-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KM7b3jStvSxIYGVtBNGTmR2Cmd2pT6MBFnIvAv24/ekBd1tZVYTJJ9HjnuBRJ3lR m+PakImoghD2vp4JME9pEQ== 0000916641-98-000287.txt : 19980327 0000916641-98-000287.hdr.sgml : 19980327 ACCESSION NUMBER: 0000916641-98-000287 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980326 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORT JAMES CORP CENTRAL INDEX KEY: 0000053117 STANDARD INDUSTRIAL CLASSIFICATION: PAPER MILLS [2621] IRS NUMBER: 540848173 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-07911 FILM NUMBER: 98573660 BUSINESS ADDRESS: STREET 1: 75 TRI STATE INTERNATIONAL OFFICE CENTER STREET 2: SUITE 100 & 175 CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 BUSINESS PHONE: 8473175000 MAIL ADDRESS: STREET 1: 75 TRI STATE INTERNATIONAL OFFICE CENTER STREET 2: SUITE 100 & 175 CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 FORMER COMPANY: FORMER CONFORMED NAME: JAMES RIVER CORP OF VIRGINIA DATE OF NAME CHANGE: 19920703 11-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K Annual Report Pursuant to Section 15(d) of Securities Exchange Act of 1934 For the year ended December 31, 1997 Commission file number 1-7911 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: FORT JAMES CORPORATION CANADIAN EMPLOYEES STOCK PURCHASE PLAN B. Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: FORT JAMES CORPORATION 1650 Lake Cook Road, Deerfield, Illinois 60015 FORT JAMES CORPORATION CANADIAN EMPLOYEES STOCK PURCHASE PLAN INDEX TO FINANCIAL STATEMENTS AND SCHEDULES Items 1. and 2. Financial Statements and Exhibits Pages a. Financial statements: Report of independent accountants 3 Statements of financial condition as of December 31, 1997 and 1996 4 Statements of income and changes in plan equity for the years ended December 31, 1997, 1996 and 1995 5 Notes to financial statements 6-10 Schedules I, II and III are omitted because they are not applicable or because substantially all of the information is provided within the financial statements. b. Exhibits: 4.0 Fort James Corporation Canadian Employees Stock Purchase Plan, as amended and restated effective August 28, 1995 (incorporated by reference to Exhibit 4 to Fort James Corporation Canadian Stock Purchase Plan Annual Report on Form 11-K for the year ended December 31, 1995). 4.1 Amendment to Fort James Corporation Canadian Employees Stock Purchase Plan, effective January 1, 1997 - filed herewith. 23 Consent of independent accountants - filed herewith. REPORT OF INDEPENDENT ACCOUNTANTS To the Retirement Plans Management Committee of Fort James Corporation: We have audited the accompanying statements of financial condition of the Fort James Corporation Canadian Employees Stock Purchase Plan (the "Plan") as of December 31, 1997 and 1996, and the related statements of income and changes in plan equity for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial condition of the Plan as of December 31, 1997 and 1996, and the income and changes in plan equity for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Richmond, Virginia February 6, 1998 FORT JAMES CORPORATION CANADIAN EMPLOYEES STOCK PURCHASE PLAN STATEMENTS OF FINANCIAL CONDITION as of December 31, 1997 and 1996 1997 1996 ASSETS Cash $ 1,108 $ 149,111 Contributions receivable: Employer: Basic 25,581 40,250 Additional 16,538 17,270 Employee 50,368 77,814 Investment in common stock, at market value: Fort James (historical cost: 1997- $1,853,577 and 1996-$1,619,753) 2,257,898 1,968,519 Crown Vantage Inc. (historical cost: 1997-$44,570 and 1996- $63,273) 14,539 25,177 Total assets $2,366,032 $2,278,141 LIABILITIES AND PLAN EQUITY Payable to withdrawing participants $ 19,473 Plan equity $2,366,032 2,258,668 Total liabilities and plan equity $2,366,032 $2,278,141 The accompanying notes are an integral part of the financial statements. FORT JAMES CORPORATION CANADIAN EMPLOYEES STOCK PURCHASE PLAN STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY for the years ended December 31, 1997, 1996 and 1995 1997 1996 1995 Investment income: Cash dividends on Common Stock $ 32,879 $ 29,996 $ 32,765 Realized gain on sale of investments 29,274 Interest on bank deposits 38 758 1,152 Total investment income 62,191 30,754 33,917 Change in net unrealized appreciation or depreciation in fair value of investments 63,620 424,064 11,197 Contributions and deposits: Deposits by participating employees 635,794 557,847 479,655 Contributions by employer: Basic 326,212 290,448 256,521 Additional 16,856 17,131 15,181 Administrative costs 26,113 21,153 21,268 Loss funded by Trustee 34,046 Total contributions and deposits 1,039,021 886,579 772,625 Withdrawals and expenditures: Distributions to participants (1,023,473) (769,239) (635,411) Administrative costs (26,113) (21,153) (21,268) Total withdrawals and expenditures (1,049,586) (790,392) (656,679) Stock distribution of Crown Vantage Inc. 133,338 Foreign currency remeasurement gain (loss) (7,882) 135 (401) Net increase in plan equity 107,364 551,140 293,997 Plan equity, beginning of year 2,258,668 1,707,528 1,413,531 Plan equity, end of year $2,366,032 $ 2,258,668 $ 1,707,528 The accompanying notes are an integral part of the financial statements. FORT JAMES CORPORATION CANADIAN EMPLOYEES STOCK PURCHASE PLAN NOTES TO FINANCIAL STATEMENTS 1. General: The Fort James Corporation Canadian Employees Stock Purchase Plan (the "Plan"), formerly the James River Corporation of Virginia Canadian Employees Stock Purchase Plan, was adopted by the Board of Directors of Fort James Corporation ("Fort James" or the "Company") for the benefit of the employees of certain operating subsidiaries of Fort James located in Canada (the "Participating Companies"). As of December 31, 1997, the Participating Companies included Fort James Marathon, Ltd. ("Marathon") and Fort James Canada, Inc. ("FJ Canada"). In 1997, James River Corporation of Virginia ("James River") and Fort Howard Corporation ("Fort Howard") merged, with Fort Howard shareholders receiving 1.375 James River common shares for each Fort Howard common share, and James River shareholders retaining their holdings. In connection with the merger James River was renamed Fort James Corporation. 2. Summary of Significant Accounting Policies: Cash Substantially all contributions to the Plan are initially invested in an interest-bearing account pending their investment in Fort James' common stock, $.10 par value ("FJ Common Stock"). Interest earned on such cash balances is credited to the Participants' accounts. Cash balances are stated at cost, which approximates market value. Investment Valuation The investments include FJ Common Stock and Crown Vantage Inc. common stock ("CV Common Stock") (See Note 3). The investments in FJ Common Stock and CV Common Stock are stated at market value, based on the closing price on the New York Stock Exchange Composite Tape on the last trading day of the period. The closing market value per share of FJ Common Stock was $38.25 and $33.125 on December 31, 1997, and December 31, 1996, respectively. The closing market value per share of CV Common Stock was $7.00 and $8.50 on December 31, 1997, and December 31, 1996, respectively. Security Transactions and Related Investment Income Security transactions are accounted for as of the trade date, and dividend income is recorded as of the date of declaration. The cost of securities sold is determined on an average-cost basis. The assets of the Plan are held under a trust Agreement, dated August 23, 1989, with National Trust Company. During 1996, National Trust Company sold its institutional custody business to Canada Trust thereby resulting in a transfer of the assets of the Plan to Canada Trust (the "Trustee"). NOTES TO FINANCIAL STATEMENTS (continued) Contributions and Deposits Employee and employer contributions are recorded on an accrual basis as of the date the employees' contributions are withheld from the employees' compensation. Employee and employer contributions are transferred to the Trustee on a monthly basis. The Trustee uses such contributions to periodically purchase shares of FJ Common Stock which are allocated to each Participant's account. Residual cash amounts held by the Trustee are carried forward to the next month. Foreign Currency Remeasurement The functional currency of the Plan is the U.S. dollar. Assets and liabilities of the Plan (except investments in common stock which are stated at U.S. dollar market value) are remeasured from Canadian dollars to U.S. dollars at the applicable year-end exchange rate. The cost of investments in common stock and the related unrealized appreciation or depreciation are remeasured at applicable historical exchange rates. Investment income, contributions and deposits, and withdrawals and expenditures are remeasured at average exchange rates for the years ended December 31, 1997, 1996, and 1995. Foreign currency remeasurement gains and losses are included in the net increase in plan equity. Withdrawals Withdrawals of common stock from the Plan by Participants are accounted for at the average historical cost of the common stock distributed, plus cash paid in lieu of fractional shares, where applicable. Withdrawals in cash or in connection with shares sold for distributions of fractional shares are accounted for at the fair market value of the related common stock. Any Participant contributions which have not yet been applied to the purchase of common stock will also be paid to each withdrawing Participant. Administrative Costs The Plan is reimbursed by the Participating Companies for its administrative and operating costs, except for brokerage fees. Brokerage fees are included in the cost of acquiring common stock and thus are borne by the Participants. Loss Funded by Trustee The loss funded by the Trustee is for reimbursements to Participant's accounts in an amount equal to the appreciation in FJ Common Stock price for funds that were not invested by the Trustee in the FJ Common Stock in a timely manner. NOTES TO FINANCIAL STATEMENTS (continued) 3. Description of the Plan: The Plan was established to enable eligible employees of certain Fort James subsidiaries located in Canada to acquire an ownership interest in Fort James, the ultimate holding company. The Plan is a non-taxable employees profit sharing plan as defined in Section 144(1) of the Income Tax Act (Canada) (the "Canadian Tax Act"). On August 28, 1995, the Company spun off part of its Communications Papers Business, as well as the specialty paper based portion of its Packaging Business, into a new Company, Crown Vantage Inc. ("Crown Vantage"). The existing shareholders of the Company on record as of August 25, 1995, received one share of CV Common Stock for each ten shares of FJ Common Stock held by the shareholder. The Plan was amended to allow for inclusion of an investment in CV Common Stock. As a result, during 1995, the plan received a stock distribution of 6,649 shares of Crown Vantage valued at $133,338. Participants may elect to contribute into the Plan, through payroll deductions, from 1% to 10% of their compensation to be used to purchase FJ Common Stock for their benefit. Participant contributions of up to six percent of compensation ("Basic Member Contributions") are matched by the Participating Companies ("Basic Employer Contributions") based on the following schedule: Participating Company's Contributions as a percentage Participant's contributions of Participant's contributions 1% of compensation 100% 2% of compensation 65% 3% to 6% of compensation 50% The Participating Companies make no contributions with respect to a Participant's contribution in excess of six percent of the Participant's compensation. The Participating Companies make "Additional Employer Contributions" on or before March 31 of each calendar year with respect to each Participant in its employ on the preceding December 31 who has not withdrawn any common stock from his Restricted Account (hereinafter defined) during either of the two immediately preceding calendar years. The amount of the Additional Employer Contribution allocated to the Participant's account equals 10% of the aggregate Basic Employer Contributions made with respect to the Participant during the earlier of such two immediately preceding calendar years. Each Participant's "Restricted Account" includes the Basic Member Contributions and Basic Employer Contributions made at any time during the current or immediately preceding calendar year, and any FJ Common Stock or CV Common Stock purchased with such contributions. The Additional Employer Contribution receivable reflected on the Statement of Financial Condition as of December 31, 1997 represents the accrued contribution related to the 1996 Basic Employer Contributions of qualifying Participants to be paid to the Plan on March 31, 1998. The Additional Employer Contribution accrued as of December 31, 1996, which related to the 1995 Basic Employer Contributions of qualifying Participants, was paid to the Plan on March 31, 1997. NOTES TO FINANCIAL STATEMENTS (continued) Each Participant is fully vested in his contributions, in Basic Employer Contributions, in Additional Employer Contributions, and in any earnings thereon at all times. The Plan had approximately 471 Participants as of December 31, 1997, and 412 Participants as of December 31, 1996. 4. Contributions to the Plan: Employee and employer contributions for the years ended December 31, 1997, 1996 and 1995 were as follows: 1997 1996 1995 Employee Employer Employee Employer Employee Employer Marathon $471,740 $267,973 $413,090 $238,437 $351,162 $208,213 FJ Canada 164,054 101,208 144,757 90,295 128,493 84,757 $635,794 $369,181 $557,847 $328,732 $479,655 $292,970 5. Investment in Common Stock: The unrealized appreciation or depreciation of investment in common stock as of December 31, 1997, 1996 and 1995 and the change in such amount during each period were as follows: Unrealized Market Appreciation Value Cost (Depreciation) December 31, 1994 $1,428,476 $1,553,067 $(124,591) Change for the year ended December 31, 1995 164,981 153,784 11,197 December 31, 1995 $1,593,457 $1,706,851 $(113,394) Change for the year ended December 31, 1996 400,239 (23,825) 424,064 December 31, 1996 1,993,696 1,683,026 310,670 Change for year ended December 31, 1997 278,741 215,121 63,620 December 31, 1997 $2,272,437 $1,898,147 $ 374,290 NOTES TO FINANCIAL STATEMENTS (continued) The Plan held 59,030 and 59,427 shares of FJ Common Stock on December 31, 1997, and December 31, 1996, respectively. In addition, the Plan held 2,077 and 2,962 shares of CV Common Stock on December 31, 1997, and December 31, 1996, respectively. 6. Tax Status: The Plan is an employee profit sharing plan and is subject to the Canadian Tax Act; all amounts contributed to a Participant's account are taxable to such Participant under Canadian income tax rules. The only U.S. taxes paid are U.S. withholding taxes on cash dividends, which are withheld on behalf of Participants. No such withholdings occurred in 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Committee who administer the Plan have duly caused this annual report to be signed by the undersigned hereunto duly authorized. March 23, 1998 /s/Clifford A. Cutchins, IV - -------------- ------------------------------------------ Date Committee Member - Clifford A. Cutchins, IV March 23, 1998 /s/Daniel J. Girvan - -------------- ------------------------------------------ Date Committee Member - Daniel J. Girvan March 23, 1998 /s/Ernst A. Haberli - -------------- ------------------------------------------ Date Committee Member - Ernst A. Haberli March 23, 1998 /s/R. Michael Lempke - -------------- ------------------------------------------ Date Committee Member - R. Michael Lempke March 23, 1998 /s/William A. Paterson - -------------- ------------------------------------------ Date Committee Member - William A. Paterson March 23, 1998 /s/Michael T. Riordan - -------------- ------------------------------------------ Date Committee Member - Michael T. Riordan EX-4 2 Amendments to Fort James Corporation Canadian Employees Stock Purchase Plan The Fort James Corporation Canadian Employees Stock Purchase Plan (the "Plan") is hereby amended, effective January 1, 1997, as follows: 1. Section 7 of the Plan (Additional Employer Contributions) is amended by replacing the first sentence with the following: A Participating Employer shall make out of profits an Additional Employer Contribution on or before March 31 of each calendar year (other than, for greater certainty, 1990) in respect of each Accountholder employed by it on the preceding December 31 who has not, during either of the two calendar years immediately preceding such March 31, made a withdrawal from his Restricted Account. 2. Section 8 of the Plan (Accounts and Allocations to Accountholders) is amended by replacing section 8(a) with the following: 8. ACCOUNTS AND ALLOCATIONS TO ACCOUNTHOLDERS (a) The Trustee shall establish and maintain the following accounts: (i) a Restricted Account, to which shall be credited at any particular time Basic Member Contributions made in respect of an Accountholder at any time during the current or immediately preceding calendar year, any Basic Employer Contributions made in respect of the Accountholder at any time during the current or immediately preceding calendar year, any Shares purchased with any such contributions and the net proceeds received by or credited to the Trustee in respect of any sale of such Shares; and (ii) an Unrestricted Account, to which shall be credited all other contributions, the amounts referred to in paragraph (c) hereof, any Shares purchased with such contributions or amounts and the net proceeds received by or credited to the Trustee in respect of any sale of such Shares. 3. Section 8A of the Plan (Crown Vantage Account) is amended by deleting the word "and" at the end of subparagraph 8A(a)(ii), replacing the period at the end of paragraph 8A(a)(iii) with "; and", and adding the following subparagraph 8A(a)(iv): (iv) the net proceeds received by or credited to the Trustee in respect of any sale of any Crown Vantage Shares held in the Accountholder's Crown Vantage Account. 4. Section 11 (Payments Out of the Plan) is amended by replacing Section 11(c) with the following: (c) A distribution (other than a distribution from an Accountholder's Crown Vantage Account, which shall be treated as a distribution from the Unrestricted Account) shall be deemed to be made from an Accountholder's Accounts in the following order: (i) the Unrestricted Account (other than the portion thereof represented by the Accountholder's Crown Vantage Account); and (ii) the Restricted Account. 5. Section 11 is further amended by adding the following Section 11(e): (e) An Accountholder may, in lieu of receiving a distribution of whole Shares or Crown Vantage Shares as provided in section 11(a) or (b) hereof, direct in his application to the Plan Administrator that all or a portion of the Shares or Crown Vantage Shares to which he would otherwise be entitled be sold and the net proceeds distributed to him. EX-23 3 Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement of Fort James Corporation on Form S-8 (File No. 33-57153) of our report dated February 6, 1998, on our audits of the financial statements of the Fort James Corporation Canadian Employees Stock Purchase Plan as of December 31, 1997 and 1996, and for each of the three years in the period ended December 31, 1997, which report is included in this Annual Report on Form 11-K. COOPERS & LYBRAND L.L.P. Richmond, Virginia March 23, 1998 -----END PRIVACY-ENHANCED MESSAGE-----