<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-11(c) or Section
240.14a-12
CROWN VANTAGE INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
April 1, 1997
Dear Shareholder:
I invite you to the second Annual Meeting of Shareholders of Crown Vantage
Inc. The meeting will be held at 11:00 a.m. (Pacific Daylight Time) on
Tuesday, May 6, 1997, at the Kaiser Center Auditorium, 2nd Floor, 300 Lakeside
Drive, Oakland, California. A Notice of Annual Meeting and a Proxy Statement
covering the formal business of the meeting are enclosed, along with the
Company's Annual Report to Shareholders for the 1996 fiscal year. During the
meeting, I will provide a review of operations and the outlook for the future.
It is important to your Company that your shares be represented at the
meeting whether or not you expect to attend. Please promptly sign, date and
return the proxy card in the accompanying postage-paid envelope.
Sincerely,
/s/ Ernest S. Leopold
Ernest S. Leopold
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
CROWN VANTAGE INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 6, 1997
TO THE SHAREHOLDERS OF
CROWN VANTAGE INC.
Notice is hereby given that the Annual Meeting of Shareholders of Crown
Vantage Inc. (the "Company") will be held at 11:00 a.m., local time, on
Tuesday, May 6, 1997, at Kaiser Center Auditorium, 2nd Floor, 300 Lakeside
Drive, Oakland, California, for the following purposes:
1. To elect a Board of Directors consisting of eight (8) persons to serve
for the ensuing year; and
2. To transact such other business as may properly come before the meeting.
The close of business on March 4, 1997, has been fixed as the record date
to determine the shareholders entitled to vote at the Annual Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED. Shareholders,
whether or not they expect to attend the meeting in person, are requested to
date, sign and return the enclosed proxy card in the envelope provided, on
which no postage is needed if mailed in the United States.
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 29, 1996, is being mailed to you with this Notice and the Proxy
Statement.
You are cordially invited to attend the meeting.
By order of the Board of Directors
April 1, 1997 Christopher M. McLain
SECRETARY
<PAGE>
CROWN VANTAGE INC.
300 Lakeside Drive
Oakland, California 94612
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1997
This Proxy Statement, which is being mailed to shareholders on or about
April 1, 1997, is furnished in connection with the solicitation by the Board of
Directors (the "Board") of Crown Vantage Inc. ("Crown Vantage" or the
"Company") of proxies in the form accompanying this Proxy Statement to be voted
at the Annual Meeting of Shareholders to be held at 11:00 a.m. local time on
Tuesday, May 6, 1997 at Kaiser Center Auditorium, 2nd Floor, 300 Lakeside
Drive, Oakland, California, and any adjournment thereof (the "Meeting").
The cost of solicitation of proxies will be borne by the Company.
Solicitation will be made initially by mail; however, the Directors, officers
and employees of the Company and its subsidiaries may, without additional
compensation, solicit proxies by telephone, telegraph or personal interview.
The Company intends to engage Georgeson & Co. to solicit proxies from brokers,
banks and other institutional holders at an estimated fee of approximately
$7,500 plus reimbursable expenses.
Any proxy given pursuant to this solicitation may be revoked by the filing
with and receipt by the Secretary of the Company of a written revocation or
duly executed proxy bearing a later date and does not preclude the shareholder
from voting in person at the Meeting. The persons named in the form of proxy
solicited by the Board will vote all proxies that have been properly executed.
If a shareholder specifies on such proxy a choice with respect to the proposal
to be acted upon, the proxy will be voted in accordance with such
specification. Where no choice is specified, the proxy will be voted FOR the
election of the nominees for Directors named herein.
Certain information below refers to a spin-off (the "Spin-Off") in which
all of the Company's outstanding shares were distributed (the "Distribution")
ratably on August 25, 1995, to the holders of record on that date of the common
stock of James River Corporation of Virginia ("James River"). Prior to the
Spin-Off, the Company was a wholly owned subsidiary of James River.
VOTING SECURITIES
The only class of voting stock is the Company's common stock, no par value
("Common Stock"). Holders of record of the Common Stock at the close of
business on March 4, 1997 (the "Record Date"), will be entitled to receive
notice of, and to vote at, the Meeting and any adjournment thereof. As of the
Record Date, there were 9,101,410 shares of Common Stock outstanding. Each
share of Common Stock is entitled to one vote on each matter presented to the
shareholders.
Presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting will
constitute a quorum. Shares for which the holder has elected to abstain or has
withheld authority to vote (including broker non-votes) on a matter will count
toward a quorum but will have no effect on the outcome of the vote on such
matter. A "broker non-vote" is a vote withheld by a broker on a particular
matter in accordance with stock exchange regulations because the broker has not
received instructions from the customer for whose account the shares are held.
With respect to matters submitted to shareholders, an action is approved if the
votes cast in favor of it exceed the votes opposing it, except that with
respect to Proposal 1 (Election of Directors), the eight nominees receiving the
greatest number of votes cast for the election of Directors will be elected.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table lists shareholders who are known by the Company to be
beneficial owners of more than five percent of the outstanding Common Stock as
of December 31, 1996.
NUMBER OF
SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED CLASS(1)
- - --------------------------------------- ------------ --------
R.B. Haave Associates, Inc. 1,448,900(2) 15.9%(3)
36 Grove Street
New Canaan, Connecticut 06840
Pioneering Management Corporation 745,200(4) 8.2%
60 State Street
Boston, Massachusetts 02109-1820
Brandywine Asset Management, Inc. 729,750(5) 8.0%
3 Christina Centre, Suite 1200
201 North Walnut Street
Wilmington, Delaware 19801-3933
Smith Barney Holdings, Inc. 472,890(6) 5.2%
Travelers Group, Inc.
388 Greenwich Street
New York, New York 10013
Crown Vantage Inc. Employee Stock 1,021,070(7) 11.2%
Ownership Plan Trust
c/o The Bank of New York
One Wall Street
New York, New York 10286
- - --------------------------
(1) Percentage calculations are based on shares outstanding as of the Record
Date as adjusted under rules of the Securities and Exchange Commission.
(2) As reported on a Schedule 13G dated February 12, 1997, R.B. Haave
Associates, Inc. had sole voting power, and sole dispositive power, over
1,448,900 shares.
(3) R.B. Haave Associates, Inc., in a letter dated February 20, 1997, informed
the Company that it has undertaken to promptly sell such number of shares of
Crown Vantage to reduce its ownership below 15% of the outstanding common
shares.
(4) As reported on a Schedule 13G dated January 22, 1997, Pioneering Management
Corporation had sole power to vote 745,200 shares; sole dispositive power
over 45,000 shares, and shared dispositive power over 700,200 shares.
(5) As reported on a Schedule 13G dated February 24, 1997, Brandywine Asset
Management, Inc. had sole voting and dispositive power as to 627,590 shares,
and shared voting and dispositive power as to 102,160 shares.
(6) As reported on a Schedule 13G dated February 5, 1997, Smith Barney
Holdings, Inc./Travelers Group Inc. had shared voting and dispositive power
over 472,890 shares.
(7) As reported on a Schedule 13G dated January 31, 1997, The Bank of New York,
as Trustee for the Crown Vantage Inc. StockPlus Employee Stock Ownership
Plan Trust, had shared voting and dispositive power as to 1,021,070 shares
of the Common Stock, which shares were held for the exclusive benefit of
participants and beneficiaries in the Crown Vantage Inc. Employee Stock
Ownership Plan pursuant to the terms of the Plan and the Plan trust
agreement.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Although the Company anticipates that all of the nominees will be able to
serve, if at the time of the Meeting any nominee is unable or unwilling to
serve, shares represented by properly executed proxies will be voted at the
discretion of the persons named therein for such other person or persons as the
Board may designate.
The following table sets forth the names, ages and principal occupations of
the nominees for Director, together with certain other information.
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - ---- --- -------- ------------------------------------------
William V. Daniel 68 1995 Retired. Formerly Managing Director of
and Consultant to Wheat First Butcher
Singer, Richmond, Virginia. Serves as a
Director of James River Corporation of
Virginia.
George B. James 59 1995 Senior Vice President and Chief Financial
Officer of Levi Strauss & Co., San
Francisco, California. Serves as a
Director of Fibreboard Corporation,
Dallas, Texas.
Ernest S. Leopold 63 1995 Has been Chairman, President and Chief
Executive Officer since creation of the
Company in 1995. Previously served as
Executive Vice President, Communications
Papers of James River Corporation of
Virginia.
Joseph T. Piemont 73 1995 Management Consultant, Bluestone
Management Corporation, Charlotte, North
Carolina. Serves as a Director of Silicon
Gaming, Palo Alto, California. Previously
served as a Director of James River
Corporation of Virginia.
E. Lee Showalter 60 1995 Forest products industry consultant since
1995. Previously served as Senior Vice
President, Fiber Business of James River,
March 1994 to December 1995. From November
1992 to March 1994, served as Senior Vice
President, Strategic Services of James
River. From June 1987 to November 1992,
served as Senior Vice President, Corporate
Development for James River.
William D. Walsh 66 1996 General Partner of Sequoia Associates,
Menlo Park, California. Serves as a
Director of Champion Road Machinery
(Chairman of the Board), Waterloo,
Ontario, Canada; Consolidated Freightways
Corp. (Chairman of the Board), Menlo Park,
California; URS Corporation, San
Francisco, California; National Education
Corp., Irvine, California; and Newcourt
Credit Corp., Toronto, Ontario, Canada.
James S. Watkinson 69 1995 Chairman and formerly Chief Executive
Officer of Morton G. Thalhimer, Inc.,
Richmond, Virginia. Serves as a Director
of NationsBank, N.A., Charlotte, North
Carolina.
Donna L. Weaver 53 1995 Chairman of Weaver, Field & London, Inc.,
San Francisco, California. Serves as a
Director of Hancock Fabrics, Inc., Tupelo,
Mississippi and Ross Stores, Inc., Newark,
California.
3
<PAGE>
COMMON STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table lists the number of shares of Common Stock that are
owned beneficially by each Director, the executive officers named in the
"Summary Compensation Table" below, and all Directors and executive officers as
a group, as of the Record Date, according to data furnished by the persons
named.
NUMBER OF SHARES
NAME BENEFICIALLY OWNED (1)
---- ----------------------
DIRECTORS:
William V. Daniel 4,583 (2)
George B. James 22,377 (2)(3)(4)
Ernest S. Leopold 84,188 (6)
Joseph T. Piemont 6,234 (2)
E. Lee Showalter 11,106 (2)(5)
William D. Walsh 26,384 (2)(3)
James S. Watkinson 6,100 (2)
Donna L. Weaver 9,384 (2)(3)
OTHER NAMED EXECUTIVE OFFICERS:
C. Neil Henderson 23,045 (6)(7)
Christopher M. McLain 28,638 (4)(6)
Robert A. Olah 29,424 (6)(7)
Charles H. Shreve 10,940 (7)
All Directors and executive officers as
a group (18 persons) 374,043
- - ----------------------
(1) Represents shares held as of the Record Date directly and with sole voting
and investment power (or with voting and investment power shared with a
spouse) unless otherwise indicated. The number of shares owned by each
Director or executive officer represents less than 1%, and as to all
Directors and executive officers as a group represents 4.1%, of the
outstanding shares of Common Stock.
(2) Includes, as to each non-employee Director, 4,000 shares (except 3,000
shares as to Mr. Walsh) that may be acquired upon the exercise of Directors
stock options, all of which are currently exercisable. These shares are
considered outstanding for purposes of calculating each Director's
percentage ownership.
(3) Includes restricted stock awards to non-employee Directors that vest in
less than 12 months and as to which the Director has the right to vote the
shares, as follows: Mr. James 3,384 shares; Mr. Walsh 3,384 shares; and
Ms. Weaver 3,384 shares.
(4) Includes shares held by family trusts as to which the following named
Director or executive officer and their spouses have shared voting and
investment power: Mr. James, 12,000 shares; Mr. McLain, 1,000 shares.
(5) Excludes 1,402 shares held by Mr. Showalter's wife, as to which he has no
voting or investment power and as to which he disclaims beneficial
ownership, and includes 3 shares held in the James River StockPlus
Investment Plan as of December 31, 1996.
(6) Includes restricted stock awards to executive officers that vest at various
times, all within four years, and as to which the officer has the right to
vote the shares, as follows: Mr. Leopold, 60,259 shares; Mr. Henderson,
13,370 shares; Mr. McLain, 15,590 shares; Mr. Olah, 17,879 shares and all
Directors and executive officers as a group, 176,980 shares. Also includes
shares issuable upon exercise of stock options exercisable prior to or
within 60 days after the Record Date, as follows: Mr. Leopold, 21,766
shares; Mr. Henderson, 6,133 shares; Mr. McLain, 7,933 shares; Mr. Olah,
6,133 shares; and Mr. Shreve, 6,133 shares.
4
<PAGE>
(7) Includes shares held under the Crown Vantage StockPlus Employee Stock
Ownership Plan on December 31, 1996, and as to which the participant has
shared voting and investment power, as follows: Mr. Henderson, 422 shares
(Crown Vantage UK Share Accumulation Plan); Mr. Olah, 1,685 shares;
Mr. Shreve, 1,074 shares; and all Directors and executive officers as a
group, 10,172 shares.
CERTAIN INFORMATION CONCERNING THE
BOARD OF DIRECTORS AND ITS COMMITTEES
COMMITTEES OF THE BOARD
The Board has established an Executive Committee, an Audit Committee, a
Compensation Committee, a Nominating Committee and a Safety, Environmental
and Legal Committee.
The Executive Committee of the Board consists of Messrs. Leopold
(Committee Chairman), James and Showalter. The Executive Committee exercises
the power and authority of the Board as may be necessary during intervals
between meetings of the Board, subject to such limitations as are provided by
law, the Company's Articles of Incorporation, Bylaws or resolutions of the
Board.
The Audit Committee of the Board, whose members are Ms. Weaver (Committee
Chairman) and Messrs. James, Showalter and Watkinson, consists only of
Directors who are not employees of the Company ("Outside Directors"). The
Audit Committee meets periodically with management, members of the Company's
internal audit staff and representatives of the Company's independent
auditors. The Audit Committee reviews the scope of internal and external
audit activities and the results of such audits and is responsible for making
the annual recommendation to the Board of the firm of independent accountants
to be retained by the Company to perform the annual audit.
The Compensation Committee, whose members are Messrs. James (Committee
Chairman), Daniel, Piemont, and Walsh and Ms. Weaver, consists only of
Outside Directors. The Compensation Committee is responsible for
recommending the salaries and compensation programs for executive officers to
the Board. This committee is also responsible for administering the
Company's profit sharing plan for salaried employees, its incentive stock
plan and other benefit programs. None of the members of the Compensation
Committee is entitled to participate in any of the Company's benefit plans
other than the Stock Option Plan for Outside Directors and the Stock Award
Plan for Outside Directors (as described below).
The Nominating Committee's members are Messrs. Watkinson (Committee
Chairman), Daniel, James and Showalter and Ms. Weaver. This committee
recommends to the Board the candidates for election as Directors of the
Company and members of the Board committees. The Nominating Committee also
considers candidates recommended by shareholders entitled to vote for the
election of Directors. Shareholder recommendations for director candidates
should include the candidate's name and qualifications and may be submitted
in writing to the Company's Secretary.
The Safety, Environmental and Legal Committee's members are Messrs.
Showalter (Committee Chairman), Piemont, Walsh and Watkinson. This committee
reviews the Company's performance in its commitment to an accident-free,
injury-free work environment, as well as the Company's environmental
strategy, policies and performance. The committee also periodically reviews
material legal matters.
The Board may establish other committees as it deems advisable.
5
<PAGE>
ATTENDANCE AT MEETINGS
During 1996, the Board held seven meetings, the Compensation Committee
five meetings, the Audit Committee three meetings, the Nominating Committee
two meetings, and the Safety Environmental and Legal Committee two meetings.
The Executive Committee did not meet during 1996. All Directors attended
(during the period each served as a Director) at least 75% of the meetings of
the Board and the committees to which they were assigned.
COMPENSATION OF DIRECTORS
MEETING FEES. Outside Directors receive $2,000 for attendance at each
meeting of the Board, $1,000 for attendance at each meeting of a committee of
the Board on which they serve, and $600 for participating in a Board or
committee meeting by telephone. The Company also reimburses Outside
Directors for usual and ordinary expenses of attending meetings. Directors
who are employees of the Company do not receive any fees for service on the
Board or its committees.
STOCK AWARD PLAN FOR OUTSIDE DIRECTORS. Outside Directors participate in
the Company's Stock Award Plan for Outside Directors (the "Award Plan"). For
1996 and 1995, this Plan provided that the Company would award each Outside
Director on the first business day of each fiscal year, that number of whole
shares of Common Stock that, when multiplied by the fair market value of
Common Stock, would as nearly as possible equal, but not exceed, $25,000.
This Plan also required that a minimum of 500 shares would be awarded to each
Outside Director each fiscal year. In fiscal 1996, the Company awarded 1,773
shares to each Director under the Award Plan, except that Mr. Walsh received
833 shares, his proportionate number of shares for his service as a Director
for a portion of the fiscal year.
For years beginning with 1997, the Award Plan has been amended. The
Award Plan provides to each Outside Director on the first business day of
each fiscal year an award of that number of whole shares of Common Stock
that, when multiplied by the fair market value of Common Stock, would as
nearly as possible equal, but not exceed, $12,500. The fair market value of
the stock is based on the mean of the average of the high and low trading
prices of the stock for each of the ten trading days immediately preceding
the award date. The minimum award is 250 shares. The Award Plan provides
for annual cash compensation to Outside Directors as may be determined from
time to time by the Board. The Board has set this annual cash compensation
for 1997 at $12,500, payable quarterly. Outside Directors may elect, in lieu
of the annual cash compensation, to receive on the first business day of the
fiscal year, that number of whole shares of Common Stock that, when
multiplied by the fair market value of Common Stock, shall as nearly as
possible equal, but not exceed, 1.2 times the amount of annual cash
compensation under this Plan. For 1997, each Outside Director elected to
receive 1,692 shares of Common Stock in lieu of the annual cash compensation,
except that Messrs. Daniel and Piemont each elected to receive payment of
$12,500.
The Award Plan reserved a total of 75,000 shares for issuance. An
Outside Director who joins the Board during a Fiscal Year receives a pro rata
portion of the annual award (shares and cash compensation) based on the
number of days remaining in the fiscal year. Awards of stock under this Plan
vest one year after the award date if the Director continues to be a member
of the Board during the year following the date of the award. The award also
vests if a Director retires from the Board at or after age 65, dies or ceases
to be a Director as a result of a change of control as defined in the Award
Plan. Directors may sell shares awarded under the Plan after the shares have
vested, subject to any applicable restrictions under securities laws. The
shares may not be sold or otherwise transferred or encumbered before they
vest. Outside Directors may vote and are entitled to receive dividends, if
any, declared on shares issued under the Award Plan.
A Director may elect to defer receipt of stock under the Stock Award
Plan, in which case issuance of the shares will be made after the Director
ceases to be a Director or at an earlier date designated by the Director at
the time of the deferral. The election to defer the receipt of shares must
be made with respect to at least 40% of the shares granted under an award, is
irrevocable and must be made before the award is granted. If a Director
elects to defer the receipt of shares, a book account is created by the
Company in the Director's name, and
6
<PAGE>
hypothetical shares of Common Stock are credited to the book account. Such
hypothetical shares are adjusted to reflect cash and stock dividends (if any)
paid with respect to Common Stock. If an Outside Director continues as a
member of the Board during the entire one-year period following the date of
an award, the Director is entitled to payment of the deferred shares of
Common Stock as of the date designated in the Director's deferral election.
If an Outside Director ceases to be an Outside Director during such one-year
period (other than on account of retirement on or after attaining age 65,
death or a change of control), the Outside Director will forfeit all of the
Director's interest in his book account except for the portion attributable
to cash dividends declared on Common Stock during the one-year period.
Payments from an Outside Director's book account are made in whole shares of
Common Stock.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS. Outside Directors also
participate in the Company's Stock Option Plan for Outside Directors (the
"Directors' Option Plan"), which has reserved 100,000 shares for issuance.
Under the Directors' Option Plan, each person shall automatically receive an
option to purchase 3,000 shares of Common Stock upon becoming an Outside
Director. As of each April 15, each Outside Director who has been a Director
for at least nine months will automatically receive an option to purchase
1,000 shares of Common Stock. The option price will be equal to the fair
market value of the stock on the date of grant, which shall be based on the
mean of the average of the high and low trading prices for each of the ten
trading days immediately preceding the date of grant. Options are exercisable
for ten years after the date of grant or for a specified period of time after
the optionee ceases to be a Director. A Director may exercise options by
paying cash, by tendering shares of Common Stock or by delivering an exercise
notice with instructions to a broker to deliver to the Company the amount of
sale or loan proceeds from an appropriate amount of the option shares to pay
the exercise price.
7
<PAGE>
COMPENSATION AND CERTAIN INFORMATION
REGARDING EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth compensation and other information for the
Company's Chief Executive Officer and each of the four other most highly
compensated executive officers for 1996 and the period from August 28, 1995
through December 31, 1995.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------- -----------------------------
RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL OCCUPATION YEAR SALARY BONUS COMPENSATION(1) AWARD(S)(2)(3) OPTIONS/SARS COMPENSATION(4)
- - ------------------------ ---- -------- -------- --------------- -------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ernest S. Leopold 1996 $450,000 -0- $783,938 34,590 $21,308
Chairman, President and 1995 $143,077 $135,463 $217,265 65,300 $830,471
Chief Executive Officer
Christopher M. McLain 1996 $200,000 -0- $270,048 9,540 $1,786
Senior Vice President 1995 $50,000 $37,609 -0- 23,800 -0-
& General Counsel,
Secretary (served since
October 1995)
C. Neil Henderson 1996 $186,000 $61,350 $231,543 8,250 $5,167
Senior Vice President, 1995 $53,038 $19,500 -0- 18,400 -0-
Uncoated Printing &
Publishing Papers
Robert A. Olah 1996 $175,000 -0- $231,543 8,250 $5,793
Senior Vice President, 1995 $53,846 $39,990 $128,511 18,400 $973
Packaging Papers
Charles H. Shreve 1996 $175,000 -0- $217,500 -0- $5,032
Senior Vice President, 1995 $53,846 $39,990 -0- 18,400 -0-
Chief Financial Officer
(until June 1996) and
Chief Accounting Officer
(retired January 1997)
</TABLE>
- - ----------------------
(1) None of the named executive officers received Other Annual Compensation
in excess of the lesser of $50,000 or 10% of combined salary and bonus for
the periods reported.
(2) The 1995 restricted stock awards were granted in connection with the
Spin-Off to replace deferred stock previously granted under James River's
Deferred Stock Plan that was forfeited by the named executive officers at
the Spin-Off. The 1995 restricted stock awards to Mr. Leopold vest as
follows: 4,639 shares vested on June 14, 1996, 2,255 shares will vest on
June 14, 1997 and 2,254 shares on June 14, 1998. The 1995 restricted stock
awards to Mr. Olah vest as follows: 902 shares vested on June 14, 1996,
902 shares will vest on each June 14 for 1997 through 2000, and 901 shares
on June 14, 2001. The 1996 restricted stock awards were granted to
executives in January and August 1996 as follows: Mr. Leopold, 50,000
shares (January) and 5,750 shares (August); Mr. McLain, 17,500 shares
(January) and 1,590 shares (August); Mr. Henderson, 15,000 shares (January)
and 1,370 shares (August): Mr. Olah, 15,000 shares (January) and 1,370
shares (August); and Mr. Shreve, 15,000 shares (January). The 1996
restricted stock awards will vest as to one-fifth of the January award on
each anniversary date of the January 1996 awards, commencing January 1997,
and as to one-third of the August award on each anniversary date of the
August 1996 awards, commencing August 1997. The recipients of the
restricted stock awards are entitled to vote the shares and receive any
dividends or other distributions paid thereon.
8
<PAGE>
(3) The number and value of the aggregate restricted stock award holdings
at December 29, 1996, for the named executive officers were as follows:
Mr. Leopold, 60,259 shares, $474,539; Mr. McLain, 19,090 shares,
$150,334; Mr. Henderson, 16,370 shares, $128,914; Mr. Olah, 20,879
shares, $164,422; and Mr. Shreve 15,000 shares, $118,125. Such values
were determined by the market price for the Company's Common Stock at the
end of the latest fiscal year ($7.875).
(4) The amount disclosed for Mr. Leopold for 1995 includes (i) $826,370,
which represents the amount that the Company reimbursed in 1995 to James
River for the payment of taxes owed by Mr. Leopold on an annuity
purchased to satisfy a supplemental executive retirement plan benefit
earned by Mr. Leopold while employed by James River (See "Employee
Pension Plans") and (ii) $4,101, which represents the Company's portion
of premiums paid in 1995 on an enhanced life insurance plan. The amount
for Mr. Leopold for 1996 includes $15,819 for the Company's portion of
premiums paid in 1996 for such insurance plan and $5,489 as the Company's
contributions to the Crown Vantage StockPlus Employee Stock Ownership
Plan. The amount included for Mr. Henderson includes $4,667 as the
Company's contributions to the Crown Vantage UK Share Accumulation Plan
and $500 for the Company's portion of premiums paid for such insurance
plan. The amounts included for Messrs. McLain, Olah and Shreve represent
the Company's contributions to the Crown Vantage StockPlus Employee Stock
Ownership Plan.
SEVERANCE AND EMPLOYMENT AGREEMENTS
SEVERANCE AGREEMENTS. The Company has entered into severance agreements
with each of the executive officers named in the Summary Compensation Table.
The agreements provide that, if the executive is terminated other than for
cause, retirement or disability within three years after a change of control
of the Company or if the executive terminates his employment for good reason
within such three-year period or voluntarily during the 30-day period
following the first anniversary of the change of control, the executive is
entitled to receive a lump sum severance payment equal to three times the sum
of his highest target annual compensation during the three years immediately
preceding the change in control, together with certain other payments and
benefits, including continuation of employee welfare benefits. An additional
payment is required to compensate the executive for certain income and excise
taxes imposed with respect to payments or benefits received due to a change
of control. Mr. Shreve's agreement expired upon his retirement in January
1997.
EMPLOYMENT AGREEMENT WITH CEO. The Company has entered into an employment
agreement with Mr. Leopold for a period ending on his 65th birthday or
earlier retirement. Provisions under the agreement provide Mr. Leopold with
continuation of his annual base salary, incentive plans and benefits during
the term of the agreement. If Mr. Leopold is terminated other than for
cause, or Mr. Leopold terminates his employment for good reason, Mr. Leopold
will be entitled to receive a lump sum severance payment equivalent to that
provided in the severance agreements described above, with such payment
reduced proportionately if termination was within three years of his 65th
birthday. If Mr. Leopold becomes disabled or dies during the term of the
agreement, he or his estate would be entitled to receive a lump sum payment
equivalent to one year of salary plus two times his then target bonus. If
there were a change of control of the Company during the term of the
agreement, Mr. Leopold would be entitled to the same payments and terms
provided in the severance agreements described above.
RETIREMENT PAYMENT. Upon the retirement of Mr. Shreve in January 1997,
the Company vested Mr. Shreve's previous award of 15,000 shares of restricted
stock and made an additional cash payment, such that the total value of the
payment made at retirement was $255,000.
STOCK OPTION GRANTS AND HOLDINGS
The following tables set forth information concerning stock options and
stock appreciation rights ("SARs") granted to the Chief Executive Officer and
the named executive officers of the Company and exercises of such options and
SARs by such persons during 1996.
9
<PAGE>
OPTION/SAR GRANTS IN 1996
<TABLE>
<CAPTION>
Potential Realizable
Number of Value at Assumed
Securities % of Total Annual Rates of
Underlying Options/SARs Stock Price
Options/ Granted to Exercise Appreciation for
SARs Employees in Price Expiration Option Term (2)
Name Granted (1) Fiscal Year Per Share Date 5% 10%
---- ----------- ------------ --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ernest S. Leopold 34,590 9.1% $10.00 8/16/06 $217,535 $551,276
Christopher M. McLain 9,540 2.5% $10.00 8/16/06 $59,997 $152,043
C. Neil Henderson 8,250 2.2% $10.00 8/16/06 $51,884 $131,484
Robert A. Olah 8,250 2.2% $10.00 8/16/06 $51,884 $131,484
Charles H. Shreve -0- -0-
</TABLE>
- - -----------------------
(1) These option grants under the 1995 Incentive Stock Plan become
exercisable in three equal cumulative annual amounts beginning one year
after the grant date. The exercise price for each option is equal to
the fair market value per share of the Common Stock on the grant date.
The 1995 Incentive Stock Plan provides for the acceleration of the
vesting of options in certain circumstances, including a change of
control or corporate change. No SARs were granted in 1996.
(2) These options were granted for a term of ten years. As permitted by
the Securities and Exchange Commission, the amounts disclosed are the
result of calculations at five and ten percent assumed rates of
appreciation over the ten year term of the options. These amounts are
not intended to forecast potential future appreciation of the Common
Stock price.
AGGREGATED OPTION/SAR EXERCISES IN 1996
AND FISCAL YEAR END OPTION/SAR VALUES
There were no stock options exercised during 1996 by the Chief Executive
Officer or any of the named executive officers of the Company.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money
Options/SARs Options/SARs
Shares as of 12/29/96 as of 12/29/96 (1)
Acquired Value --------------------------- -------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----- ----------- -------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ernest S. Leopold 0 $0 21,766 78,124 $0 $0
Christopher M. McLain 0 $0 7,933 25,407 $0 $0
C. Neil Henderson 0 $0 6,133 20,517 $0 $0
Robert A. Olah 0 $0 6,133 20,517 $0 $0
Charles H. Shreve 0 $0 6,133 12,267 $0 $0
</TABLE>
- - ---------------------
(1) The value of unexercised in-the-money options as of December 29,
1996, is calculated as the fair market value of the Common Stock on the
last day of the Company's fiscal year ($7.875 per share) minus the
exercise price. No SARs were granted in 1996.
EMPLOYEE PENSION PLANS
Under the Company's Retirement Plan for Salaried and Other
Non-Bargaining Unit Employees (the "Salaried Retirement Plan"), participating
employees contribute 1% of their pensionable earnings. Pensionable earnings
include base salary, overtime compensation, profit sharing, bonuses and
commissions. Annual benefits payable under the Plan are currently equal to
the product of the participant's years of service while contributing to
10
<PAGE>
the Plan, up to 35 years, multiplied by the sum of 1.05% of a participant's
"Final Average Pay" (the average of a participant's highest five consecutive
years of pensionable earnings) plus .65% of a participant's Final Average Pay
in excess of covered compensation (the average of the taxable Social Security
wage bases during a participant's work lifetime, up to 35 years). A
participant will be vested in the portion of benefits attributable to the
Company's contributions (i) after five years of service or (ii) if the
participant's contributions remain in the Plan until age 65. Participants
received credit under the Salaried Retirement Plan for covered service with
James River or its predecessors, if applicable.
Messrs. Leopold, Olah, and Henderson also participate in the Company's
Frozen Retirement Plan for Salaried and Other Non-Bargaining Unit Employees
(the "Frozen Plan"). The executives' benefits under the Frozen Plan are the
benefits that they had accrued as participants under James River's Retirement
Plan for Salaried and Other Non-Bargaining Unit Employees prior to the
Spin-Off. The executives are not entitled to accrue additional benefits
under the Frozen Plan. However, the executives' service with Crown Vantage
is taken into account under the Frozen Plan for purposes of determining
whether they will be vested in the portion of benefits attributed to James
River's contribution to the Plan, and the executives' eligibility to receive
payment of their benefits. The amount of benefits payable to the executives
from the Salaried Retirement Plan is offset by the amount of benefits payable
to them from the Frozen Plan.
Effective in 1996 under Internal Revenue Service regulations, the
maximum annual benefit that may be paid to any retiree from the Salaried
Retirement Plan and the Frozen Plan (if applicable), attributable to employer
contributions, is $120,000. In addition, pensionable earnings over $150,000
are not taken into account for purposes of calculating plan benefits. These
limits may be increased to take into account increases in the cost of living.
The Company's Supplemental Benefit Plan provides eligible individuals with
the difference between the benefits they actually accrue under the Salaried
Retirement Plan and accrued under the Frozen Plan (if any), and the benefits
they would have accrued under such plans but for the maximum benefit and
compensation limitations imposed by law. The Supplemental Benefit Plan
provides an additional benefit for senior employees. These employees will
receive the retirement benefit that would have been provided by the Salaried
Retirement Plan, the Frozen Plan (if applicable) and the Supplemental Benefit
Plan, had the employee's service with a predecessor company been taken into
account, reduced by the total benefit payable to the employee from the
Company's pension plans and pension plans of a predecessor company of James
River or the Company. Participants in the Supplemental Benefit Plan are
general creditors of the Company. The supplemental benefits are to be paid by
the Company as the benefits become payable, except as described below.
The Supplemental Benefit Plan provides that the accrued benefits under
the Plan may be distributed at the discretion of the Company. The Company may
make distributions to certain eligible individuals providing each such
individual with cash or an annuity, on an after tax basis, approximating the
individual's accrued benefit under the Supplemental Benefit Plan as of a
specified date.
APPROXIMATE ANNUAL PENSION BENEFIT AT AGE 65
Years of Service
Final Average ----------------------------------------------------------------
Pay 10 15 20 25 30 35
- - ------------- ------- ------- -------- -------- -------- ---------
$ 200,000 $ 32,320 $ 48,480 $ 64,640 $ 80,800 $ 96,960 $113,120
400,000 66,320 99,480 132,640 165,800 198,960 232,120
600,000 100,320 150,480 200,640 250,800 300,960 351,120
800,000 134,320 201,480 268,640 335,800 402,960 470,120
1,000,000 168,320 252,480 336,640 420,800 504,960 589,120
The pensionable earnings of each of the named executive officers are not
materially different from the amounts disclosed as annual compensation in the
Summary Compensation Table. The estimated years of benefit service, as of
normal retirement at age 65, for the Chief Executive Officer and named
executive officers are as follows: Ernest S. Leopold, 35 years; Christopher
M. McLain, 13 years; C. Neil Henderson, 32 years; and Robert A. Olah, 26
years. The above table shows the approximate annual pension benefit that
would be provided to
11
<PAGE>
salaried employees under the current benefit formula under the Salaried
Retirement Plan and the Frozen Plan upon retirement at age 65, assuming that
a single life annuity has been elected. The amounts in the table are not
subject to reduction for Social Security or other offset amounts. The pension
table includes benefits under the Supplemental Benefit Plan, some of which
will be provided by the annuities purchased, if any, as described above.
In addition to the benefits payable to Mr. Leopold under the pension
plans described above, in 1995 Mr. Leopold received an annuity from James
River which, on an after tax basis, approximated his accrued benefit under
the James River Supplemental Benefit Plan as of a specified date. The
annuity will be payable by an insurance company under an annuity contract
owned by Mr. Leopold. In 1995, the Company reimbursed James River $887,853
for the cost of the annuity contract.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(1)
THE COMPENSATION PROGRAM
Crown Vantage's compensation program is designed to enhance shareholder
value by linking a large part of executive compensation directly to
performance which is highly correlated with stock price. The objective is to
provide executives an opportunity to achieve total compensation above that of
their peers over time when performance exceeds expected results. A principal
focus for 1996 was to increase cash flow through superior operating results
which would provide funds to reduce debt. The primary components of the 1996
compensation program were base salary, an annual cash bonus based mostly on
the Company's excess cash flow and a long-term opportunity to participate in
increased shareholder value through grants of stock options and restricted
stock.
RESPONSIBILITIES OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of Crown Vantage
(the "Committee") is comprised solely of independent, non-employee Directors.
The Committee reviews and approves incentive plans, executive benefit
programs and the overall compensation structure for the Company. The
Committee reviews and approves base salaries, bonuses and any other cash
payments to executive officers and other key employees. The Committee also
grants stock options and restricted stock, approves the terms of such awards
and interprets incentive plans, as required. As administrator of the
incentive plans, the Committee establishes the targets for performance and
awards at the beginning of the plan year, and approves payment of actual
awards under the plan.
The Committee engaged an executive compensation consultant to review the
compensation structure and components for appropriateness for Crown Vantage.
The consultant reviewed the Company's program against other companies for
competitiveness and considered the current constraints on the Company's
financial position. The Committee met with the consultant without management
present to discuss the program and the consultant's findings. The Committee
also met without management present to discuss the Chief Executive Officer's
performance against pre-established objectives and his compensation.
ELEMENTS OF THE COMPENSATION PROGRAM
The primary elements of the Company's compensation program for the Chief
Executive Officer ("CEO") and other executive officers of Crown Vantage are
described below.
BASE SALARY. Base salaries are reviewed annually by the Committee with
input as to competitive practices provided by the compensation consultant,
using industry and national trends. Individual salaries may be
- - --------------------------
(1) The material in this report and under the caption "Performance
Graph" is not "soliciting material," is not deemed to be filed with the
SEC and is not to be incorporated by reference in any filing of the
Company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, whether made before or after the date
of this Proxy Statement and irrespective of any general incorporation
language therein.
12
<PAGE>
adjusted based on this information and the performance of the executive
during the preceding year against pre-established goals. The objective of
the Committee is to set base salaries at the median of salaries of similar
positions in comparable companies.
ANNUAL INCENTIVE PLANS. The Profit Sharing Plan for 1996 was
established to reward management for meeting individual performance
objectives and an overall Company excess cash flow target established by the
Committee prior to the plan year. Actual awards were to be granted by the
Committee based on management's performance against these targets. Such
awards were the only annual incentive to be granted to management for 1996.
Due to performance against plan, the Profit Sharing Plan for 1996 generated
no payments of awards for 1996 for any plan participant, including the CEO
and the other named executives in the Summary Compensation Table (except that
Mr. Henderson received an award under a separate plan based on the Company's
operations in the United Kingdom).
STOCK OPTION AND RESTRICTED STOCK AWARDS. The Committee believes that
stock options and grants of restricted stock are a superior incentive to
motivate key employees to act in the best interests of shareholders. The
Committee also feels it is important for the key managers to have the
potential for a significant ownership interest in Crown Vantage. Because of
the need to utilize cash to repay debt, stock options and grants of
restricted stock are a key element in the Company's compensation structure.
Stock options and restricted stock are the only long term incentives that the
CEO and other named executive officers receive.
The Committee made awards of stock options in 1996 under the 1995
Incentive Stock Plan. The awards were based on a number of factors,
including the competitive level of long-term incentive awards, the
prospective level of total compensation, and the individual's
responsibilities and ability to influence shareholder value. The Committee
also made awards of restricted stock in 1996 to certain executives as part of
the long-term incentive program of the Company.
Based on these factors, at the discretion of the Committee, the CEO was
granted stock options and restricted stock in 1996 with an exercise price
equal to the fair market value on the date of grant. The options and
restricted stock vest over a three-year employment period and the options
generally expire no later than ten years after grant. Stock options and
restricted stock awarded to other named executive officers were determined in
a similar fashion.
In January 1996 an award of restricted stock was made to the CEO and
other named executive officers. The grant, which vests over a five-year
employment period, was based on the need to further motivate managers to
influence shareholder value, and the need to retain management for the new
Company's operations.
POLICY REGARDING DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code limits the federal income
tax deductibility of compensation paid to the Company's CEO and to each of
the other four most highly compensated executive officers. The Company
generally may deduct compensation paid to such an officer only to the extent
the compensation does not exceed $1 million during any fiscal year or is
"performance based" as defined in Section 162(m). The Committee considers
the net cost to Crown Vantage in making compensation decisions. While the
Committee does not expect the Company's current compensation program will
result in compensation of $1 million or more to any executive officer, the
annual incentive plans and the stock option plan have been designed to permit
compensation paid thereunder to qualify as performance-based compensation for
purposes of the Internal Revenue Code.
COMPENSATION COMMITTEE MEMBERS
George B. James, CHAIR
William V. Daniel
Joseph T. Piemont
William D. Walsh
Donna L. Weaver
13
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
the Company's Common Stock with the S&P 500 Composite Stock Price Index and
the S&P Paper and Forest Products Composite Index, for the period from August
28, 1995 (the date on which the Common Stock first traded) through year-end,
assuming an initial investment of $100 and the reinvestment of all dividends.
[GRAPH]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995(1) 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Crown Vantage $100.00 $100.00 $100.00 $100.00 $ 52.78 $31.48
S & P 500 $100.00 $100.00 $100.00 $100.00 $110.77 $136.21
S & P Paper & Forest $100.00 $100.00 $100.00 $100.00 $ 88.77 $98.19
Products Group
</TABLE>
- - --------------
(1) For the four months ended December 31, 1995.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
SPIN-OFF OF COMPANY BY JAMES RIVER
In connection with a restructuring, James River in August, 1995
implemented the Spin-Off of certain of its assets. To provide financing for
the Spin-Off, the Company's principal operating subsidiary, Crown Paper Co.
("Crown Paper") issued $250,000,000 aggregate principal amount of 11% Senior
Subordinated Notes due 2005 and incurred $295 million (including $42 million
under letters of credit) of initial borrowings under a $350 million Bank
Credit Facility. The proceeds of these financings were (i) paid to James
River as a return of its capital investment in the Company; and (ii) used to
pay certain transaction expenses associated with the financings and the
Distribution. In connection with the Spin-Off, Crown Vantage also issued to
James River three 11.45% Senior Pay-in-Kind Notes due 2007 in aggregate
principal amount of $100,000,000.
14
<PAGE>
Since the Spin-Off, the Company has operated independently of James
River. However, in order to govern certain on-going relationships between
the Company and James River and to provide mechanisms for an orderly
transition, the Company and James River prior to the Spin-Off entered into a
Contribution Agreement, which provides for, among other things, the principal
corporate transactions that were required to effect the transfer of the James
River assets to the Company and the Distribution, and certain related
agreements and transition agreements. The related and transition agreements
generally provide for the allocation of assets, resources, employees, benefit
plans, taxes, liabilities and certain administrative and other services, and
for the purchase and sale of products between the Company and James River.
Generally, these agreements reduce or eliminate over time. In 1996, under
all such agreements, the Company made payments to James River totaling
approximately $45 million, and James River made payments to the Company
totaling approximately $68 million. As discussed under "Election of
Directors," Messrs. Leopold and Showalter, both of whom are currently
Directors and are nominated to continue as Directors of the Company, were
executive officers of James River before the Spin-Off. Mr. Leopold
terminated his employment with James River in connection with the Spin-Off,
and Mr. Showalter retired from James River effective December 31, 1995.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and SEC regulations
thereunder require the Company's Directors, certain officers and holders of
more than 10% of the Common Stock to file reports of ownership on Form 3 and
changes in ownership on Forms 4 or 5 with the SEC. The Company undertakes to
file such forms for its Directors and officers pursuant to powers of attorney
given to certain attorneys-in-fact. Such Directors, officers and
shareholders are also required by SEC rules to furnish the Company with
copies of all Section 16(a) reports they file. Based solely on its review of
copies of such reports received or written representations from such
officers, Directors and shareholders, the Company believes that, during the
fiscal year ended December 29, 1996, all Section 16(a) filing requirements
applicable to such Directors, officers and shareholders were met, except that
an amendment was filed on behalf of each of Director Daniel and Director
Watkinson correcting information reported by each of them in a previously
filed Form 4.
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP is the accounting firm selected by the Board of
Directors to examine and report on the Company's financial statements for the
1996 fiscal year. It is expected that representatives of the firm will be
present at the meeting to make any statements they desire to make and to
answer questions directed to them.
In June 1996, the Audit Committee recommended, and the Board of
Directors selected Ernst & Young as independent accountants for the Company
replacing Coopers & Lybrand LLP. The Company has had no disagreements with
Coopers & Lybrand during the 1994 or 1995 fiscal years or the subsequent
interim period to June 1996 on any matter of accounting principle or
practices, financial statement disclosure, or auditing scope or procedure,
which if not resolved to the satisfaction of Coopers & Lybrand, would have
caused Coopers & Lybrand to make reference to the subject matter of the
disagreement in connection with its report. The reports of Coopers & Lybrand
on the Company's financial statements for the 1994 and 1995 fiscal years did
not contain an adverse opinion or a disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principle.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
The Company has no present knowledge of any other matters to be
presented at the Annual Meeting of Shareholders. If any other matters should
properly come before the meeting, and any adjournment thereof, it is the
intention of the persons named in the accompanying proxy to vote such proxy
with respect to any such other matter in accordance with their best judgment.
15
<PAGE>
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any shareholder desiring to make a proposal to be acted upon at the 1998
annual meeting of shareholders must present such proposal to the Secretary of
the Company, whose address is 300 Lakeside Drive, Oakland, California 94612,
not later than December 2, 1997, in order for the proposal to be considered
for inclusion in the Company's Proxy Statement. Any such proposal must meet
the applicable requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder.
The Company's Bylaws prescribe the procedure that a shareholder must
follow to bring any business before an annual meeting of shareholders: The
shareholder must be a shareholder of record entitled to vote on the matter
and must give notice to the Secretary as specified in the Bylaws between
January 2 and February 1 of the year in which the annual meeting is to occur,
unless the date of such meeting has been moved more than 30 days from the
meeting date specified in the Bylaws (the second or third Thursday in April),
in which case the required notice should be given not less than 60 days
before such meeting date, except that if the shareholder wants a proposal to
be considered for inclusion in the Company's Proxy Statement, such proposal
must be presented not later than December 2, 1997, as explained above. Each
such shareholder's notice shall set forth as to each such matter (i) the name
and address, as they appear on the Company's stock transfer books, of the
shareholder proposing such business, (ii) the class and number of shares of
stock of the Corporation beneficially owned by such shareholder, (iii) a
representation that such shareholder is a shareholder of record and intends
to appear in person or by proxy at such meeting to bring before the meeting
the business specified in the notice, (iv) a brief description of the
business desired to be brought before the meeting, including the complete
text of any resolutions to be presented at the meeting and the reasons for
wanting to conduct such business, (v) any material interest that the
shareholder has in such business, and (vi) if applicable, certain other
information concerning any director candidate to be nominated by the
shareholder. Any shareholder may obtain a copy of the Company's Bylaws,
without charge, upon written request to the Secretary at the Company's
headquarters.
ANNUAL REPORT
A copy of the Annual Report of the Company for the fiscal year ended
December 29, 1996, is being mailed to you with this Notice and Proxy
Statement. No part of the Annual Report shall be regarded as proxy
soliciting material.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 29, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
MAY BE OBTAINED BY ANY SHAREHOLDER AFTER APRIL 1, 1997, FREE OF CHARGE, UPON
WRITTEN REQUEST TO CROWN VANTAGE INC., ATTENTION: INVESTOR RELATIONS, 300
LAKESIDE DRIVE, OAKLAND, CALIFORNIA 94612, OR BY CALLING (510) 874-3400.
By Order of the Board of Directors
Christopher M. McLain
SECRETARY
16
<PAGE>
CROWN VANTAGE INC.
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
PROXY The undersigned hereby appoints
James S. Watkinson and Donna L. Weaver as
Proxies, each with the power to appoint
his or her substitute, and hereby
authorizes them or either of them to
represent and to vote, as designated
below, all the shares of common stock of
Crown Vantage Inc. held of record by the
undersigned on March 4, 1997 at the annual
meeting of shareholders to be held on May
6, 1997 or any adjournment thereof.
1. Election of Directors
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
TO VOTE FOR ALL
NOMINEES LISTED
BELOW
W. Daniel, G. James, E. Leopold, J. Piemont, E. Showalter,
W. Walsh, J. Watkinson, D. Weaver
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- - -------------------------------------------------------------------------------
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1.
PLEASE PRINT EXACT NAME(S) IN WHICH SHARES ARE REGISTERED, AND SIGN EXACTLY
AS YOUR NAME APPEARS. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD
SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN
FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AN AUTHORIZED PERSON.
Dated: , 1997
--------------------------
--------------------------------------------
Print Name
--------------------------------------------
Signature
--------------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. PLEASE SUBMIT A COMPLETED CARD EVEN IF YOU INTEND TO ATTEND THE
MEETING.
