested.
(2) Calculated based on the excess of the fair market value on December 31, 1997
of Nabisco Stock ($48.50) or RJRN Stock ($37.50), as appropriate, over the
option exercise price.
(3) NA refers to Class A Common Stock; RN refers to RJRN Common Stock.
RETIREMENT PLANS
The named executive officers participate in noncontributory defined benefit
retirement plans maintained by RJRN or its subsidiaries. Mr. Greeniaus also
participates in a Supplemental Executive Retirement Plan (the "SERP"). Benefits
under the SERP are payable only after a participant's retirement at a specified
retirement age, or earlier retirement under certain circumstances with the
consent of the Company.
As explained below (see, "Agreements with Certain Officers"), for purposes
of determining Mr. Greeniaus' SERP benefit, Mr. Greeniaus' first three years of
disability will be recognized as credited service and the Company will consent
to his early retirement on January 1, 2001. Mr. Greeniaus' SERP benefit will be
based on a total of 24 years of credited service (rounded to the nearest year).
Mr. Greeniaus' Average Final Compensation at the time his SERP benefit will be
determined is expected to be $1,550,000. For purposes of determining retirement
benefits under the SERP, "Average Final Compensation" consists of base salary,
bonus in the year earned and pre-tax contributions to plans maintained under
sections 401(k) and 125 of the Code, and is determined by considering the 36
consecutive months that yield the highest average compensation during the
participant's last 60 months of service. Mr. Greeniaus' annual retirement
benefits under the SERP, prior to being offset for Social Security is expected
to be $678,125 commencing upon his retirement on January 1, 2001.
RJRN has purchased annuity contracts for Mr. Greeniaus to provide his
after-tax vested benefits (reduced by his vested benefits under RJRN's qualified
pension plan). No annuity contracts were purchased in 1997 for Mr. Greeniaus;
however, it is anticipated that annuity contracts sufficient to cover Mr.
Greeniaus' remaining unfunded SERP benefit will be purchased in 1998.
Retirement benefits for Messrs. Postl, Farrelly and Sayeau are determined
under a noncontributory qualified defined benefit plan maintained by RJRN that
has no social security offset. The following table shows the estimated annual
benefits payable under the plan. The retirement benefits shown are based on
retirement at age 65 and the payment of a single-life annuity to the
participant.
10
<PAGE>
ESTIMATED ANNUAL RETIREMENT BENEFITS
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
FINAL ---------------------------------------------
COMPENSATION 10 15 20 25 30
- ------------- ---------- ---------- ---------- --------- ---------
<C> <S> <C> <C> <C> <C> <C>
$ 400,000 ....................... $ 68,480 $ 94,260 $ 117,865 137,279 152,344
$ 500,000 ....................... $ 85,879 $ 118,183 $ 147,769 172,077 190,947
$ 600,000 ....................... $ 103,278 $ 142,107 $ 177,673 206,874 229,551
$ 700,000 ....................... $ 120,677 $ 166,030 $ 207,578 241,672 268,155
$ 800,000 ....................... $ 138,076 $ 189,954 $ 237,482 276,470 306,759
$ 900,000 ....................... $ 155,475 $ 213,877 $ 267,386 311,268 345,362
$ 1,000,000 ....................... $ 172,873 $ 237,800 $ 297,290 346,065 383,966
</TABLE>
For Plan purposes, compensation includes base salary, annual bonus (in the
year earned) and certain other payments. "Average Final Compensation" under the
plan is determined by considering the 36 consecutive months that yield the
highest average annual compensation during the participant's last 60 months of
service. If the participant has fewer than 36 months of service, all months are
considered. Average Final Compensation as of December 31, 1997 was: for Mr.
Farrelly -- $489,445 and for Mr. Sayeau -- $488,445. The estimated years of
credited service (rounded to the nearest year) at age 65 were for Mr. Farrelly
- -- 16, and for Mr. Sayeau -- 27. Mr. Postl's retirement benefit will be
determined based on 12 years of credited service (including 5 years credited
pursuant to his contractual arrangements) and Average Final Compensation of
$765,146. Mr. Coughlin had no vested retirement benefit upon termination of his
employment.
AGREEMENTS WITH CERTAIN OFFICERS
Effective December 14, 1995, RJRN Holdings, RJRN, the Company and Nabisco
entered into an amended and restated employment agreement with Mr. Greeniaus,
setting forth the terms of his employment and certain termination provisions.
Mr. Greeniaus terminated employment with the Company due to disability under the
Company's disability plans effective January 1, 1998. Mr. Greeniaus has vested
retirement benefits under the SERP and certain other plans that are funded in
respect of his service through 1994. Under the employment agreement, the Company
must provide additional funding for accruals under the SERP through the date of
Mr. Greeniaus' retirement or the termination of his employment. Under the
employment agreement, the Company must also provide Mr. Greeniaus with life
insurance, on a tax-reimbursed basis, with a face amount of $3 million.
In connection with Mr. Greeniaus' termination of employment, RJRN Holdings,
RJRN, the Company, Nabisco and Mr. Greeniaus entered into an agreement dated
January 21, 1998, setting forth the terms of Mr. Greeniaus' termination of
employment. The January 21, 1998 agreement substantially reflects the terms of
Mr. Greeniaus' amended and restated employment agreement as well as the
Company's short-term and long-term disability plans. As reflected in the January
21, 1998 agreement, Mr. Greeniaus is expected to receive disability benefits for
at least three years during which he will continue to participate in the
Company's employee benefit plans in accordance with the terms of the disability
plans. The Company has agreed to consent to Mr. Greeniaus' early retirement on
January 1, 2001 and to authorize commencement of Mr. Greeniaus' SERP benefit at
that time.
Nabisco has entered into employment agreements with Messrs. Postl, Farrelly
and Sayeau which, in each case, provides that if the executive's employment is
involuntarily terminated other than for "cause" or if the executive terminates
his employment for "good reason", he will receive two years base salary plus
bonus, payable over three years, and benefit continuation for three years.
"Cause" includes criminal dishonesty, deliberate misconduct, and deliberate and
continual refusal to perform employment duties or to act in accordance with
instructions of the Board. "Good reason" includes a substantial reduction in the
executive's responsibilities, a more than 20% reduction in the executive's
salary and annual bonus opportunity or relocation. Compensation continuance is
based on the highest annual rate of salary in effect during the twelve months
immediately prior to termination and the current target incentive award
opportunity for the calendar year in which employment terminates. Mr. Postl is
entitled to compensation and benefit continuance in connection with his
termination of employment on March 1, 1998. Nabisco had also entered into an
employment agreement with Mr. Coughlin, which was cancelled upon his termination
of employment, and he is not entitled to any further benefit thereunder.
11
<PAGE>
DIRECTORS' COMPENSATION
Directors who are not employees of the Company or RJRN Holdings or any of
their subsidiaries ("Outside Directors") receive an annual retainer fee of
$50,000 per year, plus meeting attendance fees of $1,250 per meeting. In
addition, directors who are committee members receive committee attendance fees
of $1,250 per committee meeting and committee chairmen receive a $5,000 retainer
per year. The Company provides Outside Directors with life insurance having a
death benefit of $100,000, participation in charitable giving programs (pursuant
to which directors with at least three years of service may direct that up to $1
million be contributed to eligible educational institutions following the
director's death) and supplemental insurance programs. Each Outside Director
receives an initial stock option grant pursuant to a stock option plan to
purchase 6,000 shares of Class A Common Stock. The options have an exercise
price equal to the fair market value of Class A Common Stock on the date of
grant. They cannot be exercised for at least six months following the date of
grant but, thereafter, are exercisable for ten years from the date of grant. In
addition, each Outside Director receives an annual grant of stock options
pursuant to a formula set forth in the applicable plan, which is made on the
date of the director's election or re-election to the Board of Directors. In
1997, each eligible director as of the April 1997 annual meeting received an
annual stock option to purchase 1,200 shares of Class A Common Stock at an
exercise price of $40.00 (the fair market price of Class A Common Stock on the
date of grant). The annually granted stock options have a ten-year term, vest
over three years (33% on the first and second anniversaries of the date of grant
and 34% on the third anniversary) and may contain additional limitations on
exercisablilty. No additional compensation is paid to directors who are
employees of the Company or RJRN Holdings or its subsidiaries in their capacity
as directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
Compensation Committee currently consists of General Chain, Mr. Cain and Ms.
Koplovitz. There are no Compensation Committee interlocks or insider
participation.
PERFORMANCE GRAPH
NABISCO HOLDINGS CORP.
CUMULATIVE TOTAL RETURNS--NABISCO STOCK, S&P 500, S&P FOOD INDEX
1/20/95=100
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NABISCO CLASS A COMMON STOCK S&P FOOD INDEX S&P 500 INDEX
<S> <C> <C> <C>
1/20/95 100 100 100
Dec-95 135 129 136
Dec-96 164 153 167
Dec-97 207 219 222
</TABLE>
- ------------------------
* Total returns assume $100 invested on January 20, 1995 in Class A Common
Stock, the S&P 500 Index, and the S&P Food Index with reinvestment of dividends.
Common Stock was first issued to the public under a registration statement which
was effective January 19, 1995. January 20, 1995 was the first trading day for
Class A Common Stock.
12
<PAGE>
COMPENSATION COMMITTEE REPORT
This report has been submitted to the stockholders by the Compensation
Committee (the "Committee") of the Board of Directors and reflects the executive
compensation policies and practices of the Company and its subsidiaries during
1997. The Committee is principally responsible for executive compensation and
administers the Company's executive compensation programs and plans. The
Committee reports regularly to the Board of Directors, and the Board is
periodically asked to ratify certain Committee actions. During 1997, the
Committee consisted of Directors who were not employees of the Company or any of
its subsidiaries or RJRN Holdings or any of its subsidiaries, and who,
therefore, were not eligible to participate in any of the Company's executive
compensation programs or plans.
EXECUTIVE COMPENSATION PRINCIPLES AND POLICIES
In determining the amounts, composition, and terms and conditions of the
compensation for executive officers of the Company, the Committee is guided by
two principles: (1) compensation opportunities must enable the Company to
attract and retain individuals with the high caliber of talent and skills which
are critical to the Company's success and (2) a substantial portion of each
executive officer's compensation must be tied to quantifiable measures of the
Company's financial results from operations and stock price performance. These
principles are reflected in the actions discussed below relating to salaries,
annual incentives and long-term incentives.
Changes made to the Internal Revenue Code in 1993 limit the ability of
publicly-traded companies to secure a tax deduction for certain compensation
paid to certain individuals named in the summary compensation table. The
Committee has taken actions to limit the impact of this change in tax law in the
event that compensation paid to a named executive officer might otherwise not be
deductible. The Committee will continue to seek ways to limit the impact of this
change; however, the Committee feels that the tax deduction limitation should
not be permitted to compromise the Company's ability to attract and retain the
executive talent required to compete successfully on a global basis.
Accordingly, achieving the desired flexibility in the design and delivery of
compensation may periodically result in some compensation that is not deductible
for federal income tax purposes. In 1997, only Mr. Greeniaus' compensation was
affected by this tax law and the Committee took action to limit the impact of
this change.
MAJOR COMPENSATION COMPONENTS
The compensation program for executive officers is composed of annual
compensation, long-term compensation and benefits. In determining appropriate
compensation levels, the Committee relies on independent outside consultants who
provide surveys and other data regarding the compensation practices of other
companies that are representative of the size and type of company with which the
Company competes for executive talent. Accordingly, this is a broader and more
diverse group of companies than those used for the peer company index in the
Performance Graph mandated by the Securities and Exchange Commission which
appears on page 12. The base salary and targeted incentive compensation levels
of the comparator companies (without specific regard for the impact of
performance on compensation actually earned) are used by the Committee in
determining base salary and targeted incentive compensation levels of executive
officers of the Company, as described below.
ANNUAL COMPENSATION
The annual compensation for each of the named executive officers is composed
of salary and an annual incentive opportunity. In general, salaries paid to
executive officers reflect the median of competitive practices used by the
Committee for comparison purposes. Annual compensation levels (salary plus
target annual incentive award opportunity) are set to reflect the 75th
percentile of the compensation practices of comparator companies. A senior
executive receives an increase in salary only when the Committee determines that
either a change in an individual's performance or responsibilities or market
13
<PAGE>
conditions warrants such an action. During 1997, the Committee approved salary
increases for Messrs. Greeniaus and Coughlin. Mr. Greeniaus' annual salary was
increased by 5.9% and Mr. Coughlin's annual salary was increased by 7.1%.
Each of the named executive officers has a target annual incentive award
opportunity which is expressed as a percentage of his base salary and which is
set, at target, to provide annual cash compensation at the 75th percentile of
comparator companies. For each of the named executive officers other than Mr.
Greeniaus, the actual bonus earned for 1997 and shown in the Summary
Compensation Table was based principally on the attainment of financial
performance objectives (described below) and partly on individual performance.
The bonus amount shown for Mr. Greeniaus was based solely on the Company's
financial performance. The 1997 performance measures and objectives were
established early in 1997, based on the financial performance of the businesses
for which the individual was responsible or performed services as determined
using performance grids. Performance grids project an executive's annual bonus
opportunity upon attainment of various financial performance targets. The
measure of financial performance for the Company's Corporate employees
(including Messrs. Greeniaus, Coughlin, Farrelly and Sayeau) was cash net
income. The measure of financial performance for Mr. Postl was a combination of
Corporate cash net income and Nabisco Biscuit Company's operating company
contribution.
In 1997, the annual incentive program was modified so that, for the
Company's Corporate employees (including Mr. Greeniaus), the annual incentive
score for financial performance if targeted financial performance is achieved or
exceeded is 100% of the participant's target annual incentive award opportunity.
If the targeted financial score is attained or exceeded, the award is
supplemented with restricted stock units equal to 20% of the target award. The
units, which do not vest for two years, are intended to provide a longer-term
incentive to participants. In 1997, a number of the operating companies failed
to achieve targeted financial performance. Consequently, the bonus amounts
received by each of the named executive officers for 1997 was below the
executive's target bonus opportunity. With the exception of Mr. Postl, none of
the named executive officers received the supplemental restricted stock units
under the annual incentive program. Mr. Postl received supplemental restricted
stock units for that portion of his financial score that was based on the
performance of Nabisco Biscuit Company.
LONG-TERM COMPENSATION
The Committee relies on various forms of stock-based grants and multi-year
incentive opportunities to motivate executives to maintain a longer term
perspective. In 1997, long-term incentive grants to the named executive officers
were in the form of stock options. In determining the size of the stock option
grants, the Committee targets the 75th percentile of competitive stock option
opportunities at comparator companies. In making stock option grants, the
Committee does not take into account whether an executive has exercised or
continues to hold previously granted stock options.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
In 1997, the Committee increased Mr. Greeniaus' annual base salary from
$850,000 to $900,000 (5.9%) and his target annual bonus opportunity from 70% of
base salary to 85%. The Committee believed that this increase was then
appropriate to retain Mr. Greeniaus and to maintain his compensation at a
competitive level commensurate with his skills and experience.
As noted above, Mr. Greeniaus' annual bonus was based solely on the
Company's financial performance, determined pursuant to a performance schedule
adopted by the Committee in early 1997 using the Company's annual cash net
income as the performance measure. This approach should ensure that the Company
may deduct, for federal income tax purposes, all of Mr. Greeniaus' 1997 salary
and annual bonus award. Mr. Greeniaus' annual bonus payment for 1997 was less
than his target award, because the Company's 1997 performance was below targeted
performance.
14
<PAGE>
In 1997, Mr. Greeniaus was granted a stock option to purchase 190,000 shares
of Class A Common Stock with an exercise price of $37 (the market price of Class
A Common Stock on the date of grant). The size of Mr. Greeniaus' 1997 stock
option grant was determined in accordance with the Committee's practice
(referred to above) of targeting the 75th percentile of competitive stock option
grants.
SUMMARY
The Committee believes that the Company's executive compensation program
must continually provide compensation potential of such significance that
individuals of exceptional talent and skills are encouraged to join and remain
with the Company and perform in an exceptional manner. By ensuring that such
persons are managing the Company's operations, the long-term interests of
stockholders are best served. This focus on stockholder interests is reinforced
by the heavy stock-based component in the executive compensation program. The
actions taken by the Committee for 1997 were consistent with this focus and the
principles outlined above.
John T. Chain, Jr. (Chairman)
Herman Cain
Kay Koplovitz
15
<PAGE>
RELATIONSHIP AND TRANSACTIONS WITH
RJR NABISCO HOLDINGS CORP. AND RJR NABISCO, INC.
RJRN, a wholly-owned subsidiary of RJRN Holdings, owns 100% of the
outstanding Class B Common Stock, which represents approximately 80.5% of the
economic interest in the Company and 97.6% of the combined voting power of all
of the outstanding Common Stock. Beneficial ownership of at least 80% of the
total voting power and value of the outstanding Common Stock is required in
order for RJRN Holdings to continue to include the Company in its consolidated
group for federal income tax purposes, and ownership of at least 80% of the
total voting power and 80% of each class of nonvoting capital stock is required
in order for RJRN Holdings to be able to effect a tax-free spin-off of the
Company.
RJRN Holdings has advised the Company that its current intent is to continue
to hold all of the Class B Common Stock beneficially owned by RJRN Holdings, and
RJRN Holdings' Board of Directors has adopted policies setting forth RJRN
Holdings' intention not to make such a distribution prior to December 31, 1998
if such distribution would cause the ratings of the senior indebtedness of RJRN
to be reduced from investment grade to non-investment grade or if, after giving
effect to such distribution, any publicly held senior debt of the Company would
not be rated investment grade. However, the Board is aware that the Board of
Directors of RJRN Holdings is committed to effecting a spin-off of the Company
at the appropriate time. RJRN Holdings has no agreement with the Company not to
sell or distribute such shares, and there can be no assurance concerning the
period of time during which RJRN Holdings will maintain the present levels of
its beneficial ownership of Common Stock.
The Company's ongoing relationship with RJRN Holdings and RJRN is governed
by agreements entered into in connection with the initial public offering of
Class A Common Stock completed on January 26, 1995, including a corporate
services agreement, a corporate agreement and a tax-sharing agreement, all of
which are described below.
SERVICES AGREEMENT. The Company and RJRN entered into an intercompany
services and operating agreement (the "Services Agreement") with respect to
various services provided by RJRN to the Company and by the Company to RJRN,
including certain tax services, and the provision of certain facilities. The
Services Agreement provides that such services are to be provided in exchange
for service fees that do not exceed the fees that would be paid if such services
were provided by an independent third party. Under the Services Agreement, the
fees for services provided by the Company to RJRN during 1997 totaled
approximately $2 million, exclusive of reimbursements at cost for payments made
to third parties. The Company made no payments to RJRN for services performed in
1997 under the Services Agreement, other than reimbursements at cost for
third-party fees and expenses.
In addition, during 1997 RJRN continued coverage of the Company under RJRN's
umbrella liability, property, casualty and fiduciary insurance policies. RJRN
bills the Company for the portion of RJRN's premium cost with respect to such
insurance that is attributable to coverage of the Company. The Company paid RJRN
less than $1 million for its allocable portion of the premium cost and made most
premium payments directly to the insurers. The Services Agreement permits either
RJRN or the Company to terminate the Company's coverage under the RJRN policies
at any time on 90 days' written notice.
TAX SHARING AGREEMENT. The Company is included in RJRN Holdings'
consolidated tax group and the Company's tax liability is included in the
consolidated federal income tax liability of RJRN Holdings and its subsidiaries.
The Company and RJRN Holdings entered into a tax-sharing agreement (the "Tax
Agreement") pursuant to which the Company and RJRN Holdings make payments
between them such that, with respect to any period, the amount of taxes to be
paid by the Company is determined as though the Company filed separate federal,
foreign, state and local income tax returns (including, except as provided
below, any amounts determined to be due as a result of a redetermination of the
tax liability of RJRN Holdings arising from an audit or otherwise). The Company
is reimbursed, however, for tax attributes, such as foreign tax credits and
losses, if and when they are used on a consolidated basis. In
16
<PAGE>
general, any adjustments to the Company's tax liabilities for 1989 or earlier
are the obligation of RJRN Holdings and any adjustments to the Company's tax
liabilities for years after 1989 are the obligation of the Company. RJRN
Holdings generally pays to the Company any tax refund actually received by RJRN
Holdings and attributable to the Company for years after 1989.
In determining the amount of tax-sharing payments, RJRN Holdings prepares a
pro forma consolidated return for the Company that reflects the same positions
and elections used by RJRN Holdings in preparing the returns for RJRN Holdings'
consolidated group. RJRN Holdings continues to have all the rights of a common
parent of a consolidated group, is the sole and exclusive agent for the Company
in all matters relating to the income tax liability of the Company, has
exclusive responsibility for the preparation and filing of consolidated federal
and consolidated or combined state income tax returns (or amended returns), and
has the power, in its sole discretion, to contest or compromise any asserted tax
adjustment or deficiency and to file, litigate or compromise any claim for
refund on behalf of the Company.
Each member of a consolidated group for federal income tax purposes is
jointly and severally liable for the federal income tax liability of each other
member of its consolidated group. For benefit plan purposes, the Company and its
subsidiaries are part of the RJRN Holdings controlled group, which includes RJRN
Holdings and its other subsidiaries. Under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the Internal Revenue Code of
1986, each member of the controlled group is jointly and severally liable for
the funding and termination liabilities of RJRN Holdings' and its subsidiaries'
tax qualified defined benefit retirement plans as well as certain plan taxes.
Consequently, the Company and its subsidiaries could be liable under such
provisions in the event any such liability is incurred, and not discharged, by
any other member of the RJRN Holdings consolidated or controlled group.
Accordingly, each of the Company and RJRN Holdings has agreed to indemnify the
other for their respective obligations under the Tax Agreement.
CORPORATE AGREEMENT. The Company and RJRN are parties to a corporate
agreement (the "Corporate Agreement") under which the Company has granted to
RJRN (i) a continuing option, transferable to RJRN Holdings or any of its
subsidiaries, to purchase, under certain circumstances, additional shares of
Class B Common Stock or shares of nonvoting capital stock of the Company (the
"Stock Option") and (ii) certain registration rights.
In 1997, the Company paid two quarterly dividends of $.155 and two quarterly
dividends of $.175 on each outstanding share of Common Stock. RJRN received a
total of approximately $141 million from these dividends, the amount
representing its PRO RATA share.
CERTAIN LEGAL PROCEEDINGS
In the fourth quarter of 1995, purported stockholders of RJRN Holdings, for
themselves and derivatively for RJRN Holdings and the Company, filed three
putative class and derivative actions in the Court of Chancery of the State of
Delaware in and for New Castle County against members of RJRN Holdings' Board of
Directors, some of whose members serve on the Board. The actions were
consolidated in December 1995. The plaintiffs allege, among other things, that
the defendants breached their fiduciary duty and wasted corporate assets by
undertaking the debt exchange offer and consent solicitation completed by RJRN
and Nabisco in June 1995 and by amending, in August 1995, RJRN Holdings By-Law
provisions concerning the calling of stockholder meetings and procedures for
stockholder action by written consent. The plaintiffs allege that management
took these and other actions to obstruct a spin-off of the Company wrongfully,
to enrich the defendants at the expense of RJRN Holdings, its stockholders and
the Company and to entrench the defendants in the management and control of RJRN
Holdings. By agreement of the parties, the defendants' time to respond to the
complaint in these consolidated actions has been extended, most recently, to May
1998. RJRN Holdings believes that these allegations are without merit and, if
necessary, will defend these actions vigorously.
17
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next Annual
Meeting must be received by the Secretary of the Company no later than November
16, 1998 at the Company's principal executive offices: Nabisco Holdings Corp., 7
Campus Drive, Parsippany, New Jersey 07054-0311.
OTHER INFORMATION
In addition to soliciting proxies by mail, directors, officers and regular
employees of the Company may solicit proxies in person or by telephone or
telecopy. These individuals will receive no additional compensation for these
solicitation services. The Company will reimburse brokers, fiduciaries,
custodians and other nominees for out-of-pocket expenses incurred in forwarding
this proxy statement and related materials to, and obtaining instructions
relating to such materials from, beneficial owners of the Company's capital
stock. The Company will bear all of the other costs of these solicitations.
The Board has no knowledge of any other matters to be presented at the
Annual Meeting other than those described herein. If any other matters should
properly come before the Annual Meeting, it is the intention of the persons
designated in the proxy to vote thereon according to their best judgment.
STOCKHOLDERS ARE URGED TO FORWARD THEIR PROXIES WITHOUT DELAY. A PROMPT
RESPONSE WILL BE GREATLY APPRECIATED.
NABISCO HOLDINGS CORP.
Parsippany, New Jersey
March 16, 1998
If you have any questions or need assistance in voting your shares, please
contact First Chicago Trust Company of New York at its toll free number:
1-800-519-3111.
18
<PAGE>
NABISCO HOLDINGS CORP.
ANNUAL MEETING OF STOCKHOLDERS - APRIL 15, 1998
PROXY SOLICITATION ON BEHALF OF THE BOARD OF DIRECTORS
P
The undersigned having received the Notice of Annual Meeting and Proxy
R Statement, hereby directs Wachovia Bank N.A., Trustee under the RJR Nabisco
Capital Investment Plan ("CIP"), and Trustee under the Nabisco Employee
O Savings Plan ("ESP"), to vote in person or by proxy all shares of Common
Stock of Nabisco Holdings Corp. allocated to any accounts of the undersigned
X under such Plans, and which the undersigned is entitled to instruct, in each
case, on all matters which may come before the 1998 Annual Meeting of
Y Stockholders to be held at The Hotel DuPont, 11th and Market Streets,
Wilmington, Delaware, on Wednesday, April 15, 1998, at 10:30 A.M., and at
adjournments or postponements thereof, and to vote all the shares of stock of
the Company which the undersigned may be entitled to vote on all matters
coming before said meeting.
Election of Directors. Nominees: Change of address:
H.Cain; J.T. Chain, Jr.; S.F. Goldstone: ________________________________
D.B. Jenkins, J.M. Kilts and K. Koplovitz.________________________________
________________________________
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. YOU MUST SIGN AND
RETURN THIS CARD TO DIRECT WACHOVIA HOW TO VOTE YOUR SHARES.
SEE REVERSE
SIDE
FOLD AND DETACH HERE
WACHOVIA
__________________________________________________________________________
Employee Benefit Trust Services
301 North Main Street
Winston Salem, NC 27150-3099
March 1998
To: Participants in the RJR Nabisco Capital Investment Plan ("CIP")
Participants in the Nabisco Employee Savings Plan ("ESP")
As a participant in a Company sponsored employee benefit savings plan that
requires pass through voting, you are entitled to instruct Wachovia Bank,
N.A., in its capacity as Trustee of the above named plans how to vote shares
of Common Stock allocated to your account. Enclosed are the following:
1. Nabisco Holdings Corp. 1997 Annual Report.
2. Notice of Annual Meeting of Stockholders to be held on April 15, 1998 and
the accompanying Proxy Statement.
3. This Proxy/Voting Instruction Card; (SEE REVERSE SIDE FOR VOTING) and
4. A postage-paid return envelope.
The number of shares you hold in your plan account as of the most recent date
available is shown on the reverse side of this card. These shares will be
voted as you direct if this card is completed by you and received by First
Chicago Trust Company of New York on or before April 13, 1998. First Chicago
Trust Company is responsible for tabulating the returns. Shares for which no
instructions are received shall be voted in the same proportion as the shares
for which instructions are received.
We appreciate your completing, dating and signing the reverse side of this
card and returning it promptly in the postage-paid return envelope.
Cordially yours,
Wachovia Bank, N.A.
Trustee
Enclosures SEE REVERSE SIDE
<PAGE>
X PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS INSTRUCTION CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS INSTRUCTION CARD WILL BE VOTED
FOR ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Ratify the appointment
Directors. of Deloitte & Touche as
Independent Auditors.
For, except vote withheld from the following nominee(s):
____________________________-
Will attend annual meeting
Please sign exactly as name appears
hereon. Joint owners should each
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.
____________________________________
____________________________________
SIGNATURE (S) DATE
FOLD AND DETACH HERE
<PAGE>
NABISCO HOLDINGS CORP.
ANNUAL MEETING OF STOCKHOLDERS-APRIL 15, 1998
PROXY SOLICITATION ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Steven F. Goldstone, James M.
Kilts and James A. Kirkman III, and each of them, his true and lawful agents
and proxies with full power of substitution in each, to represent the
undersigned at the Annual Meeting of Stockholders of Nabisco Holdings Corp.,
to be held at The Hotel DuPont, 11th and Market Streets, Wilmington,
Delaware, on Wednesday, April 15, 1998, at 10:30 A.M., and at adjournments or
postponements thereof, and to vote all the shares of stock of the Company
which the undersigned may be entitled to vote on all matters coming before
said meeting.
Election of Directors. Nominees: Change of address:
H. Cain; J.T. Chain, Jr.; S.F. Goldstone; _________________________________
D.B. Jenkins; J.M. Kilts; and K. Koplovitz _________________________________
_________________________________
P
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
R BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2. PLEASE MARK THIS PROXY CARD, FILL IN THE DATE
O AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ACCOMPANYING
ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
X
SEE REVERSE
Y SIDE
FOLD AND DETACH HERE
<PAGE>
X PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS INSTRUCTION CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS INSTRUCTION CARD WILL BE VOTED
FOR ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Ratify the appointment
Directors. of Deloitte & Touche as
Independent Auditors.
For, except vote withheld from the following nominee(s):
_____________________________
Will attend Do not send
annual meeting Annual Report
Please sign exactly as name appears
hereon. Joint owners should each
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.
____________________________________
____________________________________
SIGNATURE (S) DATE
FOLD AND DETACH HERE
<PAGE>
NABISCO HOLDINGS CORP.
ANNUAL MEETING OF STOCKHOLDERS-APRIL 15, 1998
PROXY SOLICITATION ON BEHALF OF THE BOARD OF DIRECTORS
P
The undersigned, having received the Notice of Annual Meeting and Proxy
R Statement, hereby directs Vanguard Group, Custodian under the Nabisco/Life
Savers Puerto Rico Capital Accumulation Plan ("NLSCAP") and Custodian for
O the Participants in the Savings and Investment Plan for Employees of R.J.
Reynolds Tobacco Company in Puerto Rico ("PRSIP"), to vote in person or by
X proxy all shares of Common Stock of Nabisco Holdings Corp. allocated to
any accounts of the undersigned under such Plans, and which the
Y undersigned is entitled to instruct, in each case, on all matters which
may come before the 1998 Annual Meeting of Stockholders to be held at The
Hotel DuPont, 11th and Market Streets, Wilmington, Delaware, on Wednesday,
April 15, 1998, at 10:30 A.M., and at adjournments or postponements
thereof, and to vote all the shares of stock of the Company which the
undersigned may be entitled to instruct on all matters coming before said
meeting.
Election of Directors. Nominees: Change of address:
H. Cain; J.T. Chain, Jr.; S.F. Goldstone; ______________________________
D.B. Jenkins, J.M. Kilts and K. Koplovitz. ______________________________
______________________________
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' RECOMMENDATION. YOU MUST SIGN AND
RETURN THIS CARD TO DIRECT VANGUARD HOW TO VOTE YOUR SHARES.
SEE REVERSE
SIDE
FOLD AND DETACH HERE
VANGUARD
______________________________________________________________________________
Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355
DE TENER ALGUNA DUDA RELATIVO A ESTOS DOCUMENTOS FAVOR DE COMUNICARSE CON EL
DEPARTAMENTO DE RECURSOS HUMANOS.
March 1998
To: Participants in the Nabisco/Life Savers Puerto Rico Capital Accumulation
Plan ("NLSCAP")
Participants in the Savings and Investment Plan for Employees of R.J.
Reynolds Tobacco Company in Puerto Rico ("PRSIP")
As a participant in a Company sponsored employee benefit savings plan that
requires pass through voting, you are entitled to instruct Vanguard, in its
capacity as Custodian of the above named plans, how to vote shares of Common
Stock allocated to your account. Enclosed are the following:
1. Nabisco Holdings Corp. 1997 Annual Report.
2. Notice of Annual Meeting of Stockholders to be held on April 15, 1998 and
the accompanying Proxy Statement.
3. This Proxy/Voting Instruction Card; (SEE REVERSE SIDE FOR VOTING) and
4. A postage-paid return envelope.
The number and type of shares you hold in your plan account as of the most
recent date available is shown on the reverse side of this card. These shares
will be voted as you direct if this card is completed by you and received by
First Chicago Trust Company of New York on or before April 13, 1998. First
Chicago Trust Company is responsible for tabulating the returns. Shares for
which no instructions are received shall be voted in the same proportion as
the shares for which instructions are received.
We appreciate your completing, dating and signing the reverse side of this
card and returning it promptly in the postage-paid return envelope.
Cordially yours,
Vanguard Group
Custodian
Enclosures SEE REVERSE SIDE
<PAGE>
X PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS INSTRUCTION CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS INSTRUCTION CARD WILL BE VOTED
FOR ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Ratify the appointment
Directors. of Deloitte & Touche as
Independent Auditors.
For, except vote withheld from the following nominee(s):
____________________________-
Will attend annual meeting
Please sign exactly as name appears
hereon. Joint owners should each
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.
____________________________________
____________________________________
SIGNATURE (S) DATE
FOLD AND DETACH HERE
