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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 COMMISSION FILE NO. 1-8712
Bowater Incorporated
(Exact name of registrant as specified in its charter)
DELAWARE 62-0721803
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 EAST CAMPERDOWN WAY
P. O. BOX 1028
GREENVILLE, SOUTH CAROLINA 29602
(Address of principal executive offices)
(864) 271-7733
(Registrant's telephone number, including area code)
-------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ------------------------------------------------------ ------------------------------
Common Stock, par value $1 per share New York Stock Exchange, Inc.
Pacific Exchange, Inc.
The London Stock Exchange
The Swiss Stock Exchanges
Depositary Shares, each representing one-fourth New York Stock Exchange, Inc.
of a share of 8.40% Series C Cumulative
Preferred Stock, par value $1 per share
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if the disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of
the registrant as of March 23, 1998, was $2,237,473,722.
As of March 23, 1998, there were 40,473,842 shares of the registrant's
Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference into the
parts of this report indicated below:
Annual Report to Shareholders for the year ended December 31, 1997. Parts I, II and IV
Proxy Statement with respect to the Annual Meeting of Shareholders to Part III
be held on May 20, 1998.
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PART I
Item 1. Business
General
Bowater Incorporated (together with its consolidated subsidiaries, the
"Company") is engaged in the manufacture, sale and distribution of newsprint,
directory paper, uncoated groundwood specialties, coated groundwood paper,
market pulp and lumber. The Company operates facilities in both the United
States and Canada, and, as of December 31, 1997, managed and controlled
approximately 3.5 million acres of timberlands to support these facilities. The
Company markets and distributes its various products in North and South America
and overseas.
The Company was incorporated in Delaware in 1964. The Company's principal
executive offices are located at 55 East Camperdown Way, Greenville, South
Carolina 29601, and its telephone number at that address is (864) 271-7733.
All three of the Company's divisions have been classified within a single
business segment, Pulp, Paper and Related Products. Information regarding net
export sales is incorporated herein by reference to page 38 of the Company's
1997 Annual Report (the "Annual Report"). Information regarding the amount of
total revenue contributed by each of the Company's product lines is incorporated
herein by reference to pages 40-41 of the Annual Report. Information regarding
the Company's fixed assets is incorporated herein by reference to page 32 of the
Annual Report.
Information regarding the Company's liquidity and capital resources is
incorporated herein by reference to pages 21-25 of the Annual Report.
Information regarding the sales of real property and subsidiaries is
incorporated herein by reference to page 31 of the Annual Report.
Information regarding the Company's agreement to acquire the outstanding
shares of Avenor Inc. common stock is incorporated herein by reference to pages
21-22 and page 31 of the Annual Report.
Operating Divisions
The Company operates through three divisions: the Newsprint and Directory
Division, the Coated Paper and Pulp Division and the Forest Products Division.
In 1997, the Company consolidated its directory paper business into the former
Newsprint Division, replacing the Great Northern Paper Division. In addition,
the Company reorganized its United States and Canadian forest and wood products
operations into a new division called the Forest Products Division.
The Newsprint and Directory Division consists of four manufacturing
facilities: the Calhoun Operations and Calhoun Newsprint Company ("CNC") (which
is owned approximately 51 percent by the Company and approximately 49 percent by
Herald Company, Inc.) located in Calhoun, Tennessee; Bowater Mersey Paper
Company Limited ("Mersey Operations") (which is owned 51 percent by the Company
and 49 percent by The Washington Post Company) located in Liverpool, Nova
Scotia; Great Northern Paper, Inc. ("GNP"), East Operations located in East
Millinocket, Maine; and GNP, Millinocket Operations located in Millinocket,
Maine. This division is also supported by four domestic sales offices, which are
responsible for marketing all of the Company's domestic newsprint, directory
paper and some uncoated groundwood specialties. Bowater Asia Pte Ltd (formerly
Paper Traders International Pte Ltd), a wholly-owned subsidiary located in
Singapore, is responsible for the Company's newsprint sales in Asia and Pacific
Rim countries.
The Coated Paper and Pulp Division consists of the Catawba Operations
located in Catawba, South Carolina, and three sales offices. This division is
responsible for selling all of the Company's coated groundwood paper, as well as
all of the Company's market pulp and some uncoated groundwood specialties.
The Forest Products Division consists of three manufacturing facilities:
Bowater Lumber Company located in Albertville, Alabama; Bowater Mersey Paper
Company Limited Oakhill Sawmill (which is owned 51 percent by the Company and 49
percent by The Washington Post Company) located in Bridgewater, Nova Scotia; and
Pinkham Lumber Company located in Ashland, Maine. This division is supported by
four business offices and is responsible for managing the Company's timberlands
and selling all of the Company's timber, softwood lumber and non-strategic
timberlands.
Additional descriptive information regarding the Company's divisions is
incorporated herein by reference to pages 6-7 of the Annual Report.
1
Newsprint, Directory Paper and Uncoated Groundwood Specialties
The Company is the largest manufacturer of newsprint and directory paper in
the United States. Including its Mersey Operations, the Company's annual
production capacity of newsprint, directory paper and uncoated groundwood
specialties is approximately 8 percent of the North American capacity total and
approximately 4 percent of the worldwide capacity total. Its market share in the
United States is 9 percent. These amounts were generated internally using data
from Paper Trader, a monthly publication by Resource Information Systems, Inc.
The Calhoun Operations, located on the Hiwassee River in Tennessee, is one
of the largest and most productive newsprint mills in North America. At this
facility, the Company operates four paper machines, which produced 594,000 tons
of newsprint and uncoated groundwood specialties in 1997. Also located at this
facility is CNC's paper machine, which produced 239,000 tons of newsprint in
1997. Although the Company manages and operates the entire facility, CNC also
owns 68.4 percent of the thermomechanical pulp ("TMP") mill and 100 percent of
the recycled fiber plant at the facility. The Company owns the remaining 31.6
percent of the TMP mill and 100 percent of the other assets at this location.
These other assets include kraft and stone groundwood pulp mills and other
support equipment necessary to produce the finished product. The Company is
currently in the process of expanding the TMP mill at this location.
The Mersey Operations, located on an ice-free port providing economical
access to ports along the eastern seaboard of the United States and throughout
the world, has two paper machines. Built in 1929, they were rebuilt between 1983
and 1985 and produced 263,000 tons of newsprint in 1997. This facility also
operates a TMP mill, a wastewater treatment facility and other support equipment
required to produce the finished product.
Newsprint, directory paper and uncoated groundwood specialties are also
produced at three other Company locations. The newsprint machine at the Catawba
Operations, located on the Catawba River in South Carolina, produced 248,000
tons in 1997 and is one of the largest and most productive newsprint machines in
the industry. The Company's East Millinocket Operations, located on the West
Branch of the Penobscot River in northern Maine, has two paper machines that
were built in 1954 and rebuilt in 1986. These two machines produced a total of
296,000 tons of newsprint, directory paper and uncoated groundwood specialties
in 1997. This facility also operates a groundwood pulp mill, a recycled fiber
plant and other support equipment required to produce the finished product.
Beginning in 1999, the Company plans to modernize this facility over a two-year
period at an estimated cost of $220 million. The Company's Millinocket
Operations, located eight miles from the East Millinocket Operations, has four
paper machines that produced 128,000 tons of directory paper and uncoated
groundwood specialties in 1997. These paper grades are used in directories,
catalogs, newspaper advertising inserts and magazines, and are sold primarily to
customers east of the Mississippi River. The Company is seeking a buyer for this
facility as it no longer meets the Company's long-term objectives.
Domestic newsprint, directory paper and uncoated groundwood specialty paper
sales are made directly by the Company through its regional sales offices
located near major metropolitan areas in the eastern half of the United States.
Sales to Asia and Pacific Rim countries are made through Bowater Asia Pte Ltd,
while the balance of export sales is made primarily through international sales
agents local to their markets. CNC's minority shareholder and its affiliates
purchase the equivalent of all of CNC's annual output, and The Washington Post
Company purchases approximately 70,000 tons of newsprint annually. Combined,
these two customers in 1997 accounted for approximately 9 percent of the
Company's consolidated net sales and approximately 20 percent of the Company's
newsprint net sales. The Company distributes newsprint, directory paper and
uncoated groundwood specialties by rail, truck, ship and barge.
Coated Groundwood Paper
The Company is one of the largest producers of coated groundwood paper in
the United States and North America with approximately 11 percent and 9 percent
of the United States and North American capacity, respectively. These amounts
were generated internally using data from the American Forest and Paper
Association and Pulp & Paper Magazine. Coated groundwood paper produced by the
Company is primarily light weight coated paper and is used in magazines,
catalogs, advertising pieces, textbooks, direct mail pieces and coupons.
The Company manufactures a variety of coated grades on two paper machines
at the Catawba Operations and on three of the four paper machines at the
Millinocket Operations. Both machines at the Catawba Operations utilize
off-machine blade coaters. At the Millinocket Operations, two machines produce a
base stock that is coated on an off-machine blade coater while the third machine
has an on-machine roll coater. In 1997, the two coated machines at the Catawba
Operations produced 349,000 tons of coated groundwood paper, and the three
machines at the Millinocket Operations produced 124,000 tons of coated
groundwood paper. The Catawba Operations include a kraft mill, a TMP mill and
other support equipment
2
required to produce the finished product. The Millinocket Operations include a
sulphite mill and other support equipment required to produce the finished
product.
Coated groundwood paper is sold domestically by the Company and paper
brokers to major printers, publishers, and catalogers. It is distributed by
truck and rail from the Catawba and Millinocket facilities. These facilities are
strategically located to supply the southeastern and northeastern United States,
respectively, and jointly serve the mid-western market. Export markets are
serviced primarily through international agents.
Market Pulp
In addition to furnishing its internal pulp requirements, the Company
produced 260,000 tons of softwood market pulp at its Catawba Operations in 1997
for use by manufacturers of fine paper, tissues and other paper products. The
Calhoun Operations produced 153,000 tons of hardwood market pulp for sale to its
customers. In 1997, the Calhoun facility benefited from a pulp dryer rebuild
completed in late 1996. This enabled the Company to significantly increase
market pulp production in 1997 from the 118,000 tons of hardwood market pulp
produced by the Calhoun Operations in 1996.
In 1997, 59 percent of the Company's market pulp was sold to the export
market. Export sales are made through international sales agents local to their
markets, while domestic sales are made directly by the Company and its sales
agents. The Company distributes market pulp primarily by rail and ship.
Forest Products
In addition to market pulp and paper, the Company sells pulpwood,
sawtimber, lumber and wood chips to a variety of customers located in the
eastern United States, the United Kingdom and Canada. The Company also sells
non-strategic timberland tracts and provides its manufacturing facilities with a
portion of the wood needed for pulp, paper and lumber production.
At December 31, 1997, the Company owned or managed under lease
approximately 3.5 million acres of timberlands throughout the United States and
Canada. Approximately 2 million acres of these timberlands are located in the
state of Maine, 900,000 acres are located in the southeastern United States, and
600,000 acres are located in Nova Scotia. This timberland base supplies a
portion of the needs of the Company's paper mills and sawmills, as well as many
independently owned forest products businesses. The Company maintains one
nursery and contracts with numerous other nurseries in order to replace trees
harvested from its timberlands and from the timberlands of small private
landowners. The Company also employs harvest activities designed to promote
natural regeneration.
In 1997, the Company consumed 8 million tons of wood for pulp, paper and
lumber production. Of this amount, 2 million tons of wood were harvested from
Company-owned properties, while 6 million tons were purchased, primarily under
contract, from local wood producers, private landowners and sawmills (in the
form of residual chips) at market prices. In addition, the Company harvested 2
million tons of wood from Company-owned properties to sell to other sawmills and
paper companies.
The Company operates three sawmills that produce construction grade lumber.
Bowater Lumber Company produced 95 million board feet of lumber in 1997. This
lumber is sold in the southeastern and mid-western United States. The Bowater
Mersey Paper Company Limited Oakhill Sawmill, which produced 35 million board
feet of lumber in 1997, sells to customers in eastern Canada, the northeastern
United States, and the United Kingdom. Pinkham Lumber Company produced 71
million board feet of lumber in 1997, also selling to customers in eastern
Canada and in the northeastern United States. The Company distributes lumber by
truck and rail.
Recycling Capability
The Company has focused its efforts in recent years on meeting the demand
for recycled-content paper products, which provides an environmental benefit in
reducing solid waste landfill deposits. In addition, this effort allows
publishers and other customers to meet recycled-content standards.
The Company operates recycling plants at its Calhoun and East Millinocket
Operations. Taking a mixture of old newspapers and old magazines ("recovered
paper"), these plants utilize advanced mechanical and chemical processes to
manufacture high quality pulp. When this recycled fiber is combined with virgin
fiber, the resulting products, which include recycled-content newsprint,
directory paper, coated groundwood paper and uncoated groundwood specialties,
are comparable in quality to paper produced with 100 percent virgin fiber pulp.
In 1997, the Company processed 342,000 tons of recovered paper.
3
Recovered paper is purchased from suppliers in the regions of the Company's
recycling plants. These suppliers collect, sort and bale the material before
selling it to the Company, primarily under long-term contracts, with prices and
quantities fluctuating according to market conditions. The Company is one of the
largest purchasers of recovered paper in North America.
Competition
In general, the Company's products are globally-traded commodities. Pricing
and the level of shipments of these products are influenced by the balance
between supply and demand as affected by global economic conditions, changes in
consumption and capacity, the level of customer and producer inventories, and
fluctuations in exchange rates.
Newsprint and market pulp, two of the Company's principal products, are
produced by numerous worldwide manufacturers. Aside from quality specifications
to meet customer needs, the production of newsprint and market pulp generally do
not depend upon a proprietary process or formula. There are approximately 20
major worldwide producers of newsprint with which the Company competes. In
addition, the Company faces actual and potential competition from numerous
smaller producers located around the world. Price, quality, service and the
ability to produce paper with recycled content are important competitive
determinants. The Company is not a major producer in the pulp market.
The Company competes with approximately 13 coated groundwood producers
located in North America. In addition, there are approximately six major
offshore suppliers of coated groundwood paper that sell into the North American
market. As a major supplier to printers in North America, the Company also
competes with numerous worldwide suppliers of other grades of paper such as
coated freesheet, supercalendered and uncoated groundwood papers. Price, quality
and service are important competitive determinants, but a degree of proprietary
knowledge is required in both the manufacture and use of this product, which
requires close customer-supplier relationships.
The Company competes with three major worldwide producers and several
smaller producers of directory paper. Price, quality and service, as well as the
ability to produce lower basis weights and recycled products, are all important
competitive determinants.
The Company is not a major producer in the uncoated groundwood specialties
or lumber markets.
As with other globally manufactured and sold commodities, the competitive
position of the Company's products is significantly affected by the volatility
of currency exchange rates. With several of the Company's primary competitors
located in Canada, Sweden and Finland, the relative rates of exchange between
those countries' currencies and the United States dollar can have a substantial
effect on the Company's ability to compete. In addition, the degree to which the
Company competes with foreign producers depends in part on the level of demand
abroad. Shipping costs generally cause producers to prefer to sell in local
markets when the demand is sufficient in those markets.
Trends in electronic data transmission and storage could adversely affect
traditional print media, including products of the Company's customers; however,
neither the timing nor the extent of those trends can be predicted with
certainty. Industry reports indicate that the Company's newspaper publishing
customers in North America have experienced some loss of market share to other
forms of media and advertising, such as direct mailings and newspaper inserts
(both of which are end uses for several of the Company's products), cable
television and the Internet. Some of these customers are also facing a decline
in newspaper readership, circulation and advertising lineage. The Company does
not believe that this is the case in most overseas markets. The Company's
magazine and catalog publishing customers have also been affected by the use of
electronic media for merchandising products, while benefiting from the increase
in magazine and catalog publications dealing with electronic media, especially
computer hardware and software.
Part of the Company's competitive strategy is to be a lower-cost producer
of its products while maintaining strict quality standards and responding to
environmental concerns. The Company's two recycling facilities have further
enhanced its competitive position by enabling it to respond to customer demand
for recycled-content newsprint, directory paper, coated groundwood paper and
uncoated groundwood specialties.
Raw Materials and Energy
The manufacture of pulp and paper requires significant amounts of wood and
energy. The wood needed for pulp, paper and lumber production is obtained from
Company-owned properties and purchased from local producers. The Company also
uses recovered paper as raw material when producing recycled-content paper
grades. See Forest Products and Recycling Capability on page 3 of this Form 10-K
for information regarding the Company's use of raw materials.
4
Steam and electrical power are the primary forms of energy used in pulp and
paper production. Process steam is produced in boilers at the various mill sites
from a variety of fuel sources. Internally generated electrical power at the
Calhoun and Catawba Operations is used to supplement purchased electrical power.
The Mersey Operations purchases all of its steam and electrical power
requirements. It has the ability, however, to produce some of its steam
requirements. GNP has the capacity to be totally self-sufficient electrically
with six hydroelectric facilities located on the West Branch of the Penobscot
River (containing 31 hydroelectric generators) and seven steam turbine
generators located in the mill power plants.
The Company operates its Maine hydroelectric facilities pursuant to
long-term licenses granted by the Federal Energy Regulatory Commission ("FERC")
or its predecessor, the Federal Power Commission. The licenses for certain dams
expired at the end of 1993, and the Company continued to operate those dams
under interim licenses. In October 1996, FERC issued new 30-year licenses
allowing the Company to continue operating its hydroelectric facilities with
substantially similar terms and conditions as the old licenses. In November
1996, five intervenors filed requests for a rehearing, generally rearguing
issues already considered by FERC. These requests are pending before FERC, and,
although no assurances can be given, management believes that the requests
should not result in any material adverse change to the terms or conditions of
the licenses.
Employees
As of December 31, 1997, the Company employed 5,000 people, of whom 3,600
were represented by bargaining units. The labor contract at the Company's
Catawba Operations, which covers all of the plant's hourly employees, expires in
April 2003. The labor contract with most of the plant's hourly employees at the
Calhoun Operations expires in July 2002. The labor agreement for the majority of
unionized employees at GNP expires in July 2001, while all other labor
agreements there expire during 2002. The labor contract covering all unionized
employees at the Mersey Operations expires in April 1998. All plant facilities
are situated in areas where adequate labor pools exist. Relations with employees
are considered good.
Trademarks and Name
The Company owns the trademarked Company logo exclusively throughout the
world. Effective June 30, 1997, the Company obtained from the former Bowater
plc, now Rexam plc, ownership of the name "Bowater" in connection with the sale
of all of the Company's products exclusively throughout the world, with a
limited exception for a few non-conflicting uses by Rexam plc. The Company
considers its interests in the Company logo and name to be valuable and
necessary to the conduct of its business.
Environmental Matters
Information regarding environmental matters is incorporated herein by
reference to page 22 of the Annual Report.
The Company believes that its United States and Canadian operations are in
substantial compliance with all applicable federal, state and provincial
environmental regulations and that all currently-required control equipment is
in operation. While it is impossible to predict future environmental regulations
that may be established, the Company believes that it will not be at a
competitive disadvantage with regard to meeting future United States or Canadian
standards.
The Company has taken positive action to address concerns about municipal
solid waste by constructing a recycled fiber plant at its Calhoun and East
Millinocket Operations. See Recycling Capability on page 3 of this Form 10-K.
Item 2. Properties
Information regarding the Company's properties is incorporated herein by
reference to the material included in Item 1, "Business" of this Form 10-K, and
on page 42 and the back cover page of the Annual Report.
In addition to the properties that it owns, the Company also leases under
long-term leases certain timberlands, office premises, and office and
transportation equipment. Information regarding timberland leases and operating
leases is incorporated herein by reference to page 38 of the Annual Report.
Item 3. Legal Proceedings
The Company is involved in various legal proceedings relating to contracts,
commercial disputes, taxes, environmental issues, employment and workers'
compensation claims and other matters. The Company's management believes that
the ultimate disposition of these matters will not have a material adverse
effect on the Company's operations or its financial condition taken as a whole.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 1997.
5
Executive Officers of the Registrant as of March 23, 1998
The Company's executive officers, who are elected by the Board of Directors
to serve one-year terms, are listed below. There are no family relationships
among officers and no arrangements or understandings between any officer and any
other person pursuant to which the officer was selected.
Served as
Name Age Position Officer Since
- ---------------------- ----- ---------------------------------------------------------------- --------------
Arnold M. Nemirow 54 Chairman, President and Chief Executive Officer 1994
Arthur D. Fuller 53 Executive Vice President and President -- Newsprint and 1995
Directory Division
Anthony H. Barash 55 Senior Vice President -- Corporate Affairs and General Counsel 1996
E. Patrick Duffy 56 Senior Vice President and President -- Coated Paper and Pulp 1995
Division
David G. Maffucci 47 Senior Vice President and Chief Financial Officer 1992
Donald G. McNeil 47 Senior Vice President and President -- Great Northern 1995
Paper, Inc.
James H. Dorton 41 Vice President and Treasurer 1996
Richard F. Frisch 50 Vice President -- Human Resources 1995
Richard K. Hamilton 49 Vice President and President -- Forest Products Division 1997
Steven G. Lanzl 49 Vice President -- Information Technology 1996
Robert A. Moran 53 Vice President -- Manufacturing Services 1992
Michael F. Nocito 42 Vice President and Controller 1993
Wendy C. Shiba 47 Vice President, Secretary and Assistant General Counsel 1993
Arnold M. Nemirow became Chairman in March 1996, and Chief Executive
Officer in March 1995. He has been President and a director of the Company since
September 1994 and was Chief Operating Officer from September 1994 through
February 1995. Previously he was President, Chief Executive Officer and a
director of Wausau Paper Mills Company, a pulp and paper company, from July 1990
through July 1994, Chairman, President, Chief Executive Officer and a director
of Nekoosa Papers, Inc., the business papers division of Great Northern Nekoosa
Corporation, from 1988 to March 1990 and Vice President of Great Northern
Nekoosa Corporation from 1984 to March 1990.
Arthur D. Fuller became Executive Vice President and President -- Newsprint
and Directory Division in August 1997. From 1995 to August 1997, he was Senior
Vice President and President -- Newsprint Division. He was Vice President
Finance, Planning & Administration of MacMillan Bloedel Packaging Inc., the
containerboard and packaging business of MacMillan Bloedel Ltd., from 1994 to
1995. From 1991 to 1993 he was a partner of Nukraft, which sought to develop a
recycled linerboard mill, and from 1987 to 1990 he was Vice President and
General Manager of Great Southern Paper Company, the containerboard division of
Great Northern Nekoosa Corporation. Earlier he held various management positions
with Great Southern Paper Company.
Anthony H. Barash became Senior Vice President -- Corporate Affairs and
General Counsel in April 1996. From 1993 through March 1996, he was a partner of
the law firm Seyfarth, Shaw, Fairweather & Geraldson, where he was a member of
the firm's Business Law and Real Estate Group. Previously, from 1980 to 1993, he
was a senior partner of the law firm Barash & Hill, where he also concentrated
in business and real estate law.
E. Patrick Duffy became Senior Vice President and President -- Coated Paper
and Pulp Division in 1995. He was President of the Telecommunications Business
Unit of R.R. Donnelly and Sons, a printing company located in Chicago, Illinois,
from 1993 to 1995, where he was responsible for the sale and manufacture of
printed products, and President of its Catalog Group from 1990 to 1992.
Previously he was a Senior Vice President of R.R. Donnelly and Sons.
David G. Maffucci became Senior Vice President and Chief Financial Officer
in 1995. He had served as Vice President -- Treasurer since 1993 and Treasurer
from 1992 to 1993 and relinquished the title of Treasurer in August 1996. From
1977 to 1992 he held various positions of increasing responsibility in the
Company's Finance Department.
Donald G. McNeil became Senior Vice President in 1995, and has been
President of GNP since 1994. He was President and General Manager of Bowater
Mersey Paper Company, a subsidiary of the Company ("Mersey"), from 1992 to 1994.
He was General Manager of Mersey from 1991 to 1992 and Assistant General Manager
from 1990 to 1991. From 1977 through 1989 he held various engineering and
management positions with Mersey.
6
James H. Dorton became Vice President and Treasurer in 1996. From 1990
through 1996, he was Treasurer of Intergraph Corporation, a manufacturer and
designer of computers and software for engineering applications, where he was
responsible for treasury management, corporate finance and shareholder
relations. He was Assistant Treasurer of Intergraph Corporation from 1986 to
1990.
Richard F. Frisch became Vice President -- Human Resources in 1995. He was
Director of Compensation and Benefits from 1994 to 1995. Prieviously he was
employed by Scott Paper Company, a pulp and paper company, at its Philadelphia,
Pennsylvania, headquarters, most recently as Director of Benefits from 1991 to
1994, where he was responsible for strategic design and management of benefit
plans.
Richard K. Hamilton became Vice President and President -- Forest Products
Division in August 1997. He was Vice President Wood Products -- Newsprint
Division from 1995 to 1997. From 1993 to 1995, he was Group Manager -- Forest
Resources Division of Georgia-Pacific Corporation, a building products and pulp
and paper company, where he was responsible for a woodlands organization
management of about 340,000 acres of timberland and the procurement, production
and sale of pulpwood, logs and wood chips. Previously, he held various woodlands
positions with Great Southern Paper Company and Scott Paper Company.
Steven G. Lanzl became Vice President -- Information Technology in 1996.
From 1992 to 1996 he was with E.I. du Pont de Nemours and Company, a diversified
chemical and petroleum products company, where he was responsible for planning
information system initiatives. Earlier he was with DuPont Asia Pacific, Ltd. in
Japan as Manager of Information Systems Planning.
Robert A. Moran became Vice President -- Manufacturing Services in 1996 and
was Vice President -- Pulp and Paper Manufacturing Services from 1992 to 1996.
He was Vice President -- Manufacturing Services for the Pulp and Paper Group
from 1991 and Director of Planning and Development for the Pulp and Paper Group
from 1988 to 1991. He also served as Assistant General Manager of the Catawba
Operations during 1988.
Michael F. Nocito became Vice President and Controller in 1993. He was
Controller of the Calhoun Operations from 1992 to 1993 and Assistant Controller
of the Calhoun Operations from 1988 to 1992. From 1978 to 1988 he held various
positions of increasing responsibility in the Company's Finance Department.
Wendy C. Shiba became Vice President in May 1997 and has been Secretary and
Assistant General Counsel since 1993. From 1992 to 1993, she was Corporate Chair
of the City of Philadelphia Law Department where she managed the Corporate
Group, which was responsible for all of the City's nonlitigation legal work. She
was Associate Professor of Law from 1990 to 1993 and Assistant Professor of Law
from 1985 to 1990 at Temple University School of Law, where she taught subjects
relating to corporate law and served as a consultant in legal writing and
corporate law. Earlier she practiced corporate law in the private sector.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholders
Matters
(a) The Company's common stock, $1 par value ("Common Stock"), is listed on
the New York Stock Exchange (stock symbol BOW), the Pacific Exchange, Inc., the
London Stock Exchange and the Swiss Stock Exchanges. Price information with
respect to the Company's Common Stock on page 45 of the Annual Report is
incorporated herein by reference.
(b) As of March 23, 1998, there were 5,099 holders of record of the
Company's Common Stock.
(c) The Company paid consecutive quarterly dividends of $.15 per share of
Common Stock during 1995. The quarterly dividend was increased to $.20 per share
of Common Stock effective with the dividend payable April 1, 1996. This amount
was paid quarterly during the balance of 1996 and in 1997.
Future declarations of dividends on the Company's Common Stock are
discretionary with the Board of Directors, and the declaration of any such
dividends will depend upon, among other things, the Company's earnings, capital
requirements and financial condition. Dividends on the Common Stock may not be
paid if there are any unpaid or undeclared accrued dividends on the Company's
outstanding preferred stock, which currently consists of the Company's 8.40%
Series C Cumulative Preferred Stock. At December 31, 1997, there were no
arrearages on dividends accrued on the Company's preferred stock.
In addition, the Company's ability to pay dividends on its preferred stock
and on its Common Stock depends on its maintaining adequate net worth and
compliance with the required ratio of total debt to total capital as defined in
and required
7
by the Company's current credit agreement (the "Credit Agreement"). The Credit
Agreement requires the Company to maintain a minimum net worth (generally
defined therein as common shareholders' equity plus any outstanding preferred
stock) of $1.0 billion as of December 31, 1997. In addition, the Credit
Agreement imposes a maximum 60 percent ratio of total debt to total capital
(defined therein as total debt plus net worth). The Company anticipates that its
new one-year committed $1 billion credit facility (see page 22 of the Annual
Report) will contain substantially similar requirements. At December 31, 1997,
the net worth of the Company and the ratio of total debt to total capital as
defined under the Credit Agreement were $1.2 billion and 40 percent,
respectively.
Item 6. Selected Financial Data
Information regarding the Company's financial position and operating record
is incorporated herein by reference to pages 40-41 of the Annual Report.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Information regarding the Company's business and financial results is
incorporated herein by reference to pages 19-25 of the Annual Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8. Financial Statements and Supplementary Data
The information required by Item 8 is incorporated herein by reference to
pages 26-39 of the Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding the Company's directors is incorporated herein by
reference to the material under the heading "Election of Directors --
Information on Nominees and Directors" in the Company's Proxy Statement with
respect to the Annual Meeting of Shareholders scheduled to be held May 20, 1998
(the "Proxy Statement"), filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended.
Information regarding the Company's executive officers is provided under
the caption "Executive Officers of the Registrant as of March 23, 1998" on pages
6-7 of this Form 10-K.
Information regarding Section 16(a) Beneficial Ownership Reporting
Compliance is incorporated herein by reference to the material under the heading
"Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy
Statement.
Item 11. Executive Compensation
Information regarding executive compensation is incorporated herein by
reference to the material under the headings "Election of Directors --
Information on Nominees and Directors -- Director Compensation", "Human
Resources and Compensation Committee Report on Executive Compensation", "Total
Shareholder Return" and "Executive Compensation" in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information concerning (1) any person or group known to the Company to be
the beneficial owner of more than 5 percent of the Company's voting stock, and
(2) ownership of the Company's equity securities by management is incorporated
herein by reference to the material under the heading "Certain Information
Concerning Stock Ownership" in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
Information regarding certain relationships and related transactions is
incorporated herein by reference to the material under the heading "Related
Party Transactions" in the Proxy Statement.
8
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following are filed as a part of this Report on Form 10-K:
(1) The following are included at the indicated page in the Annual Report
and are incorporated by reference herein:
Page(s)
--------
Consolidated Statement of Operations for Each of the Years in the Three-Year Period
Ended December 31, 1997 .......................................................... 26
Consolidated Balance Sheet at December 31, 1997 and 1996 ........................... 27
Consolidated Statement of Capital Accounts for Each of the Years in the Three-Year
Period Ended December 31, 1997 ................................................... 28
Consolidated Statement of Cash Flows for Each of the Years in the Three-Year Period
Ended December 31, 1997 .......................................................... 29
Notes to Consolidated Financial Statements. ........................................ 30-38
Management's Statement of Responsibility and Independent Auditors' Report .......... 39
(2) All financial statement schedules are omitted because they are not
applicable, the amounts associated with them are immaterial, or because
the required information is included in the financial statements or notes
thereto.
(3) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
Exhibit No. Description
- ------------- ---------------------------------------------------------------------------------------------------------
3.1 Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit
4.2 to the Company's Registration Statement No. 33-51569).
3.2 Certificate of Designations of the 7% PRIDES, Series B Convertible Preferred Stock of the Company
(incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated
February 1, 1994, File No. 1-8712 (the "February 1994 8-K")).
3.3 Certificate of Designations of the 8.40% Series C Cumulative Preferred Stock of the Company
(incorporated by reference to Exhibit 4.2 to the February 1994 8-K).
3.4 Bylaws of the Company amended and restated as of July 26, 1995 (incorporated by reference to Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q for the period ending September 30, 1995, File
No. 1-8712 (the "September 1995 10-Q")).
3.4.1 * Amendment to Bylaws dated as of February 27, 1998.
4.1 Agreement pursuant to S-K Item 601(b)(4)(iii)(A) to provide the Commission upon request copies of
certain other instruments with respect to long-term debt not being registered where the amount of
securities authorized under each such instrument does not exceed 10% of the total assets of the
registrant and its subsidiaries on a consolidated basis (incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement No. 2-93455).
4.2 Indenture, dated as of August 1, 1989, by and between the Company and Manufacturers Hanover Trust
Company, as Trustee, with respect to the 9% Debentures Due 2009 (incorporated by reference to Exhibit
4.7 to the Company's Registration Statement No. 33-61219).
4.3 Indenture, dated as of December 1, 1991, by and between the Company and Marine Midland Bank,
N.A., as Trustee, with respect to the 9 3/8% Debentures Due 2021 (incorporated by reference to Exhibit
4.8 to the Company's Annual Report on Form 10-K for the period ending December 31, 1991, File
No. 1-8712 (the "1991 10-K")).
4.4 Indenture, dated as of December 1, 1991, by and between the Company and Marine Midland Bank,
N.A., as Trustee, with respect to the 8 1/2% Notes Due 2001 (incorporated by reference to Exhibit 4.9 to
the 1991 10-K).
4.5 Indenture, dated as of October 15, 1992, by and between the Company and The Chase Manhattan Bank
(N.A.) as Trustee, with respect to the 8 1/4% Notes Due 1999 (incorporated by reference to Exhibit 4.10
to the Company's Annual Report on Form 10-K for the period ending December 31, 1992, File
No. 1-8712 (the "1992 10-K")).
4.6 Indenture, dated as of October 15, 1992, between the Company and The Chase Manhattan Bank (N.A.)
as Trustee, with respect to the 9 1/2% Debentures Due 2012 (incorporated by reference to Exhibit 4.11 to
the 1992 10-K).
4.7 Deposit Agreement, dated as of February 1, 1994, by and among the Company, Trust Company Bank, as
Depositary, and the holders from time to time of the Depositary Receipts relating to the Company's
8.40% Series C Cumulative Preferred Stock, together with form of Depositary Receipt (incorporated by
reference to Exhibit 4.4 to the February 1994 8-K).
4.8 See Exhibits 3.1, 3.3, 3.4 and 3.4.1.
9
Exhibit No. Description
- ----------- -------------
+10.1 Employment Agreement, dated as of July 20, 1994, by and between the Company and Arnold M.
Nemirow (incorporated by reference to Exhibit 10.3 to the Company's Annual Report on Form 10-K for
the period ending December 31, 1994, File No. 1-8712 (the "1994 10-K")).
+10.2 Employment Agreement, dated as of October 21, 1996, by and between the Company and Steven G.
Lanzl (incorporated by reference to Exhibit 10.2 to the Company's Annual Report on Form 10-K for the
period ending December 31, 1996, File No. 1-8712 (the "1996 10-K")).
+10.3 Employment Agreement, dated as of April 1, 1995, by and between the Company and E. Patrick Duffy
(incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the
period ending March 31, 1995, File No. 1-8712).
+10.4 Form of Employment Agreement by and between the Company and each of Robert A. Moran and
Michael F. Nocito (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form
10-K for the period ending December 31, 1993, File No. 1-8712 (the "1993 10-K")).
+10.5 Form of Change in Control Agreement, by and between the Company and each of Edward Patrick
Duffy, Richard F. Frisch, David G. Maffucci, Donald G. McNeil, Robert A. Moran, Arnold M. Nemirow,
and Michael F. Nocito (incorporated by reference to Exhibit 10.5 to the Company's Annual Report on
Form 10-K for the period ending December 31, 1995, File No. 1-8712 (the "1995 10-K")).
+10.6 Form of Change in Control Agreement by and between the Company and each of Anthony H. Barash,
James H. Dorton and Steven G. Lanzl (incorporated by reference to Exhibit 10.6 to the 1996 10-K).
+10.7 Employment Agreement, dated as of May 21, 1997, by and between the Company and Wendy C. Shiba
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
period ending June 30, 1997, File No. 1-8712 (the "June 1997 10-Q")).
+10.8 Change in Control Agreement, dated as of May 21, 1997, by and between the Company and Wendy C.
Shiba (incorporated by reference to Exhibit 10.2 to the June 1997 10-Q).
+10.9 Employment Agreement, dated as of June 1, 1995, by and between the Company and Richard F. Frisch
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
period ending June 30, 1995, File No. 1-8712).
+10.10 Employment Agreement, dated as of August 6, 1996, by and between the Company and James H.
Dorton (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for
the period ending June 30, 1996, File No. 1-8712 (the "June 1996 10-Q")).
+10.11 Employment Agreement, dated as of August 1, 1997, by and between the Company and Arthur D. Fuller
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
period ending September 30, 1997, File No. 1-8712 (the "September 1997 10-Q")).
+10.12 Change in Control Agreement, dated as of August 1, 1997, by and between the Company and Arthur D.
Fuller (incorporated by reference to Exhibit 10.2 to the September 1997 10-Q).
+10.13 Employment Agreement, dated as of November 1, 1995, by and between the Company and David G.
Maffucci (incorporated by reference to Exhibit 10.12 to the 1995 10-K).
+10.14 Employment Agreement, dated as of March 1, 1995, by and between the Company and Donald G.
McNeil (incorporated by reference to Exhibit 10.12 to the 1994 10-K).
+10.15 Employment Agreement, dated as of April 1, 1996, by and between the Company and Anthony H.
Barash (incorporated by reference to Exhibit 10.14 to the 1995 10-K).
+10.16 * Employment Agreement, dated as of August 1, 1997, by and between the Company and Richard K.
Hamilton.
+10.17 * Change in Control Agreement, dated as of August 1, 1997, by and between the Company and
Richard K. Hamilton.
+10.18 Compensatory Benefits Plan of the Company, as amended and restated as of April 30, 1991
(incorporated by reference to Exhibit 10.8 to the 1991 10-K).
+10.18.1 Amendment, effective as of January 1, 1996, to the Compensatory Benefits Plan of the Company
(incorporated by reference to Exhibit 10.15.1 to the 1996 10-K).
+10.18.2 * Second Amendment, effective as of January 1, 1997, to the Compensatory Benefits Plan of the
Company.
+10.19 Annual Bonus Plan of the Company (incorporated by reference to Exhibit 10.16 to the 1994 10-K).
+10.19.1 * Administrative Guide to Annual Bonus Plan of the Company.
+10.20 Deferred Compensation Plan for Outside Directors of the Company, as amended and restated effective
as of January 1, 1996 (incorporated by reference to Exhibit 10.18 to the 1995 10-K).
+10.20.1 Deferred Compensation Plan for Outside Directors of the Company, as amended and restated effective
January 1, 1997 (incorporated by reference to Exhibit 10.18.1 to the 1996 10-K).
+10.21 Retirement Plan for Outside Directors of the Company, effective as of July 1, 1988 (incorporated by
reference to Exhibit 10.19 to the 1995 10-K).
10
Exhibit No. Description
- ----------- ------------
+10.21.1 First Amendment to Retirement Plan for Outside Directors
(incorporated by reference to Exhibit 10.19.1 to the 1995 10-K).
+10.21.2 * Second Amendment to Retirement Plan for Outside Directors.
+10.22 Supplemental Benefit Plan for Designated Employees of Bowater
Incorporated and Affiliated Companies, as amended and restated
effective as of November 1, 1995 (incorporated by reference to
Exhibit 10.20 to the 1995 10-K).
+10.22.1 First Amendment, dated as of March 18, 1996, to the Supplemental
Benefit Plan for Designated Employees of Bowater Incorporated and
Affiliated Companies (incorporated by reference to Exhibit 10.20.1
to the 1995 10-K).
+10.23 Executive Deferred Compensation Plan of the Company, effective as
of July 1, 1994, and as amended as of January 1, 1995
(incorporated by reference to Exhibit 10.29.1 to the 1994 10-K).
+10.23.1 Amendment to Executive Deferred Compensation Plan, dated as of
November 14, 1995 (incorporated by reference to Exhibit 10.21.1 to
the 1995 10-K).
+10.24 Equity Participation Rights Plan, effective as of January 17, 1996
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the period ending September 30,
1996, File No. 1-8712 (the "September 1996 10-Q")).
+10.24.1 First Amendment to Equity Participation Rights Plan, effective as
of March 1, 1996 (incorporated by reference to Exhibit 10.1.1 to
the September 1996 10-Q).
+10.25 1988 Stock Incentive Plan of the Company (incorporated by
reference to the Company's Proxy Statement for 1988, File No.
1-8712).
+10.25.1 Amendment to 1988 Stock Incentive Plan of the Company, dated as of
August 23, 1989 (incorporated by reference to Exhibit 10.16A to
the 1989 10-K).
+10.26 Benefit Plan Grantor Trust of the Company, dated as of May 20,
1988 (incorporated by reference to Exhibit 10.17 to the 1989
10-K).
+10.26.1 Amendment to Benefit Plan Grantor Trust, dated as of August 23,
1989 (incorporated by reference to Exhibit 10.17A to the 1989
10-K).
+10.26.2 Amendment Number 2 to Benefit Plan Grantor Trust, dated as of
November 20, 1996 (incorporated by reference to Exhibit 10.24.2 to
the 1996 10-K).
+10.26.3 Supplemental Agreement to Benefit Plan Grantor Trust, dated as of
May 20, 1988 (incorporated by reference to Exhibit 10.28.2 to the
1995 10-K).
+10.27 Form of Indemnification Agreement, by and between the Company and
each of James H. Dorton, Richard F. Frisch, David G. Maffucci and
Wendy C. Shiba (incorporated by reference to Exhibit 10.1 to the
June 1996 10-Q).
+10.28 Executive Severance Grantor Trust of the Company, dated as of
September 1, 1989 (incorporated by reference to Exhibit 10.18 to
the 1989 10-K).
+10.28.1 Supplemental Agreement to Executive Severance Grantor Trust of the
Company, dated as of September 1, 1989 (incorporated by reference
to Exhibit 10.29.1 to the 1995 10-K).
+10.29 Outside Directors Benefit Plan Grantor Trust of the Company, dated
as of September 5, 1989 (incorporated by reference to Exhibit
10.19 to the 1989 10-K).
+10.29.1 Supplemental Agreement to Outside Directors Benefit Plan Grantor
Trust of the Company, dated as of September 5, 1989 (incorporated
by reference to Exhibit 10.30.1 to the 1995 10-K).
+10.30 Benefits Equalization Plan, dated as of August 22, 1990
(incorporated by reference to Exhibit 10.20 to the Company's
Annual Report on Form 10-K for the period ending December 31,
1990, File No. 1-8712 (the "1990 10-K")).
+10.30.1 First Amendment to Bowater Incorporated Benefits Equalization
Plan, effective as of January 1, 1996 (incorporated by reference
to Exhibit 10.28.1 to the 1996 10-K).
+10.31 1992 Stock Incentive Plan (incorporated by reference to Exhibit
10.23 to the 1991 10-K).
+10.32 Long-Term Cash Incentive Plan, dated as of January 1, 1994
(incorporated by reference to Exhibit 10.33 to the 1995 10-K).
+10.32.1 First Amendment, dated as of March 18, 1996, to the Long-Term Cash
Incentive Plan dated as of January 1, 1994 (incorporated by
reference to Exhibit 10.33.1 to the 1995 10-K).
+10.32.2 Long-Term Cash Incentive Deferred Compensation Plan, effective as of
September 16, 1996 (incorporated by reference to Exhibit 10.2 to
the September 1996 10-Q).
+10.33 Bowater Incorporated 1997 Stock Option Plan, effective as of
January 1, 1997, as amended and restated (incorporated by
reference to Exhibit 10.31 to the 1996 10-K).
+10.34 Bowater Incorporated 1997-1999 Long-Term Incentive Plan, effective
as of January 1, 1997, as amended and restated (incorporated by
reference to Exhibit 10.32 to the 1996 10-K).
10.35 Restated Agreement, dated as of January 1, 1991, by and among the
Company, Advance Publications, Inc. and Calhoun Newsprint Company
(incorporated by reference to Exhibit 10.11 to the 1990 10-K).
11
Exhibit No. Description
- ----------- ------------
10.36 Recycle Agreement, dated as of January 1, 1991, by and among the
Company, Advance Publications, Inc., and Calhoun Newsprint Company
(incorporated by reference to Exhibit 10.19.1 to the 1993 10-K).
10.37 Agreement, dated as of February 21, 1963, by and between Bowater
Canadian Limited and The Washington Post Company (incorporated by
reference to Exhibit 10.12 to the Company's Registration Statement
No. 2-90172).
10.38 Licensing Agreement, dated as of December 30, 1976, as amended,
between the Company and Bowater Industries plc (incorporated by
reference to Exhibit 10.13 to the Company's Registration Statement
No. 2-90172).
10.39 Trademark Agreement, dated May 8, 1984, between the Company and
Bowater Corporation plc (incorporated by reference to Exhibit
10.17 to the Company's Registration Statement No. 2-90172).
10.40 * World-Wide Trademark Ownership, Use and Assignment Agreement,
effective as of June 30, 1997, by and between the Company and
Rexam plc (formerly Bowater plc).
10.41 Credit Agreement, dated as of September 29, 1995, among the
Company, each of the banks signatory thereto (the "Banks"), and
The Chase Manhattan Bank (National Association), as administrative
agent for the Banks (incorporated by reference to Exhibit 10.1 to
the September 1995 10-Q).
13.1 * Copy of the Company's 1997 Annual Report to Stockholders (except
for those portions that are expressly incorporated by reference in
this Report on Form 10-K, this exhibit is furnished for the
information of the Commission and is not deemed to be filed as
part hereof).
21.1 * Subsidiaries of the registrant.
23.1 * Consent of Independent Auditors.
27.1 * Financial Data Schedule (electronic filing only).
- ---------
* Filed herewith
+ This is a management contract or compensatory plan or arrangement.
(b) None.
(c) The response to this portion of Item 14 is submitted as a separate section
of this report.
(d) None.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BOWATER INCORPORATED
By: /s/ ARNOLD M. NEMIROW
------------------------
Arnold M. Nemirow
Chairman, President and
Chief Executive Officer
Date: March 23, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities indicated, as of March 23, 1998.
Signature Title
---------- -------
/s/ ARNOLD M. NEMIROW Director, Chairman, President and Chief
- ---------------------------------------
Arnold M. Nemirow Executive Officer
/s/ DAVID G. MAFFUCCI Senior Vice President and Chief
- ---------------------------------------
David G. Maffucci Financial Officer
/s/ MICHAEL F. NOCITO Vice President and Controller
- ---------------------------------------
Michael F. Nocito
/s/ FRANCIS J. AGUILAR Director
- ---------------------------------------
Francis J. Aguilar
/s/ H. DAVID AYCOCK Director
- ---------------------------------------
H. David Aycock
/s/ RICHARD BARTH Director
- ---------------------------------------
Richard Barth
/s/ KENNETH M. CURTIS Director
- ---------------------------------------
Kenneth M. Curtis
/s/ CHARLES J. HOWARD Director
- ---------------------------------------
Charles J. Howard
/s/ DONALD R. MELVILLE Director
- ---------------------------------------
Donald R. Melville
/s/ JAMES L. PATE Director
- ---------------------------------------
James L. Pate
/s/ JOHN A. ROLLS Director
- ---------------------------------------
John A. Rolls
13
14
INDEX TO EXHIBITS
Exhibit No. Description
- ------------ -----------
3.1 Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit
4.2 to the Company's Registration Statement No. 33-51569).
3.2 Certificate of Designations of the 7% PRIDES, Series B Convertible Preferred Stock of the Company
(incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated
February 1, 1994, File No. 1-8712 (the "February 1994 8-K")).
3.3 Certificate of Designations of the 8.40% Series C Cumulative Preferred Stock of the Company
(incorporated by reference to Exhibit 4.2 to the February 1994 8-K).
3.4 Bylaws of the Company amended and restated as of July 26, 1995 (incorporated by reference to Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q for the period ending September 30, 1995, File
No. 1-8712 (the "September 1995 10-Q")).
3.4.1 * Amendment to Bylaws dated as of February 27, 1998.
4.1 Agreement pursuant to S-K Item 601(b)(4)(iii)(A) to provide the Commission upon request copies of
certain other instruments with respect to long-term debt not being registered where the amount of
securities authorized under each such instrument does not exceed 10% of the total assets of the
registrant and its subsidiaries on a consolidated basis (incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement No. 2-93455).
4.2 Indenture, dated as of August 1, 1989, by and between the Company and Manufacturers Hanover Trust
Company, as Trustee, with respect to the 9% Debentures Due 2009 (incorporated by reference to Exhibit
4.7 to the Company's Registration Statement No. 33-61219).
4.3 Indenture, dated as of December 1, 1991, by and between the Company and Marine Midland Bank,
N.A., as Trustee, with respect to the 9 3/8% Debentures Due 2021 (incorporated by reference to Exhibit
4.8 to the Company's Annual Report on Form 10-K for the period ending December 31, 1991, File
No. 1-8712 (the "1991 10-K")).
4.4 Indenture, dated as of December 1, 1991, by and between the Company and Marine Midland Bank,
N.A., as Trustee, with respect to the 8 1/2% Notes Due 2001 (incorporated by reference to Exhibit 4.9 to
the 1991 10-K).
4.5 Indenture, dated as of October 15, 1992, by and between the Company and The Chase Manhattan Bank
(N.A.) as Trustee, with respect to the 8 1/4% Notes Due 1999 (incorporated by reference to Exhibit 4.10
to the Company's Annual Report on Form 10-K for the period ending December 31, 1992, File
No. 1-8712 (the "1992 10-K")).
4.6 Indenture, dated as of October 15, 1992, between the Company and The Chase Manhattan Bank (N.A.)
as Trustee, with respect to the 9 1/2% Debentures Due 2012 (incorporated by reference to Exhibit 4.11 to
the 1992 10-K).
4.7 Deposit Agreement, dated as of February 1, 1994, by and among the Company, Trust Company Bank, as
Depositary, and the holders from time to time of the Depositary Receipts relating to the Company's
8.40% Series C Cumulative Preferred Stock, together with form of Depositary Receipt (incorporated by
reference to Exhibit 4.4 to the February 1994 8-K).
4.8 See Exhibits 3.1, 3.3, 3.4 and 3.4.1.
+10.1 Employment Agreement, dated as of July 20, 1994, by and between the Company and Arnold M.
Nemirow (incorporated by reference to Exhibit 10.3 to the Company's Annual Report on Form 10-K for
the period ending December 31, 1994, File No. 1-8712 (the "1994 10-K")).
+10.2 Employment Agreement, dated as of October 21, 1996, by and between the Company and Steven G.
Lanzl (incorporated by reference to Exhibit 10.2 to the Company's Annual Report on Form 10-K for the
period ending December 31, 1996, File No. 1-8712 (the "1996 10-K")).
+10.3 Employment Agreement, dated as of April 1, 1995, by and between the Company and E. Patrick Duffy
(incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the
period ending March 31, 1995, File No. 1-8712).
+10.4 Form of Employment Agreement by and between the Company and each of Robert A. Moran and
Michael F. Nocito (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form
10-K for the period ending December 31, 1993, File No. 1-8712 (the "1993 10-K")).
+10.5 Form of Change in Control Agreement, by and between the Company and each of Edward Patrick
Duffy, Richard F. Frisch, David G. Maffucci, Donald G. McNeil, Robert A. Moran, Arnold M. Nemirow,
and Michael F. Nocito (incorporated by reference to Exhibit 10.5 to the Company's Annual Report on
Form 10-K for the period ending December 31, 1995, File No. 1-8712 (the "1995 10-K")).
+10.6 Form of Change in Control Agreement by and between the Company and each of Anthony H. Barash,
James H. Dorton and Steven G. Lanzl (incorporated by reference to Exhibit 10.6 to the 1996 10-K).
Exhibit No. Description
- ----------- ------------
+10.7 Employment Agreement, dated as of May 21, 1997, by and between the Company and Wendy C. Shiba
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
period ending June 30, 1997, File No. 1-8712 (the "June 1997 10-Q")).
+10.8 Change in Control Agreement, dated as of May 21, 1997, by and between the Company and Wendy C.
Shiba (incorporated by reference to Exhibit 10.2 to the June 1997 10-Q).
+10.9 Employment Agreement, dated as of June 1, 1995, by and between the Company and Richard F. Frisch
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
period ending June 30, 1995, File No. 1-8712).
+10.10 Employment Agreement, dated as of August 6, 1996, by and between the Company and James H.
Dorton (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for
the period ending June 30, 1996, File No. 1-8712 (the "June 1996 10-Q")).
+10.11 Employment Agreement, dated as of August 1, 1997, by and between the Company and Arthur D. Fuller
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
period ending September 30, 1997, File No. 1-8712 (the "September 1997 10-Q")).
+10.12 Change in Control Agreement, dated as of August 1, 1997, by and between the Company and Arthur D.
Fuller (incorporated by reference to Exhibit 10.2 to the September 1997 10-Q).
+10.13 Employment Agreement, dated as of November 1, 1995, by and between the Company and David G.
Maffucci (incorporated by reference to Exhibit 10.12 to the 1995 10-K).
+10.14 Employment Agreement, dated as of March 1, 1995, by and between the Company and Donald G.
McNeil (incorporated by reference to Exhibit 10.12 to the 1994 10-K).
+10.15 Employment Agreement, dated as of April 1, 1996, by and between the Company and Anthony H.
Barash (incorporated by reference to Exhibit 10.14 to the 1995 10-K).
+10.16 * Employment Agreement, dated as of August 1, 1997, by and between the Company and Richard K.
Hamilton.
+10.17 * Change in Control Agreement, dated as of August 1, 1997, by and
between the Company and Richard K. Hamilton.
+10.18 Compensatory Benefits Plan of the Company, as amended and
restated as of April 30, 1991 (incorporated by reference to
Exhibit 10.8 to the 1991 10-K).
+10.18.1 Amendment, effective as of January 1, 1996, to the Compensatory
Benefits Plan of the Company (incorporated by reference to
Exhibit 10.15.1 to the 1996 10-K).
+10.18.2 * Second Amendment, effective as of January 1, 1997, to the
Compensatory Benefits Plan of the Company.
+10.19 Annual Bonus Plan of the Company (incorporated by reference to
Exhibit 10.16 to the 1994 10-K).
+10.19.1 * Administrative Guide to Annual Bonus Plan of the Company.
+10.20 Deferred Compensation Plan for Outside Directors of the Company,
as amended and restated effective as of January 1, 1996
(incorporated by reference to Exhibit 10.18 to the 1995 10-K).
+10.20.1 Deferred Compensation Plan for Outside Directors of the Company,
as amended and restated effective January 1, 1997 (incorporated
by reference to Exhibit 10.18.1 to the 1996 10-K).
10.21 Retirement Plan for Outside Directors of the Company, effective
as of July 1, 1988 (incorporated by reference to Exhibit 10.19 to
the 1995 10-K).
+10.21.1 First Amendment to Retirement Plan for Outside Directors
(incorporated by reference to Exhibit 10.19.1 to the 1995 10-K).
+10.21.2 * Second Amendment to Retirement Plan for Outside Directors.
+10.22 Supplemental Benefit Plan for Designated Employees of Bowater
Incorporated and Affiliated Companies, as amended and restated
effective as of November 1, 1995 (incorporated by reference to
Exhibit 10.20 to the 1995 10-K).
+10.22.1 First Amendment, dated as of March 18, 1996, to the Supplemental
Benefit Plan for Designated Employees of Bowater Incorporated
and Affiliated Companies (incorporated by reference to Exhibit
10.20.1 to the 1995 10-K).
+10.23 Executive Deferred Compensation Plan of the Company, effective
as of July 1, 1994, and as amended as of January 1, 1995
(incorporated by reference to Exhibit 10.29.1 to the 1994
10-K).
+10.23.1 Amendment to Executive Deferred Compensation Plan, dated as of
November 14, 1995 (incorporated by reference to Exhibit 10.21.1
to the 1995 10-K).
+10.24 Equity Participation Rights Plan, effective as of January 17,
1996 (incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the period ending
September 30, 1996, File No. 1-8712 (the "September 1996
10-Q")).
+10.24.1 First Amendment to Equity Participation Rights Plan,
effective as of March 1, 1996 (incorporated by reference to
Exhibit 10.1.1 to the September 1996 10-Q).
Exhibit No. Description
- ----------- ------------
+10.25 1988 Stock Incentive Plan of the Company (incorporated by
reference to the Company's Proxy Statement for 1988, File No.
1-8712).
+10.25.1 Amendment to 1988 Stock Incentive Plan of the Company, dated as of
August 23, 1989 (incorporated by reference to Exhibit 10.16A to
the 1989 10-K).
+10.26 Benefit Plan Grantor Trust of the Company, dated as of May 20,
1988 (incorporated by reference to Exhibit 10.17 to the 1989
10-K).
+10.26.1 Amendment to Benefit Plan Grantor Trust, dated as of August 23,
1989 (incorporated by reference to Exhibit 10.17A to the 1989
10-K).
+10.26.2 Amendment Number 2 to Benefit Plan Grantor Trust, dated as of
November 20, 1996 (incorporated by reference to Exhibit 10.24.2 to
the 1996 10-K).
+10.26.3 Supplemental Agreement to Benefit Plan Grantor Trust, dated as of
May 20, 1988 (incorporated by reference to Exhibit 10.28.2 to the
1995 10-K).
+10.27 Form of Indemnification Agreement, by and between the Company and
each of James H. Dorton, Richard F. Frisch, David G. Maffucci and
Wendy C. Shiba (incorporated by reference to Exhibit 10.1 to the
June 1996 10-Q).
+10.28 Executive Severance Grantor Trust of the Company, dated as of
September 1, 1989 (incorporated by reference to Exhibit 10.18 to
the 1989 10-K).
+10.28.1 Supplemental Agreement to Executive Severance Grantor Trust of the
Company, dated as of September 1, 1989 (incorporated by reference
to Exhibit 10.29.1 to the 1995 10-K).
+10.29 Outside Directors Benefit Plan Grantor Trust of the Company, dated
as of September 5, 1989 (incorporated by reference to Exhibit
10.19 to the 1989 10-K).
+10.29.1 Supplemental Agreement to Outside Directors Benefit Plan Grantor
Trust of the Company, dated as of September 5, 1989 (incorporated
by reference to Exhibit 10.30.1 to the 1995 10-K).
+10.30 Benefits Equalization Plan, dated as of August 22, 1990
(incorporated by reference to Exhibit 10.20 to the Company's
Annual Report on Form 10-K for the period ending December 31,
1990, File No. 1-8712 (the "1990 10-K")).
+10.30.1 First Amendment to Bowater Incorporated Benefits Equalization
Plan, effective as of January 1, 1996 (incorporated by reference
to Exhibit 10.28.1 to the 1996 10-K).
+10.31 1992 Stock Incentive Plan (incorporated by reference to Exhibit
10.23 to the 1991 10-K).
+10.32 Long-Term Cash Incentive Plan, dated as of January 1, 1994
(incorporated by reference to Exhibit 10.33 to the 1995 10-K).
+10.32.1 First Amendment, dated as of March 18, 1996, to the Long-Term Cash
Incentive Plan dated as of January 1, 1994 (incorporated by
reference to Exhibit 10.33.1 to the 1995 10-K).
+10.32.2 Long-Term Cash Incentive Deferred Compensation Plan, effective as
of September 16, 1996 (incorporated by reference to Exhibit 10.2
to the September 1996 10-Q).
+10.33 Bowater Incorporated 1997 Stock Option Plan, effective as of
January 1, 1997, as amended and restated (incorporated by
reference to Exhibit 10.31 to the 1996 10-K).
+10.34 Bowater Incorporated 1997-1999 Long-Term Incentive Plan, effective
as of January 1, 1997, as amended and restated (incorporated by
reference to Exhibit 10.32 to the 1996 10-K).
10.35 Restated Agreement, dated as of January 1, 1991, by and among the
Company, Advance Publications, Inc. and Calhoun Newsprint Company
(incorporated by reference to Exhibit 10.11 to the 1990 10-K).
10.36 Recycle Agreement, dated as of January 1, 1991, by and among the
Company, Advance Publications, Inc., and Calhoun Newsprint Company
(incorporated by reference to Exhibit 10.19.1 to the 1993 10-K).
10.37 Agreement, dated as of February 21, 1963, by and between Bowater
Canadian Limited and The Washington Post Company (incorporated by
reference to Exhibit 10.12 to the Company's Registration Statement
No. 2-90172).
10.38 Licensing Agreement, dated as of December 30, 1976, as amended,
between the Company and Bowater Industries plc (incorporated by
reference to Exhibit 10.13 to the Company's Registration Statement
No. 2-90172).
10.39 Trademark Agreement, dated May 8, 1984, between the Company and
Bowater Corporation plc (incorporated by reference to Exhibit
10.17 to the Company's Registration Statement No. 2-90172).
10.40* World-Wide Trademark, Ownership, Use and Assignment Agreement,
effective as of June 30, 1997, by and between the Company and
Rexam plc (formerly Bowater plc).
10.41 Credit Agreement, dated as of September 29, 1995, among the
Company, each of the banks signatory thereto (the "Banks"), and
The Chase Manhattan Bank (National Association), as administrative
agent for the Banks (incorporated by reference to Exhibit 10.1 to
the September 1995 10-Q).
13.1 * Copy of the Company's 1997 Annual Report to Stockholders (except
for those portions that are expressly incorporated by reference in
this Report on Form 10-K, this exhibit is furnished for the
information of the Commission and is not deemed to be filed as
part hereof).
21.1 * Subsidiaries of the registrant.
23.1 * Consent of Independent Auditors.
Exhibit No. Description
- ----------- -----------
27.1 * Financial Data Schedule (electronic filing only).
- ---------
* Filed herewith
+ This is a management contract or compensatory plan or arrangement.