<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to __________________
Commission file Number 1-4001
UNION CAMP CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
VIRGINIA 13-5652423
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1600 VALLEY ROAD, WAYNE, NEW JERSEY 07470
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
(201) 628-2000
(Registrant's Telephone Number, Including Area Code)
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, and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
____ _____
68,589,126 shares of Registrant's Common Stock, Par Value $1 Per Share, were
outstanding as of the close of business on June 30, 1996.
<PAGE>
<PAGE>
UNION CAMP CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I. FINANCIAL INFORMATION*
Item 1. Financial Statements. 2
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations. 7
Part II. OTHER INFORMATION
Item 1. Legal Proceedings. 9
Item 6. Exhibits and Reports on Form 8-K. 10
</TABLE>
---------------
*A summary of the Registrant's significant accounting policies is contained in
the Registrant's Form 10-K for the year ended December 31, 1995 which has
previously been filed with the Commission.
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item I. Financial Statements.
UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
($ in thousands, except per share)
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- -------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net Sales $ 934,048 $1,109,295 $1,912,303 $2,130,441
Costs and other charges:
Cost of products sold 709,583 693,129 1,388,290 1,355,958
Selling and administrative expenses 99,478 98,634 202,977 189,268
Depreciation and cost of timber harvested 69,464 68,487 137,914 134,851
--------- --------- ----------- ----------
Income from operations 55,523 249,045 183,122 450,364
--------- --------- ----------- ----------
Gross interest expense 28,841 31,905 57,073 64,840
Less capitalized interest (942) (2,153) (1,802) (7,231)
Other (income) expense - net (7,133) 2,514 (3,655) 3,529
--------- --------- ----------- ----------
Income before income taxes
and minority interest 34,757 216,779 131,506 389,226
--------- --------- ----------- ----------
Income taxes:
Current 9,757 53,004 32,206 97,405
Deferred 3,628 27,521 16,977 47,861
--------- --------- ----------- ----------
Total income taxes 13,385 80,525 49,183 145,266
--------- --------- ----------- ----------
Minority interest (net of tax) (3,233) (3,103) (5,681) (5,802)
--------- --------- ----------- ----------
Net Income $ 18,139 $ 133,151 $ 76,642 $ 238,158
========= ========= ============ ==========
Earnings per share: $0.26 $1.90 $1.11 $3.40
Dividends per share $0.45 $0.41 $0.90 $0.80
Earnings per share are computed on the
basis of the average number of common
shares outstanding:
1996 1995
Quarter Ended June 30, 68,960,257 70,074,370
Six Months Ended June 30, 69,034,603 70,055,541
</TABLE>
See also the accompanying notes to consolidated financial statements.
2
<PAGE>
<PAGE>
UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ in thousands)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 45,075 $ 30,332
Receivables-net 484,945 489,967
Inventories at lower of cost or market:
Finished goods 214,298 242,732
Raw materials 106,738 109,181
Supplies 118,326 116,804
------- -------
Total inventories 439,362 468,717
------- -------
Assets held for resale 1,302 1,289
Other 47,517 43,512
------ ------
Total current assets 1,018,201 1,033,817
Plant and equipment, at cost 6,416,967 6,304,113
Less: accumulated depreciation 3,044,331 2,918,963
--------- ---------
3,372,636 3,385,150
Timberlands, less cost of timber harvested 348,970 274,935
--------- ---------
Total property 3,721,606 3,660,085
--------- ---------
Other assets 176,387 144,441
--------- ---------
Total Assets $ 4,916,194 $ 4,838,343
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 647,040 $ 620,113
Long-term debt 1,189,957 1,151,536
Deferred income taxes 727,717 709,850
Other liabilities and minority interest 245,666 235,152
Stockholders' equity (Shares outstanding
1996: 68,589,126; 1995: 69,078,078) 2,105,814 2,121,692
--------- ---------
Total Liabilities and Stockholdes' Equity $4,916,194 $4,838,343
========== ==========
</TABLE>
See also the accompanying notes to consolidated financial statements.
-3-
<PAGE>
<PAGE>
UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------
1996 1995
<S> <C> <C>
Cash Provided By (Used For) Operations:
Net income $ 76,642 $238,158
Adjustments to reconcile net income
to cash provided by operations:
Depreciation, amortization, and cost of company
timber harvested 146,680 142,982
Deferred income taxes 16,977 47,861
Other 8,496 2,474
Changes in operational assets and liabilities:
Receivables 5,159 (95,629)
Inventories 29,230 (33,618)
Other assets (6,017) (10,376)
Accounts payable, taxes and other liabilities (16,055) (7,471)
------- ------
Cash Provided By Operations 261,112 284,381
Cash (Used For) Provided By Investment Activities:
Capital expenditures:
Plant and equipment (117,358) (98,920)
Timberlands (81,031) (10,250)
Proceeds from sale of businesses - 35,862
Payments for acquired businesses (31,850) -
Other (6,774) 4,298
-------- -------
(237,013) (69,010)
-------- -------
Cash (Used For) Provided By Financing Activities:
Change in short-term notes payable 106,277 (122,447)
Repayments of long-term debt (21,048) (15,630)
Repurchase of common stock (32,065) -
Dividends paid (62,085) (56,049)
------- --------
(8,921) (194,126)
------- --------
Effect of exchange rate changes on cash (435) 291
---- ---
Increase (decrease) in cash and cash equivalents 14,743 21,536
Balance at beginning of year 30,332 13,256
------ ------
Balance at end of period $ 45,075 $ 34,792
======== ========
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $56,043 $57,616
Income taxes $38,886 $93,555
</TABLE>
See also the accompanying notes to consolidated financial statements.
-4-
<PAGE>
<PAGE>
UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The information furnished in this report is unaudited but includes all
adjustments which, in the opinion of management, are necessary for a
fair presentation of results for the interim periods reported. The
adjustments made were of a normal recurring nature, except as described
in Notes 2, 3 and 6.
Note 2. Included in "Income from Operations" for the current quarter is a $2.9
million pre-tax charge for estimated severance costs related to the
company's decision to outsource timber harvesting operations in the
third quarter of 1996. Included in last year's results for the second
quarter was a $6.4 million gain from the sale of a flexible packaging
operation.
Note 3. Included in "Other Income/Expense" for the second quarter of 1996 is a
$4.2 million pre-tax gain from the sale of land by the company's Bush
Boake Allen flavor and fragrance business.
Note 4. "Other Assets" increased by more than $31 million from year-end 1995,
primarily due to a $22.5 million investment to acquire a 50% interest in
a corrugated container plant in Turkey.
Note 5. Included in "Current Liabilities" are $154 million and $90 million of
commercial paper borrowings at June 30, 1996 and year-end 1995,
respectively. (See Note 6 below.)
Note 6. Effective July 2, 1996, the company filed an amended Annual Report on
Form 10-K/A for the year ended December 31, 1995, and an amended
Quarterly Report on Form 10-Q/A for the quarter ended March 31, 1996.
The amendments reflected the reclassification of $46 million of
commercial paper borrowings which had originally been included in
"Long-Term Debt" in the December 31, 1995 and March 31, 1996
Consolidated Balance Sheets. These restatements increased current
liabilities by $46 million with corresponding decreases in long-term
debt. Since the filing of the amended Forms 10-K/A and 10-Q/A, the
company has extended a revolving credit agreement which permits
inclusion of the above commercial paper borrowings within "Long-Term
Debt". Accordingly, the company has included $46 million of commercial
paper borrowings in "Long-Term Debt" for the June 30, 1996 Consolidated
Balance Sheet.
5
<PAGE>
<PAGE>
Note 7. Included in "Other Liabilities and Minority Interest" at June 30, 1996
and year-end 1995 are $74.7 million and $69.3 million, respectively,
representing the minority interest in Union Camp's 68% owned subsidiary,
Bush Boake Allen.
Note 8. Certain amounts have been reclassified for 1995 to conform with the 1996
presentation.
6
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net income for the second quarter of 1996 was $18.1 million or $.26 per share,
compared to $133.2 million or $1.90 per share for the second quarter of last
year. The significant decline in earnings occurred as a result of the continued
unfavorable pricing climate in both the domestic and export paper products
markets. Operating income for the quarter was $55.5 million, a 78% decrease from
the $249.0 million reported for last year's second quarter. Last year's second
quarter results included a $.06 per share gain from the sale of a flexible
packaging operation.
Net income for the first half of 1996 was $76.6 million or $1.11 per share,
compared to $238.2 million or $3.40 per share for the same period last year.
Operating income for the first half of 1996 was $183.1 million, a 59% decrease
from the $450.4 million reported for the first half of 1995.
Net sales for the second quarter were $934 million, 16% below the previous
year's comparable quarter. Total paper product shipments for the quarter were
approximately 879,000 tons, a 6% decline from last year's second quarter. Lower
selling prices for the company's paper and packaging products also contributed
to the decrease in revenue.
Operating income for the paper and paperboard segment was $13.9 million, a 94%
decrease from the $216.6 million reported for the second quarter of last year.
The decline in earnings was primarily attributable to lower average selling
prices for both domestic and export linerboard and uncoated business papers and
a 29% decrease in linerboard shipments from the level achieved in 1995's second
quarter. Average selling prices for the company's linerboard and uncoated
business papers decreased 40% and 28%, respectively, compared to last year's
second quarter, reflecting the impact of a continued sluggish economy. As a
result of the slowness in the market, the company took approximately 75,000 tons
of market-related linerboard downtime during the second quarter, and anticipates
taking 65,000 tons of additional linerboard downtime during the third quarter.
Included in operating income for the quarter is a $2.9 million pre-tax charge
for estimated severance costs related to the company's decision to outsource
timber harvesting operations in the third quarter of 1996.
Packaging segment operating income was $15.8 million for the second quarter of
1996, compared to $18.3 million for last year's comparable quarter. Included
in last year's results was income of $3.3 million from non-recurring items,
primarily the result of a gain from the sale of a flexible packaging operation.
Earnings for the flexible packaging operations in the second quarter of
1996 improved substantially over the same quarter of last year, primarily
attributable to an improvement in average selling prices and a reduction
in overall costs. Although average selling prices decreased for the domestic
corrugated container operations, operating income remained level with last
year's second quarter due to significant cost reductions. Overseas container
operations reported a $2.8 million decline in operating income primarily
resulting from lower average selling prices, which was partially offset by an
increase in shipments.
The company's non-paper businesses reported an 18% decrease in operating income,
compared to last year's second quarter. The chemical operations reported
operating income of $17.8 million, 22% below the second quarter of last year.
Although total shipments increased for the chemical operations, lower average
selling prices more than offset the increase, resulting in the decline in
operating income. Operating income weakened slightly within the company's Bush
Boake Allen flavors and fragrances business, also contributing to the decline in
earnings in the chemical operations. Operating income for the wood products
segment was $10.3 million for the quarter, compared to $11.3 million for last
year's second quarter, due to a combination of decreased volume and lower
average selling prices for the quarter. However, the downward trend of the last
several quarters has begun to turnaround, as wood products operating income
almost doubled over the first quarter of 1996.
7
<PAGE>
<PAGE>
Depreciation expense for the second quarter was level with last year's
comparable period and increased 1% for the first half of 1996 compared to last
year's first half. The increase is primarily due to the start up of a recovery
boiler at the Savannah mill at the end of the first quarter of last year.
Cash flow from operations for the first half of 1996 was $261.1 million,
compared to $284.4 million for last year's comparable period. The decrease was
primarily due to the lower earnings and decreased deferred taxes, partially
offset by decreased working capital during the first half of this year. Capital
expenditures for the first half of this year totaled $198.4 million, compared to
$109.2 million last year. This increase is primarily attributable to a large
timberland acquisition in early 1996. Total debt increased $85 million during
the first half of 1996, primarily attributable to increased commercial paper
borrowings. The ratio of long-term debt to total capital was 29.6% at June 30,
1996, compared to 28.9% at year-end 1995.
Net working capital was $371.2 million at June 30, 1996, compared to $413.7
million at year-end 1995. The decrease in working capital was primarily
attributable to an increase in short-term commercial paper borrowings combined
with a decrease in inventory.
During the second quarter of 1996, the company repurchased 603,200 shares of its
common stock for a total cost of $32.1 million, under its stock repurchase
program.
In April 1996, the company entered into a definitive agreement to acquire the
outstanding shares of The Alling & Cory Company (Alling & Cory) a paper
distribution business, for a combination of company common stock and cash
totaling approximately $88 million. Alling & Cory had net sales of $764 million
in 1995. The acquisition was approved by Alling & Cory stockholders and closed
on August 2, 1996.
In June 1996, the company decided to exit the Kansas City container market. This
decision will not have a significant impact on the company's operations.
Subsequent to the close of the second quarter, the company signed a letter of
intent to sell the Kansas City container plant as an ongoing business.
8
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
In its Annual Report on Form 10-K for the year ended December 31, 1995,
the Company reported that the United States Environmental Protection
Administration ("EPA") had notified the Company it was contemplating commencing
a civil action against Union Camp and several other potentially responsible
parties under the Comprehensive Environmental Response and Compensation
Liability Act ("CERCLA") for recovery of past and future remediation costs
incurred by the EPA at the Bayou Bonfouca Superfund Site in Slidell, Louisiana
which operated as a wood treatment facility from 1882 to 1972. The EPA has spent
approximately $100 million for remediation at the site and has stated there will
be future response costs. In 1956 a subsidiary of Union Camp acquired the assets
of American Creosoting Company which included the stock of a subsidiary which
owned and operated the Slidell facility since 1933. The Slidell facility was
sold in 1958 and the subsidiary was sold in 1964.
Representatives of the Company met with the EPA to discuss their respective
views of this matter and possible settlement. Thereafter, in May 1996, the EPA
filed suit against the Company in the U.S. District Court for the District of
Louisiana seeking recovery for past and future response costs. The State of
Louisiana filed a similar claim against the Company seeking to recover the share
of the response costs for which it is responsible under CERCLA. The EPA alleges
that Union Camp has owner and/or operator status under CERCLA by virtue of its
ownership of the subsidiary which owned the Slidell facility. Union Camp denies
it ever owned and/or operated the Slidell facility. While it is not possible to
estimate the likely outcome of these proceedings, Union Camp believes it has
meritorious defenses based upon longstanding principles of corporate and
shareholders' liability.
9
<PAGE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
<TABLE>
<S> <C> <C>
a) Exhibits.
No. Description
3.2 Bylaws of Union Camp Corporation,
as amended June 25, 1996.
10 Union Camp Corporation Supplemental
Retirement Income Plan for Executive
Officers as amended and restated
June 24, 1996.
11 Statement re computation of per share earnings.
27 Financial data schedule.
b) Reports on Form 8-K.
No Current Report on Form 8-K was filed by the Registrant during
the second quarter of 1996.
</TABLE>
10
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION CAMP CORPORATION
(Registrant)
Date: August 6, 1996 /S/ Dirk R. Soutendijk
----------------------
DIRK R. SOUTENDIJK
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
Date: August 6, 1996 /S/ Robert E. Moore
-------------------
ROBERT E. MOORE
VICE PRESIDENT AND COMPTROLLER
(Chief Accounting Officer)
11
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NO. DESCRIPTION PAGE
<S> <C> <C>
3.2 Bylaws of Union Camp Corporation, 14
as amended June 25, 1996
10 Union Camp Corporation Supplemental 35
Retirement Income Plan for Executive
Officers as amended and restated
June 24, 1996
11 Statement re computation of per 49
share earnings
27 Financial data schedule 50
</TABLE>
<PAGE>
<PAGE>
Exhibit 3.2
________________________________________________________________________________
BY-LAWS
UNION CAMP CORPORATION
(AS AMENDED JUNE 25, 1996)
________________________________________________________________________________
BY-LAWS
OF
UNION CAMP CORPORATION
(AS AMENDED JUNE 25, 1996)
----------------------------
ARTICLE I
Stock
SECTION 1. Form and Execution of Certificates. The certificates of shares
of stock of the Corporation shall be in such form not inconsistent with the
Articles of Incorporation as shall be approved by the Board of Directors.
Certificates of stock shall be signed by the Chairman of the Board, the
President or by a Vice President and the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, except that where any such certificates
shall be countersigned by a transfer agent or by a registrar, other than the
Corporation, the signatures of any of the officers above specified may be
facsimiles, engraved or printed. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date of its
issue.
SECTION 2. Regulations. The Board of Directors may make such rules and
regulations as it may deem expedient concerning the issue, transfer and
registration of certificates of stock and concerning certificates of stock
issued, transferred or registered in lieu or replacement of any lost, stolen,
destroyed or mutilated certificates of stock.
1
<PAGE>
<PAGE>
SECTION 3. Transfer Agent and Registrar. The Board of Directors may appoint
a transfer agent or transfer agents and a registrar or registrars of transfer
for any or all classes of the capital stock of the Corporation, and may require
stock certificates of any or all classes to bear the signature of either or
both.
SECTION 4. Closing of Transfer Books, Fixing of Record Date. The Board of
Directors may fix in advance a date, not exceeding 70 days preceding the date of
any meeting of stockholders, or the date for the payment of any dividend, or the
date for the determination of stockholders for any other proper purpose, as a
record date for the determination of the stockholders exclusively entitled to
notice of and to vote at any such meeting, or any adjournment thereof, or
entitled to receive payment of any such dividend, or for any other proper
purpose.
SECTION 5. Restrictions on Transfer. The Board of Directors may impose
restrictions on transfer of securities of the Corporation pursuant to the Rights
Agreement, dated as of January 25, 1996, by and between the Corporation and The
Bank of New York, as and to the extent required by such Rights Agreement, as
amended from time to time.
SECTION 6. Control Share Acquisitions. Article 14.1 of the Virginia Stock
Corporation Act shall not apply to acquisitions of the Corporation.
2
<PAGE>
<PAGE>
ARTICLE II
Stockholders
SECTION 1. Annual Meeting. The annual meeting of the stockholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at such time, and at such place,
either within or without the State of Virginia, as may be designated in the
notice thereof, on the last Tuesday in April of each year if not a legal
holiday, but if a legal holiday, then on the next succeeding business day or on
such other date as the Board of Directors may determine at any time in advance
of such date.
At the annual meeting of stockholders, only such business shall be
conducted as shall have been properly brought before the meeting (a) by or at
the direction of the Board of Directors or (b) by any stockholder of the
Corporation who shall be entitled to vote at such meeting and who complies with
the procedures set forth in this Section 1.
In addition to any other applicable requirements, for business, including
the nomination of one or more persons for election as Directors, to be properly
brought before the annual meeting by a stockholder, such stockholder must have
given timely advance written notice thereof to the Secretary of the Corporation.
The Secretary shall deliver timely received notices to the Board of Directors or
a committee designated by the Board for review. To be timely, a stockholder's
notice must be received by the Secretary at the principal executive offices of
the Corporation not less than sixty days in advance of the first anniversary
date of the annual
3
<PAGE>
<PAGE>
meeting of shareholders for the preceding year; provided,
however, if and only if the annual meeting is not scheduled to be held within a
period which commences 30 days before such anniversary date and ends 30 days
after such anniversary date, such notice shall be given not later than 60 days
in advance of the meeting date unless the date of such meeting is not publicly
disclosed by the Corporation (by press release or by a document filed by the
Corporation with the Securities and Exchange Commission) at least 85 days prior
thereto, in which case such notice shall be given not later than the close of
business on the date that is 25 days following the first public disclosure by
the Corporation of the date of the annual meeting. In calculating days, the day
of such annual meeting shall not be included so that stockholders shall begin
counting with the day immediately preceding the day of the annual meeting which,
for purposes of such calculation, shall be one day in advance of the annual
meeting.
A stockholder's notice to the Secretary shall set forth as to each matter
of business the stockholder proposes to bring before the annual meeting: (a) a
description of the business intended to be brought before the annual meeting,
including the text of any resolution to be presented, and the reasons for
conducting such business at the annual meeting; (b) the name and address of the
stockholder proposing such business; (c) a representation that the stockholder
is a holder of record of stock of the Corporation entitled to vote at the annual
meeting and intends to appear in person or by proxy at the meeting to bring the
business specified in the notice before the meeting; (d) the class and number of
shares of stock of the Corporation owned (i) of record and (ii) beneficially by
the stockholder; and (e) any material interest of the stockholder in the
business to be brought before the meeting.
4
<PAGE>
<PAGE>
A stockholder's notice of intent to make a nomination of one or more
persons for election as Directors at the annual meeting of stockholders shall,
in addition to the information required above, set forth as to each such person:
(a) the name, age and business and residence addresses of the person; (b) the
principal occupation or employment of the person; (c) the class and number of
shares of stock of the Corporation owned (i) of record and (ii) beneficially by
the person; (d) a description of all arrangements or understandings between the
stockholder and the person and any other person or persons (naming such other
person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder; (e) such other information regarding the person as
would be required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission, had the person been
nominated by the Board of Directors; and (f) the written consent of the person
to serve as a Director of the Corporation if so elected. The Corporation may
require any stockholder proposing to nominate one or more persons for election
as Directors to furnish such other information as may reasonably be required by
the Corporation to determine the eligibility of each such person to serve as a
Director of the Corporation.
In the event a stockholder attempts to bring business before the annual
meeting without complying with the provisions of this Section 1, the presiding
officer of the meeting shall determine and declare to the meeting that the
business was not properly brought before the meeting, and such business shall
not be transacted.
SECTION 2. Special Meeting. Special meetings of the stockholders for any
purpose or purposes may be held at any time and at any place, within or without
the State of Virginia,
5
<PAGE>
<PAGE>
designated in the call thereof, whenever called by the
Board of Directors, the Chairman of the Board, the President, or as otherwise
provided by law.
SECTION 3. Notice. Written notice of every annual or special meeting of the
stockholders, stating the place, day and hour and purpose or purposes thereof,
shall be given to each stockholder of record entitled to vote thereat, either
personally or by mailing the notice to him at his address as it appears on the
stock transfer books of the Corporation. Where such notice of a stockholders'
meeting includes as a purpose thereof action with respect to an amendment of the
Articles of Incorporation or a reduction of stated capital or a plan of merger
or consolidation, such notice shall be given in the manner hereinabove provided,
but at least 25 and not more than 50 days before the date of any such meeting
and any such notice shall be accompanied by a copy of the proposed amendment or
plan of reduction or merger or consolidation.
SECTION 4. Quorum. A quorum at any meeting of the stockholders shall
consist of a majority of the stock of the Corporation entitled to vote, present
in person or by proxy, unless otherwise required by law or the Articles of
Incorporation. If at the time and place of the meeting there is present less
than a quorum, a majority of the stock present in person or by proxy and
entitled to vote, shall have power to adjourn the meeting from time to time
without notice until a quorum is secured, and thereupon any business may be
transacted which might have been transacted at the meeting as originally called.
SECTION 5. Organization. All meetings of the stockholders shall be presided
over by the Chairman of the Board, or in his absence, by the President, or in
his absence, by the Chairman of the Executive Committee. In case none of such
officers of the Corporation shall be
6
<PAGE>
<PAGE>
present, a chairman shall be elected by the vote of a majority of the
stock present in person or by proxy entitled to vote.
The Secretary of the Corporation or an Assistant Secretary shall act as
secretary of every such meeting when present, and in the absence of either, the
presiding officer may appoint any other officer of the Corporation to act as
Secretary.
SECTION 6. Inspectors. At any annual or special meeting of stockholders,
inspectors of election may be appointed by the presiding officer of the meeting
for the purpose of opening and closing the polls, receiving and taking charge of
proxies, and receiving and counting the ballots or the votes of stockholders
otherwise given and shall in writing certify to the returns. No candidate for
election as director shall be appointed or act as inspector.
ARTICLE III
Directors
SECTION 1. Number, Vacancy. The property, business and affairs of the
Corporation shall be managed by a Board of 11 directors. Except as otherwise
provided by law or in these By-laws or in the Articles of Incorporation, the
directors shall be elected by the stockholders at each annual meeting of
stockholders and shall serve until the next succeeding annual meeting and until
their successors shall have been elected. In the event of any vacancy in the
directors resulting from death, resignation, disqualification, an increase by
thirty percent (30%) or less in the number of directors last elected by the
stockholders, or other cause, the remaining directors, although less than a
quorum, by an affirmative vote of a majority thereof, may fill such vacancy.
SECTION 2. Regular Meeting. Regular meetings of the Board of Directors
shall be held, either within or without the State of Virginia, as shall from
time to time be determined
7
<PAGE>
<PAGE>
by the Board of Directors. After there has been such
determination and notice thereof has been given to each member of the Board of
Directors, no further notice shall be required for any such regular meeting. The
annual meeting of the Board of Directors may be held, without notice, on the
same day as and after the annual meeting of the stockholders.
SECTION 3. Special Meeting. Special meetings of the Board of Directors
shall be held, either within or without the State of Virginia, upon the order of
the Board, or the call of the Chairman of the Board, the President, or three
directors. The Secretary, or other officer performing his duties, shall give
notice to each director of the time and place of each meeting, by mailing the
same at least two days before the meeting or by telegraphing or telephoning the
same prior to the meeting.
SECTION 4. Quorum. A majority of the number of directors fixed by these
By-laws shall constitute a quorum for the transaction of business except as
otherwise provided by law or the Articles of Incorporation or these By-laws, but
a majority of those present at the time and place of any meeting, although less
than a quorum, may adjourn from time to time without notice, until a quorum is
secured.
SECTION 5. Compensation. The Board of Directors shall have the authority to
fix the compensation of the directors and of members of the Executive Committee
and of other committees of the Board.
SECTION 6. Indemnification of Officers, Directors and Employees.
(a) Each director and officer of the Corporation shall be indemnified by
the Corporation against all costs and expenses reasonably incurred by or imposed
upon him in connection with or resulting from any action, suit or proceeding to
which he may be made a party
8
<PAGE>
<PAGE>
by reason of his being or having been a director or
officer of the Corporation (whether or not he continues to be a director or
officer at the time of incurring such cost or expense), except in relation to
matters as to which a recovery shall be had against him by reason of his having
been finally adjudged in such action, suit or proceeding to have been derelict
in the performance of his duty as such director or officer. The foregoing
qualification shall not, however, prevent a settlement by the Corporation prior
to final adjudication when such settlement appears to be in the interest of the
Corporation. The right of indemnification herein provided shall not be exclusive
of other rights to which any director or officer may be entitled as a matter of
law. (Adopted by the stockholders of the Corporation March 3, 1942.)
(b) As used in the following subsections of this Section 6:
"Applicant" means the person seeking indemnification
pursuant to this Section.
"Expenses" includes counsel fees.
"Liability" means the obligation to pay a judgment,
settlement, penalty, fine, including any excise tax assessed with respect to an
employee benefit plan, or reasonable expenses incurred with respect to a
proceeding.
"Official capacity" means, (i) when used with respect to
a director, the office of director in the Corporation; or (ii) when used with
respect to an individual other than a director, the office in the Corporation
held by the officer or the employment or agency relationship undertaken by the
employee or agent on behalf of the Corporation.
9
<PAGE>
<PAGE>
"Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
employee benefit plan, or other enterprise.
"Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a proceeding.
"Proceeding" means any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative or investigative and
whether formal or informal.
(c) The Corporation shall indemnify any person who was
or is a party to any proceeding by reason of the fact that he is or was a
director, officer or employee of the Corporation, or is or was serving at the
request of the Corporation as a director, trustee, partner, officer or employee
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against any liability incurred by him in connection with
such proceeding if (i) he believed, in the case of conduct in his official
capacity, that his conduct was in the best interests of the Corporation, and in
all other cases that his conduct was at least not opposed to its best interests,
and, in the case of any criminal proceeding, had no reasonable cause to believe
his conduct was unlawful, (ii) in connection with a proceeding by or in the
right of the Corporation, he was not adjudged liable to the Corporation, and
(iii) in connection with any proceeding charging improper benefit to him,
whether or not involving action in his official capacity, he was not adjudged
liable on the basis that personal benefit was improperly received by him. A
person is considered to be serving an employee benefit plan at the corporation's
request if his duties to the corporation also impose duties on, or otherwise
involve services by, him to the plan or to
10
<PAGE>
<PAGE>
participants in or beneficiaries of the plan. A person's conduct with respect
to an employee benefit plan for a purpose he believed to be in the interests
of the participants and beneficiaries of the plan is conduct that satisfies
the requirements of this subsection.
(d) The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not of
itself create a presumption that the applicant did not meet the standard of
conduct described in subsection (c) of this Section.
(e) To the extent that the applicant has been successful on the merits or
otherwise in defense of any proceeding referred to in subsection (c) of this
Section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses actually and reasonably incurred by him in
connection therewith.
(f) Any indemnification under subsection (c) of this Section (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the applicant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in subsection (c).
The determination shall be made:
(i) By the Board of Directors by a majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
(ii) If a quorum cannot be obtained under paragraph (i) of
this subsection, by majority vote of a committee duly designated by the
Board of Directors (in which designation directors who are parties may
participate), consisting solely of two or more directors not at the time parties
to the proceeding;
11
<PAGE>
<PAGE>
(iii) By special legal counsel:
(A) Selected by the Board of Directors or its committee
in the manner prescribed in paragraph (i) or (ii) of this subsection; or
(B) If a quorum of the Board of Directors cannot be
obtained under paragraph (i) of this subsection and a committee cannot be
designated under paragraph (ii) of this subsection, selected by majority vote of
the full Board of Directors, in which selection directors who are parties may
participate; or
(iv) By the shareholders, but shares owned by or voted under
the control of directors who are at the time parties to the proceeding may not
be voted on the determination.
Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the determination
that indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under paragraph (iii)
of this subsection to select counsel.
(g) (i) The Corporation may pay for or reimburse the
reasonable expenses incurred by any applicant who is a party to a proceeding in
advance of final disposition of the proceeding if:
(A) The applicant furnishes the Corporation a written statement
of his good faith belief that he has met the standard of conduct described in
subsection (c);
(B) The applicant furnishes the Corporation a written
undertaking, executed personally or on his behalf, to repay the advance if it is
ultimately determined that he did not meet the standard of conduct; and
12
<PAGE>
<PAGE>
(C) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this Section.
(ii) The undertaking required by subparagraph (B) of paragraph (i) of
this subsection shall be an unlimited general obligation of the applicant but
need not be secured and may be accepted without reference to financial ability
to make repayment.
(iii) Determinations and authorizations of payments under this
subsection shall be made in the manner specified in subsection (f).
(h) The Board of Directors is hereby empowered, by majority vote
of a quorum of disinterested directors, to cause the Corporation to indemnify or
contract in advance to indemnify any person not specified in subsection (c) of
this Section who was or is a party to any proceeding, by reason of the fact that
he is or was an agent of the Corporation, or is or was serving at the request of
the Corporation as an agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, to the same extent as if such
person were specified as one to whom indemnification is granted in subsection
(c). The provisions of subsections (d) through (g) of this Section shall be
applicable to any indemnification provided hereafter pursuant to this subsection
(h).
(i) The Corporation may purchase and maintain insurance to
indemnify it against the whole or any portion of the liability assumed by it in
accordance with this Section and may also procure insurance, in such amounts as
the Board of Directors may determine, on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise,
13
<PAGE>
<PAGE>
against any liability asserted against or incurred by him in
any such capacity or arising from his status as such, whether or not the
Corporation would have power to indemnify him against such liability under the
provisions of this Section.
(j) The Board of Directors is hereby empowered to cause the
Corporation to contract in advance to indemnify any person specified in
subsection (c) of this Section provided that such contract does not permit
indemnification if the proposed indemnitee failed to meet the standard of
conduct set forth in subsection (c).
(k) Every reference herein to directors, officers, employees or
agents shall include former directors, officers, employees and agents and their
respective heirs, executors and administrators. The indemnification hereby
provided and provided hereafter pursuant to the power hereby conferred on the
Board of Directors shall not be exclusive of any other rights to which any
person may be entitled, including any right under policies of insurance that may
be purchased and maintained by the Corporation or others, with respect to
claims, issues or matters in relation to which the Corporation would not have
the power to indemnify such person under the provisions of this Section.
(l) For the purposes of this Section, references to the
"Corporation" include all constituent corporations absorbed in a consolidation
or merger as well as the resulting or surviving corporation so that any person
who is or was a director, officer or employee of such a constituent corporation
or is or was serving at the request of such constituent corporation as a
director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under the
provisions of this Section with respect to the
14
<PAGE>
<PAGE>
resulting or surviving corporation as he would if he had served the resulting
or surviving corporation in the same capacity.
(m) If any part of this Section 6 shall be found, in any claim,
action, suit or proceeding, to be invalid or ineffective, the validity and the
effect of the remaining parts shall not be affected.
SECTION 7. Executive Committee. The Board of Directors may, by a
resolution adopted by a majority of the number of directors fixed by these
By-laws, appoint an Executive Committee to consist of two or more directors as
determined by the Board. A majority of the members appointed shall constitute a
quorum. Such Committee shall have the power of the Board of Directors in the
management of the property, business and affairs of the Corporation, except the
power to declare dividends, or to approve an amendment of the Articles of
Incorporation or of these By-laws or to approve a plan of merger or
consolidation. Such Committee shall keep regular minutes of its proceedings and
shall report to the Board and be subject to its directions. The Board may fill
vacancies therein in the same manner as original appointments to such Committee.
Meetings of the Executive Committee shall be held, either within or without the
State of Virginia, upon the order of the Committee or the call of the Chairman
of the Executive Committee, or two or more members of the Committee. The
Secretary, or other officer performing his duties, shall give notice to each
Executive Committee member of the time and place of each Executive Committee
meeting, by mailing the same at least two days before the meeting or by
telegraphing or telephoning the same prior to the meeting.
15
<PAGE>
<PAGE>
SECTION 8. Other Committees. From time to time the Board of Directors by
a resolution adopted by a majority of the directors present at a meeting at
which a quorum is present may appoint any other committee or committees of
directors for any purpose or purposes, to the extent lawful, which shall have
such powers as shall be determined and specified by the Board of Directors in
the resolution of appointment. Meetings of any such committees shall be held
either within or without the State of Virginia, upon the order of such
committee, or the call of the Chairman, such committee, or two or more members
of such committee. The Secretary, or other officer performing his duties, shall
give notice to each member of such committee of the time and place of each
meeting of such committee, by mailing the same at least two days before the
meeting or by telegraphing or telephoning the same prior to the meeting.
SECTION 9. Action Without a Meeting. Unless otherwise restricted by law
or the Articles of Incorporation, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if a written consent, setting forth the action so to be
taken, shall be signed by all of the directors or all of the members of the
committee, as the case may be. Action taken under this Section is effective when
the last director signs the consent unless the consent specifies a different
effective date, in which event the action taken is effective as of the date
specified therein provided the consent states the date of execution by each
director.
SECTION l0. Termination of Committee Membership. In the event any person
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee.
16
<PAGE>
<PAGE>
ARTICLE IV
Officers
SECTION 1. Officers. The officers of the Corporation shall be the
Chairman of the Board, the Vice Chairman of the Board, President, Chairman of
the Executive Committee, one or more Senior Executive Vice Presidents, Executive
Vice Presidents, Senior Vice Presidents, Vice Presidents, Secretary, Treasurer,
General Counsel, Comptroller, Assistant Secretaries, Assistant Treasurers, and
Assistant Comptrollers, and such other officers and agents as may be required by
law, or as may be deemed useful. The Chairman of the Board, the Vice Chairman of
the Board, the President and the Chairman of the Executive Committee shall each
be a member of the Board of Directors. Any person may hold at the same time any
two of the offices above named, except the offices of President and Secretary.
SECTION 2. Election of Officers; Term of Office. All officers and agents
shall be elected annually by the Board of Directors at each annual meeting of
the Board. If the Board of Directors shall fail to fill any designated office at
an annual meeting or if any vacancy shall occur, or if any office shall be newly
created, such office may be filled at any meeting of the Board of Directors.
Each officer shall hold office until his successor is duly elected, or
until his earlier death, resignation or removal, provided that the terms of
office of all officers shall terminate at any annual meeting of the Board of
Directors at which the President is elected. The Board of Directors shall have
the power to remove any officer, with or without cause, at any time.
17
<PAGE>
<PAGE>
ARTICLE V
Powers and Duties of Officers
SECTION l. Chairman of the Board. The Chairman of the Board shall be the
chief executive officer of the Corporation and shall have general supervision
over the business of the Corporation. He shall preside at all meetings of the
stockholders and the Board of Directors.
SECTION 2. Chairman of the Executive Committee. The Chairman of the
Executive Committee shall be the presiding officer of the Executive Committee
and shall have such other powers and duties as may be assigned to him by the
Board of Directors.
SECTION 3. President. The President shall be the chief operating officer
of the Corporation and shall have such other powers and duties as may from time
to time be assigned to him by the Board of Directors or the Chairman of the
Board.
SECTION 4. Other officers. All officers other than those expressly
referred to in this Article V shall have such powers and duties as usually
pertain to their respective offices, in addition to the powers and duties
conferred by law or by other sections of these By-laws, and such other duties
and powers as may be assigned to them by the Board of Directors, the Chairman of
the Board or the President.
ARTICLE VI
Fiscal Year
SECTION 1. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year.
18
<PAGE>
<PAGE>
ARTICLE VII
Checks, Notes, Drafts, Contracts, Etc.
SECTION 1. Checks, Notes, Drafts, Etc. All checks, notes, drafts or
other orders for the payment of money of the Corporation shall be signed,
endorsed or accepted in the name of the Corporation by such officer or person as
may be designated from time to time either by the Board of Directors or by an
officer authorized by the Board of Directors to make such designation.
SECTION 2. Execution of Contracts, Deeds, Etc. The Board of Directors
may authorize any officer or agent in the name and on behalf of the Corporation
to enter into or execute and deliver any and all deeds, bonds, mortgages,
contracts and other obligations or instruments, and such authority may be
general or confined to specific instances.
ARTICLE VIII
Seal
SECTION 1. Form. The Corporate Seal of the
Corporation shall be the Seal impressed on the margin hereof.
19
<PAGE>
<PAGE>
ARTICLE IX
Waiver of Notice
SECTION 1. Waiver of Notice. Any stockholder, director or officer may
waive any notice required to be given in accordance with law, these By-laws or
the Articles of Incorporation by attendance in person or by a writing signed by
the person or persons entitled to said notice or by his proxy, whether before or
after the time or event referred to in said notice, which waiver shall be deemed
equivalent to such notice.
ARTICLE X
Amendment to By-laws
SECTION 1. By the Directors. Except as otherwise provided by law, the
Board of Directors shall have the power to make, amend and repeal the By-laws of
the Corporation.
SECTION 2. By the Stockholders. By-laws made by the Board of Directors
may be repealed or changed, and new By-laws made, by the stockholders and the
stockholders may prescribe that any By-laws made by them shall not be altered,
amended or repealed by the directors. Any such action shall be taken at any
annual or special meeting of stockholders, provided that the notice of such
meeting shall have included such action among the purposes of the meeting.
20
<PAGE>
<PAGE>
Exhibit 10
UNION CAMP CORPORATION
SUPPLEMENTAL RETIREMENT INCOME PLAN
FOR EXECUTIVE OFFICERS
(EFFECTIVE FEBRUARY 23, 1993
AMENDED NOVEMBER 30, 1993,
APRIL 26, 1994
AND JUNE 24, 1996)
PREAMBLE
The principal purpose of the Union Camp Corporation
Supplemental Retirement Income Plan for Executive Officers (the "Plan") is to
ensure the payment of a competitive level of retirement income to present
members of the policy committee of Union Camp Corporation (the "Company") in
order to attract, retain and motivate such members and to provide supplemental
retirement benefits to executive officers of the Company, identified by the
Personnel, Nominating and Compensation Committee of the Board of Directors of
the Company (the "Board"), who are then members of the policy committee or who
join or have joined the Company in mid-career and are responsible for a
significant segment of the Company's business and who otherwise would receive
retirement benefits from the Company which would not reflect their experience
prior to employment with the Company or would not be appropriate for the
position of responsibility which they hold with the Company.
1. DEFINITIONS.
1.1 Benefit. Benefit is the benefit provided to an
Executive pursuant to Section 2 of the Plan.
1.2 Change in Control. A "Change in Control of the
Company" shall be deemed to have occurred if
(i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any employee benefit
plan sponsored by the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or
becomes the "beneficial
-1-
<PAGE>
<PAGE>
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the
Company's then outstanding securities;
(ii) during any period of no more than two consecutive years,
individuals who at the beginning of such period constitute the
Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided, that,
any new director whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the Incumbent Directors who
remain on the Board (including those directors whose election
or nomination for election was previously so approved)shall
also be deemed to be Incumbent Directors; provided, however,
that no director who during such two year period is designated
by a person who has entered into an agreement with the Company
to effect a transaction of the type described in clause (i) or
(iii) of this Section or is initially elected or nominated as
a director of the Company as a result of an actual or
threatened election contest with respect to directors or any
other actual or threatened solicitation of proxies or consents
by or on behalf of any person other than the Board shall be
treated as an Incumbent Director for purposes of determining
whether this clause (ii) has been triggered for such two year
period.
(iii) the consummation of a merger or consolidation of the Company
or any such type of transaction involving the Company or any
of its subsidiaries that requires the approval of the
Company's stockholders (whether for the transaction or the
issuance of securities in the transaction or otherwise) (a
"Business Combination"), other than a Business Combination
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
directly or indirectly (either by remaining outstanding or by
being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the
voting securities of the Company or such surviving entity
outstanding immediately after such Business Combination; or
-2-
<PAGE>
<PAGE>
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or the sale of all or substantially
all of the Company's assets.
A Change in Control of the Company shall be deemed not to have occurred with
respect to the Executive if the Executive participates as an investor in the
acquiring entity in any such Change in Control transaction, unless such
acquiring entity is a publicly-traded corporation and the Executive's interest
in such acquiring entity immediately prior to the acquisition constitutes less
than one percent (1%) of both (1) the combined voting power of such entity's
outstanding securities and (2) the aggregate fair market value of such entity's
outstanding securities. For this purpose the Executive's interest shall include
any such interest of which the Executive is a "beneficial owner" as defined in
Rule 13d-3 under the Exchange Act.
Subject only to the provision in the immediately preceding paragraph, if the
Executive's employment is terminated prior to a Change in Control (including
pursuant to an event which would constitute Good Reason), and the Executive
reasonably demonstrates that such termination was at the request or suggestion
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control (a "Third Party"), then for all
purposes of this Plan, the date of a Change in Control with respect to such
Executive shall mean the date immediately prior to the date of such termination
of employment.
1.3 Code. The Internal Revenue Code of 1986, as amended from
time to time.
1.4 Committee. The Committee is the Personnel, Nominating and
Compensation Committee of the Board or such other committee of the Board to
which similar responsibilities are delegated in the future.
1.5 Earnings. Earnings means the salary received by an
Executive, plus the amount of his annual target bonus, but excluding income
attributable to moving, group life insurance premiums, participation (except as
provided below) in any savings plan, restricted stock performance plan, stock
options and appreciation rights. Earnings shall exclude severance payments made
pursuant to the Company's Severance Policy for Key Employees or pursuant to a
written severance agreement between the Company and the Executive. In the case
of an Executive on overseas temporary assignment,
-3-
<PAGE>
<PAGE>
Earnings shall include the Executive's salary and annual target bonus but shall
not include any special, extra or supplemental payments of compensation pursuant
to the Company's Compensation and Relocation Guidelines for Overseas
Assignments, other than the overseas premium payable pursuant to such
Guidelines, unless the Retirement Board in its discretion provides otherwise
pursuant to a nondiscriminatory rule of uniform application. Earnings shall
include amounts which are contributed on behalf of an Executive to any plan by
the Company pursuant to a salary reduction agreement and which are not
includible in the gross income of the Executive under Sections 125, 402(e)(3) or
402(h)(1)(B) of the Code and any amounts deferred and not includible in the
gross income of the Executive pursuant to any nonqualified plan intended to
supplement the Company's 401(k) savings plan. Notwithstanding the above, the
amount of the Executive's actual annual bonus shall be substituted for his
annual target bonus for any period prior to 1994 if doing so would result in the
Executive's Earnings being higher.
1.6 Executive. The term Executive means the following
members of the Company's policy committee: Messrs. Ballengee, Boekenheide,
Cartledge, McClelland, Munford, Reed, Soutendijk and Trice; and such officers as
the Committee may from time to time designate as covered by the Plan if each
such officer is (i) a member of the Company's policy committee and/or (ii) an
executive officer of the Company who is responsible for a significant segment of
the Company's business and who when first employed by the Company already had
prior business or professional experience which was valuable to the Company and
relevant to the position for which he was employed. This term shall also include
the Executive's spouse in the event Benefit payments, as described hereinafter,
to such spouse have commenced under the Plan.
1.7 Final Average Earnings. Final Average Earnings
means the average annual Earnings of an Executive during the 60 consecutive
calendar months of highest aggregate Earnings during either the Executive's
final 120 calendar months of Service or, if the Executive has vested in a
Benefit hereunder and been employed for less than 120 calendar months, such
lesser number of calendar months of Service immediately prior to his termination
of employment.
1.8 Good Reason. "Good Reason" shall mean without the
Executive's express written consent, the occurrence after a Change in Control of
the Company of any of the following circumstances:
-4-
<PAGE>
<PAGE>
(a) the assignment to the Executive of any duties inconsistent
with the position in the Company that he held immediately
prior to a Change in Control of the Company (other than in the
nature of a promotion), or a significant adverse alteration in
the nature or status of the Executive's responsibilities or
the conditions of his employment from those in effect
immediately prior to such Change in Control;
(b) a reduction by the Company in the Executive's annual base
salary as in effect on the date of a Change in Control except
for across-the-board salary reductions similarly affecting all
management personnel of the Company and all management
personnel of any person in control of the Company;
(c) the relocation of the Company's offices at which the Executive
is principally employed immediately prior to the date of a
Change in Control of the Company to a location more than 25
miles from such location, or the Company's requiring the
Executive to be based anywhere other than the Company's
offices at such location except for required travel on the
Company's business to an extent substantially similar to his
business travel obligations immediately prior to a Change in
Control;
(d) the failure by the Company to pay the Executive any portion of
his current compensation or to pay to him any portion of an
installment of deferred compensation under any deferred
compensation program of the Company within seven (7) days of
the date such compensation is due;
(e) the failure by the Company to continue to provide
substantially the same compensation plans in which the
Executive participates immediately prior to a Change in
Control of the Company, including without limitation, a
savings and investment plan, a stock option and stock award
plan, a restricted stock performance plan, and an annual
incentive compensation plan, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has
been made with respect to each such plan, or the failure by
the Company to continue the Executive's participation therein
(or in any such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of
benefits provided and the level of his
-5-
<PAGE>
<PAGE>
participation relative to other participants, than that which
existed at the time of a Change in Control of the Company; or
(f) the failure by the Company to continue to provide the
Executive with benefits and coverage substantially similar to
those provided to him under any of the Company's pension, life
insurance, medical, accident, or disability plans in which he
was participating at the time of a Change in Control of the
Company, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits,
or the failure by the Company to provide the Executive with
the number of paid vacation days to which he is entitled on
the basis of years of service with the Company in accordance
with the Company's vacation policy for salaried employees in
effect at the time of a Change in Control of the Company.
1.9 Primary Insurance Amount. The Primary Insurance
Amount shall be the Executive's primary insurance amount for Social Security
purposes, determined on the basis of the Executive's actual compensation with
respect to years of employment with the Company. With respect to years of
employment, if any, prior to employment with the Company, the Committee shall
estimate the Executive's income that is treated as wages for purposes of the
Social Security Act. If the Executive's employment with the Company is
terminated prior to age 65, for years following termination of employment, it
shall be assumed for purposes of calculating the Primary Insurance Amount that
the Executive earns compensation so as to accrue the maximum Social Security
benefits.
1.10 Retirement Board. The Retirement Board provided
for in the Retirement Plan.
1.11 Retirement Plan. Retirement Plan means the
Retirement Plan for Salaried Employees of Union Camp Corporation.
1.12 Retirement Plan Commencement Date. Retirement
Plan Commencement Date means the date upon which the Executive commences to
receive benefits under the Retirement Plan.
1.13 Service. Service is an Executive's "Service" as
defined in the Retirement Plan.
-6-
<PAGE>
<PAGE>
2. SUPPLEMENTAL RETIREMENT BENEFIT.
2.1 Benefit. All supplemental retirement benefits
under the Plan shall be determined according to this Section 2. The base annual
Benefit payable to the Executive shall be equal to forty (40) percent of his
Final Average Earnings following ten years of Service, plus one and one-half (1
1/2) percent of such earnings for each year of additional Service up to a
maximum of fifty-five (55) percent of his Final Average Earnings following
twenty years of Service. This amount shall be reduced by the sum of (i) the
amount of any benefits paid or payable to the Executive from any defined benefit
pension plans maintained by the Company, including the Retirement Plan and the
related Supplemental Retirement Plan of Union Camp Corporation (the "Company's
Plans"), and any benefits paid or payable from any retirement plans of any other
employer (whether tax-qualified or nonqualified) intended to provide retirement
benefits similar to the benefits provided under the Company's Plans, determined,
in all cases, by adjusting such benefits, using the tables and actuarial
assumptions under the Retirement Plan, to the same form as the Executive's
benefits are paid or payable from the Retirement Plan and assuming the
Executive's retirement age is the age that the Executive retires under the
Retirement Plan, and (ii) one-half (1/2) of his annual Primary Insurance Amount
payable at age 65. The benefit remaining after this reduction shall constitute
the Executive's net annual Benefit.
2.2(a) Form and Timing of Payment. Subject to Sections
2.3, 3 and 4, the net annual Benefit shall be payable to the Executive in
either: (i) such form as benefits are available to the Executive under the
Retirement Plan or (ii) in a single lump-sum payment as provided under Section
2.2(b). Except as provided under Section 4.1 below, such Benefit shall commence
(or, be paid out, in the case of a lump sum payment) upon the Retirement Plan
Commencement Date. However, to the extent a lump-sum payment is not deductible
in full in accordance with Section 162(m) of the Code, it shall be paid, to the
extent of deductibility, in the next one or more taxable years until paid in
full. Notwithstanding the foregoing, following a Change in Control of the
Company, the immediately preceding sentence shall not be applicable.
(b)Lump Sum Payment Election. Subject to the approval,
in its sole discretion, of the Retirement Board, an Executive may irrevocably
elect in writing to receive the net annual Benefit provided by
-7-
<PAGE>
<PAGE>
the Plan in the form of a single lump-sum payment. An Executive may elect a
lump-sum payment at any time up to, but no later than one year in advance of the
earlier of his Retirement Plan Commencement Date or normal retirement date under
the Retirement Plan, provided, however, that an Executive who is age 64 or older
as of April 26, 1994 may not make such an election later than June 25, 1994. The
amount of the lump-sum payment shall be determined by calculating the
Executive's net annual Benefit as a single life annuity and converting such
annuity to a present value. The rate that shall be used to calculate such
present value shall be determined on the first business day of each calendar
quarter in accordance with the following formula and shall apply to each
lump-sum payment made in such calendar quarter:
The rate shall be the net after-tax rate derived by multiplying one (1)
minus the current U.S. income tax rate expected to be applicable to the
Company for financial reporting purposes by the sum of (a) and (b),
where:
(a) is the average of (i) the interest rate on
10 year U.S. Treasuries and (ii) the interest rate on 30 year
U.S. Treasuries, and,
(b) is the average of the spread on 10 and 30
year taxable debt of industrial companies with similar credit
rating to that of the Company over the 10 and 30 year U.S.
Treasuries, respectively.
If payment of any part of the lump-sum amount must be deferred due to its
non-deductibility pursuant to Section 162(m) of the Code, the amount of the
lump-sum payment to be deferred shall be converted back into a single life
annuity form of payment using the interest rate assumption used to calculate the
amount of the lump-sum payment. As soon as the payment of all or any part of the
deferred lump-sum payment can be deducted by the Company, such single life
annuity shall be converted to a present value, using the rate set forth above as
in effect for the calendar quarter in which the payment occurs and using the
Executive's age as of the Retirement Plan Commencement Date.
Notwithstanding anything to the contrary in this Section 2.2(b), if, during the
two (2) year period following a Change in Control of the Company, (i) an
Executive's employment is terminated by the Company or the Executive terminates
his employment for Good Reason and (ii) the Executive's Retirement Plan
Commencement Date occurs, the Executive shall not be
-8-
<PAGE>
<PAGE>
eligible to elect the form of payment of the Benefit, but, rather shall receive
such Benefit in the form of a single lump-sum payment.
(c) Death Benefits. If, at the Executive's death prior
to his Retirement Plan Commencement Date he is entitled to a payment hereunder
and is currently married, subject to Section 4.3, his surviving spouse shall be
entitled to payments determined in accordance with Article VIII of the
Retirement Plan based upon the Executive's net annual Benefit, commencing upon
the day following the last day of the month in which the Executive dies and, if
a lump-sum payment election shall have been made by the Executive under Section
2.2(b), such election shall be void and of no effect.
2.3 Eligibility for Benefit. No Benefit shall be
payable unless the Executive shall have completed at least 10 years of Service
on his date of termination of employment; provided, however, that a Benefit
shall become vested to an Executive who, as of the date of a Change in Control
of the Company, either (i) has at least ten (10) years of Service or (ii) has
attained age 55 and has completed at least five (5) years of Service or (iii)
has attained at least the age and completed at least the Service as follows:
Age Upon Service
Change in Control Required
----------------- --------
51 years 9 Years
52 Years 8 Years
53 Years 7 Years
54 years 6 Years
In the event an Executive who vests pursuant to clause (ii) or (iii) in the
prior sentence has completed, on the date his employment terminates, less than
ten (10) years of Service, his base annual Benefit shall be forty (40) percent
of his Final Average Earnings.
An Executive who is vested in a Benefit hereunder upon
a Change in Control shall be credited with additional Service under this Plan in
an amount equal to the lesser of two (2) years or the number of years by which
his age upon termination of employment is less than 65 if within two (2) years
following a Change in Control his employment is terminated by the Company or he
terminates his employment for Good Reason.
-9-
<PAGE>
<PAGE>
2.4 Vesting. Subject to Sections 2.3, 3 and 4.4, the
Benefit of each Executive under the Plan shall at all times be 100% vested and
nonforfeitable.
2.5 Special Benefits. Notwithstanding anything herein
to the contrary, the minimum annual Benefit to be provided to W. Craig
McClelland shall be equal to the greater of (i) the Benefit determined under the
other provisions of the Plan, and (ii) the sum of $22,400 and any pension
payable to W. Craig McClelland under the Retirement Plan and the related
Supplemental Retirement Plan of Union Camp Corporation.
3. COMPETITION WITH COMPANY; CAUSE. Subject to Section 5 and the last paragraph
of this Section 3, but notwithstanding any other provision of the Plan to the
contrary, no Benefits or no further Benefits, as the case may be, shall be paid
to an Executive if the Committee reasonably determines that such Executive has:
(i) To the detriment of the Company or any affiliate,
directly or indirectly acquired, without the prior written consent of
the Committee, an interest in any other company, firm, association, or
organization (other than an investment interest of less than 1% in a
publicly-owned company or organization), the business of which is in
direct competition with the business (present or future) of the Company
or any of its affiliates;
(ii) To the detriment of the Company or any affiliate,
directly or indirectly competed with the Company or any affiliate as an
owner, employee, partner, director or contractor of a business, in a
field of business activity in which the Executive has been primarily
engaged on behalf of the Company or any affiliate or in which he has
considerable knowledge as a result of his employment by the Company or
any affiliate, either for his own benefit or with any person other than
the Company or any affiliate, without the prior written consent of the
Committee; or
(iii) Been discharged from employment with the Company or
any affiliate for "cause." "Cause" shall include the occurrence of any
of the following events or such other dishonest or disloyal act or
omission as the Committee reasonably determines in its sole discretion
to be "cause":
-10-
<PAGE>
<PAGE>
(a) The Executive has misappropriated any funds
or property of the Company or any affiliate;
(b) The Executive has, without the prior
knowledge or written consent of the Committee, obtained
personal profit as a result of any transaction by a third
party with the Company or any affiliate; or
(c) The Executive has sold or otherwise imparted
to any person, firm, or corporation the names of the customers
of the Company or any affiliate or any confidential records,
data, formulae, specifications and other trade secrets or
other information of value to the Company or any affiliate
derived by his association with the Company or any affiliate.
In any case described in this Section 3, the Executive
shall be given prior written notice that no Benefits or no further Benefits, as
the case may be, will be paid to such Executive. Such written notice shall
specify the particular acts(s), or failures to act, on the basis of which the
decision to terminate his Benefits has been made.
Notwithstanding the preceding provisions of this
Section 3, following a Change in Control of the Company, this Section 3 shall
not be applicable.
4. TERMINATION OF EMPLOYMENT PRIOR TO AGE 65. If the Executive terminates
employment prior to age 65 for any reason, his rights and Benefits under the
Plan will be determined in accordance with this Section 4.
4.1 Deferral. At the option of the Company,
commencement of Benefit payments under the Plan can be deferred until the
Executive attains age 65. If no such deferral is elected by the Company, the
commencement date of Benefit payments shall be the Retirement Plan Commencement
Date, provided the Executive terminates employment with the Company with the
written consent of the Committee. Notwithstanding the preceding provisions of
this Section 4.1, following a Change in Control of the Company, no deferral of
Benefit payments may be elected by the Company pursuant to this Section 4.1.
-11-
<PAGE>
<PAGE>
4.2 Benefit Adjustment. If the Executive commences to
receive Benefits hereunder prior to age 62, his Benefit shall be reduced in
accordance with the early retirement benefit provisions of the Retirement Plan.
4.3 Death or Disability. If the employment of the
Executive with the Company terminates prior to age 65 but after completion of at
least 10 years of Service with the Company, due to reasons of death or total and
permanent disability, as determined by the Company's physician, the Executive or
his surviving spouse will be eligible for Benefit payments pursuant to Section
2.
4.4 Company Consent. Except for termination of
employment under Section 4.3 above, if the Executive terminates employment with
the Company prior to age 65 without the express, written consent of the
Committee, all rights of the Executive to Benefits hereunder shall thereupon
terminate. However, in the event of a termination of employment following a
Change in Control of the Company, the immediately preceding sentence shall not
be applicable.
5. DISPUTES. If any dispute arises under the Plan between the Company and an
Executive as to the amount or timing of any Benefit payable under the Plan or as
to the persons entitled thereto, such dispute shall be resolved by binding
arbitration proceedings initiated by either party to the dispute in accordance
with the rules of the American Arbitration Association and the results of such
proceedings shall be conclusive on both parties and shall not be subject to
judicial review. If the disputed Benefits involve the Benefits of an Executive
who is no longer employed by the Company or any affiliate, the Company shall pay
or continue to pay the Benefit (except a Benefit payable in a lump-sum pursuant
to Section 2.2(b)) until the results of the arbitration proceedings are
determined unless such claim is patently without merit; provided, however, that
if the results of the arbitration proceedings are adverse to the Executive, then
in such event the recipient of the Benefits shall be obligated to repay the
excess benefits to the Company. The Company shall pay any and all legal fees and
expenses incurred by the Executive in seeking to obtain or enforce any rights
under the Plan, provided that the Executive is successful in obtaining or
enforcing such rights.
-12-
<PAGE>
<PAGE>
6. ADMINISTRATION. The Committee shall be responsible for the administration of
the Plan and may delegate to any management committee, employee, director or
agent its responsibility to perform any act hereunder, including without
limitation those matters involving the exercise of discretion, provided that
such delegation shall be subject to revocation at any time at its discretion.
The Committee shall have the authority to interpret the provisions of the Plan
and construe all of its terms, to adopt, amend, and rescind rules and
regulations for the administration of the Plan, and generally to conduct and
administer the Plan and to make all determinations in connection with the Plan
as may be necessary or advisable, other than those determinations delegated to
management employees or independent third parties by the Board. All such actions
of the Committee shall be conclusive and binding upon all Executives.
7. AMENDMENT. The Plan may not be terminated, suspended or amended except by
action of the Committee, and may not be amended to terminate or reduce or
adversely affect Benefits (including vesting and any other rights accruing upon
a Change in Control) to any Executive then participating in the Plan without the
written approval of such Executive.
8. GOVERNING LAW; BINDING EFFECT. The Plan shall be governed and construed and
enforceable in accordance with the laws of the State of New Jersey. If the
Company is consolidated or merged with or into another corporation, or if
another entity purchases all, or substantially all of the Company's assets the
surviving or acquiring corporation shall succeed to the Company's rights and
obligations under the Plan. The Plan shall inure to the benefit of, and is
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, devisees, and legatees. If the Executive dies
while married and any amounts are payable under the Plan, all such amounts shall
be paid in accordance with the terms of the Plan to the Executive's surviving
spouse.
9. NATURE OF OBLIGATIONS. The plan is unfunded, and the Company will make
Benefit payments solely on a current disbursement basis, provided, however, that
the Company reserves the right to purchase insurance contracts, which may or may
not be in the name of an Executive, or establish one or more trusts to provide
alternative sources of Benefit payments under this Plan.
10. NOTICE. Any notice or filing required or permitted to be given to the
Company shall be sufficient if in writing and hand delivered or when sent by
registered or certified mail to the principal office of the Company,
-13-
<PAGE>
<PAGE>
directed to the attention of the Secretary of the Company. Any notice to the
Executive must be in writing and is effective when delivered or when mailed by
registered or certified mail, return receipt requested, postage prepaid to the
Executive or his personal representatives at his last known address.
11. EMPLOYMENT. Nothing contained in the Plan nor any action taken hereunder
shall be construed as a contract guaranteeing the Executive continued status as
an employee.
12. VALIDITY. In the event any provision of this Plan is held invalid, void, or
unenforceable, the same shall not affect in any respect whatsoever the validity
of any other provision of this Plan.
13. ASSIGNMENT. An Executive may not assign, alienate, anticipate, or otherwise
encumber any rights, duties or amounts which he may be entitled to receive under
the Plan.
14. PROTECTIVE PROVISIONS. Each Executive shall cooperate in good faith with the
Company in furnishing any and all information reasonably requested by the
Company in order to determine and facilitate Benefit payments under the Plan.
15. GENDER, SINGULAR AND PLURAL. All pronouns in any variations thereof shall be
deemed to refer to the masculine or feminine as the identity of the person or
persons may require. As the context may require, the singular may be read as the
plural and the plural as the singular.
16. CAPTIONS. The captions to the Sections of the Plan are for convenience only
and shall not control or affect the meaning or construction of any of its
provisions.
-14-
<PAGE>
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
----------------------- -------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C> <C>
Net Income ($000) $18,139 $133,151 $76,642 $238,158
Weighted Average Common
Shares Outstanding 68,960,257 70,074,370 69,034,603 70,055,541
Earnings Per Share $0.26 $1.90 $1.11 $3.40
Weighted Average Common
Shares Outstanding
Including Common Stock
Equivalents - Primary Basis 69,462,050 70,680,077 69,472,760 70,596,801
Primary Earnings Per Share $0.26 $1.88 $1.10 $3.37
Weighted Average Common
Shares Outstanding
Including Common Stock
Equivalents - Fully
Diluted Basis 69,462,050 70,917,939 69,472,760 70,899,110
Fully Diluted Earnings Per Share $0.26 $1.88 $1.10 $3.36
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND THE CONSOLIDATED BALANCE SHEET AT JUNE 30, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 45,075
<SECURITIES> 0
<RECEIVABLES> 502,253
<ALLOWANCES> 17,308
<INVENTORY> 439,362
<CURRENT-ASSETS> 1,018,201
<PP&E> 6,765,937
<DEPRECIATION> 3,044,331
<TOTAL-ASSETS> 4,916,194
<CURRENT-LIABILITIES> 647,040
<BONDS> 1,189,957
<COMMON> 68,589
0
0
<OTHER-SE> 2,037,225
<TOTAL-LIABILITY-AND-EQUITY> 4,916,194
<SALES> 1,912,303
<TOTAL-REVENUES> 1,912,303
<CGS> 1,388,290
<TOTAL-COSTS> 1,729,181
<OTHER-EXPENSES> (3,655)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55,271
<INCOME-PRETAX> 131,506
<INCOME-TAX> 49,183
<INCOME-CONTINUING> 76,642<F1>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 76,642
<EPS-PRIMARY> 1.11
<EPS-DILUTED> 1.10
<FN>
<F1> REFLECTS ADJUSTMENT FOR MINORITY INTEREST (NET OF TAX) OF $5,681
</FN>
</TABLE>
