UNION CAMP CORP, S-4, 1996-05-14

UNION CAMP CORP
S-4, 1996-05-14
PAPER MILLS

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As filed with the Securities and Exchange Commission on May 14, 1996
Registration Statement No. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________

UNION CAMP CORPORATION
(Exact name of registrant as specified in its charter)
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<C> <C> <C>

VIRGINIA 2621 13-5652423
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification Number)
Code Number)
</TABLE>
1600 VALLEY ROAD
WAYNE, NEW JERSEY 07470
(201) 628-2000
(Address, including Zip Code, and telephone number,
including area code, of registrant's principal executive offices)

DIRK R. SOUTENDIJK, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
UNION CAMP CORPORATION
1600 VALLEY ROAD
WAYNE, NEW JERSEY 07470
<PAGE>
(201) 628-2000
(Name, address, including Zip Code, and telephone number,
including area code, of agent for service)
__________________________

Copies to:

KEVIN KEOGH, ESQ.
WHITE & CASE
1155 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 819-8200

APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
Immediately upon consummation of the Merger described herein.

__________________________

CALCULATION OF REGISTRATION FEE
<TABLE>

<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH OFFERING PRICE AGGREGATE AMOUNT OF
CLASS OF SECURITIES AMOUNT TO BE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED SHARE (1) PRICE(1) FEE

Common Stock Par Value 1,877,659 $53.06 $99,628,586.54 $34,354.69
$1.00 PER SHARE
Preferred Stock _____ _____ _____
Purchase Rights (2) 1,877,659

(1) Estimated solely for purposes of computing the registration fee pursuant to Rule 457(f) under the Securities Act of 1933,
as amended, based on the average of the high and the low of the common stock of Union Camp Corporation on May 8, 1996 as
reported on the New York Stock Exchange, Inc.
(2) The Common Stock includes Preferred Stock Purchase Rights associated with the Common Stock through a Shareholder Rights
Plan.
</TABLE>
__________________________

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
UNION CAMP CORPORATION
_______________

CROSS REFERENCE SHEET
(PURSUANT TO ITEM 501(B) OF REGULATION S-K AND RULE 404(A) OF THE SECURITIES
ACT OF 1933)
BETWEEN ITEMS OF REGISTRATION STATEMENT (FORM S-4) AND PROXY
<TABLE>
<CAPTION>
S-4 Item Proxy Statement/Prospectus Caption
<C> <C> <C>

A.
INFORMATION ABOUT THE TRANSACTION

Item 1. Forepart of Registration Statement and Out-

side Front Cover Page of Proxy Statement/
Prospectus . . . . . . . . . . . . . . . . . . Facing Page of Registration Statement; Outside Front
Cover Page of Proxy Statement/Prospectus

Item 2. Inside Front and Outside Back Cover Pages of
Proxy Statement/Prospectus . . . . . . . . . . Available Information; Incorporation of Certain
Information by Reference; Table of Contents

Item 3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information . . . . . . . . . Inside Front Cover Page of Proxy Statement/Prospectus;
Summary

Item 4. Terms of the Transaction . . . . . . . . . . . Summary; The Merger; The Merger Agreement; Description
of Union Camp Capital Stock; Certain United States
Federal Income Tax Consequences; Comparison of
Rights of Holders of Union Camp Common Stock and
Alling & Cory Common Stock

Item 5. Pro Forma Financial Information . . . . . . . . Not Applicable

Item 6. Material Contracts with the Company Being

Acquired . . . . . . . . . . . . . . . . . . . Summary; The Merger; Proposal to Approve Certain
Executive Compensation

Item 7. Additional Information Required for Reoffering

by Persons and Parties Deemed to be
Underwriters . . . . . . . . . . . . . . . . . Not Applicable

Item 8. Interests of Named Experts and Counsel . . . . Legal Matters

Item 9. Disclosure of Commission Position on Indemni-
fication for Securities Act of 1933 Liabilities
Not Applicable

B.
INFORMATION ABOUT THE REGISTRANT

Item 10. Information With Respect to S-3 Registrants . . Incorporation of Certain Information by Reference

Item 11. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . . . . . Incorporation of Certain Information by Reference

Item 12. Information With Respect to S-2 or S-3
Registrants . . . . . . . . . . . . . . . . . . Not Applicable

Item 13. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . . . . . Not Applicable

Item 14. Information With Respect to Registrants Other
Than S-2 or S-3 Registrants . . . . . . . . . . Not Applicable

C.
INFORMATION ABOUT THE COMPANY BEING ACQUIRED
<PAGE>
Item 15. Information With Respect to S-3 Companies . . . Not Applicable

Item 16. Information With Respect to S-2 or S-3 Not Applicable
Companies . . . . . . . . . . . . . . . . . . .

Item 17. Information With Respect to Companies Other

Than S-2 or S-3 Companies . . . . . . . . . . . Summary; The Merger; Description of Alling & Cory;
Alling & Cory Share Prices and Dividends;
Consolidated Financial Statements

Item 18. Information if Proxies, Consents or Authori-
zations Are to be Solicited in an Exchange
Offer . . . . . . . . . . . . . . . . . . . . . Outside Front Cover Page of Prospectus; Summary; The
Special Meeting; Appraisal Rights of Dissenting
Shareholders; The Merger; Proposal to Approve
Certain Executive Compensation; Voting Securities
and Principal Holders Thereof; Incorporation of
Certain Information by Reference

Item 19. Information if Proxies, Consents or Authori-
zations Are Not to be Solicited in an Exchange
Offer . . . . . . . . . . . . . . . . . . . . . Not Applicable
</TABLE>
<PAGE>
THE ALLING & CORY COMPANY
1059 West Ridge Road
P.O. Box 20403
Rochester, NY 14602

,
1996

TO OUR SHAREHOLDERS:

A Special Meeting of the shareholders of The Alling & Cory Company
("Alling & Cory") will be held on , 1996 at 10:00 a.m. (local time)
at .

As the enclosed materials indicate, the purpose of the meeting is to
consider and vote upon an amended and restated merger agreement whereby Alling
& Cory will become a subsidiary of Union Camp Corporation ("Union Camp").
Upon such vote and if the amended and restated merger agreement is approved,
each holder of Alling & Cory Common Stock may elect to receive, for each share
of Alling & Cory Common Stock held, either $112.064 in cash or a number of
shares of Union Camp Common Stock having a valuation of $112.064 per Alling &
Cory share, in each case subject to certain adjustments, all as more fully
explained in the Proxy Statement/Prospectus accompanying this letter.

The Board of Directors of Alling & Cory has unanimously approved the
proposed merger and recommends adoption of the amended and restated merger
agreement by holders of Alling & Cory Common Stock.

All holders of Alling & Cory Common Stock are encouraged to attend the
meeting. However, to assure your representation at the meeting, you are urged
to sign, date and return the accompanying proxy in the enclosed postage-
prepaid envelope. If you are able to attend the meeting, you may, if you
wish, vote your shares in person even if you have returned a proxy.

You should not return any certificate for shares of Alling & Cory Common
Stock held by you at this time. Instructions and documents for sending such
certificates will be sent to you after the meeting. You should, however, make
an election to receive cash or Union Camp Common Stock prior to the meeting
date.

Sincerely yours,

Samuel T. Hubbard, Jr.
President and Chief Executive Officer

PLEASE RETURN PROMPTLY BOTH THE ENCLOSED PROXY AND
THE ENCLOSED ELECTION FORM INDICATING WHETHER YOU
ELECT TO RECEIVE CASH OR UNION CAMP COMMON STOCK.
<PAGE>
THE ALLING & CORY COMPANY
1059 West Ridge Road
P.O. Box 20403
Rochester, NY 14602

,
1996

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

Notice is hereby given that a special meeting of the shareholders of The
Alling & Cory Company, a New York corporation ("Alling & Cory"), will be held
on , 1996, at 10:00 a.m. (local time) at Alling & Cory's principal
executive offices at 1059 West Ridge Road, Rochester, New York 14615 for the
following purposes:

1. To consider and act upon a proposal to approve the Amended and
Restated Agreement and Plan of Merger, dated April 13, 1996, as amended
and restated as of May 13, 1996 (the "Merger Agreement"), by and among
Alling & Cory, Union Camp Corporation, a Virginia corporation ("Union
Camp") and North Merger Corp., a New York corporation and a wholly-owned
subsidiary of Union Camp ("Merger Sub"), a copy of which is attached as
Annex A to the Proxy Statement/Prospectus accompanying this Notice,
pursuant to which (i) Merger Sub will be merged with and into Alling &
Cory with Alling & Cory surviving the merger as a wholly-owned subsidiary
of Union Camp, and (ii) each of the issued and outstanding shares of
Alling & Cory Common Stock held by each holder of such shares (other than
shares of Alling & Cory Common Stock held in the treasury of Alling &
Cory, by Merger Sub or Union Camp or by Dissenting Shareholders, if any)
will be converted into the right to receive, at the election of such
holder and subject, in each case, to certain adjustments, either (x)
$112.064 in cash or (y) a number of shares of Union Camp Common Stock
equal to the quotient obtained by dividing $112.064 by the fair market
value of the Union Camp Common Stock (the "Fair Market Value") which Fair
Market Value shall equal the average of the closing prices of the Union
Camp Common Stock as reported on the New York Stock Exchange as published
by The Wall Street Journal for the twenty trading days ending on and
including the third trading day preceding, but not including, the
effective date of the Merger (the "Average Closing Price"); provided that,
notwithstanding the foregoing, (A) if the Average Closing Price is $47.00
per share of Union Camp Common Stock or less, the Fair Market Value shall
be $47.00 and (B) if the Average Closing Price is $57.00 per share of
Union Camp Common Stock or greater, the Fair Market Value shall be $57.00.

2. To consider and act upon a proposal to approve compensation
previously paid, proposed to be paid, or deemed to be paid to Samuel T.
Hubbard, Jr., the President and Chief Executive Officer of Alling & Cory,
and Margaret Supinski, the Vice President, Human Relations of Alling &
Cory, for the purpose of establishing that such compensation is excluded
from the rules governing certain "excess parachute payments", as such term
is defined in the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.

3. To consider and act upon such other matters incident to the conduct
of the meeting as may properly come before the meeting or any adjournments
or postponements thereof.
<PAGE>
The Board of Directors has fixed the close of business on
, 1996, as the record date for the meeting. Only record holders of Alling &
Cory Common Stock on that date will be entitled to notice of, and to vote at,
the meeting and any adjournment or postponement thereof. Your attention is
directed to the accompanying Proxy Statement/Prospectus.

By Order of the Board of Directors

R. Macy Harris III
Secretary
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 14, 1996

PROXY STATEMENT/PROSPECTUS

THE ALLING & CORY COMPANY

PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS

To Be Held on , 1996

UNION CAMP CORPORATION
PROSPECTUS
For up to 1,877,659 Shares of Common Stock, $1.00 Par Value

This Proxy Statement/Prospectus is being furnished to holders of common
stock, par value $1.25 per share ("Alling & Cory Common Stock"), of The Alling
& Cory Company, a New York corporation ("Alling & Cory"), in connection with
the solicitation of proxies by the Board of Directors of Alling & Cory from
holders of outstanding shares of Alling & Cory Common Stock for use at the
Special Meeting of Alling & Cory shareholders to be held on ,
1996, at Alling & Cory's principal executive offices at 1059 West Ridge Road,
Rochester, New York 14615, commencing at 10:00 a.m. (local time) and at any
adjournment or postponement thereof (the "Special Meeting").

This document also constitutes a prospectus of Union Camp Corporation, a
Virginia corporation ("Union Camp"), under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to up to 1,877,659 shares of the
common stock of Union Camp, par value $1.00 per share (the "Union Camp Common
Stock"), that may be issued to the shareholders of Alling & Cory in connection
with the merger (the "Merger") of North Merger Corp., a New York corporation
and a subsidiary of Union Camp ("Merger Sub"), with and into Alling & Cory in
accordance with the Amended and Restated Agreement and Plan of Merger, dated
April 13, 1996, as amended and restated as of May 13, 1996, by and among
Alling & Cory, Union Camp and Merger Sub (the "Merger Agreement"). As a
result of the Merger, (i) each of the issued and outstanding shares of Alling
& Cory Common Stock held by each holder of such shares (other than shares of
Alling & Cory Common Stock held in the treasury of Alling & Cory, by Merger
Sub or Union Camp or by Dissenting Shareholders, if any) will be converted
into the right to receive, at the election (an "Election") of such holder and
subject, in each case, to certain adjustments, either (x) $112.064 in cash (a
"Cash Election") (subject to the limitation contained in the Merger Agreement)
or (y) a number of shares of Union Camp Common Stock (a "Stock Election")
equal to the quotient (the "Share Conversion Number") obtained by dividing
$112.064 by the fair market value of the Union Camp Common Stock (the "Fair
Market Value") which Fair Market Value shall equal the average of the closing
prices of the Union Camp Common Stock as reported on the New York Stock
Exchange (the "NYSE") as published by The Wall Street Journal for the twenty
trading days ending on and including the third trading day preceding, but not
including, the effective date of the Merger (the "Average Closing Price");
provided that, notwithstanding the foregoing, (A) if the Average Closing Price
is $47.00 per share of Union Camp Common Stock or less, the Fair Market Value
shall be $47.00 and (B) if the Average Closing Price is $57.00 per share of
Union Camp Common Stock or greater, the Fair Market Value shall be $57.00,
(ii) the separate corporate existence of Merger Sub will cease and (iii) all
of the shares of Merger Sub will be converted into shares of Alling & Cory
Common Stock and Alling & Cory will continue its existence as a separate
subsidiary of Union Camp.

In order to make an effective Election each holder of record of shares of
Alling & Cory Common Stock must properly complete the form of election
enclosed herewith (a "Form of Election"). Any Election will have been
properly made and will be effective only if Registrar and Transfer Company
(the "Transfer Agent") receives at its designated office by 5:00 p.m. New York
City time on , 1996 a properly completed Form of Election,
provided that any holder of shares of Alling & Cory Common Stock who does not
<PAGE>
properly and timely make an Election shall be deemed to have properly and
timely made a Stock Election with respect to all shares of Alling & Cory
Common Stock held by such holder for all purposes of the Merger Agreement. AS
A RESULT, SHAREHOLDERS OF ALLING & CORY WHO FAIL TO MAKE AN EFFECTIVE ELECTION
(EXCLUDING SHAREHOLDERS WHO ESTABLISH AND PERFECT APPRAISAL RIGHTS) WILL
RECEIVE SHARES OF UNION CAMP COMMON STOCK (PLUS CASH IN LIEU OF FRACTIONAL
SHARES, IF ANY) FOR ALL SHARES OF ALLING & CORY COMMON STOCK OWNED BY SUCH
SHAREHOLDER.

The principal executive offices of Union Camp are located at 1600 Valley
Road, Wayne, New Jersey 07470 and its telephone number is (201) 628-2000. The
principal executive offices of Alling & Cory are located at 1059 West Ridge
Road, Rochester, New York 14615 and its telephone number is (716) 581-4100.

This Proxy Statement/Prospectus and the enclosed proxy card and form of
election are first being mailed to shareholders of Alling & Cory on or about
, 1996.

THE SHARES OF UNION CAMP COMMON STOCK TO BE OFFERED IN CONNECTION WITH THE
MERGER HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS , 1996.

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Proxy Statement/Prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sales of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such State.
<PAGE>
AVAILABLE INFORMATION

Union Camp is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: New York Regional Office, Seven World Trade Center, 13th
Floor, New York, New York 10048; and Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material also can
be obtained at prescribed rates by writing to the Commission's Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549. Such
material can also be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005 and the Pacific Stock Exchange, Inc. (the "PSE"), 301
Pine Street, San Francisco, California 94104, on which Union Camp Common Stock
is listed.

Union Camp has filed with the Commission a Registration Statement on Form
S-4 (together with any amendments thereto, the "Registration Statement") under
the Securities Act, with respect to the securities to be issued pursuant to
the Merger. This Proxy Statement/Prospectus does not contain all the informa-
tion set forth in the Registration Statement, certain portions of which are
omitted in accordance with the Rules and Regulations of the Commission. Such
additional information may be obtained from the Commission's principal office
in Washington, D.C. Statements contained in this Proxy Statement/Prospectus or
in any document incorporated by reference in this Proxy Statement/Prospectus
as to the contents of any contract or other document referred to herein or
therein are not necessarily complete and in each instance reference is made to
the copy of such contract or other document filed as an exhibit to the
Registration Statement or such other document, each such statement being
qualified in all respects by such reference.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE) ARE AVAILABLE TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM THIS PROXY STATEMENT/PROSPECTUS IS DELIVERED, WITHOUT CHARGE, ON WRITTEN
OR ORAL REQUEST DIRECTED TO THE CORPORATE SECRETARY, UNION CAMP CORPORATION,
1600 VALLEY ROAD, WAYNE, NEW JERSEY 07470 (TEL. (201) 628-2000). IN ORDER TO
ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY SUCH REQUESTS SHOULD BE MADE BY
, 1996.

The following documents filed with the Commission by Union Camp (File No.
1-4001) pursuant to the Exchange Act are incorporated by reference into this
Proxy Statement/Prospectus:

1. Union Camp's Annual Report on Form 10-K for the year ended December
31, 1995; and

2. Union Camp's Proxy Statement for the Annual Meeting of Shareholders
held on April 30, 1996, filed with the Commission on March 18, 1996.

All documents and reports subsequently filed by Union Camp pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Proxy Statement/Prospectus and prior to the date of the Special Meeting shall
be deemed to be incorporated by reference in this Proxy Statement/Prospectus
and made a part hereof from the date of filing of such documents or reports.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement/Prospectus to the extent that a statement
<PAGE>
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Proxy
Statement/Prospectus. Subject to the foregoing, all information appearing in
this Proxy Statement/Prospectus is qualified in its entirety by the
information appearing in the documents incorporated herein by reference.

NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS
IN CONNECTION WITH THE SOLICITATION OF PROXIES OR THE OFFERING OF SECURITIES
MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY UNION CAMP, ALLING & CORY OR ANY
OTHER PERSON. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES, OR THE
SOLICITATION OF A PROXY, IN ANY JURISDICTIONS OR TO OR FROM ANY PERSON TO OR
FROM WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES
MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF UNION CAMP OR ALLING & CORY SINCE THE
DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
<PAGE>
TABLE OF CONTENTS

Page
<PAGE>
SUMMARY

The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus. Reference is made to, and such information
is qualified in its entirety by, the more detailed information contained, or
incorporated by reference, in this Proxy Statement/Prospectus and the Annexes
attached hereto. Shareholders are urged to read this Proxy
Statement/Prospectus and the Annexes attached hereto in their entirety.
Certain terms used elsewhere in this Proxy Statement/Prospectus are defined in
this Summary.

THE ALLING & CORY COMPANY

Alling & Cory is a New York corporation organized in 1908 as a successor
to a paper distribution business formed in 1819 by Elihu Marshall. Mr.
Marshall sold his business to William Alling in 1834 and Mr. Alling was joined
in the business by his nephew David Cory in 1859, from which time until its
incorporation in 1908, the business was operated as a general partnership
under the name of Alling & Cory.

Alling & Cory's principal businesses are the wholesale distribution and
retail sale of fine printing, writing and publishing papers, industrial
packaging equipment and supplies, janitorial products and magnetic media
supplies. Alling & Cory operates 15 warehouse/office facilities and 20 retail
shops in the states of New York, New Jersey, Pennsylvania, Maryland, West
Virginia and Ohio. A wholly-owned subsidiary, The Alcor Envelope Company,
Inc. ("Alcor Envelope"), operates a manufacturing plant in Hamburg, New York
with a capacity of over one billion envelopes per year.

Alling & Cory's principal executive offices are located at 1059 West Ridge
Road, Rochester, New York 14615 and its telephone number is (716) 581-4100.
See "Description of Alling & Cory."

UNION CAMP CORPORATION

Union Camp is a Virginia corporation resulting from a merger in 1956 of
Union Bag and Paper Corporation and Camp Manufacturing Company, Incorporated.
Predecessor businesses were started in 1861 and 1887, respectively.

Union Camp's principal businesses are the manufacture and sale of paper
and paperboard, packaging products and wood products, and the production and
sale of chemicals, including flavors and fragrances. Union Camp controls
approximately 1,543,000 acres of timberlands in Georgia, Alabama, Virginia,
Florida, North Carolina and South Carolina, approximately 1,500,000 acres of
which are owned by Union Camp.

Union Camp's principal executive offices are located at 1600 Valley Road,
Wayne, New Jersey 07470 and its telephone number is (201) 628-2000.

THE SPECIAL MEETING

Time, Date and Place. The Special Meeting of the shareholders of Alling &
Cory will be held on , 1996 at Alling & Cory's principal executive
offices at 1059 West Ridge Road, Rochester, New York 14615, commencing at
10:00 a.m. (local time) to (i) consider and vote upon the approval and
adoption of the Merger Agreement and the approval of the terms of the Merger,
(ii) consider and vote upon a proposal to approve payment of compensation
previously paid, proposed to be paid, or deemed to be paid to certain
executive officers of Alling & Cory (the "Compensation Proposal") and (iii)
transact such other business as may properly come before the Special Meeting
or any adjournment or postponement thereof.
<PAGE>
Record Date; Shares Entitled to Vote; Quorum. Only holders of record of
shares of Alling & Cory Common Stock at the close of business on
, 1996 (the "Record Date"), are entitled to notice of, and to vote at, the
Special Meeting or any adjournment or postponement thereof. On the Record
Date there were 787,496 shares of Alling & Cory Common Stock issued and
outstanding and entitled to vote at the Special Meeting. Each holder of
Alling & Cory Common Stock outstanding on the Record Date is entitled to one
vote for each share so held, exercisable in person or by properly executed and
delivered proxy, at the Special Meeting. The presence at the Special Meeting
in person or by proxy of the holders of a majority of the outstanding shares
of Alling & Cory Common Stock on the Record Date shall constitute a quorum for
the transaction of business at the Special Meeting.

Votes Required. Under the New York Business Corporation Law (the
"NYBCL"), the affirmative vote of two-thirds of the outstanding shares of
Alling & Cory Common Stock entitled to vote at the Special Meeting is
necessary to adopt the Merger Agreement. Certain shareholders of Alling &
Cory, including Samuel T. Hubbard, Jr., the President and Chief Executive
Officer of Alling & Cory, Richard M. Harris, Jr., the Chairman of the Board of
Directors of Alling & Cory and each other member of the Board of Directors of
Alling & Cory who owns Alling & Cory Common Stock, have granted Union Camp
proxies to vote an aggregate of shares of Alling & Cory Common
Stock (approximately % of the issued and outstanding Alling & Cory Common
Stock) at the Special Meeting, which proxies Union Camp is required to vote in
favor of the approval and adoption of the Merger Agreement and the approval of
the terms of the Merger. See "The Merger -- Interests of Certain Persons in
the Merger."

Directors and executive officers of Alling & Cory, and their affiliates,
beneficially owned, as of the Record Date, 201,369 shares of Alling & Cory
Common Stock, or 25.7% of the Alling & Cory Common Stock outstanding and
entitled to vote at the Special Meeting. Directors and executive officers of
Union Camp, and their affiliates, did not own any shares of Alling & Cory
Common Stock as of the Record Date. Each of James M. Reed, the Vice Chairman
of the Board of Directors and Chief Financial Officer of Union Camp, and Dirk
R. Soutendijk, Vice President, General Counsel and Secretary of Union Camp,
hold the proxies referred to above to vote shares or approximately
% of the issued and outstanding Alling & Cory Common Stock in favor of the
Merger.

The affirmative vote of in excess of 75% of the outstanding shares of
Alling & Cory Common Stock entitled to vote at the Special Meeting is
necessary to approve and adopt the Compensation Proposal. Certain share-
holders of Alling & Cory, including Mr. Hubbard, Mr. Harris and each other
member of the Board of Directors of Alling & Cory who owns Alling & Cory
Common Stock, have granted Union Camp proxies to vote an aggregate of
shares of Alling & Cory Common Stock (approximately % of the issued
and outstanding Alling & Cory Common Stock) at the Special Meeting, which
proxies Union Camp is required to vote in favor of the Compensation Proposal.
See "Proposal to Approve Certain Executive Compensation."

THE MERGER

Union Camp intends to issue a press release prior to the Special Meeting
to state the number of shares of Union Camp Common Stock into which each share
of Alling & Cory Common Stock in respect of which a Stock Election has been
made will be converted.

REASONS FOR THE MERGER; RECOMMENDATION OF THE BOARD OF DIRECTORS OF ALLING &
CORY

In reaching its determination to approve and recommend the Merger, the
Alling & Cory Board of Directors consulted with Alling & Cory management, as
well as its legal and financial advisors, and considered a number of factors,
including: (i) the oral opinion of Alling & Cory's financial advisors, Bear,
Stearns & Co. Inc. ("Bear Stearns"), given at the April 8, 1996 meeting of the
Board of Directors that, as of such date, based upon and subject to the
various conditions set forth herein, the consideration to be received by
holders of Alling & Cory Common Stock pursuant to the Merger is fair from a
financial point of view; (ii) the stated intent of Union Camp to operate
Alling & Cory as an independent subsidiary with its present employees and man-
agement; (iii) the belief that the acquisition will provide a significant
opportunity for Alling & Cory to expand its business and increase its sales
and profitability; (iv) the belief that the transaction will address certain
strategic concerns facing Alling & Cory; (v) the liquidity that the receipt of
cash or Union Camp Common Stock in the Merger will provide to the Alling &
Cory shareholders; (vi) the belief that the Union Camp and Alling & Cory
corporate cultures are compatible; and (vii) the belief that the Merger is the
best available transaction for Alling & Cory, its shareholders, employees and
retirees. See "The Merger -- Reasons for the Merger and Recommendation of the
Alling & Cory Board of Directors."

The Alling & Cory Board of Directors has determined that the terms of the
Merger Agreement, which were established through arm's-length bargaining with
Union Camp, and the transactions contemplated thereby, including the Merger,
are fair to, and in the best interests of, Alling & Cory and its shareholders.
ACCORDINGLY, THE ALLING & CORY BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT THE ALLING & CORY
SHAREHOLDERS VOTE AT THE SPECIAL MEETING FOR APPROVAL AND ADOPTION OF THE
MERGER AGREEMENT AND TO APPROVE THE TERMS OF THE MERGER.

OPINION OF FINANCIAL ADVISOR

Alling & Cory retained Bear Stearns to act as its financial advisor and to
render its opinion as to whether the consideration to be received by the
shareholders of Alling & Cory pursuant to the Merger is fair, from a financial
point of view. Bear Stearns is an internationally recognized investment
banking firm and is continually engaged in the valuation of businesses and
their securities and in rendering opinions in connection with mergers,
acquisitions, corporate transactions and other purposes. Alling & Cory
retained Bear Stearns based on its qualifications, expertise and reputation in
providing advice to companies with respect to transactions similar to the
Merger.

At a meeting held on April 8, 1996, Bear Stearns orally advised Alling &
Cory's directors of its conclusions and on May , 1996 delivered to the Board
of Directors of Alling & Cory its written opinion to the effect that, based
upon and subject to the various considerations set forth in such opinion, as
of the date of such opinion, the consideration to be received by the
shareholders of Alling & Cory pursuant to the Merger is fair, from a financial
point of view. The summary of Bear Stearns' opinion set forth in this Proxy
Statement/Prospectus is qualified in its entirety by reference to the full
text of such opinion, which is attached as Annex B to this Proxy
<PAGE>
Statement/Prospectus. Alling & Cory shareholders are urged to, and should,
read such opinion carefully in its entirety in connection with this Proxy
Statement/Prospectus for assumptions made, matters considered and limits of
the review by Bear Stearns. See "The Merger -- Opinion of Financial Advisor."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

Alling & Cory shareholders should be aware that certain executive officers
and directors of Alling & Cory and their family members have, or may have, a
substantial financial interest in the Merger by reason of their direct or
indirect ownership of Alling & Cory Common Stock. See "The Merger -- Interests
of Certain Persons in the Merger," and "Voting Securities and Principal
Holders Thereof." All directors of Alling & Cory who own Alling & Cory Common
Stock have granted Union Camp proxies to vote an aggregate of shares
of Alling & Cory Common Stock (approximately % of the issued and
outstanding Alling & Cory Common Stock) at the Special Meeting, which proxies
Union Camp is required to vote in favor of the approval and adoption of the
Merger Agreement and the approval of the terms of the Merger. See "The
Special Meeting -- Vote Required."

In addition, in considering the recommendations of the Alling & Cory Board
of Directors, Alling & Cory shareholders should be aware that certain members
of management and of the Alling & Cory Board of Directors have interests in
the Merger that are in addition to the interests of Alling & Cory shareholders
generally and which may create potential conflicts of interest.

Mr. Hubbard is party to an employment agreement dated January 31, 1989, as
subsequently amended (the "Employment Agreement"), with Alling & Cory that was
triggered upon the execution of the Merger Agreement (the "Starting Date") and
which will continue in effect for a term of three years from such date. On
May , 1996, the parties agreed to an amendment to the Employment Agreement
limiting the bonus payable to Mr. Hubbard. The Employment Agreement provides
that during such three-year period, Alling & Cory will employ Mr. Hubbard in
an executive capacity with similar duties and at the same location as he was
engaged in on the Starting Date. As compensation for his services, Mr.
Hubbard will receive: (i) an annual base salary equal to $350,000 and (ii) a
bonus in an amount not less than $40,000 per year. Subject to certain
conditions, at the Starting Date, and for each year during the term of the
agreement, Mr. Hubbard's salary and bonus are subject to a cost of living
increase based on the consumer price index. The Employment Agreement also
provides that Mr. Hubbard is entitled to the maximum amount of benefits,
including, but not limited to any incentive compensation plan or arrangement,
to which he was entitled under his employment arrangement as it existed at any
time during the one year period immediately preceding the Starting Date. Mr.
Hubbard may terminate the agreement at will on 30 days' notice to Alling &
Cory. Alling & Cory can terminate the agreement only for willful misconduct
in the performance of Mr. Hubbard's duties. See "The Merger -- Interests of
Certain Persons in the Merger."

Subsequent to the execution of the Merger Agreement, Union Camp in
principle agreed to establish a long-term incentive plan for certain key
officers of Alling & Cory (the "Alling & Cory LTIP"), in order to more closely
align the interests of such officers to the performance of Alling & Cory. The
officers of Alling & Cory who initially will be eligible to participate in the
Alling & Cory LTIP will be Mr. Hubbard; Paul C. Carney, Senior Vice President
Marketing -- Industrial Products and Packaging and Western Regional President
of Alling & Cory; John B. Henderson, Senior Vice President and Upstate
Regional President of Alling & Cory; John P. Maddock, Senior Vice President
Marketing -- Printing Papers and National Markets President; and Robert G.
Preston, Senior Vice President and Mid-Atlantic Regional President. While the
precise terms of the Alling & Cory LTIP have not been fully determined, it is
anticipated that each participant will purchase and/or be granted stock
appreciation rights, options or restricted stock, or a combination thereof,
(the "LTIP Rights") in Alling & Cory. It is anticipated that, initially,
participants in the Alling & Cory LTIP will purchase and/or be granted LTIP
<PAGE>
Rights with an aggregate value equal to an approximately 1% equity interest in
the Surviving Corporation. It is not anticipated that the aggregate value of
the LTIP Rights available for grant will exceed a 5% equity interest in the
Surviving Corporation.

Alling & Cory has in effect an employee benefit plan, the Retirement
Restoration Plan, which provides to participants retirement benefits equal to
the amount by which benefits under Alling & Cory's Retirement Plan is reduced
by reason of certain IRS limitations. Ten individuals were recently named as
participants in the Retirement Restoration Plan, including all of the officers
who are also directors of Alling & Cory. Alling & Cory has recently adopted a
Retirement Enhancement Plan which provides to participants who are terminated
without cause after a change in control of Alling & Cory, a benefit which,
when combined with benefits under Alling & Cory's other plans, equals the
retirement benefit they would have earned if they had worked until the earlier
of age 55 or the tenth anniversary of their employment termination date. Each
of the officers who is also a director has been named as a participant in this
plan. See "The Merger -- Interests of Certain Persons in the Merger."

THE MERGER AGREEMENT

Effective Time of the Merger. The Merger will become effective upon the
filing of the Certificate of Merger with the Secretary of State of the State
of New York or at such later time as may be specified in the Certificate of
Merger (the "Effective Time"). This filing will occur as soon as practicable
following approval of the Merger Agreement by holders of Alling & Cory Common
Stock and the satisfaction or waiver of all other conditions to the Merger.

No Solicitation of Other Offers. In the Merger Agreement, Alling & Cory
has agreed that it and its subsidiaries will not, directly or indirectly,
take, and will not authorize or permit its or their officers, directors,
employees, representatives, consultants, investment bankers, attorneys,
accountants or any agents or affiliates to take, any action to (i) encourage,
solicit or initiate the submission of any acquisition proposal, (ii) enter
into an agreement for the sale or other disposition by Alling & Cory or any of
its subsidiaries of a material amount of assets or a sale of shares of capital
stock or (iii) participate in any way in discussions or negotiations with, or
furnish any information to, any person (other than Union Camp or Merger Sub)
in connection with, or take any other action to facilitate any inquiries or
the making of any proposal that constitutes, or may reasonably be expected to
lead to, any acquisition proposal; provided, however, that Alling & Cory and
such individuals may participate in discussions or negotiations with or
furnish information to any third party which proposes a transaction which the
Board of Directors of Alling & Cory reasonably believes will be likely to
result in an acquisition proposal, if the Board of Directors believes (based
upon the written advice of independent outside counsel) that failing to take
such action would likely constitute a breach of its fiduciary duties. In
addition, neither the Board of Directors of Alling & Cory nor any committee
thereof shall withdraw or modify in a manner adverse to Union Camp the
approval and recommendation of the Merger Agreement and the Merger or approve
or recommend any acquisition proposal; provided that Alling & Cory may
recommend to its shareholders an acquisition proposal and in connection
therewith withdraw or modify its approval or recommendation of the Merger if
(i) the Board of Directors of Alling & Cory has determined that the
acquisition proposal is a proposal that is more favorable to Alling & Cory and
its shareholders than the Merger, (ii) certain other conditions have been
satisfied (including the payment of a $4,000,000 termination fee) and (iii)
simultaneously with such withdrawal, modification or recommendation, the
Merger Agreement is terminated in accordance with its terms.

Conditions to the Merger. In addition to customary conditions, the
obligations of Alling & Cory, Union Camp and Merger Sub to consummate the
Merger are subject to the satisfaction or, where permitted, waiver of certain
other conditions, including (a) the absence of any order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction issued by
<PAGE>
any court or governmental authority or any action, suit or proceeding
prohibiting or preventing or seeking to prohibit or prevent the consummation
of the Merger or which could reasonably be expected to have a material adverse
effect on Alling & Cory or Union Camp, (b) the absence of any stop order
suspending the effectiveness of the Registration Statement or preventing the
use thereof or any related prospectus and (c) the approval and adoption of the
Merger Agreement and the approval of the terms of the Merger by an affirmative
vote of two-thirds of the outstanding shares of Alling & Cory Common Stock
entitled to vote at the Special Meeting.

In addition, Union Camp and Merger Sub's obligation to consummate the
Merger is subject to various additional conditions, including (a) the absence
of any material adverse change in Alling & Cory, (b) the receipt of certain
consents of third parties and (c) the receipt of customary opinions of counsel
to Alling & Cory and comfort letters from Alling & Cory's independent public
accountants.

Alling & Cory's obligation to consummate the Merger is subject to various
additional conditions, including (a) the absence of any material adverse
change in Union Camp, (b) the authorization for listing on the NYSE of the
shares of Union Camp Common Stock to be issued in the Merger in exchange for
those shares of Alling & Cory Common Stock in respect of which an effective
Stock Election has been made or has been deemed to have been made and (c) the
receipt of customary opinions of counsel to Union Camp and comfort letters
from Union Camp's independent certified public accountants. See "The Merger
Agreement -- Conditions to the Merger."

Termination of the Merger Agreement; Fees and Expenses. The Merger
Agreement may be terminated and the transactions contemplated thereby
abandoned, at any time prior to the Effective Time, whether before or after
approval of the Merger Agreement by Alling & Cory's shareholders, (i) by
action authorized by the vote of a majority of the members of the Board of
Directors of each of Alling & Cory and Union Camp; (ii) by Union Camp or
Alling & Cory if the Merger shall not have been consummated on or before
August 31, 1996 (or such later date as may be agreed to by Union Camp and
Alling & Cory) by reason of the failure of any condition to the consummation
of the Merger; provided, however, that no party may terminate the Merger
Agreement if the failure of such condition is caused primarily by such party's
material breach of the Merger Agreement; (iii) by Union Camp, if any of the
representations and warranties of Alling & Cory contained in the Merger
Agreement fail to be true and correct in all respects except for failures of
representations or warranties to be true and correct which would not have a
material adverse effect on the business, assets, prospects, condition
(financial or otherwise) or the results of operations of Alling & Cory and/or
its subsidiaries taken as a whole or the Surviving Corporation and its
subsidiaries taken as a whole, exclusive of any effect on the prospects of
Alling & Cory due to a general deterioration in economic conditions; (iv) by
Union Camp, if Alling & Cory fails to perform or comply with, in all material
respects, any of its material agreements or covenants contained in the Merger
Agreement as to which notice has been given to Alling & Cory and Alling & Cory
has failed to cure or otherwise resolve the same to the reasonable
satisfaction of Union Camp within 30 days after receipt of such notice; (v) by
Alling & Cory, if any of the representations and warranties of Union Camp
contained in the Merger Agreement fail to be true and correct in all respects
except for failures of any representations or warranties to be true and
correct which would not have a material adverse effect on the business,
assets, prospects, condition (financial or otherwise) or the results of
operations of Union Camp and its active operating subsidiaries taken as a
whole; (vi) by Alling & Cory, if Union Camp fails to perform or comply with,
in all material respects, any of its material agreements or covenants
contained in the Merger Agreement as to which notice has been given to Union
Camp and Union Camp has failed to cure or otherwise resolve the same to the
reasonable satisfaction of Alling & Cory within 30 days after receipt of such
notice; (vii) by Union Camp or Alling & Cory if a court of competent
jurisdiction or other governmental body shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise
<PAGE>
prohibiting the Merger and such order, decree, ruling or other action shall
have become final and nonappealable; (viii) by Union Camp or Alling & Cory, if
the Board of Directors of Alling & Cory determines that an acquisition
proposal from a third party is a proposal that is more favorable to Alling &
Cory and its shareholders than the Merger and believes in the exercise of its
good faith judgment (which judgment is based upon the written advice of
independent outside counsel) that a failure to terminate the Merger Agreement
and enter into an agreement to effect the proposal that is more favorable to
Alling & Cory and its shareholders than the Merger would likely constitute a
breach of its fiduciary duties under applicable law; provided that Alling &
Cory may not terminate the Merger Agreement pursuant to this clause unless (a)
Alling & Cory has fully complied with certain notice provisions of the Merger
Agreement and (b) prior to such termination, Union Camp has received a
termination fee of $4,000,000; (ix) by Union Camp or Alling & Cory, if the
Board of Directors of Alling & Cory has withdrawn or modified in a manner
adverse to Union Camp its approval or recommendation to the shareholders of
Alling & Cory of the Merger Agreement, the Merger and the other transactions
contemplated by the Merger Agreement, provided that Alling & Cory may not
terminate the Merger Agreement pursuant to this clause unless Alling & Cory's
Board of Directors believes, in the exercise of its good faith judgment based
upon the written advice of independent outside counsel, that a failure to
withdraw or modify such approval or recommendation would likely constitute a
breach of its fiduciary duties; and (x) by Alling & Cory, if the Average
Closing Price per share of Union Camp Common Stock is less than $42.50 and by
Union Camp, if the Average Closing Price is greater than $61.50.

The Merger Agreement provides that in certain circumstances involving the
termination of the Merger Agreement, Alling & Cory may be required to pay to
Union Camp a fee of $4,000,000, which will constitute, among other things,
reimbursement for fees, costs and expenses incurred by Union Camp in
connection with the transactions contemplated by the Merger Agreement. See
"The Merger Agreement -- Termination Rights; Fees and Expenses."

Method of Election. A holder of Alling & Cory Common Stock may elect to
receive in exchange for each share of Alling & Cory Common Stock held by such
shareholder, subject in each case, to certain adjustments, either $112.064 in
cash pursuant to a Cash Election (subject to the limitation contained in the
Merger Agreement) or a number of shares of Union Camp Common Stock equal to
the Share Conversion Number pursuant to a Stock Election. An Election will
have been properly made and will be effective only if the Transfer Agent
receives at its designated office by 5:00 p.m. New York City time, on
, 1996, a properly completed Form of Election, provided that any holder of
Alling & Cory Common Stock who does not properly and timely make an Election
shall be deemed to have properly and timely made a Stock Election for all
purposes of the Merger Agreement. See "The Merger Agreement -- Method of
Election" and "-- The Merger -- Limitation on Cash Elections."

An Election may be revoked only by written notice received by the Transfer
Agent (i) prior to 5:00 p.m. New York City time, on , 1996 or (ii)
after 90 days after the date the Form of Election is first mailed to holders
of Alling & Cory Common Stock, if the Effective Time shall not have occurred
prior to such date. In addition, all Forms of Election will automatically be
revoked if the Transfer Agent is notified in writing by the parties to the
Merger Agreement that the Merger has been abandoned. See "The Merger
Agreement -- Method of Election."

Exchange of Alling & Cory Share Certificates. As soon as practicable
after the Effective Time, Union Camp will cause The Bank of New York (the
"Exchange Agent") to mail and make available to each record holder of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Alling & Cory Common Stock ("Certificates"),
(x) a notice and letter of transmittal (a "Letter of Transmittal"), advising
such holder of the effectiveness of the Merger and the procedures for
surrendering any Certificates to the Exchange Agent for exchange and (y)
instructions for use in effecting the surrender of such Certificates for
<PAGE>
exchange pursuant to the Merger Agreement. See "The Merger Agreement --
Exchange of Share Certificates."

HOLDERS OF CERTIFICATES SHOULD NOT SUBMIT THEIR CERTIFICATES FOR EXCHANGE
UNTIL SUCH INSTRUCTIONS AND LETTER OF TRANSMITTAL ARE RECEIVED.

Appraisal Rights. Section 623 of the NYBCL provides for appraisal rights
in certain circumstances. See "Appraisal Rights of Dissenting Shareholders"
and Section 623 of the NYBCL attached to this Proxy Statement/Prospectus as
Annex C.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

Alling & Cory has been advised by its counsel that the Merger will consti-
tute a reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code"),
and that accordingly, for United States federal income tax purposes, (i)
Alling & Cory shareholders who exchange all of the shares of Alling & Cory
Common Stock that such shareholders actually own for shares of Union Camp
Common Stock in the Merger will recognize no income, gain or loss on such
exchange, except to the extent that such shareholders receive cash in lieu of
fractional shares, (ii) Alling & Cory shareholders who exchange all of the
shares of Alling & Cory Common Stock that such shareholders actually own
solely for cash in the Merger, and who are not deemed to own by attribution
shares of Alling & Cory Common Stock that are exchanged for shares of Union
Camp Common Stock in the Merger, will recognize gain or loss with respect to
the exchange in an amount equal to the difference between the cash received in
the Merger or pursuant to the exercise of appraisal rights and such
shareholders' adjusted tax basis in the Alling & Cory Common Stock surrendered
therefor, and (iii) Alling & Cory shareholders who (a) exchange a portion of
Alling & Cory Common Stock for Union Camp Common Stock and another portion of
such Alling & Cory Common Stock for cash (other than cash received in lieu of
fractional shares of Union Camp Common Stock) in the Merger, or (b) exchange
all of the shares of Alling & Cory Common Stock that such shareholders
actually own solely for cash in the Merger, but are deemed to own by
attribution shares of Alling Cory Common Stock that are exchanged for shares
of Union Camp Common Stock in the Merger, will treat any cash such
shareholders receive in the exchange for his or her shares of Alling & Cory
Common Stock either (x) in its entirety as a distribution treated as a
dividend to the extent of the shareholders' ratable share of applicable
current and/or accumulated earnings and profits, or (y) as received pursuant
to a sale or exchange, whereby such shareholders will realize capital gain or
loss equal to the difference between the fair market value of Union Camp
Common Stock plus the cash received by such shareholders in the Merger and
such shareholders' adjusted tax basis in the Alling & Cory Common Stock
surrendered therefor; however, any such gain will be recognized only to the
extent of cash received, and no loss shall be recognized.

In the event that the transaction is treated as a sale or exchange, and
not as a distribution, a shareholder's aggregate adjusted tax basis for the
shares of Union Camp Common Stock received in the Merger will equal such
shareholder's adjusted tax basis in the shares of Alling & Cory Common Stock
that were surrendered in exchange therefor, less the portion of such basis, if
any, allocable to fractional shares for which cash is received, decreased by
the amount of the cash received (other than cash received with respect to
fractional Union Camp Common Stock), and increased by the amount of gain
recognized by such shareholder, if any (other than with respect to fractional
Union Camp Common Stock). The holding period of Union Camp Common Stock
received in the Merger by each holder of Alling & Cory Common Stock will
include the holding period of the Alling & Cory Common Stock surrendered
therefor.

Consummation of the Merger is conditioned, among other things, upon
receipt by Alling & Cory of an opinion from Underberg & Kessler LLP, counsel
to Alling & Cory, and by Union Camp of an opinion from White & Case, counsel
<PAGE>
to Union Camp, to the effect that if the Merger is consummated in accordance
with the terms of the Merger Agreement, the shareholders of Alling & Cory will
not recognize gain or loss for United States federal income tax purposes in
connection with their receipt of Union Camp Common Stock, except to the extent
that such shareholders receive (i) cash for their Alling & Cory Common Stock
pursuant to an effective Cash Election, (ii) cash withheld in respect of
certain escrow arrangements established in respect of certain contingent
liabilities of Alling & Cory, or (iii) cash in lieu of fractional shares. See
"The Merger Agreement -- The Merger -- Certain Contingencies; Escrow
Arrangements."

All shareholders should read carefully the discussion in "Certain United
States Federal Income Tax Consequences" and other sections of this Proxy
Statement/Prospectus. They are urged to consult their own tax advisors as to
the specific consequences to them of the Merger under United States federal,
state, local or any other applicable tax laws.

COMPARISON OF RIGHTS OF UNION CAMP AND ALLING & CORY STOCKHOLDERS

Union Camp is incorporated under the laws of the Commonwealth of Virginia,
and Alling & Cory is incorporated under the laws of the State of New York.
The Alling & Cory shareholders, whose rights as shareholders are currently
governed by New York law and Alling & Cory's Certificate of Incorporation and
by-laws, will become, upon consummation of the Merger and to the extent they
receive shares of Union Camp Common Stock, shareholders of Union Camp, and
their rights will be governed by Virginia law and Union Camp's Articles of
Incorporation and by-laws. See "Comparison of Rights of Holders of Union Camp
Common Stock and Alling & Cory Common Stock."

NYSE LISTING

The Union Camp Common Stock is listed on the NYSE. Union Camp has agreed
to use its reasonable best efforts to cause the shares of Union Camp Common
Stock to be issued in the Merger to be listed on the NYSE at the Effective
Time. A condition to Alling & Cory's obligation to consummate the Merger is
that prior to the Effective Time any shares of Union Camp Common Stock, to the
extent applicable, to be issued in the Merger will be approved for listing on
the NYSE.
<PAGE>
PER SHARE INFORMATION

The following tables set forth certain historical information and certain
pro forma and equivalent information with respect to net income per share,
cash dividends per share and book value per share for Alling & Cory Common
Stock and Union Camp Common Stock. The information provided should be read in
conjunction with the financial statements of Union Camp and Alling & Cory, and
notes thereto, incorporated herein by reference, in the case of Union Camp,
and included elsewhere in this Proxy Statement/Prospectus, in the case of
Alling & Cory. The comparative pro forma and equivalent pro forma per share
data have been included for comparative purposes only and do not purport to be
indicative of the results or financial position which would have been obtained
if the Merger had occurred at the beginning of the period or as of the date
indicated or of the financial position or results which may be obtained in the
future.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1995
<S> <C>
BOOK VALUE PER SHARE
Union Camp $30.71
Alling & Cory $51.37
Union Camp pro forma(1) $30.71
Alling & Cory merger equivalent shares(2) $66.18
CASH DIVIDENDS DECLARED PER SHARE
Union Camp $1.66
Alling & Cory $1.60
Alling & Cory merger equivalent shares(2) $3.58
INCOME PER SHARE
Union Camp Net Income $6.45
Alling & Cory Net Income $6.20
Union Camp pro forma Net Income(1) $6.44
Alling & Cory merger equivalent shares Net Income(2) $13.88
______________________
(1) Union Camp pro forma amounts were calculated using the following assumptions: (a) a market value of $52.00 per share of Union
Camp Common Stock, which represents the midpoint of the negotiated low and high values used in determining the Fair Market
Value of Union Camp Common Stock, (b) a conversion rate of 2.155 shares as described in note 2 below, (c) that 100% of the
holders of Alling & Cory Common Stock elect to receive shares of Union Camp Common Stock and (d) that Union Camp will
repurchase in the open market all of the number of shares issued to effectuate the Merger through the issuance of debt
securities at prevailing market rates.

(2) Equivalent per share amounts are calculated by multiplying the Union Camp pro forma per share amounts (or Union Camp cash
dividends declared per share, in the case of equivalent dividends per share) by 2.155 (assuming that the Fair Market Value of
Union Camp Common Stock equals $52.00).
</TABLE>
<PAGE>
MARKET PRICES

The following table sets forth the historical market price of Union Camp
Common Stock and of Alling & Cory Common Stock (based on its book value for
historical price) on a historical and equivalent share basis, as of April 12,
1996, the business day immediately preceding the announcement of the execution
of the Merger Agreement, and as of May , 1996.

<TABLE>
<CAPTION>
April 12, 1996 May , 1996
<S> <C> <C>
Union Camp Historical(1) $ 50.13 $
Alling & Cory Historical(2) $ 51.20 $51.20
Alling & Cory Equivalent Share Basis(3) $108.02 $
____________________

(1) The last sale price as reported on the NYSE Composite Tape on April 12, 1996 and on May , 1996.

(2) There is no established public trading market for Alling & Cory Common Stock. The Board of Directors of Alling & Cory
periodically establishes a value (rounded book value) for the shares of Alling & Cory Common Stock; subject to the
restrictions of the NYBCL and the restrictions on stock repurchases imposed by the covenants contained in its debt
agreements, Alling & Cory has, on request, frequently repurchased shares at that value and has priced the shares of Alling
& Cory Common Stock issued from time to time under its dividend reinvestment plan at 95% of this value. See "Alling & Cory
Share Prices and Dividends." The price shown was established by the Alling & Cory Board of Directors on February 8, 1996
based on Alling & Cory's December 31, 1995 book value. The Alling & Cory Board of Directors has not determined any value
for the shares of Alling & Cory Common Stock since February 8, 1996.

(3) Equivalent share basis is determined by multiplying the Union Camp historical share price by 2.155 (assuming the fair
market value of Union Camp Common Stock equals $52.00).
</TABLE>
<PAGE>
UNION CAMP SELECTED FINANCIAL DATA

The selected consolidated financial data has been derived from consoli-
dated financial statements audited by Price Waterhouse LLP, independent
accountants. Consolidated balance sheets at December 31,1994 and 1995 and the
related consolidated statements of income and of cash flows for the three
years ended December 31, 1995 and notes thereto are incorporated by reference
in this Proxy Statement/Prospectus.
<TABLE>
<CAPTION>
For the Year Ended December 31,

1995 1994(1) 1993 1992 1991
(dollars in thousands except per share amounts)

STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C> <C> <C>

Net Sales . . . . . $4,211,709 $3,395,825 $3,120,421 $3,064,358 $2,967,138
Income from
Operations . . . $ 830,102 $ 274,500 $ 211,624 $ 180,576 $ 274,990
Net Income(2) . . .
Total . . . . . $ 451,073 $ 117,226 $ 50,043 $ 42,655 $ 128,010
Per Share . . . $ 6.45 $ 1.67 $ .72 $ .61 $ 1.85

Dividends Per
Common Share . . $ 1.66 $ 1.56 $ 1.56 $ 1.56 $ 1.56

BALANCE SHEET DATA (AT PERIOD END):
Current Assets . . $1,033,817 $ 951,133 $ 910,718 $1,016,117 $ 909,990

Total Assets . . . $4,838,343 $4,776,578 $4,685,033 $4,745,197 $4,697,714
Current
Liabilities . . . $ 574,113 $ 883,924 $ 909,372 $ 892,115 $ 764,916
Long-Term Debt . . $1,197,536 $1,252,249 $1,244,907 $1,289,706 $1,348,157
Stockholders'
Equity . . . . . $2,121,692 $1,836,321 $1,815,848 $1,881,878 $1,936,256

OTHER DATA:
Cash Provided by
Operations . . . $ 750,222 $ 368,502 $ 418,420 $ 268,865 $ 375,041
Capital
Expenditures . . $ 266,799 $ 324,939 $ 310,113 $ 219,654 $ 482,638

Depreciation,
Amortization &
Cost of Union
Camp Timber
Harvested . . . . $ 287,738 $ 270,850 $ 261,518 $ 253,087 $ 219,210
______________________

(1) 1994 results include a $14 million pre-tax charge relating to the write down of non-strategic assets, an $11.7 million pre-
tax charge to reflect the company's withdrawal from the retail paper bag business, as well as a pre-tax gain of $34.7
million on the sale of a minority interest in Bush Boake Allen Inc.
(2) Represents net income before extraordinary items and cumulative effect of accounting changes.
</TABLE>
<PAGE>
ALLING & CORY SELECTED FINANCIAL DATA

The selected financial information for the years ended December 31, 1991-
1995 was derived from the consolidated financial statements of Alling & Cory
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their report included elsewhere herein, and should be read in conjunction
with the consolidated financial statements included in this Proxy
Statement/Prospectus.
<TABLE>
<CAPTION>
For the Year Ended December 31,

1995 1994 1993 1992 1991
(dollars in thousands except per share amounts)

STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C> <C> <C>

Net Sales . . . . . . . . . . . $763,608 $617,518 $550,668 $527,454 $476,537
Income from Operations . . . . $ 11,093 $ 4,394 $ 2,743 $ 5,739 $ 4,452
Net income:
Total . . . . . . . . . . . . $ 4,806 $ 2,601 $ 1,386 $ 2,403 $ 1,314
Per Wtd. Avg. Share . . . . . $ 6.20 $ 3.31 $ 1.72 $ 2.94 $ 1.55

Dividends Per Common Share . . $ 1.60 $ 1.50 $ 1.40 $ 1.60 $ 1.60

BALANCE SHEET DATA (AT PERIOD END):
Current Assets . . . . . . . . $124,514 $120,640 $ 99,624 $ 93,753 $ 85,501

Total Assets . . . . . . . . . $140,942 $134,945 $113,785 $106,688 $ 97,758
Current Liabilities . . . . . . $ 81,949 $ 80,203 $ 62,372 $ 54,615 $ 45,812
Long-Term Debt . . . . . . . . $ 13,851 $ 14,051 $ 12,628 $ 13,458 $ 13,654
Stockholders' Equity . . . . . $ 39,903 $ 36,365 $ 35,871 $ 36,249 $ 35,718

OTHER DATA:
Cash Provided by
(used for) Operations . . . . ($863) ($7,240) ($4,303) $ 5,271 $ 14,220
Capital Expenditures . . . . . $ 4,249 $ 1,312 $ 2,817 $ 1,202 $ 1,011

Depreciation &
Amortization . . . . . . . . $ 1,985 $ 2,103 $ 2,198 $ 2,011 $ 1,729
</TABLE>
<PAGE>
THE COMPENSATION PROPOSAL

Under Sections 280G and 4999 of the Code, certain payments made, to be
made or deemed to be made by Alling & Cory to certain of its employees may be
taxable as "excess parachute payments," which would have adverse tax
consequences for both Alling & Cory and the employee who received such
payments. The Code presumes (the "Presumption") that any payments made to an
employee within one year of the Merger were made in contemplation of the
Merger and that, if such payments exceed three times the base amount, they
constitute "parachute payments." The "base amount" is defined as the average
of the employee's last five years' total compensation. Excess parachute
payments are the amount by which the parachute payments exceed the greater of
the base amount or "reasonable compensation." Excess parachute payments will
not be deductible by Alling & Cory and will be subject to a twenty percent
excise tax (in addition to regular income and Social Security taxes) payable
by the employee receiving the payments.

Under the above tests, it is possible that certain payments, including,
without limitation, those required to be made to Mr. Hubbard under the
Employment Agreement, and certain payments made or deemed to be made to Mr.
Hubbard and to Margaret Supinski, Alling & Cory's Vice President, Human
Relations, in the form of stock bonuses and/or pursuant to certain employee
benefit plans, may be added together and taxed as excess parachute payments.

Under the Code, if receipt or retention of payments which would otherwise
constitute "parachute payments" are conditioned on approval by in excess of
75% of the outstanding shares of the Alling & Cory Common Stock, on receipt of
such approval, these payments will be exempt from the parachute rules and will
not constitute "parachute payments," and, therefore, the payments will not in-
volve the negative tax effects connected with such excess parachute rules.

The Compensation Committee of the Alling & Cory Board of Directors (the
"Compensation Committee") and the Alling & Cory Board of Directors have
determined that the stock bonuses and benefits granted to Mr. Hubbard and Ms.
Supinski (and in the case of Mr. Hubbard, the terms of the Employment
Agreement) are fair and reasonable compensation for past services rendered
and/or are necessary to ensure the continued services of Mr. Hubbard and Ms.
Supinski to Alling & Cory and thus that such payments are in the best
interests of Alling & Cory. The Compensation Committee has further determined
that it is in the best interests of Alling & Cory that neither Alling & Cory
nor Mr. Hubbard and Ms. Supinski suffer the negative tax effects of such
payments being deemed "excess parachute payments." See "Proposal to Approve
Executive Compensation."

ACCORDINGLY, THE ALLING & CORY BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS OF ALLING & CORY VOTE TO APPROVE THE COMPENSATION PREVIOUSLY
PAID, PROPOSED TO BE PAID OR DEEMED TO BE PAID TO EACH OF MR. HUBBARD AND MS.
SUPINSKI, INCLUDING, WITHOUT LIMITATION, THE STOCK BONUS, THE RETIREMENT
ENHANCEMENT PLAN BENEFITS AND THE RETIREMENT RESTORATION PLAN BENEFITS. If
the holders of in excess of 75% of the outstanding shares of the Alling & Cory
Common Stock grant such approval, such payments will not be deemed to be
"parachute payments."
<PAGE>
THE SPECIAL MEETING

GENERAL

The Special Meeting of the shareholders of Alling & Cory will be held on
, 1996 at Alling & Cory's principal executive offices at 1059 West
Ridge Road, Rochester, New York 14615, commencing at 10:00 a.m. (local time)
to (i) consider and vote upon the approval and adoption of the Merger
Agreement and the approval of the terms of the Merger, (ii) consider and vote
upon the Compensation Proposal and (iii) transact such other business as may
properly come before the Special Meeting or any adjournment or postponement
thereof.

The Board of Directors of Alling & Cory has (i) unanimously approved the
Merger Agreement and the transactions contemplated thereby and has determined
that such transactions are in the best interests of Alling & Cory and its
shareholders and (ii) unanimously approved the Compensation Proposal. The
Board of Directors of Alling & Cory unanimously recommends that shareholders
vote (x) FOR the approval and adoption of the Merger Agreement and (y) FOR the
approval and adoption of the Compensation Proposal.

RECORD DATE; QUORUM

Only record holders of shares of Alling & Cory Common Stock on the Record
Date are entitled to notice of, and to vote at, the Special Meeting or any
adjournment or postponement thereof. On the Record Date there were 787,496
shares of Alling & Cory Common Stock issued and outstanding and entitled to
vote at the Special Meeting. Each holder of Alling & Cory Common Stock
outstanding on the Record Date is entitled to one vote for each such share so
held, exercisable in person or by properly executed and delivered proxy, at
the Special Meeting. The presence at the Special Meeting in person or by
proxy of the holders of a majority of the outstanding shares of Alling & Cory
Common Stock on the Record Date shall constitute a quorum for the transaction
of business at the Special Meeting.

VOTE REQUIRED

Under the NYBCL the affirmative vote of two-thirds of the outstanding
shares of Alling & Cory Common Stock entitled to vote at the Special Meeting
is necessary to adopt the Merger Agreement. Certain shareholders of Alling &
Cory, including Mr. Hubbard, Mr. Harris and each other member of the Board of
Directors of Alling & Cory who owns Alling & Cory Common Stock have granted
Union Camp proxies to vote an aggregate of shares of Alling & Cory
Common Stock (approximately % of the issued and outstanding Alling & Cory
Common Stock) at the Special Meeting, which proxies Union Camp is required to
vote in favor of the approval and adoption of the Merger Agreement and the
approval of the terms of the Merger. See "The Merger -- Interest of Certain
Persons in the Merger."

The affirmative vote of in excess of 75% of the outstanding shares of
Alling & Cory Common Stock entitled to vote at the Special Meeting is
necessary to approve and adopt the Compensation Proposal. Certain share-
holders of Alling & Cory, including Mr. Hubbard, Mr. Harris and each other
member of the Board of Directors of Alling & Cory who owns Alling & Cory
Common Stock, have granted Union Camp proxies to vote an aggregate of
shares of Alling & Cory Common Stock (approximately % of the issued and
outstanding Alling & Cory Common Stock) at the Special Meeting, which proxies
Union Camp is required to vote in favor of the Compensation Proposal.

PROXIES; FORMS OF ELECTION

Shareholders of Alling & Cory are requested to complete, date and sign
the accompanying form of proxy and return it promptly to Alling & Cory in the
<PAGE>
enclosed postage-paid envelope. When the accompanying form of proxy is
returned properly executed, the shares of Alling & Cory Common Stock
represented thereby will be voted at the Special Meeting in accordance with
the instructions contained therein; however, a properly executed proxy marked
"ABSTAIN," including a proxy representing shares held of record by a broker or
nominee who has not been given voting instructions by the beneficial owner,
although counted for purposes of determining whether there is a quorum at the
Special Meeting, will not be voted on each of the proposals to be voted on at
the Special Meeting (including the approval and adoption of the Merger
Agreement and the terms of the Merger and the Compensation Proposal) and will
have the same effect as a negative vote on each of the proposals to be voted
on at the Special Meeting (including the approval and adoption of the Merger
Agreement and the terms of the Merger and the Compensation Proposal). If a
proxy is executed and returned without an indication as to how the shares of
Alling & Cory Common Stock represented thereby are to be voted, such shares
will be voted to approve and adopt each of the proposals to be voted upon at
the Special Meeting.

Any Alling & Cory shareholder giving a proxy pursuant to this
solicitation has the power to revoke it at any time before it is voted at the
Special Meeting. A later dated proxy or written notice of revocation received
by the Secretary of Alling & Cory prior to the vote at the Special Meeting
will serve to revoke such proxy. Also, an Alling & Cory shareholder who
attends the Special Meeting in person may, if he or she wishes, vote by ballot
at the Special Meeting, thereby cancelling any proxy previously given. Mere
presence at such meeting will not serve to revoke any proxy previously given.

Holders of Alling & Cory Common Stock are also requested to complete,
date and sign the enclosed Form of Election and return it promptly in the
enclosed postage-paid envelope to the Transfer Agent.

OTHER MATTERS TO BE CONSIDERED

The Board of Directors of Alling & Cory is not aware of any other matter
which will be brought before the Special Meeting. If, however, other matters
incident to the conduct of the Special Meeting are presented, proxies will be
voted in accordance with the discretion of the holders of such proxies.

SOLICITATION OF PROXIES

This Proxy Statement/Prospectus is being furnished to holders of Alling &
Cory Common Stock in connection with the solicitation of proxies by and on
behalf of the Board of Directors of Alling & Cory for use at the Special
Meeting. All expenses of this solicitation, including the cost of filing,
preparing and mailing this Proxy Statement/Prospectus, will be borne by Alling
& Cory and Union Camp. In addition to the use of mails, proxies may be
solicited by persons regularly employed by Alling & Cory, in person or by
telephone, facsimile or telegraph. Such persons will receive no additional
compensation for such services, but will be reimbursed for any out-of-pocket
expenses incurred by them in connection with such services. Arrangements may
also be made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of shares of Alling & Cory Common Stock held of record by such persons,
and Alling & Cory may reimburse such persons for reasonable out-of-pocket
expenses incurred by them in connection therewith.
<PAGE>
ALLING & CORY SHARE PRICES AND DIVIDENDS

There is no established public trading market for Alling & Cory Common
Stock. In the past, Alling & Cory's Board of Directors, from time to time,
has established a value (rounded book value) at which, subject to the
restrictions of the NYBCL and the restrictions on stock redemptions imposed by
the covenants contained in its debt agreements, Alling & Cory has, on request,
frequently repurchased its shares of Alling & Cory Common Stock. A summary of
those share redemptions since January 1, 1993 and the price per share of
Alling & Cory Common Stock is as follows:

<TABLE>
<CAPTION>
Fiscal Quarter of Number of Number of
Repurchase Transactions Shares Price Per Share
<S> <C> <C> <C>

1993
1st Qtr 6 1,030 $43.60-$44.60
2nd Qtr 13 2,053 $44.60
3rd Qtr 8 5,738 $44.60
4th Qtr 9 9,195 $44.60

1994
1st Qtr 7 3,245 $44.60-$44.80
2nd Qtr 17 18,613 $44.60-$44.80
3rd Qtr 7 1,648 $44.60
4th Qtr 4 2,674 $44.60-$46.20

1995
1st Qtr 8 2,845 $46.20-$46.80
2nd Qtr 11 11,172 $46.80-$47.20
3rd Qtr 1 100 $47.20
4th Qtr 1 787 $50.20

1996
1st Qtr 0 0 --
2nd Qtr 0 0 --
</TABLE>

During each of 1993, 1994, 1995 and the first quarter of 1996, Alling &
Cory paid quarterly cash dividends of $0.35 per share of Alling & Cory Common
Stock. In addition, Alling & Cory paid special cash dividends of $0.10, $0.20
and $0.25 per share of Alling & Cory Common Stock in the first quarter of
1994, 1995 and 1996, respectively. As of May 1, 1996, there were 315 holders
of record of Alling & Cory Common Stock. Alling & Cory has in effect a
dividend reinvestment plan that allows shareholders of Alling & Cory electing
to participate in such plan to receive shares of Alling & Cory Common Stock in
lieu of cash dividends at a price equal to 95% of the value of Alling & Cory
Common Stock periodically established by Alling & Cory's Board of Directors,
which price is currently established at $51.20.
<PAGE>
THE MERGER

GENERAL

The terms and conditions of the Merger are set forth in the Merger
Agreement, the text of which is attached to this Proxy Statement/Prospectus as
Annex A. The summary of the Merger Agreement contained in this Proxy
Statement/Prospectus does not purport to be complete and is qualified in its
entirety by reference to the complete text of such document.

At the time the Merger becomes effective, Merger Sub will be merged with
and into Alling & Cory in accordance with the NYBCL. As a result of the
Merger, the separate corporate existence of Merger Sub (which was formed
solely for the purposes of the Merger and has not engaged in any operations or
businesses) will cease, and Alling & Cory will continue its existence as a
separate subsidiary of Union Camp.

Upon the consummation of the Merger each of the issued and outstanding
shares of Alling & Cory Common Stock held by each holder of such shares (other
than shares of Alling & Cory Common Stock held in the treasury of Alling &
Cory, by Merger Sub or Union Camp or by Dissenting Shareholders, if any) will
be converted into the right to receive, at the Election of such holder and
subject, in each case, to certain adjustments, either (x) $112.064 cash
(subject to the limitation contained in the Merger Agreement) pursuant to a
Cash Election or (y) shares of Union Camp Common Stock equal to the Share
Conversion Number, pursuant to a Stock Election. To the extent that any
Alling & Cory shareholder makes (or is deemed to make) a Stock Election, any
fractional shares resulting from the conversion of shares of Alling & Cory
Common Stock will entitle the holder to receive cash. In the event that Cash
Elections by the holders of Alling & Cory Common Stock are received and not
revoked prior to the Effective Time in respect of a number of shares of Alling
& Cory Common Stock in excess of a number (the "Maximum Cash Election Number")
equal to 157,400 shares of Alling & Cory Common Stock, less a number of shares
equal to the number of shares held by Dissenting Shareholders, less the number
of shares repurchased prior to the Merger from employee/retiree shareholders,
less 322 shares and less a number of shares equal to the number of shares
resulting from multiplying the total cash withheld pursuant to certain escrow
arrangements times a fraction, the numerator of which is the number of shares
of Alling & Cory Common Stock with respect to which a Stock Election is made
and the denominator of which is the total number of shares of Alling & Cory
Common Stock issued and outstanding on the Effective Time and dividing the
product by the Cash Election Price then only the number of shares of Alling &
Cory Common Stock equal to the Maximum Cash Election Number shall be converted
into and receive the Cash Election Price. In that case, shares of Alling &
Cory Common Stock to be converted into the Cash Election Price shall be
selected on a pro rata basis, with adjustments to avoid purchases of
fractional shares, based on the number of shares in respect of which an
effective Cash Election is received and not revoked prior to the Effective
Time. All shares of Alling & Cory Common Stock in respect of which an
effective Cash Election is received and not revoked prior to the Effective
Time which are not converted into the Cash Election Price shall be deemed to
have made an effective Stock Election and shall be converted into shares of
Union Camp Common Stock. See "The Merger Agreement -- The Merger -- Limitation
on Cash Elections," "-- Certain Contingencies; Escrow Agreements" and "The
Merger Agreement -- Fractional Shares."

UNION CAMP INTENDS TO ISSUE A PRESS RELEASE PRIOR TO THE SPECIAL MEETING
TO STATE THE NUMBER OF SHARES OF UNION CAMP COMMON STOCK INTO WHICH EACH SHARE
OF ALLING & CORY COMMON STOCK IN RESPECT OF WHICH A STOCK ELECTION HAS BEEN
MADE OR HAS BEEN DEEMED TO HAVE BEEN MADE WILL BE CONVERTED.

BACKGROUND OF THE MERGER

Alling & Cory is a major independent regional distributor of fine
printing, writing and publishing papers, industrial packaging equipment and
<PAGE>
supplies, janitorial supplies, and magnetic media supplies. Prior to entering
into discussions regarding a potential business combination, Alling & Cory had
concentrated on improving its operating results through increasing the
efficiency of its operations, including restructuring of its warehousing
operations and improving its inventory control and other information systems.

On April 24, 1995, a representative of a publicly traded paper and forest
products company (the "First Potential Acquiror") contacted Samuel T. Hubbard,
Jr., President and Chief Executive Officer of Alling & Cory to inquire whether
Alling & Cory might be interested in an acquisition proposal by the First
Potential Acquiror. Mr. Hubbard discussed this inquiry with Richard M.
Harris, Jr., the Chairman of the Board of Directors of Alling & Cory, and
certain directors and officers of Alling & Cory and with Alling & Cory's
regular outside legal counsel. In light of this overture, Mr. Hubbard and his
advisors focused on three significant strategic issues facing Alling & Cory.
First, a number of the large shareholders of Alling & Cory were facing a need
for liquidity in their investments. Although in the past, Alling & Cory had
frequently repurchased shares from shareholders on request, management
believed accommodating the needs of these large shareholders would likely
require more capital than Alling & Cory expected to have available for such
purposes. Second, in order to take advantage of future growth opportunities,
management of Alling & Cory believed it would require access to more capital
than could be generated internally. Third, management was concerned that a
trend toward consolidation in the paper industry appeared likely to result in
larger and better capitalized companies gaining the ability to acquire
inventory at prices superior to those available to Alling & Cory, thereby
reducing Alling & Cory's ability to offer competitive prices. Upon
consideration of these issues, management concluded that the acquisition
overture should be further explored. On November 10, 1995, Alling & Cory
executed a confidentiality agreement with, and began supplying information to,
the First Potential Acquiror.

Mr. Hubbard and his advisors also reviewed alternatives to the sale of
Alling & Cory, including the possibility of attracting one or more strategic
investors, and analyzed the paper industry to determine what companies, in
addition to the First Potential Acquiror, might have a strategic interest in
Alling & Cory. They identified Union Camp, with whom Alling & Cory had a
long-standing relationship, as a major paper and forest products manufacturer
that had no distribution capability. On October 27, 1995, Mr. Hubbard met
with W. Craig McClelland, Chairman and Chief Executive Officer of Union Camp
and James M. Reed, Vice Chairman of the Board of Directors and Chief Financial
Officer of Union Camp, to inquire if Union Camp would have an interest in
making a debt investment in Alling & Cory. Mr. McClelland expressed interest
in such an investment, and indicated that Union Camp might also wish to
explore the possible acquisition of Alling & Cory. Subsequently, Mr. Hubbard
and Mr. McClelland agreed to explore a possible acquisition of Alling & Cory
by Union Camp. On December 6, 1995, Alling & Cory and Union Camp executed a
confidentiality agreement and Alling & Cory subsequently began supplying
information to Union Camp.

Mr. Hubbard and his advisors determined that if the discussions with
these two parties were to continue, Alling & Cory should retain financial
advisors to assist it with the process and the evaluation of any acquisition
proposals that might be forthcoming, as well as to explore other alternatives
available to Alling & Cory to address its strategic concerns. Preliminary
discussions began with Bear Stearns on October 17, 1995 and on December 14,
1995, Bear Stearns was formally engaged. Bear Stearns recommended that an
effort be made to identify other potential acquirors and to solicit indica-
tions of interest in participating in an auction process from the First
Potential Acquiror, Union Camp, and any additional companies identified. Mr.
Hubbard limited the number of potential acquirors to whom that invitation was
sent because he believed that it would be extremely damaging to Alling & Cory
if it became known generally in the industry that Alling & Cory was soliciting
acquisition proposals. Mr. Hubbard believed that a number of Alling & Cory
employees, including the critically important sales force, might defect to or
be vulnerable to solicitation by competitors. This situation could seriously
<PAGE>
damage Alling & Cory's business as well as its value to a potential acquiror.
On December 21, 1995, a third company (the "Third Potential Acquiror")
approached Mr. Hubbard to inquire about a potential acquisition of Alling &
Cory by the Third Potential Acquiror. In late December, 1995, Bear Stearns
was directed to contact the Third Potential Acquiror to begin exploring a
potential acquisition. Alling & Cory and the Third Potential Acquiror
executed a confidentiality agreement on January 22, 1996 and Alling & Cory
began supplying information to the Third Potential Acquiror.

After consulting with Bear Stearns, Mr. Hubbard determined that the First
Potential Acquiror, Union Camp and the Third Potential Acquiror appeared to be
the most likely potential buyers for Alling & Cory. On January 19, 1996, Bear
Stearns sent a letter to the three potential acquirors, asking each to submit
an indication of interest containing a preliminary, non-binding valuation of
Alling & Cory, describing sources of financing for any proposed transaction
and discussing the strategic rationale behind the potential acquiror's
interest. The letter expressed the preference that any transaction be a tax-
free merger in which the consideration would be the stock of the acquiring
company.

The First Potential Acquiror and Union Camp expressed interest in
proceeding, but the Third Potential Acquiror declined to participate in any
further discussions. After Mr. Hubbard informally discussed the situation
with the Alling & Cory directors, the possibility of a sale of Alling & Cory
was formally placed before the Board of Directors at its regular meeting held
on February 8, 1996. Representatives of Bear Stearns attended the meeting,
made a lengthy presentation to the Board of Directors with respect to the
timing and procedure involved in a merger transaction, and described the
events leading up to the current situation and the proposals received from two
of the three potential acquirors.

Union Camp proposed to acquire all of Alling & Cory's equity for a price
between $90,000,000 and $95,000,000. It indicated that it would prefer a
transaction involving a mix of 60% Union Camp stock and 40% cash, but that it
was prepared to use 100% stock if necessary. Union Camp's letter emphasized
its strong dividend history and indicated that Union Camp contemplated
maintaining Alling & Cory as an independent subsidiary of Union Camp,
retaining the current trade name, management and supplier group. Union Camp
indicated that it viewed the acquisition of Alling & Cory as the first step in
establishing a distribution capability for Union Camp. Union Camp also
indicated its intention to offer the senior management of Alling & Cory the
opportunity to participate in the future growth of Alling & Cory.

The First Potential Acquiror's response provided for an all-stock
transaction, but at a value lower than the range proposed by Union Camp. The
First Potential Acquiror already owned a distribution business, and it
proposed integrating Alling & Cory into its existing business, further noting
that the integration process would clearly involve work force reductions. The
Alling & Cory Board of Directors anticipated that such reductions would be
based on a need to eliminate redundancies from a management, administrative
and operating standpoint and on overlaps in the territories served by the
First Potential Acquiror's distribution business and Alling & Cory.

After discussing the responses and consulting with its legal and
financial advisors, the Board of Directors determined that acquisition by
Union Camp on the terms proposed would offer several decisive advantages over
the First Potential Acquiror's proposal. The Board of Directors considered
many factors in deciding to pursue the Union Camp proposal, including but not
limited to the following factors. First, the Union Camp price range was
higher than that offered by the First Potential Acquiror. Second, the Board
of Directors of Alling & Cory believed that an acquisition of Alling & Cory by
Union Camp would result in the continued operation of Alling & Cory as an
independent subsidiary of Union Camp, with existing management and employees.
This factor was considered important to Alling & Cory's current employees and
retirees. The Alling & Cory Board of Directors believed that this fact would
significantly benefit Alling & Cory's shareholders because approximately 50%
<PAGE>
of Alling & Cory's outstanding shares are owned by employees and retirees and
the Alling & Cory Board of Directors also believed that shareholders who were
neither employees nor retirees, some of whom were directors (and family
members of directors) holding large blocks of shares, would agree that this
should be an important consideration in determining a merger partner. Third,
the Board of Directors believed that job opportunities would be enhanced for
Alling & Cory's employees because of Union Camp's stated desire to use Alling
& Cory as a base for building its distribution capabilities and because of the
compatible cultures of Union Camp and Alling & Cory. Fourth, the Board of
Directors determined that in order to rationalize overlapping territories and
duplicative management and administrative structures, the First Potential
Acquiror could be expected to require significant work force reductions and
consolidations if it acquired Alling & Cory. The Board of Directors believed
that, if an acquisition by the First Potential Acquiror were announced, many
employees, particularly Alling & Cory's critical sales force, would foresee
work force reductions and begin exploring their own alternatives or be
vulnerable to overtures by others in the industry. This in turn could both
jeopardize Alling & Cory's value to the First Potential Acquiror and create a
risk that the transaction could not be completed.

As a result of the foregoing, the Alling & Cory Board of Directors deter-
mined that the transaction with Union Camp appeared to offer unique advantages
to both Union Camp and Alling & Cory that the Board of Directors did not
believe could be duplicated by any other acquiror. Consequently, the Board of
Directors authorized Mr. Hubbard and Mr. Harris to contact Union Camp,
determine whether it had a firm interest in proceeding, fix a price within the
range outlined in the Union Camp proposal letter, and obtain a commitment that
a definitive agreement could be reached which would provide a maximum level of
commitment on the part of both Alling & Cory and Union Camp to the Merger, and
which would provide maximum possible certainty that the transaction would be
consummated once publicly announced.

On February 9, 1996, Mr. Hubbard and Mr. Harris met with Mr. McClelland,
and the parties tentatively agreed to a total equity value of $92,500,000.00
and to move expeditiously to document a transaction that would meet the condi-
tions envisioned by the Board of Directors.

Subsequent to the oral understanding reached between Messrs. McClelland,
Harris and Hubbard, various officers and employees of Alling & Cory, counsel
and financial advisors discussed and negotiated the terms of the Merger
Agreement with their counterparts at Union Camp. On February 28, 1996,
representatives of Alling & Cory and Union Camp met to discuss the structure
of the proposed Merger. On March 21, 1996, the parties met in the offices of
Union Camp's counsel to negotiate a definitive Merger Agreement. During the
course of those discussions, the parties agreed that the Merger would be
structured as a cash-option merger in which, at the option of Alling & Cory's
shareholders, up to 20% of the consideration paid in the Merger would be in
cash with the remainder to be paid in Union Camp Common Stock. The parties
also discussed the basis for valuing the Union Camp Common Stock. The parties
also agreed to a requirement that Alling & Cory pay its own transaction costs
(estimated by the parties at $2,000,000) by a reduction in the total purchase
price. On that basis, and as a result of certain unexpected reductions from
prior estimates in Alling & Cory's 1995 operating income, Alling & Cory agreed
to lower the equity purchase price from $92,500,000.00 to $88,250,000.00.

On April 1 and April 2, 1996, representatives of Alling & Cory and Union
Camp met in the offices of Alling & Cory's counsel. The parties agreed to the
terms of the nonsolicitation provisions of the Merger Agreement and to closing
conditions that would meet Alling & Cory's requirements regarding assurance of
completion of the transaction. During that period, the parties agreed to the
method by which Union Camp's Common Stock would be valued. Negotiations
continued thereafter between the parties concerning certain final matters
regarding the conditions and covenants in the Merger Agreement.

On April 8, 1996, the Board of Directors of Alling & Cory met to discuss
the proposed transaction. Members of Alling & Cory's management updated the
<PAGE>
Alling & Cory Board of Directors on the events surrounding the transaction
since the last meeting, indicating the resolutions of certain issues and
describing those that remained outstanding. The Alling & Cory Board of
Directors then engaged in a lengthy discussion of the terms of the proposed
transaction and its benefits and costs to the Alling & Cory shareholders.
After listening to an oral presentation and opinion of Bear Stearns and
reviewing, analyzing and discussing the proposed transaction, the Alling &
Cory Board of Directors voted unanimously to approve the Merger Agreement in
substantially the form presented to it and to recommend the approval of the
Merger to the Alling & Cory shareholders.

On April 13, 1996, officers of Union Camp and Alling & Cory resolved the
remaining issues outstanding under the Merger Agreement, primarily in respect
of the treatment of certain contingent liabilities, and executed the Merger
Agreement.

During the course of its negotiations with Union Camp, Alling & Cory did
not terminate discussions with the First Potential Acquiror and continued to
provide certain information to the First Potential Acquiror. Upon being
informed of the signing of the Merger Agreement, the First Potential Acquiror
declined to pursue further a potential acquisition of Alling & Cory. Except
as described above, Alling & Cory has not received, either prior to or
subsequent to the public announcement of the Union Camp transaction, any
request for information or indication of interest from any third parties with
regard to an acquisition of Alling & Cory.

REASONS FOR THE MERGER AND RECOMMENDATION OF THE ALLING & CORY BOARD OF
DIRECTORS

At the special meeting held on April 8, 1996, the Alling & Cory Board of
Directors attended a presentation concerning, and reviewed the terms of, the
Merger Agreement with members of Alling & Cory's management and its legal
counsel and financial advisors. The Alling & Cory Board of Directors
unanimously determined that the Merger, upon the terms and conditions set
forth in the Merger Agreement, is fair to, and in the best interests of, the
shareholders of Alling & Cory. Accordingly, the Alling & Cory Board of
Directors has unanimously approved the Merger Agreement and unanimously
recommends that the holders of outstanding shares of Alling & Cory Common
Stock vote FOR approval of the Merger Agreement at the Special Meeting. In
reaching its determination, the Alling & Cory Board of Directors considered
and weighed many reasons and factors, including the following:

(i) The belief that Alling & Cory's business, financial condition
and future prospects, the strategic direction of Alling & Cory's business
and current conditions in and future prospects of the industry in which
it does business, as a whole, support the Board of Directors' decision to
pursue the Merger;

(ii) Certain strategic concerns facing Alling & Cory, including the
Alling & Cory shareholders' need for liquidity, Alling & Cory's lack of
internally generated capital both to supply sufficient shareholder
liquidity and to fund future growth, and the consolidation trend in the
industry and the competitive pressures on Alling & Cory expected to
result therefrom;

(iii) A review of the possible alternatives to the sale of Alling &
Cory, including the possibility of continuing to operate Alling & Cory as
an independent entity. The Board of Directors rejected the other
alternatives because it believed that Alling & Cory could more
successfully address the strategic concerns facing it through a merger
with Union Camp;

(iv) The oral presentation of Bear Stearns at the April 8, 1996
Board of Directors meeting to be confirmed by the written opinion of Bear
Stearns to be delivered prior to the mailing of the Proxy
<PAGE>
Statement/Prospectus, in which Bear Stearns stated its opinion that, as
of such date, based upon and subject to the various considerations set
forth in the opinion, the consideration to be received by holders of
Alling & Cory Common Stock pursuant to the Merger is fair, from a
financial point of view;

(v) The terms and conditions of the Merger Agreement, including the
opportunity for holders of Alling & Cory Common Stock to elect to receive
cash or Union Camp Common Stock in exchange for their shares;

(vi) The absence of any established trading market for Alling &
Cory Common Stock and the ability of holders of Alling & Cory Common
Stock, as a result of the Merger, to receive shares of Union Camp Common
Stock which are actively traded on the NYSE;

(vii) The fact that the Merger is not subject to any financial
conditions;

(viii) The rate of dividends historically paid on Union Camp Common
Stock, as compared to the rate of dividends historically paid on Alling &
Cory Common Stock;

(ix) The intention to qualify the Merger, for federal income tax
purposes, as a tax free reorganization for Alling & Cory and holders of
Alling & Cory Common Stock to the extent that they elect to receive
shares of Union Camp Common Stock in the Merger;

(x) The belief that Alling & Cory will continue to operate as an
independent subsidiary of Union Camp, with its present employees and
management. The Board of Directors believed that it was important to
protect the interests of its employees and to consider the desires of its
employees and retirees in general, and it concluded that the employees
and retirees who own approximately 50% of Alling & Cory's outstanding
shares would consider this a significant factor. It also believed that
this consideration would have substantial support among certain large
shareholders who are not employees or retirees;

(xi) The belief that the acquisition by Union Camp, coupled with
Union Camp's stated intention to increase its distribution capability,
provides a significant opportunity for Alling & Cory to expand its
business and increase its sales and profitability;

(xii) The belief that Union Camp and Alling & Cory corporate
cultures are compatible; and

(xiii) The belief that the Union Camp transaction offers unique
strategic advantages and opportunities for Alling & Cory.

The Board of Directors' determination that the Merger is fair and in the
best interests of Alling & Cory and its shareholders was based on a wide
variety of factors, including those referred to above. The Alling & Cory
Board of Directors believes that each of these factors supports its
recommendation that the Alling & Cory shareholders approve and adopt the
Merger Agreement and approve the terms of the Merger. The Board of Directors
did not attempt to quantify or assign any relative weights to the various
factors it considered in reaching its decision, but based its decision on the
totality of the information presented to it.

In reaching its conclusion that the Merger is fair and in the best
interests of Alling & Cory and its stockholders, the Board of Directors
recognized that seven of the 11 members of Alling & Cory's Board of Directors
are officers and/or employees of Alling & Cory and may have various interests
in the Merger which may differ from those of Alling & Cory's shareholders.
See "The Merger -- Interests of Certain Persons in the Merger."
<PAGE>
THE ALLING & CORY BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALLING &
CORY SHAREHOLDERS VOTE TO APPROVE AND ADOPT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY.

OPINION OF FINANCIAL ADVISOR

Alling & Cory retained Bear Stearns to act as its financial advisor and
to render its opinion as to whether the consideration to be received by the
shareholders of Alling & Cory pursuant to the Merger is fair, from a financial
point of view. Bear Stearns is an internationally recognized investment
banking firm and is continually engaged in the valuation of businesses and
their securities and in rendering opinions in connection with mergers,
acquisitions, corporate transactions and other purposes. Alling & Cory
retained Bear Stearns based on its qualifications, expertise and reputation in
providing advice to companies with respect to transactions similar to the
Merger.

At a meeting held on April 8, 1996, Bear Stearns orally advised Alling &
Cory's directors of its conclusions and on May , 1996 delivered to the Board
of Directors of Alling & Cory its written opinion to the effect that, based
upon and subject to the various considerations set forth in such opinion, as
of the date of such opinion, the consideration to be received by the share-
holders of Alling & Cory pursuant to the Merger is fair, from a financial
point of view. The summary of Bear Stearns' opinion set forth in this Proxy
Statement/Prospectus is qualified in its entirety by reference to the full
text of such opinion, which is attached as Annex B to this Proxy
Statement/Prospectus. Alling & Cory shareholders are urged to, and should,
read such opinion carefully in its entirety in connection with this Proxy
Statement/Prospectus for assumptions made, matters considered and limits of
the review by Bear Stearns.

In rendering its opinion, Bear Stearns did not opine as to any other
transactions or contractual arrangements to be entered into or payments to be
made by or to Alling & Cory or any other person concurrently with the Merger.
Bear Stearns' opinion was directed to the Board of Directors of Alling & Cory
and does not constitute a recommendation to any shareholder of Alling & Cory
as to how such shareholder should vote on the proposals to be considered at
the Special Meeting.

In arriving at its opinion, Bear Stearns, among other things: (i)
reviewed the Merger Agreement and certain related agreements; (ii) reviewed
Alling & Cory's Annual Reports to Shareholders for the fiscal years 1990
through 1995; (iii) reviewed certain operating and financial information,
including historical financial statements and projections provided to Bear
Stearns by Alling & Cory's senior management, relating to Alling & Cory's
business and prospects; (iv) met with certain members of Alling & Cory's
senior management to discuss Alling & Cory's business and operations,
historical financial performance, projections, current financial condition and
liquidity, expected capital requirements and future prospects; (v) visited
Alling & Cory's facilities in Rochester, New York; (vi) reviewed Union Camp's
Annual Reports to Shareholders for fiscal years 1993 through 1995; (vii)
reviewed certain operating and financial information provided to Bear Stearns
by Union Camp's senior management relating to Union Camp's business and
prospects; (viii) met with certain members of Union Camp's senior management
to discuss its operations, historical financial statements, future prospects
and its prospective business strategy for Alling & Cory and its views of
Alling & Cory's corporate and operating management, business and operations,
historical financial performance, projected financial performance, current
financial condition and liquidity, expected capital requirements and future
prospects; (ix) reviewed the historical prices, trading activity and valuation
parameters of Union Camp Common Stock; (x) reviewed publicly available
financial data, stock market performance data and valuation parameters of
certain companies that Bear Stearns deemed generally comparable to Alling &
Cory; (xi) reviewed the terms of selected precedent mergers and acquisitions,
to the extent publicly available, involving companies that Bear Stearns deemed
<PAGE>
generally comparable to Alling & Cory; and (xii) conducted such other studies,
analyses, inquiries and investigations as Bear Stearns deemed appropriate.

In connection with the foregoing, Bear Stearns relied without independent
verification upon the accuracy and completeness of all financial and other
information reviewed by it and representations of senior management related
thereto. With respect to Alling & Cory's projections, Bear Stearns assumed
that they had been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the senior management as to the expected
future performance of Alling & Cory. Bear Stearns did not assume any
responsibility for the information or current estimates provided to it and
relied upon the assurances of the senior management that it was unaware of any
facts that would make the information provided to Bear Stearns incomplete or
misleading. In arriving at its opinion, Bear Stearns did not perform or
obtain any independent appraisal or valuation of the assets or liabilities of
Alling & Cory or Union Camp or their respective subsidiaries and was not
provided with any such evaluation or appraisal. Bear Stearns' opinion was
necessarily based on economic, market and other conditions, and the
information made available to it, as of the date thereof.

In rendering its opinion, Bear Stearns considered (i) Alling & Cory's
recent financial performance, current financial condition and future
prospects; (ii) Alling & Cory's prospects for raising debt and/or equity in
the public and private capital markets; and (iii) various terms and conditions
of the Merger, including that (x) the Merger is subject to a vote of Alling &
Cory's shareholders, (y) the "no solicitation" and "termination" provisions of
the Merger Agreement provide the Board of Directors of Alling & Cory with the
flexibility to exercise its fiduciary duty to pursue certain alternative
transactions in lieu of the Merger and (z) the irrevocable proxies granted to
Union Camp by Mr. Hubbard, Mr. Harris and all other members of the Board of
Directors of Alling & Cory who own shares of Alling & Cory Common Stock.

The following is a summary of the principal financial and valuation
analyses performed by Bear Stearns to arrive at its opinion. Based on these
financial and valuation analyses and the other factors discussed herein, Bear
Stearns determined that, as of the date of its opinion, the consideration to
be received by the shareholders of Alling & Cory pursuant to the Merger is
fair, from a financial point of view. In arriving at its opinion, Bear
Stearns did not attribute any particular weight to any analysis or factor
considered by it, but rather made a single judgment as to fairness based on
its experience and professional judgment and the analyses as a whole.

Review and Analysis of Alling & Cory's Financial and Operating
Performance. Bear Stearns reviewed and analyzed the historical financial and
operating performance of Alling & Cory for fiscal years 1989 through 1995.
This review and analysis considered Alling & Cory's reported revenues, gross
profit, earnings before interest, taxes, depreciation and amortization
("EBITDA"), earnings before interest and taxes ("EBIT") and net income,
adjusted to reflect the elimination of certain non-recurring items. Bear
Stearns noted that Alling & Cory's results for fiscal years 1989, 1990, 1991,
1992, 1993, 1994 and 1995 were, (i) total revenues of $528.5 million, $514.8
million, $481.9 million, $533.5 million, $557.2 million, $625.0 million and
$773.2 million, respectively, (ii) gross profit of $80.0 million, $79.6
million, $79.3 million, $83.0 million, $81.8 million, $86.0 million and $97.6
million, respectively; (iii) EBITDA of $14.8 million, $7.0 million, $6.8
million, $8.3 million, $5.5 million, $8.0 million and $14.1 million,
respectively, (iv) EBIT of $12.7 million, $5.1 million, $5.1 million, $6.3
million, $3.3 million, $5.9 million and $12.1 million, respectively; and (v)
net income of $5.8 million, $1.2 million, $1.3 million, $2.4 million, $0.9
million, $1.8 million and $4.8 million, respectively.

Analysis at Offer Price. Bear Stearns calculated the value of the
consideration to be received by the shareholders of Alling & Cory pursuant to
the Merger at $88.25 million (the "Merger Consideration") and the aggregate
value of the Merger (including the net indebtedness of $46.5 million to be
assumed by Union Camp) at $134.8 million (the "Transaction Value"). Bear
<PAGE>
Stearns considered the Transaction Value as a multiple of EBITDA and EBIT and
considered the Merger Consideration as a multiple of earnings for the last
twelve month ("LTM") period ended December 31, 1995. Bear Stearns' analysis
indicated Transaction Value multiples of LTM EBITDA of 9.6x and LTM EBIT of
11.1x and a Merger Consideration multiple of LTM earnings of 18.4x.

Analysis of Selected Publicly Traded Companies. Bear Stearns compared
certain operating and financial information of Alling & Cory to certain
publicly available operating, financial, trading and valuation information of
seven publicly traded companies, which, in Bear Stearns' judgment, were
reasonably comparable to Alling & Cory for purposes of this analysis. These
companies included Bearings, Inc., Hughes Supply, Inc., Marshall Industries,
Pioneer-Standard Electronics, Inc., Rykoff-Sexton, Inc., Super Food Services,
Inc. and United Stationers Inc. (collectively, the "Comparable Companies").
Bear Stearns' analysis of the Comparable Companies included reviewing their
enterprise values as a multiple of LTM EBITDA and LTM EBIT and their stock
prices as a multiple of earnings per share. In addition, Bear Stearns
analyzed various financial and operating performance measures of the
Comparable Companies including revenue growth, gross margins, EBITDA margins,
EBIT growth, EBIT margins, net income margins, earnings per share growth,
returns on equity and assets and total debt as a percentage of total
capitalization. Bear Stearns' analysis of the Comparable Companies indicated
that (i) the range of enterprise value to LTM EBITDA multiples was 6.0x to
12.0x with a harmonic mean (the reciprocal of the arithmetic mean of
reciprocals) of 8.2x; (ii) the range of enterprise value to LTM EBIT multiples
was 6.6x to 21.6x with a harmonic mean of 10.7x; and (iii) the range of stock
price to LTM earnings per share multiples was 10.9x to 26.0x with a harmonic
mean of 14.5x. Bear Stearns' analysis of various financial and operating
performance measures of the Comparable Companies indicated that (i) the range
of LTM EBITDA margins was 2.3% to 8.2% with an average of 4.7%; (ii) the range
of LTM EBIT margins was 1.3% to 7.5% with an average of 3.7%; (iii) the range
of LTM returns on equity was 2.1% to 17.4% with an average of 10.7%; and (iv)
the range of LTM returns on assets was 3.6% to 18.7% with an average of 9.1%.
Bear Stearns calculated Transaction Value multiples of LTM EBITDA of 9.6x and
LTM EBIT of 11.1x and a Merger Consideration multiple of LTM earnings of
18.4x. Bear Stearns' analysis indicated that Alling & Cory had a LTM EBITDA
margin of 1.8%, a LTM EBIT margin of 1.6%, a LTM return on equity of 12.0% and
a LTM return on assets of 6.7%.

Analysis of Selected Precedent Merger and Acquisition Transactions. Bear
Stearns reviewed and analyzed the publicly available financial terms of 11
selected merger and acquisition transactions which, in Bear Stearns' judgment,
were reasonably comparable to the Merger for purposes of this analysis. The
11 transactions included (i) the acquisition of US Foodservice Inc. by Rykoff-
Sexton, Inc.; (ii) the acquisition of Curtis Matheson Scientific, Inc./Fisons
Scientific U.K., Limited from Fisons plc by Fisher Scientific International
Inc.; (iii) the acquisition of United Stationers Inc. by Associated
Stationers, Inc.; (iv) the acquisition of Anthem Electronics, Inc. by Arrow
Electronics, Inc.; (v) the acquisition of Hanson Office Products Group from
Hanson plc by Corporate Express, Inc.; (vi) the acquisition of Eastman Office
Products Corporation by Office Depot, Inc.; (vii) the acquisition of Butler
Paper Company from Georgia-Pacific Corporation by Alco Standard Corporation;
(viii) the acquisition of Hall-Mark Electronics Corporation by Avnet, Inc.;
(ix) the acquisition of Eastman Office Products Corporation by McCown De
Leeuw; (x) the acquisition of The Paper Distribution Group of Abitibi-Price
Inc. by Alco Standard Corporation; and (xi) the acquisition of SDC
Distributing Corp. by United Stationers Inc. (collectively, the "Precedent M&A
Transactions"). Bear Stearns reviewed the prices paid in the Precedent M&A
Transactions and analyzed various operating and financial information and
imputed valuation multiples and ratios. Bear Stearns' analysis of the
Precedent M&A Transactions indicated that the range of enterprise value to
EBITDA multiples was 5.7x to 15.4x with a harmonic mean of 9.5x. Bear
Stearns' analysis of various financial and operating performance measures
indicated that (i) the range of EBITDA margins was 1.5% to 9.1% with an
average of 4.9%; (ii) the range of sales growth rates was (2.6%) to 24.0% with
an average of 10.7%; and (iii) the range of EBIT growth rates was (25.4%) to
<PAGE>
52.6% with an average of 9.2%. Bear Stearns calculated the Transaction Value
multiple of LTM EBITDA of 9.6x. Bear Stearns' analysis indicated that Alling
& Cory had a LTM EBITDA margin of 1.8%, a sales growth rate of 6.6% and an
EBIT growth rate of 1.1%.

Discounted Cash Flow Analysis. Bear Stearns performed discounted cash
flow analyses using projections based on operating assumptions provided by
management of Alling & Cory as well as projections based on the average sales
growth rates and EBIT margins of Alling & Cory since 1989. Bear Stearns
calculated a net present value of free cash flows for Alling & Cory for the
calendar years 1996 though 2000 using discount rates ranging from 13.1% to
14.1%. Bear Stearns then calculated estimated terminal values for Alling &
Cory using multiples of 7.5x, 8.5x and 9.5x projected EBITDA for calendar year
2000. Based on the discount rates above and the discounted cash flows, these
analyses produced estimated net present values for Alling & Cory, when using
the terminal value multiple of 7.5x, that ranged from $87.0 million to $170.5
million, with an implied equity value of $40.5 million to $124.0 million, when
using the terminal value multiple of 8.5x, that ranged from $97.0 million to
$190.0 million, with an implied equity value of $50.5 million to $143.5
million, and when using the terminal value multiple of 9.5x, that ranged from
$107.0 million to $209.5 million, with an implied equity value of $60.5
million to $163.0 million.

Analysis of the Securities to be Issued. Bear Stearns compared certain
operating and financial information of Union Camp to certain publicly
available operating, financial, trading and valuation information of seven
publicly traded companies, which, in Bear Stearns' judgment, were comparable
to Union Camp for purposes of this analysis. These companies included Boise
Cascade Corporation, Champion International Corporation, Domtar Inc., Georgia-
Pacific Corporation, International Paper Company, The Mead Corporation and
Westvaco Corporation (collectively, the "UCC Comparable Companies"). Bear
Stearns' analysis of the UCC Comparable Companies included reviewing their
enterprise values as a multiple of LTM EBITDA and LTM EBIT and their stock
prices as a multiple of LTM earnings per share; in addition, Bear Stearns
analyzed various financial and operating performance measures of the UCC
Comparable Companies including revenue growth, gross margins, EBITDA margins,
EBIT growth, EBIT margins, net income margins, earnings per share growth,
returns on equity and assets, dividend yield and total debt as a percentage of
total capitalization. Bear Stearns' analysis of the UCC Comparable Companies
indicated that (i) the range of enterprise value to LTM EBITDA multiples was
3.3x to 5.6x with a harmonic mean of 4.2x; (ii) the range of enterprise value
to LTM EBIT multiples was 4.2x to 8.1x with a harmonic mean of 5.7x; and (iii)
the range of stock price to LTM earnings per share multiples was 4.3x to 11.3x
with a harmonic mean of 6.9x. Bear Stearns' analysis of various financial and
operating performance measures of the UCC Comparable Companies indicated that
(i) the range of LTM EBITDA margins was 15.0% to 26.8% with an average of
21.3%; (ii) the range of LTM EBIT margins was 10.4% to 21.1% with an average
of 15.7%; (iii) the range of LTM returns on equity was 13.3% to 28.9% with an
average of 18.8%; (iv) the range of LTM returns on assets was 10.5% to 18.2%
with an average of 14.2%; and (v) the range of dividend yields was 0.4% to
2.9% with an average of 2.0%. Bear Stearns calculated Union Camp's enterprise
value as a multiple of LTM EBITDA of 4.3x, Union Camp's enterprise value as a
multiple of LTM EBIT of 5.8x and Union Camp's stock price as a multiple of LTM
earnings per share of 7.8x. Bear Stearns' analysis indicated that Union Camp
had a LTM EBITDA margin of 26.7%, a LTM EBIT margin of 19.9%, a LTM return on
equity of 21.1%, a LTM return on assets of 17.0% and a dividend yield of 3.6%.

The foregoing summary does not purport to be a complete description of
the analyses performed and factors considered by Bear Stearns in arriving at
its opinion. The preparation of a fairness opinion is a complex process and
is not susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without
considering the analysis as a whole, could create an incomplete view of the
processes underlying Bear Stearns' opinion. In arriving at its opinion, Bear
Stearns considered the results of all such reviews, calculations and analyses.
No company or transaction used in the analyses described above as a comparison
<PAGE>
is identical to Alling & Cory, Union Camp or the proposed transaction.
Accordingly, an analysis of the results of the foregoing is not mathematical;
rather it involves complex considerations and judgments concerning differences
in financial and operating characteristics of the companies and other factors
that could affect the public trading or private market values of the company
or companies to which they are being compared.

The analyses were prepared solely for purposes of providing Bear Stearns'
opinion as to the fairness, from a financial point of view, of the
consideration to be received by the shareholders of Alling & Cory pursuant to
the Merger and do not purport to be appraisals or necessarily reflect the
prices at which businesses or securities might actually be sold to other
parties. Analyses based upon forecasts of future results are not necessarily
indicative of actual future results, which may be significantly more or less
favorable than suggested by such analyses. Because such analyses are
inherently subject to uncertainty, being based on numerous factors or events
beyond the control of the parties or their respective advisors, neither Alling
& Cory nor Bear Stearns or any other person assumes responsibility if future
results are materially different from those forecast. As described above,
Bear Stearns' opinion and presentation to the Board of Directors of Alling &
Cory was one of many factors taken into consideration by the Board of
Directors of Alling & Cory in making its determination to approve the Merger
and recommend the proposals to the shareholders of Alling & Cory.

Pursuant to a letter agreement dated December 14, 1995 entered into by
Alling & Cory and Bear Stearns, Alling & Cory has agreed to pay Bear Stearns
(i) an initial cash fee of $150,000, (ii) a cash fee of $200,000 upon the
rendering of its opinion and (iii) a cash fee equal to the greater of (a)
$1,000,000 against which shall be credited any amounts previously paid to Bear
Stearns pursuant to clauses (i) and (ii) above or (b) 1.0% of the total
consideration paid by a purchaser in respect of (x) assets or operations of
Alling & Cory, (y) Alling & Cory Common Stock and (z) the assumption, directly
or indirectly, or repayment of indebtedness for borrowed money against which
shall be credited any amounts previously paid to Bear Stearns pursuant to
clauses (i) and (ii) above. Alling & Cory also has agreed to reimburse Bear
Stearns for its out-of-pocket expenses, including the fees and disbursements
of counsel. Alling & Cory has agreed to indemnify Bear Stearns and certain
related persons against certain liabilities in connection with the engagement
of Bear Stearns, including certain liabilities under the federal securities
laws.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

The directors and executive officers of Alling & Cory, as a group, are
the beneficial owners of 201,369 shares, or approximately 26% of the
outstanding Alling & Cory Common Stock. By reason of this stock ownership,
the directors and executive officers have a substantial financial interest in
the Merger. Each director who owns Alling & Cory Common Stock has granted
Union Camp a proxy to vote in favor of the approval and adoption of the Merger
Agreement and the approval of the terms of the Merger. See "Voting Securities
and Principal Holders Thereof" and "The Special Meeting -- Vote Required."

Certain members of Alling & Cory's management also have interests in the
Merger in addition to their interests solely as shareholders of Alling & Cory,
as described below.

Employment Agreement. On January 31, 1989, Mr. Hubbard entered into the
Employment Agreement with Alling & Cory that became operative upon the
Starting Date and which will continue in effect for a term of three years from
such date.

The Employment Agreement provides that during the three-year period
immediately following the Starting Date, Alling & Cory will employ Mr. Hubbard
in an executive capacity with similar duties and at the same location as he
was engaged in on the Starting Date. As compensation for his services, Mr.
<PAGE>
Hubbard will receive: (i) an annual base salary equal to $350,000 and (ii) a
bonus in an amount not less than $40,000 per year. Subject to certain
conditions, at the Starting Date, and for each year during the term of the
agreement, Mr. Hubbard's salary and bonus are subject to a cost of living
increase based on the consumer price index. The Employment Agreement also
provides that Mr. Hubbard is entitled to the maximum amount of benefits,
including, but not limited to, any incentive compensation plan or arrangement,
to which he was entitled under his employment arrangement as it existed at any
time during the one year period immediately preceding the Starting Date. Mr.
Hubbard may terminate the agreement at will on 30 days' notice to Alling &
Cory. Alling & Cory can terminate the agreement only for willful misconduct
in the performance of Mr. Hubbard's duties.

The Employment Agreement contains a liquidated damages clause that
becomes effective when Alling & Cory either (i) breaches the agreement by
terminating Mr. Hubbard; (ii) makes any material change in Mr. Hubbard's
duties; or (iii) changes the location at which Mr. Hubbard is asked to perform
his duties to a location outside of Monroe County, New York. Upon the
occurrence of any one of these events, Mr. Hubbard will be entitled to the
entire amount of salary, bonus and benefits he would be entitled to during the
remaining term of the agreement. The Employment Agreement contains no
provision, nor is there any separate agreement, that prohibits Mr. Hubbard
from competing with Alling & Cory upon termination of the Employment
Agreement.

Alling & Cory Retirement Plans. Alling & Cory has in effect the
Retirement Restoration Plan for Participants in The Retirement Plan of Alling
& Cory (the "Retirement Restoration Plan"). The Retirement Restoration Plan
is an excess benefit plan which provides retirement benefits equal to the
amount that the participant's retirement benefit pursuant to the formula in
The Retirement Plan of Alling & Cory is reduced by certain limitations of the
Internal Revenue Code and the regulations thereunder. The Board of Directors
of Alling & Cory previously had designated the participants in the Retirement
Restoration Plan immediately prior to their retirement. However, on February
8, 1996 Alling & Cory's Board of Directors named ten employees, including each
of the officers who are directors of Alling & Cory, as participants in this
plan.

Additionally, on February 8, 1996, the Alling & Cory Board of Directors
adopted a nonqualified deferred compensation plan entitled "Retirement
Enhancement Plan For Certain Highly Compensated Employees of Alling & Cory"
("Enhancement Plan"). The purpose of the Enhancement Plan is to provide total
retirement benefits for director/employees of Alling & Cory in the event of a
change of control of Alling & Cory equal to the retirement benefit they would
have earned if they had worked until the earlier of age 55 or the tenth
anniversary of their employment termination date. The Enhancement Plan pays
the difference between the retirement benefit paid from The Retirement Plan of
Alling & Cory and the Retirement Restoration Plan and the benefit a
director/employee would have received from those plans if he or she had been
employed until the earlier of the tenth anniversary date of the termination of
employment or age 55. A participant only receives a benefit if he or she is
terminated without "cause" after a change in control of Alling & Cory as
defined in the Enhancement Plan. The Alling & Cory Board of Directors named
six officers, all of whom are also directors of Alling & Cory, as participants
in this plan.

Equity Participation. Subsequent to the execution of the Merger
Agreement, Union Camp in principle agreed to establish the Alling & Cory LTIP
in order to more closely align the interests of such officers to the
performance of Alling & Cory. The officers of Alling & Cory who initially
will be eligible to participate in the Alling & Cory LTIP will be Mr. Hubbard,
Mr. Carney, Mr. Henderson, Mr. Maddock, and Mr. Preston. While the precise
terms of the Alling & Cory LTIP have not been fully determined, it is
anticipated that each participant will purchase and/or be granted LTIP Rights.
It is anticipated that, initially, participants in the Alling & Cory LTIP will
purchase and/or be granted LTIP Rights with an aggregate value equal to an
<PAGE>
approximately 1% equity interest in the Surviving Corporation. It is not
anticipated that the aggregate value of the LTIP Rights available for grant
will exceed a 5% equity interest in the Surviving Corporation.

Indemnification. Under the terms of the Merger, the current Certificate
of Incorporation and by-laws of Alling & Cory will remain in effect until
amended as provided therein. Officers and directors of Alling & Cory will
benefit from the continuing indemnification provisions thereof.

RESTRICTIONS ON RESALES OF UNION CAMP COMMON STOCK

The shares of Union Camp Common Stock to be issued to holders of Alling &
Cory Common Stock pursuant to the Merger Agreement have been registered under
the Securities Act and, therefore, will be freely transferable under the
Securities Act except for shares issued to any person who may be deemed to be
an "affiliate" of Alling & Cory within the meaning of Rule 145 under the
Securities Act. Under Rule 145, any person deemed to be an "affiliate" of
Alling & Cory, will be restricted from selling any shares of Union Camp Common
Stock received by them in the Merger, unless such sales are made in accordance
with the provisions of Rule 145 (including the related volume and other
limitations of Rule 144 under the Securities Act) or any such offering by them
is registered under the Securities Act or otherwise exempt from the registra-
tion requirements thereof. Persons who may be deemed to be an affiliate of
Alling & Cory or Union Camp generally include individuals or entities that
control, are controlled by or under common control with such party and may
include certain officers and directors of such party as well as principal
stockholders of such party. The Merger Agreement obligates Alling & Cory to
use reasonable efforts to cause each person who may be deemed to be an
"affiliate" of Alling & Cory to enter into an agreement (an "Affiliate
Agreement") with Union Camp at or prior to the Effective Time providing that
such affiliate will not offer to sell, sell or otherwise dispose of any shares
of Union Camp Common Stock issued to such person pursuant to the Merger,
except pursuant to an effective registration statement or in compliance with
Rule 145 or in a manner not requiring registration under or pursuant to an
exemption from the registration requirements of the Securities Act. Pursuant
to such Affiliate Agreement, Union Camp will agree that if any such person is
not able to dispose of his or her shares in compliance with Rule 145 or in a
manner not requiring registration under or pursuant to an exemption from the
registration requirements of the Securities Act, it will use its reasonable
efforts to register for resale the shares of Union Camp Common Stock issued to
such person pursuant to the Merger at the request of such person provided that
the person requesting such registration pays all of Union Camp's fees and
expenses in connection with such registration. If any such affiliate refuses
to enter into such an Affiliate Agreement, Union Camp will be entitled to
cause appropriate legends to be placed on any certificates evidencing the
Union Camp Common Stock to be received by such affiliate in the Merger. Union
Camp may also issue appropriate stop transfer instructions to its transfer
agent to the effect that the shares of Union Camp Common Stock received or to
be received by such affiliate in the Merger may only be sold, transferred or
otherwise conveyed, and the holder thereof may only reduce his or her interest
in or risks relating to such shares of Union Camp Common Stock, pursuant to an
effective registration statement under the Securities Act, in accordance with
the provisions of paragraph (d) of Rule 145, or in a manner not requiring
registration under or pursuant to an exemption provided from registration
under the Securities Act. Such restrictions on the transferability of Union
Camp Common Stock will apply to all purported sales, transfers and other
conveyances of the shares of Union Camp Common Stock received or to be
received by an affiliate pursuant to the Merger and to all purported
reductions in the interest in or risks relating to such shares of Union Camp
Common Stock, whether or not the affiliate has exchanged the certificates
previously evidencing shares of Alling & Cory Common Stock for certificates
evidencing the shares of Union Camp Common Stock into which the affiliate's
shares of Alling & Cory Common Stock were converted.
<PAGE>
ACCOUNTING TREATMENT

Union Camp will account for the acquisition of Alling & Cory pursuant to
the Merger as a purchase transaction.

FINANCING OF THE MERGER

Union Camp will require no outside financing to fund the purchase price
of the outstanding shares of Alling & Cory Common Stock with respect to which
an effective Cash Election has been made. Union Camp will purchase the shares
of Alling & Cory Common Stock with respect to which an effective Stock
Election has been made by issuing additional shares of Union Camp Common
Stock.

SHARE REPURCHASE PROGRAM

In the second quarter of 1995, the Board of Directors of Union Camp
authorized the repurchase of up to 5.0 million shares of Union Camp Common
Stock. To date, Union Camp has repurchased approximately 1.15 million shares
of Union Camp Common Stock at a cost of approximately $59.6 million. Union
Camp currently intends to repurchase a number of shares of Union Camp Common
Stock approximately equal to the number of shares of Union Camp Common Stock
to be issued in the Merger. Such repurchases will be accomplished at Union
Camp's discretion, either before or after the consummation of the Merger,
subject to applicable laws and regulations. Union Camp will not repurchase
any Union Camp Common Stock during the twenty-five trading days immediately
preceding the Closing Date. Union Camp anticipates that any future
repurchases of Union Camp Common Stock will be accomplished using internally
generated cash or through the issuance of debt securities or other debt
financing.

DESCRIPTION OF ALLING & CORY

Alling & Cory is principally engaged in the wholesale and retail
distribution of fine printing, writing and publishing papers, industrial
packaging equipment and supplies, janitorial products and magnetic media
supplies. Alling & Cory's wholly-owned subsidiary, Alcor Envelope,
manufactures envelopes which are distributed by Alling & Cory.

Wholesale Distribution. Alling & Cory distributes over 20,000 different
products purchased from in excess of 1,000 different suppliers. Distribution
operations are conducted out of 15 warehouse/office facilities located in the
States of New York, New Jersey, Pennsylvania, Maryland, Ohio and West
Virginia. Customers are principally located in those states and in Delaware
and Virginia.

The largest segment, approximately 83% of 1995 net sales, were from
wholesale paper distribution to over 12,000 customers, principally publishers,
commercial printers and office paper users. Approximately 14% of 1995 net
sales were from industrial packaging equipment and supplies.

Retail Distribution. Alling & Cory operates 20 retail stores, under the
name "The Paper Shop," for distribution of fine writing and printing papers,
janitorial products, magnetic media supplies and other selected office items.
The Paper Shops are located in Pennsylvania (8 stores), New York (7 stores),
New Jersey (3 stores) and Ohio (2 stores). Retail distribution accounted for
approximately 3% of Alling & Cory's 1995 net sales.

The typical Paper Shop is approximately 6,500 square feet in size and
stocks over 1,500 different products, typically papers and graphic arts
supplies. The Paper Shop customers are principally small printers and office
paper users.
<PAGE>
Envelope Manufacturing. Alcor Envelope operates an envelope
manufacturing facility of approximately 88,000 square feet located in Hamburg,
New York with a capacity of over one billion envelopes per year. Envelopes
are manufactured by Alcor Envelope in varying sizes and paper types. Alcor
Envelope's facility is generally operated five to seven days per week on a
multi-shift basis. Substantially all of the envelopes manufactured by Alcor
Envelope are distributed by Alling & Cory. Wholesale distribution of
envelopes manufactured by Alcor Envelope accounted for approximately 3% of
1995 net sales, which net sales were included in the net sales from wholesale
paper distribution.

Sources of Supply. Products distributed by Alling & Cory are purchased
from a variety of sources and Alling & Cory is not dependent upon any one
source for any of Alling & Cory's principal products. Principal suppliers of
Alling & Cory include International Paper Company, S.D. Warren Co.,
Weyerhauser Company, Union Camp, Penntech Papers and Consolidated Papers Inc.
which supply approximately 16.5%, 9.7%, 8.1%, 7.6%, 5.3% and 5.0%,
respectively, of the products distributed by Alling & Cory, based on the cost
of such products to Alling & Cory. Alling & Cory's top ten suppliers
accounted for approximately 68.6% of the products distributed by Alling &
Cory, based on the cost of such products to Alling & Cory. In addition,
approximately 55.6% of the coated papers distributed by Alling & Cory are
supplied by S.D. Warren Co. Management believes that in the event this source
of supply were to be interrupted, Alling & Cory would be able to secure
alternate sources of supply for these products. Raw materials used by Alcor
Envelope are principally paper and adhesives. Again, these are purchased from
a variety of sources and Alcor Envelope is not dependent upon any one source
of supply. Although available from numerous sources, from time to time paper
is in short supply in the United States market which can result in increased
prices and difficulties in meeting customer demand. Fluctuations in price and
availability of paper will generally affect both Alling & Cory and its
competitors.

Employees. As of April 1, 1996, Alling & Cory employed approximately
1,189 persons of whom approximately 344 were executive, administrative and
clerical personnel, 418 were sales personnel and 427 were manufacturing and
other skilled personnel. Approximately 91 of Alling & Cory's employees are
represented by three labor unions. Management believes that Alling & Cory's
labor relations are good.

Competition. Each of the three major businesses in which Alling & Cory
operates, wholesale distribution, retail distribution and envelope
manufacturing, is highly competitive. Competition is based primarily upon
service, quality and price. Alling & Cory has many competitors in each of the
businesses in which it operates, some of whom have substantially greater
financial and other resources than Alling & Cory.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF ALLING & CORY

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Sales. Net Sales for 1995 increased by 23.7% to $763.6 million from
$617.5 million in 1994. This increase was due primarily to the rapid increase
in the cost of paper which began in July 1994 and continued through June 1995,
which in turn Alling & Cory reflected in the prices of its products to its
customers.

Alling & Cory has two primary distribution channels. The net sales for
each of these channels in 1995 compared to 1994 were as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994
$ % $ %

(dollar amounts in millions)
<S> <C> <C> <C> <C>
Wholesale Distribution $742.1 97.2 $599.7 97.1
Retail Paper Shops $21.5 2.8 $17.8 2.9
</TABLE>

The wholesale distribution division, after eliminating intercompany
transactions, experienced a 23.7% increase in net sales from $599.7 million to
$742.1 million. This increase was principally the result of increases in the
prices of all grades of paper, particularly for groundwood coated and book
publishing grades.

Alling & Cory opened two new Paper Shops in 1995, but these units only
accounted for less than $0.6 million in net sales. Same store net sales
through the Paper Shops increased by 18.0% or $3.2 million in 1995 over 1994.
This improvement was the result of increased volume and higher prices for
products sold through the Paper Shops.

Alcor Envelope reported net sales of $19.7 million for 1995 and $15.7
million for 1994. Except for an immaterial amount, these sales were to Alling
& Cory and have been eliminated in consolidation in the net sales results set
forth above.

Gross Profit. Gross profit increased 12.0% to $99.3 million for 1995
from $88.7 million in 1994. Alling & Cory was unable to pass on the price
increases from its suppliers to its customers as quickly as these increases
were implemented by Alling & Cory's suppliers. This condition, plus continued
competitive pressure on selling prices, resulted in gross margin as a
percentage of net sales declining to 13.0% in 1995 from 14.4% in 1994.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 4.6% over 1994 from $84.3 million to $88.2
million. Selling expenses accounted for $2.9 million of the increase. As a
percentage of net sales, selling, general and administrative expenses declined
to 11.6% in 1995 from 13.7% in 1994. This reduction as a percentage of net
sales resulted primarily from a reduction in sales through warehouses as a
percentage of total sales.

Management believes employee productivity has continued to improve due to
continued pursuit of total quality management principles, the consolidation of
Alling & Cory's warehouse system from 19 to 15 distribution centers, and
further progress toward "pay-for-performance" compensation methods.

Other Income (Expense). Other income (expense) declined from an income
of $0.7 million in 1994 to an expense of $2.9 million in 1995, a decrease of
<PAGE>
$3.6 million, primarily as the result of higher interest expense of $3.9
million in 1995 compared to $2.6 million in 1994. The increased interest
expense was due to higher levels of borrowing to support working capital needs
and higher average interest rates. In addition, in 1994 Alling & Cory
received condemnation proceeds from the City of Rochester, New York for Alling
& Cory's headquarters facility in a gross amount of $3.2 million, of which
$1.9 million was recorded as a gain.

For 1995, earnings before income taxes and the cumulative effect of an
accounting change (in the amount of $287,700 in 1994) were $8.2 million, a
64.0% increase over the prior year's level of $5.0 million and 1995 net
earnings were $4.8 million, an 84.6% increase over the 1994 level of $2.6
million due to the factors mentioned above. Alling & Cory's effective tax
rate of 41.2% for 1995 was down slightly from the prior year's rate of 42.8%
as a result of the net effect of various permanent differences.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

Net Sales. Net sales for 1994 increased by 12.1% to $617.5 million from
$550.7 million for 1993. This increase was due primarily to volume gains and
price increases for paper and plastic commodity items in the second half of
1994.

The net sales for each of Alling & Cory's two primary distribution
channels in 1994 compared to 1993 were as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993
$ % $ %

(dollar amounts in millions)
<S> <C> <C> <C> <C>
Wholesale Distribution $599.7 97.1 $534.9 97.1
Retail Paper Shops $17.8 2.9 $15.8 2.9
</TABLE>

The wholesale distribution division, after eliminating intercompany
transactions, experienced a 12.1% increase in net sales from $534.9 to $599.7.
This increase was principally the result of higher unit volume and rising
prices in the second half of the year.

No new Paper Shops were opened in 1994. Same store net sales through the
Paper Shops increased by 12.7% or $2.0 million in 1994 over 1993. This
improvement was the result of increased volume and higher prices for products
sold through the Paper Shops.

Alcor Envelope reported net sales of $15.7 million for 1994 and $14.1
million for 1993. Except for an immaterial amount, these sales were to Alling
& Cory and have been eliminated in consolidation in the net sales results set
forth above.

Gross Profit. Gross profit increased 6.9% to $88.7 million for 1994 from
$83.0 million in 1993. The primary causes of the 1994 increase in gross
margin were increased selling prices and higher sales volume. Competitive
pressures on selling prices reduced Alling & Cory's gross margin as a
percentage of net sales to 14.4% in 1994 from 15.1% in 1993.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 5.0% over 1993 from $80.3 million to $84.3
million. As a percentage of net sales, selling, general and administrative
expenses declined to 13.7% in 1994 from 14.6% in 1993. This reduction as a
percentage of net sales resulted primarily from a slightly greater proportion
of mill direct sales in 1994 over 1993 and continued expense control efforts
by Alling & Cory.
<PAGE>
Other Income (Expense). Other income (expense) increased by $1.1 million
from an expense of $0.4 million in 1993 to an income of $0.7 million in 1994.
Higher interest expense of $2.6 million for 1994 compared to $1.9 million in
1993, primarily as a result of the higher levels of borrowing to support
working capital needs and higher average interest rates, was offset by the
receipt in 1994 of $3.2 million in condemnation proceeds from the City of
Rochester, New York for Alling & Cory's headquarters of which $1.9 million was
recorded as a gain.

For 1994, earnings before income taxes and the cumulative effect of
accounting changes (in the amount of $287,700 in 1994 and $155,600 in 1993)
were $5.0 million, a 108.3% increase over the prior year's level of $2.4
million and 1994 net earnings were $2.6 million, an 85.7% increase over the
prior year's level of $1.4 million. Alling & Cory's 1994 effective tax rate
of 42.8% was up from 34.7% for 1993 due primarily to the adjustment of prior
year accruals during 1993 that did not recur during 1994.

LIQUIDITY AND CAPITAL RESOURCES

Alling & Cory's primary capital requirements for 1995 were the funding of
its move to a new headquarters facility, the costs associated with a new
operating software system, and working capital to support business expansion.

In 1994 the capital requirements of Alling & Cory were primarily for
working capital and the repurchase of stock from shareholders.

In fiscal years 1995 and 1994, these capital requirements were met
through cash flows from operations and financing under Alling & Cory's
revolving credit facility. In 1994, cash flow needs were also met by $2.7
million in cash proceeds from the sale of two facilities.

Alling & Cory's primary borrowing source is revolving credit agreements
with a group of commercial banks. In June of 1995, Alling & Cory added two
banks to the pre-existing group of three and expanded the aggregate commit-
ments from $49 million to $64 million. These agreements expire in May 1997
and are secured by Alling & Cory's accounts receivable. As of year-end 1995,
Alling & Cory was in compliance with the terms and conditions of these
agreements and management believes this financing will be adequate for the
remaining term of the agreements.

Alling & Cory's working capital increased during the year from $40.4
million at year-end 1994 to $42.6 million at year-end 1995. This was the
result of cash flow from operations exceeding the amounts paid out for capital
expenditures and to Alling & Cory's shareholders as dividends. At year-end
1995, Alling & Cory's outstanding amounts under its revolving credit notes
were 48.5% of the eligible receivables. Although other terms and conditions
of the agreements could change, management believes, if necessary, additional
monies could be raised by the further leveraging of this receivables borrowing
base.

In 1996, management anticipates Alling & Cory's primary capital
requirements will be the completion of the installation of its new computer
operating system and the move into a build-to-suit leased facility in
Cleveland, Ohio. The estimated total cost for these projects is $5.5 million
of which $3.2 million has been spent through 1995. Alling & Cory has also
budgeted the opening of four new Paper Shops at a cost of $300,000.
Management believes Alling & Cory's existing revolving credit facility will be
more than adequate to fund these requirements and does not plan to secure
additional financing. Alling & Cory also has under contract the sale of its
existing Cleveland facility for $1.15 million, which after the repayment of
mortgage debt, will result in net cash proceeds of approximately $350,000.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Only holders of record of Alling & Cory Common Stock at the close of
business on the Record Date are entitled to notice of and to vote at the
Special Meeting, or any adjournment or postponement thereof. On the Record
Date there were 787,496 shares of Alling & Cory Common Stock issued and
outstanding held by 315 record owners. Each outstanding share is entitled to
one vote on each matter to be acted upon or which may properly be brought
before the Special Meeting.

The following table sets forth information with respect to the
"beneficial ownership," within the meaning of Rule 13d-3 promulgated under the
Exchange Act, of shares of Alling & Cory Common Stock as of May 1, 1996 by (i)
all known beneficial owners of more than 5% of the outstanding shares of
Alling & Cory Common Stock, (ii) each of the current directors and executive
officers of Alling & Cory and (iii) the current directors and the five most
highly compensated executive officers of Alling & Cory as a group. So far as
is known to Alling & Cory, the persons named below have sole direct voting and
investment power with respect to the shares indicated as owned by them, except
as otherwise stated in the notes to the table. Unless otherwise indicated,
the business address of each person listed in the table is 1059 West Ridge
Road, Rochester, NY 14602. So far as Alling & Cory is aware, it is neither
directly nor indirectly owned or controlled by one or more corporations nor by
any government.
<TABLE>
<CAPTION>

BENEFICIAL OWNER NUMBERS OF SHARES PERCENT OF SHARES
<S> <C> <C>

R. Macy Harris, III (1) 96,399 12.24

J.L. Nevill Smythe (2) 51,455 6.53
Lawrence Harris (3) 49,844 6.33

Jane Harris Hansford(4) 44,822 5.69
Samuel T. Hubbard, Jr. 17,118 2.17

Norman L. Alling (5) 10,347 1.31

John P. Maddock (6) 8,907 1.13
John B. Henderson (7) 6,350 *

Richard M. Harris, Jr. (8) 3,662 *
Paul C. Carney (9) 2,974 *

Robert G. Preston (10) 2,739 *

Margaret P. Supinski 1,077 *
Alan J. Underberg (11) 0 *

All directors and executive officers as a 201,369 25.57
group (12 persons, including those named
above) (11)

*Less than one percent

(1) Includes 42,400 shares held as trustee for the benefit of Richard M. Harris, Jr., 42,400 shares held as trustee for the
benefit of Mary Slocum Harris, 275 shares held by the spouse of R. Macy Harris, III and 224 shares held by the child of R.
Macy Harris, III.

(2) Includes 32,564 shares as to which voting and investment power are shared with Mellon Bank as co-trustees of two trusts,
one for the benefit of J.L. Nevill Smythe and the other for the benefit of Mary Shepard, 3,221 shares held by Mr. Smythe's
spouse and 2,576 shares as to which Mr. Smythe shares voting and investment power with his spouse. Mr. Smythe's address is
3 Huntingwood Retreat, Savannah, GA 31411.
<PAGE>
(3) Mr. Harris' address is Long's Point, Naples, NY 14512.

(4) Ms. Hansford's address is c/o Northern Trust Bank of Florida, 4001 Tamiami Trail North, Naples, Florida 33940.

(5) Includes 75 shares held by Norman L. Alling's spouse. Mr. Alling's address is 215 Sandringham Road, Rochester, NY 14610.

(6) Includes 1,037 shares as to which John P. Maddock shares voting and investment power with his spouse.

(7) Includes 1,000 shares owned by John B. Henderson's spouse.

(8) Includes 1,164 shares as to which Richard M. Harris, Jr. shares voting and investment power with Daniel E. Slocum as co-
trustees of a trust for the benefit of Dorothy E. Slocum.

(9) Includes 33 shares as to which Paul C. Carney shares voting and investment power with his spouse.

(10) Mr. Underberg's business address is c/o Underberg & Kessler, 1800 Chase Square, Rochester, NY 14604.

(11) See notes (1), (2) and (5) through (9) above.
</TABLE>

DESCRIPTION OF UNION CAMP CAPITAL STOCK

Union Camp is authorized to issue 125,000,000 shares of Common Stock, par
value $1 per share. As of March 4, 1996, 69,118,211 shares of Union Camp
Common Stock were issued and outstanding. Union Camp is authorized to issue
1,000,000 shares of Preferred Stock, par value $1 per share ("Union Camp
Preferred Stock"). No shares of Union Camp Preferred Stock are issued or
outstanding. If any Union Camp Preferred Stock should be issued, Union Camp
Common Stock may become subordinated to dividend, voting, liquidation and
other rights granted to holders of Union Camp Preferred Stock.

COMMON STOCK

Each holder of Union Camp Common Stock is entitled to one vote for each
share registered in his name upon all matters voted upon by holders of Union
Camp Common Stock. There is no provision for cumulative voting in the
election of directors, which means that holders of more than 50% of the shares
voting at an election of directors can elect all of the directors standing for
election if they choose to do so. Union Camp Common Stock is not subject to
redemption or to liability for further calls and holders of Union Camp Common
Stock have no conversion, subscription or preemptive rights.

Holders of Union Camp Common Stock are entitled to receive, out of funds
legally available therefor, such dividends as may be declared by the Board of
Directors.

Union Camp Common Stock is listed on the NYSE and the PSE.

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

In connection with its Shareholders' Rights Plan, Union Camp has reserved
for issuance up to 125,000 shares of Series A Junior Participating Preferred
Stock, par value $1 per share (the "Junior Preferred Stock"). No shares of
the Junior Preferred Stock are presently outstanding. Each holder of Junior
Preferred Stock is entitled to 1,000 votes per share, subject to adjustment,
on all matters voted on by shareholders. Holders of Junior Preferred Stock
are entitled to receive, out of funds legally available therefor, such
dividends as may be declared by the Board of Directors. Any outstanding
shares of Junior Preferred Stock may be redeemed at the option of the Board of
Directors as a whole, but not in part, at any time or from time to time. See
"-- Shareholders' Rights Plan."

SHAREHOLDERS' RIGHTS PLAN
<PAGE>
Union Camp has a Shareholders' Rights Plan pursuant to which Preferred
Stock Purchase Rights ("Rights") are issued to the holders of Union Camp
Common Stock at the rate of one Right for each share of Common Stock. Each
Right entitles the holder to purchase, under certain conditions (i) one one-
thousandth of a share of Union Camp's Junior Preferred Stock at an exercise
price of $175 or (ii) Union Camp Common Stock having a market value of two
times the exercise price. Alternatively, the Board of Directors may permit
holders to surrender each Right in exchange for one share of Union Camp Common
Stock. The Rights will be exercisable only if a person or group acquires 15%
or more of the outstanding Union Camp Common Stock or announces a tender offer
for 15% or more of the Union Camp Common Stock. The Rights expire February
26, 2006 and may be redeemed for $.001 per Right by the Board of Directors
prior to the time the Right becomes exercisable. In addition, if after any
person acquires 15% or more of the Union Camp Common Stock, Union Camp is
involved in a merger or other business combination transaction with another
person after which the Union Camp Common Stock does not remain outstanding, or
Union Camp sells 50% or more of its assets or earning power, each Right will
entitle its holder to purchase, at the then current exercise price, shares of
the acquiring company's common stock having a market value equal to two times
the exercise price.

Until one of the events described above occurs, the Rights will be
attached to all certificates representing shares of Union Camp Common Stock
then outstanding, and no separate certificates evidencing the Rights will be
distributed. Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of Union Camp, including the right to vote or
to receive dividends.

The Rights may have certain anti-takeover effects, including deterring
someone from acquiring control of Union Camp in a manner or on terms not
approved by Union Camp's Board of Directors. The Rights should not interfere
with any merger or other business combination approved by Union Camp's Board
of Directors, since the Rights may be redeemed generally at any time by Union
Camp as set forth above.

A copy of the Rights Agreement dated January 25, 1996, between Union Camp
and The Bank of New York, as Rights Agent, has been filed with the Commission
as an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Rights Agent. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated
herein by reference.
<PAGE>
THE MERGER AGREEMENT

The following is a brief summary of certain provisions of the Merger
Agreement, a copy of which is attached as Annex A to this Proxy
Statement/Prospectus and is incorporated herein by reference. This summary is
qualified in its entirety by reference to the Merger Agreement.

THE MERGER

The Merger Agreement provides that following adoption of the Merger
Agreement and the transactions contemplated thereby by the holders of the
Alling & Cory Common Stock and the satisfaction or waiver of the other
conditions to the Merger, Merger Sub will be merged with and into Alling &
Cory in accordance with the NYBCL. Alling & Cory will be the surviving
corporation (the "Surviving Corporation") in the Merger and upon the
effectiveness of the Merger the initial officers of the Surviving Corporation
shall be the officers of Alling & Cory. The initial directors of the
Surviving Corporation will be James M. Reed, Dirk R. Soutendijk and Samuel T.
Hubbard, Jr. Additionally, the Certificate of Incorporation and By-laws of
Alling & Cory in effect immediately prior to the Effective Time will be the
Certificate of Incorporation and By-laws of the Surviving Corporation until
thereafter amended.

Pursuant to the terms of the Merger Agreement, as of the Effective Time:
(i) each issued and outstanding share of capital stock of Merger Sub will
remain outstanding and be converted into one share of common stock of the
Surviving Corporation, (ii) all shares of Alling & Cory Common Stock held by
Alling & Cory as treasury stock or by a wholly-owned subsidiary of Alling &
Cory will be cancelled, and (iii) each outstanding share of Alling & Cory
Common Stock, other than shares cancelled pursuant to clause (ii) above and
shares held by shareholders who exercise appraisal rights under the NYBCL,
will be converted into the right to receive, at the option and pursuant to the
election of the holder thereof, either an amount in cash (the "Cash Election
Price") or a number of shares of Union Camp Common Stock equal to the Share
Conversion Number and certain other consideration, in each case subject to
certain adjustments, as specified below. See "-- Stock Election," "-- Certain
Contingencies; Escrow Arrangements" and "-- Method of Election."

Cash Election. Each shareholder of Alling & Cory who elects to receive
the Cash Election Price in respect of any of his shares of Alling & Cory
Common Stock shall have each such share of Alling & Cory Common Stock in
respect of which an effective Cash Election is made converted into the right
to receive the Cash Election Price. The Cash Election Price shall be an
amount equal to the quotient resulting from dividing the total value
attributed to all outstanding shares of Alling & Cory Common Stock (the
"Attributed Value") by 787,496 less the number of any shares that may be
repurchased by Alling & Cory prior to the Merger from certain current and
former employees of Alling & Cory pursuant to certain associated repurchase
rights. See "-- Certain Repurchase Rights." The Attributed Value shall be
$88,250,000.00 and the Cash Election Price shall be $112.064, except that (i)
the Attributed Value shall be reduced by the amount of consideration, if any,
utilized by Alling & Cory to repurchase shares of Alling & Cory Common Stock
from certain current and former employees of Alling & Cory pursuant to certain
associated repurchase rights, and the Cash Election Price shall be adjusted
(up or down) accordingly, and (ii) the Attributed Value shall be adjusted up
or down by the amount that the funds required to settle certain contingent
liabilities of Alling & Cory exceeds or is less than $400,000.00 (with the
excess reducing the Attributed Value and the amount by which such settlement
amount is below $400,000.00 increasing the Attributed Value) and the Cash
Election Price shall be adjusted (up or down) accordingly.

Stock Election. Each shareholder of Alling & Cory who elects to receive
a number of shares of Union Camp Common Stock equal to the Share Conversion
Number and such other consideration as is specified in the Merger Agreement in
respect of any of his or her shares of Alling & Cory Common Stock shall have
<PAGE>
each such share of Alling & Cory Common Stock in respect of which an effective
Stock Election is made (or deemed to have been made), converted into the right
to receive a number of fully-paid and non-assessable shares of Union Camp
Common Stock equal to the Share Conversion Number. The Share Conversion
Number will be calculated as follows: the Share Conversion Number will be the
number (calculated to three decimal places and rounded downward to the nearest
one thousandth of a share) that results from dividing the Cash Election Price
by the "Fair Market Value" of a share of Union Camp Common Stock; provided,
however, that for purposes of calculating the Share Conversion Number only,
if, on the date on which the Merger is consummated (the "Closing Date"),
Alling & Cory has declared and/or paid its second quarter dividend, as permit-
ted under the Merger Agreement, and such Closing Date is on or prior to the
record date for Union Camp's second quarter dividend, so that holders of
shares of Alling & Cory Common Stock making a Stock Election will be entitled
to payment of such Union Camp dividend, then the Cash Election Price shall be
deemed to be reduced by the amount of any such Union Camp dividend that may be
payable with respect to each share of Union Camp Common Stock to be issued to
such holders.

Limitation on Cash Elections. In the event that effective Cash Elections
by the holders of Alling & Cory Common Stock are received and not revoked
prior to the Effective Time in respect of in excess of the Maximum Cash
Election Number, then only the number of shares of Alling & Cory Common Stock
equal to the Maximum Cash Election Number shall be converted into and receive
the Cash Election Price. In that case, shares of Alling & Cory Common Stock
to be converted into the Cash Election Price shall be selected on a pro rata
basis, with adjustments to avoid purchases of fractional shares, based on the
number of shares in respect of which an effective Cash Election is received
and not revoked prior to the Effective Time. All shares of Alling & Cory
Common Stock in respect of which an effective Cash Election is received and
not revoked prior to the Effective Time which are not converted into the Cash
Election Price shall be deemed to have made an effective Stock Election and
shall be converted into shares of Union Camp Common Stock as specified in the
preceding paragraph.

Certain Contingencies; Escrow Arrangements. Pursuant to a letter
agreement dated April 13, 1996 (the "Contingent Liability Letter Agreement"),
Alling & Cory has agreed to use its best efforts to cause its obligations in
respect of certain contingent liabilities to be finally determined prior to
the Closing Date of the Merger in a manner that imposes no obligation, other
than certain monetary obligations, on Alling & Cory, Union Camp or the Merger
Sub. If the liability of Alling & Cory in respect such contingent liabilities
of Alling & Cory is not finally determined prior to the Closing Date, Alling &
Cory, Union Camp and Merger Sub have agreed pursuant to the Contingent
Liability Letter Agreement that Union Camp and Merger Sub shall be entitled to
withhold a portion of the merger consideration (the "Withheld Consideration")
in an amount not to exceed $3.50 per share of Alling & Cory Common Stock
outstanding on the Closing Date (other than Dissenting Shares) in order to
ensure the satisfaction of such contingent liabilities. Such Withheld
Consideration shall consist solely of cash and shall be withheld pro rata from
each holder of shares of Alling & Cory Common Stock (other than holders of
Dissenting Shares) in accordance with the number of shares of Alling & Cory
Common Stock held by each such shareholder as of the Effective Time. The
Withheld Consideration shall be held in escrow by The Bank of New York or such
other bank or other financial institution as is reasonably acceptable to Union
Camp and Alling & Cory (the "Escrow Agent") pending the final determination of
Alling & Cory's obligations in respect of such contingent liabilities.

Upon the final determination of Alling & Cory's obligations in respect of
such contingent liabilities, Union Camp will be required to determine the
amount of such final judgment or final settlement and all costs and expenses
of determining such liability (including reasonable attorneys' fees and costs
of internal counsel) incurred by Union Camp or the Surviving Corporation and
resulting from or arising out of the determination of Alling & Cory's
obligations in respect of such contingent liabilities (the sum of all such
amounts, the "Total Cost"). If the Total Cost incurred by Union Camp or the
<PAGE>
Surviving Corporation and resulting from or arising out of such contingent
obligations exceeds $400,000.00, Union Camp shall be entitled to cause to be
deducted from the Withheld Consideration an amount in cash (the "Parent
Amount") equal to the amount by which the Total Cost exceeds $400,000.00. The
remainder of the Withheld Consideration will be delivered to the Exchange
Agent by the Escrow Agent for distribution to the former holders of Alling &
Cory Common Stock (other than Dissenting Shareholders).

Any Withheld Consideration remaining after the payment of any Parent
Amount shall be distributed in cash by the Exchange Agent or Union Camp to the
former holders of shares of Alling & Cory Common Stock (other than Dissenting
Shareholders) pro rata in accordance with the number of shares of Alling &
Cory Common Stock formerly held by such holders, together with interest
thereon from the Closing Date through, but not including, the date on which
such funds were delivered to the Exchange Agent or Union Camp, as the case may
be, at a rate equal to the London inter-bank offered rate for three month
deposits of U.S. dollars. In the event that the Total Cost is less than
$400,000.00, Union Camp shall pay to the Exchange Agent an amount in cash (the
"Additional Amount") equal to the amount by which $400,000.00 exceeds the
Total Cost. The Exchange Agent or Union Camp, as the case may be, shall
distribute the Additional Amount to the former holders of shares of Alling &
Cory Common Stock (other than Dissenting Shareholders) pro rata in accordance
with the number of shares of Alling & Cory Common Stock formerly held by such
holders. No interest shall be payable on the Additional Amount.

TERMINATION RIGHTS; FEES AND EXPENSES

The Merger Agreement may be terminated and the transactions contemplated
thereby abandoned, at any time prior to the Effective Time, whether before or
after approval of the Merger Agreement by Alling & Cory's shareholders, (i) by
action authorized by the vote of a majority of the members of the Board of
Directors of each of Alling & Cory and Union Camp; (ii) by Union Camp or
Alling & Cory if the Merger shall not have been consummated on or before
August 31, 1996 (or such later date as may be agreed to by Union Camp and
Alling & Cory) by reason of the failure of any condition to the consummation
of the Merger; provided, however, that no party may terminate the Merger
Agreement if the failure of such condition is caused primarily by such party's
material breach of the Merger Agreement; (iii) by Union Camp, if any of the
representations and warranties of Alling & Cory contained in the Merger
Agreement fail to be true and correct in all respects except for failures of
any representations or warranties to be true and correct which would not have
a material adverse effect on the business, assets, prospects, condition
(financial or otherwise) or the results of operations of Alling & Cory and/or
its subsidiaries taken as a whole or the Surviving Corporation and its
subsidiaries taken as a whole, which term would not for the purposes of such
condition include any effect on the prospects of Alling & Cory due to a
general deterioration in economic conditions; (iv) by Union Camp, if Alling &
Cory fails to perform or comply with, in all material respects, any of its
material agreements or covenants contained in the Merger Agreement as to which
notice has been given to Alling & Cory and Alling & Cory has failed to cure or
otherwise resolve the same to the reasonable satisfaction of Union Camp within
30 days after receipt of such notice; (v) by Alling & Cory, if any of the
representations and warranties of Union Camp contained in the Merger Agreement
fail to be true and correct in all respects except for failures of any
representations or warranties to be true and correct which would not have a
material adverse effect on the business, assets, prospects, condition (finan-
cial or otherwise) or the results of operations of Union Camp and its active
operating subsidiaries taken as a whole; (vi) by Alling & Cory, if Union Camp
fails to perform or comply with, in all material respects, any of its material
agreements or covenants contained in the Merger Agreement as to which notice
has been given to Union Camp and Union Camp has failed to cure or otherwise
resolve the same to the reasonable satisfaction of Alling & Cory within 30
days after receipt of such notice; (vii) by Union Camp or Alling & Cory if a
court of competent jurisdiction or other governmental body shall have issued
an order, decree or ruling or taken any other action restraining, enjoining or
<PAGE>
otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and nonappealable; (viii) by Union Camp or
Alling & Cory, if the Board of Directors of Alling & Cory determines that an
acquisition proposal from a third party is a proposal that is more favorable
to Alling & Cory and its shareholders than the Merger and believes in the
exercise of its good faith judgment (which judgment is based upon the written
advice of independent outside counsel) that a failure to terminate the Merger
Agreement and enter into an agreement to effect the proposal that is more
favorable to Alling & Cory and its shareholders than the Merger would likely
constitute a breach of its fiduciary duties under applicable law; provided
that Alling & Cory may not terminate the Merger Agreement pursuant to this
clause unless (a) Alling & Cory has fully complied with certain notice provi-
sions of the Merger Agreement and (b) prior to such termination, Union Camp
has received a termination fee of $4,000,000; (ix) by Union Camp or Alling &
Cory, if the Board of Directors of Alling & Cory has withdrawn or modified in
a manner adverse to Union Camp its approval or recommendation to the
shareholders of Alling & Cory of the Merger Agreement, the Merger and the
other transactions contemplated by the Merger Agreement, provided that Alling
& Cory may not terminate the Merger Agreement pursuant to this clause unless
Alling & Cory's Board of Directors believes, in the exercise of its good faith
judgment based upon the written advice of independent outside counsel, that a
failure to withdraw or modify such approval or recommendation would likely
constitute a breach of its fiduciary duties; and (x) by Alling & Cory, if the
Average Closing Price per share of Union Camp Common Stock is less than $42.50
and by Union Camp, if the Average Closing Price is greater than $61.50.

If (i) the Merger Agreement is terminated by Union Camp or Alling & Cory
for the reasons specified in clause (viii) or (ix) in the preceding paragraph,
or (ii) on or before August 31, 1996 and while the Merger Agreement remains in
effect, Alling & Cory enters into a definitive agreement with respect to an
acquisition proposal with any person other than Union Camp or an affiliate of
Union Camp and such transaction is thereafter consummated (whether before or
after August 31, 1996), then Alling & Cory will pay Union Camp a fee of
$4,000,000, which will constitute, among other things, reimbursement for Union
Camp's documented fees, costs and expenses incurred in connection with the
transactions contemplated by the Merger Agreement.

CONDITIONS TO THE MERGER

In addition to customary conditions, the obligation of Alling & Cory,
Union Camp and Merger Sub to consummate the Merger is subject to the
satisfaction or, where permitted, waiver of certain other conditions,
including (a) the absence of any order, statute, rule, regulation, executive
order, stay, decree, judgment or injunction issued by any court or govern-
mental authority or any action, suit or proceeding, prohibiting or preventing
or seeking to prohibit or prevent the consummation of the Merger or which
could reasonably be expected to have a material adverse effect on Alling &
Cory or Union Camp, (b) the absence of any stop order suspending the
effectiveness of the Registration Statement or preventing the use thereof or
any related prospectus and (c) the approval and adoption of the Merger
Agreement and the approval of the terms of the Merger by an affirmative vote
of at least two-thirds of the outstanding shares of Alling & Cory Common Stock
entitled to vote at the Special Meeting.

Alling & Cory's obligation to consummate the Merger is subject to various
additional conditions, including (a) the absence of any material adverse
change in Union Camp, (b) the authorization for listing on the NYSE of the
shares of Union Camp Common Stock to be issued in the Merger in exchange for
<PAGE>
those shares of Alling & Cory Common Stock in respect of which an effective
Stock Election has been made or has been deemed to have been made and (c) the
receipt of customary opinions of counsel to Union Camp and comfort letters
from Union Camp's independent certified public accountants.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains various representations and warranties
relating to, among other things: (a) the due organization, power and standing
of Alling & Cory and Union Camp and similar corporate matters; (b) the
authorization, execution, delivery and enforceability of the Merger Agreement;
(c) the capital structure of Alling & Cory and Union Camp; (d) subsidiaries of
Alling & Cory; (e) conflicts under charters or by-laws and violations of any
instruments or law and required consents or approvals; (f) conduct of business
in the ordinary course and the absence of certain changes or material adverse
effects; (g) brokers' and finders' fees with respect to the Merger; (h) with
respect to Alling & Cory, the payment of taxes, no undisclosed material
liabilities, material contracts, litigation, employee benefit plans, employee
relations and intellectual property and (i) with respect to Union Camp,
certain documents filed by Union Camp with the Commission and the accuracy of
information contained therein.

CERTAIN REGULATORY MATTERS

Consummation of the Merger is conditioned upon receipt by Union Camp and
Alling & Cory of such regulatory and other approvals as are required under
applicable law, including certain approvals from the Commission. Other than
these approvals and the matters described below, Union Camp and Alling & Cory
know of no such regulatory or other approvals required by law.

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act"), certain acquisition transactions, including the proposed Merger, may
not be consummated unless certain information has been furnished to the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and certain waiting period
requirements have expired or been terminated. In accordance with the HSR Act,
Union Camp and Alling & Cory each filed Notification and Report Forms and
certain supplementary materials with the Antitrust Division and the FTC for
review in connection with the proposed Merger. The FTC granted early
termination of the waiting period under the HSR Act on May 7, 1996.

NYSE LISTING

The Union Camp Common Stock is listed on the NYSE. Union Camp has agreed
to use its best efforts to cause the shares of Union Camp Common Stock to be
issued in the Merger in respect of those shares of Alling & Cory Common Stock
for which an effective Stock Election has been made, or has been deemed to
have been made, to be listed on the NYSE prior to the Effective Time. A
condition to Alling & Cory's obligation to close is that prior to the
Effective Time any shares of Union Camp Common Stock to be issued in the
Merger in respect of those shares of Alling & Cory Common Stock for which an
effective Stock Election has been made, or has been deemed to have been made,
will be approved for listing on the NYSE, subject to official notice of
issuance.

METHOD OF ELECTION

A holder of Alling & Cory Common Stock may elect to receive in exchange
for each share of Alling & Cory Common Stock held by such shareholder, either
$112.064 in cash pursuant to a Cash Election or a number of shares of Union
Camp Common Stock equal to the Share Conversion Number pursuant to a Stock
Election. Alling & Cory has mailed a Form of Election together with this
<PAGE>
Proxy Statement/Prospectus to holders of Alling & Cory Common Stock as of the
Record Date for the Special Meeting.

An Election will have been properly made and will be effective only if
the Transfer Agent receives at its designated office by 5:00 p.m. New York
City time, on , 1996, a properly completed Form of Election,
provided that any holder of Alling & Cory Common Stock who does not properly
and timely make any Election shall be deemed to have properly and timely made
a Stock Election for all purposes of the Merger Agreement.

An Election may be revoked only by written notice received by the
Transfer Agent (i) prior to 5:00 p.m. New York City time, on , 1996
or (ii) after 90 days after the date the Form of Election is first mailed to
holders of Alling & Cory Common Stock, if the Effective Time shall not have
occurred prior to such date. In addition, all Forms of Election will
automatically be revoked if the Transfer Agent is notified in writing by the
parties to the Merger Agreement that the Merger has been abandoned. The
Transfer Agent, in consultation with the Exchange Agent, will determine
whether or not any such Election has been properly made or deemed properly
made. Any such determination shall be conclusive and binding.

EXCHANGE OF SHARE CERTIFICATES

At and after the Effective Time, each holder of a Certificate shall cease
to have any rights as a shareholder of Alling & Cory, except for, (i) in the
case of a holder of a Certificate who does not exercise appraisal rights under
Section 623 of the NYBCL, the right to surrender such Certificate in exchange
for payment of the consideration deliverable with respect thereto in
accordance with the terms of the Merger Agreement, or (ii) in the case of a
holder of a Certificate who exercises appraisal rights under Section 623 of
the NYBCL, the right to receive payment from Alling & Cory and not from Union
Camp or the Surviving Corporation of the value of its shares of Alling & Cory
Common Stock determined pursuant to Section 623 of the NYBCL if such holder
has validly established and perfected and not withdrawn such right. At and
after the Effective Time, no transfer of shares of Alling & Cory Common Stock
will be made on the stock transfer books of the Surviving Corporation. At the
close of business on the date on which the Effective Time occurs, Alling &
Cory's stock ledger will be closed. See "Appraisal Rights of Dissenting
Shareholders."

Not later than the close of business on the Closing Date of the Merger,
Union Camp shall deposit or cause to be deposited with the Exchange Agent (i)
certificates representing shares of Union Camp Common Stock issuable in
respect of those shares of Alling & Cory Common Stock in respect of which an
effective Stock Election has been made, or has been deemed to have been made,
plus the amount of cash in immediately available funds in lieu of any
fractional shares issuable in respect of such shares of Alling & Cory Common
Stock and (ii) an amount of cash in immediately available funds equal to that
amount of cash issuable in respect of those shares of Alling & Cory Common
Stock in respect of which an effective Cash Election has been made; provided
that Union Camp and Merger Sub will be entitled to withhold from such
consideration and deposit with the Escrow Agent an amount equal to the
Withheld Consideration, if any. As soon as practicable after the Effective
Time, Union Camp will cause the Exchange Agent to mail and make available to
each record holder of a Certificate (x) a notice and Letter of Transmittal
advising such holder of the effectiveness of the Merger and the procedures for
surrendering to the Exchange Agent any Certificates for exchange and (y)
instructions for use in effecting the surrender of Certificates for exchange
pursuant to the Merger Agreement. Upon surrender to the Exchange Agent of one
or more Certificates for cancellation together with a duly executed and
completed Letter of Transmittal, the Exchange Agent will promptly mail to such
holder (A) in the case of a holder of Alling & Cory Common Stock who has made,
or who has been deemed to have made, an effective Stock Election, the number
of shares of Union Camp Common Stock determined in accordance with the
procedures described in the Merger Agreement and a check payable to such
<PAGE>
person representing the payment of cash in lieu of fractional shares of Union
Camp Common Stock determined in accordance with the terms of the Merger
Agreement plus any amount of any dividends or other distributions payable in
accordance with the Merger Agreement, or (B) in the case of a holder of Alling
& Cory Common Stock who has made an effective Cash Election, a check payable
to such person in the amount of the Cash Election Price per share of Alling &
Cory Common Stock.

HOLDERS OF CERTIFICATES SHOULD NOT SUBMIT THEIR CERTIFICATES FOR EXCHANGE
UNTIL SUCH INSTRUCTIONS AND LETTER OF TRANSMITTAL ARE RECEIVED.

In the event of the transfer of ownership of Alling & Cory Common Stock
which is not registered in the transfer records of Alling & Cory, a
certificate representing the proper number of shares of Union Camp Common
Stock and the proper amount of cash, if any, may be issued to a transferee if
the Certificate representing such Alling & Cory Common Stock is presented to
the Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence satisfactory to the Exchange Agent that
any applicable stock transfer taxes have been paid. Until surrendered as
described above, each Certificate will be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
shares of Union Camp Common Stock, cash consideration, cash in lieu of any
fractional shares of Union Camp Common Stock, and any dividends or
distributions payable in accordance with the Merger Agreement. In the event
any Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the consideration deliverable in respect
thereof, provided that the person to whom such consideration is paid shall, as
a condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as it may reasonably direct or otherwise indemnify the
Surviving Corporation in a manner reasonably satisfactory to it against any
claim that may be made against the Surviving Corporation with respect to the
Certificate claimed to have been lost, stolen or destroyed.

No dividends or other distributions declared or made after the Effective
Time with respect to Union Camp Common Stock with a record date after the
Effective Time will be paid to the holder of any unsurrendered Certificate
with respect to the shares of Union Camp Common Stock exchangeable therefor
and no cash payment in lieu of fractional shares will be paid until the holder
of record of such Certificate surrenders the Certificate to the Exchange Agent
or, if such Certificate is surrendered six months or more after the Effective
Time, to Union Camp. Subject to applicable law, following such surrender,
there shall be paid to the record holder of such Certificate, certificates
representing whole shares of Union Camp Common Stock issued in exchange
therefor, without interest, and (i) at the time of such surrender, the amount
of any cash payable in lieu of a fractional share of Union Camp Common Stock
to which such holder is entitled and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid
with respect to such whole shares of Union Camp Common Stock and (ii) at the
appropriate payment date, the amount of dividends or other distributions with
a record date after the Effective Time but prior to such surrender and a
payment date subsequent to such surrender payable with respect to such whole
shares of Union Camp Common Stock.

Any Merger Consideration delivered or made available to the Exchange
Agent and not exchanged for Certificates within six months after the Effective
Time will be returned by the Exchange Agent to Union Camp, which will
thereafter act as the Exchange Agent and any shareholders of Alling & Cory who
have not theretofore complied with the provisions of the Merger Agreement
relating to the exchange of Certificates shall thereafter look as general
creditors only to Union Camp for payment of their claim for Union Camp Common
Stock, any cash in lieu of fractional shares of Union Camp Common Stock, any
dividends or distributions in respect of Union Camp Common Stock, any cash
consideration issuable in connection with those shares of Alling & Cory Common
<PAGE>
Stock in respect of which an effective Cash Election has been made, any
Withheld Consideration and any Additional Amounts. Neither Union Camp, the
Surviving Corporation nor Alling & Cory will be liable to any holder of Alling
& Cory Common Stock, for such shares (or dividends or distributions with
respect thereto) or for any cash issuable in accordance with the terms of the
Merger Agreement in exchange for Alling & Cory Common Stock if delivered to a
public official pursuant to applicable abandoned property, escheat or similar
laws, at any time after the expiration of one year after the Effective Time or
earlier if required by law.

FRACTIONAL SHARES

No fractional shares of Union Camp Common Stock will be issued upon the
surrender for exchange of Certificates representing Alling & Cory Common
Stock, nor will such fractional share interests involved entitle the holder
thereof to vote, to receive dividends or to exercise any other rights of a
shareholder of Union Camp. In lieu of such fractional shares, any holder of
Alling & Cory Common Stock otherwise entitled to a fractional share of Union
Camp Common Stock will, upon surrender of such holder's Certificate or
Certificates representing Alling & Cory Common Stock, receive an amount of
cash equal to the value of such fractional share. The value of such
fractional share shall be the product of such fraction multiplied by the Fair
Market Value of one share of Union Camp Common Stock.

INDEMNIFICATION

Pursuant to the terms of the Merger Agreement, Surviving Corporation is
required to observe any indemnification provisions either set forth in the
NYBCL or as provided in Alling & Cory's Certificate of Incorporation or by-
laws as of the Effective Time, for any individual who served as a director or
officer of Alling & Cory at any time prior to the Effective Time.
Notwithstanding the foregoing, Union Camp and Surviving Corporation may amend
the Certificate of Incorporation and by-laws of Alling & Cory in any manner
that does not affect the rights to indemnification of any individual who
served as an officer or director of Alling & Cory at any time prior to the
Effective Time.

CERTAIN COVENANTS

Pursuant to the terms of the Merger Agreement, each of Alling & Cory and
Union Camp have entered into certain customary covenants and have agreed,
among other things, prior to the consummation of the Merger, (i) to use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the Merger and the transactions
contemplated by the Merger Agreement, (ii) to give prompt written notice to
the other of certain matters, including any event which, so far as reasonably
foreseen at the time of occurrence, could have a material adverse effect on
such party or which could render any representation or warranty of such party
untrue, and (iii) to make certain regulatory filings required in connection
with the Merger, including filings required under the HSR Act.

In addition, Alling & Cory has agreed in the Merger Agreement that,
except as otherwise contemplated by the Merger Agreement, it will, and will
cause its subsidiaries to, conduct its or their businesses in the ordinary
course and consistent with past practice, and Alling & Cory will, and will
cause its subsidiaries to, use its or their reasonable best efforts to
preserve intact its business organization, keep available the services of its
officers and employees and maintain satisfactory relationships with all
persons with whom it does business. Alling & Cory has further agreed that
except as otherwise contemplated by the Merger Agreement or otherwise con-
sented to or approved in writing by Union Camp, neither Alling & Cory nor any
of its subsidiaries will (i) amend or propose to amend its Certificate of
<PAGE>
Incorporation or by-laws; (ii) authorize for issuance, issue, grant, sell,
pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any
shares of, or any options, warrants, commitments, subscriptions or rights of
any kind to acquire any shares of, the capital stock of Alling & Cory or any
Alling & Cory subsidiary or any securities convertible into or exchangeable
for shares of stock of any class of Alling & Cory or any Alling & Cory
subsidiary; (iii) split, combine or reclassify any shares of its capital stock
or declare, pay or set aside any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, or redeem, purchase or otherwise acquire or offer to acquire any shares
of its capital stock, provided, however, that (a) Alling & Cory shall be
permitted to declare and pay in cash a dividend up to $0.35 per share, and (b)
Alling & Cory shall have the right, provided that it obtains the prior written
approval of Union Camp, which may be withheld by Union Camp at its sole
discretion, to exercise its rights, pursuant to agreements with certain of its
shareholders, to purchase shares of Alling & Cory Common Stock in order to
satisfy the condition in the Merger Agreement limiting the number of
shareholders exercising appraisal rights; (iv) (a) except for debt from time
to time advanced and repaid pursuant to Alling & Cory's existing bank credit
agreements, not in excess of $55,000,000 in the aggregate at any time
outstanding, create, incur or assume any short-term debt, long-term debt or
obligations in respect of capital leases, (b) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, indirectly,
contingently or otherwise) for the obligations of any person, except in the
ordinary course of business consistent with past practice, (c) make any
capital expenditures or make any loans, advances or capital contributions to,
or investments in, any other person (other than (x) customary travel or
business advances to employees made in the ordinary course of business
consistent with past practice, (y) currently committed capital expenditures
disclosed to Union Camp and (z) capital expenditures not exceeding $100,000
individually, provided that such capital expenditures do not exceed $1,000,000
in the aggregate, (d) acquire the stock or assets of, or merge or consolidate
with, any other person, or (e) incur any material liability or obligation
(absolute, accrued, contingent or otherwise), outside the ordinary course of
business; (v) except as previously disclosed to Union Camp, sell, transfer,
mortgage, or otherwise dispose of or encumber, or agree to sell, transfer,
mortgage or otherwise dispose of or encumber, any material assets or
properties, real, personal or mixed, or release or relinquish any material
contract rights, outside the ordinary course of business; (vi) increase in any
manner the compensation of any of its officers or employees or enter into any
employment, consulting or similar agreement with, any shareholder, officer,
director, agent, employee or consultant of Alling & Cory or any Alling & Cory
subsidiary outside the ordinary course of business except as may be necessary
to keep available the services of its officers and employees pursuant to the
Merger Agreement; (vii) fail to perform any material obligation or commitment
under any of its material contracts (other than those obligations or
commitments being contested in good faith); (viii) settle or compromise any
claim or litigation other than (a) those involving an alleged or potential
liability of Alling & Cory or an Alling & Cory subsidiary not exceeding
$25,000 individually or $100,000 in the aggregate, (b) claims by Alling & Cory
and any Alling & Cory subsidiary for recovery of amounts not exceeding $25,000
individually or $100,000 in the aggregate, and (c) disputes with customers and
suppliers which are not material individually and which are resolved in the
ordinary course of business and consistent with past practices, provided that
Alling & Cory shall be authorized to enter into an agreement or agreements
prior to the Closing Date of the Merger which finally determines its obliga-
tions in respect of certain contingent liabilities in a manner that imposes no
obligation, other than certain monetary obligations, on Alling & Cory, Union
Camp or the Surviving Corporation, and (ix) take any action, engage in any
transaction or enter into any agreement which would cause the representations
and warranties of Alling & Cory contained in the Merger Agreement to be
untrue.

Alling & Cory has also agreed in the Merger Agreement to give Union Camp
and its authorized representatives, at all reasonable times, access to all
plants, offices, warehouses and other facilities and to all contracts,
<PAGE>
agreements, commitments, books and records of Alling & Cory and its
subsidiaries. Alling & Cory has further agreed to cause its officers and
employees to furnish such additional information as Union Camp may from time
to time request.

NO SOLICITATION OF OTHER OFFERS

In the Merger Agreement, Alling & Cory has agreed that it and its
subsidiaries will not, directly or indirectly, take, and will not authorize or
permit its or their officers, directors, employees, representatives,
consultants, investment bankers, attorneys, accountants or any agents or
affiliates to take, any action to (i) encourage, solicit or initiate the
submission of any acquisition proposal, (ii) enter into an agreement for the
sale or other disposition by Alling & Cory or any of its subsidiaries of a
material amount of assets or a sale of shares of capital stock or (iii)
participate in any way in discussions or negotiations with, or furnish any
information to, any person (other than Union Camp or Merger Sub) in connection
with, or take any other action to facilitate any inquiries or the making of
any proposal that constitutes, or may reasonably be expected to lead to, any
acquisition proposal; provided, however, that Alling & Cory and such indiv-
iduals may participate in discussions or negotiations with or furnish
information to any third party which proposes a transaction which the Board of
Directors of Alling & Cory reasonably believes will be likely to result in an
acquisition proposal, if the Board of Directors believes (based upon the
written advice of independent outside counsel) that failing to take such
action would likely constitute a breach of its fiduciary duties. In addition,
neither the Board of Directors of Alling & Cory nor any committee thereof
shall withdraw or modify in a manner adverse to Union Camp the approval and
recommendation of the Merger Agreement and the Merger or approve or recommend
any acquisition proposal; provided that Alling & Cory may recommend to its
shareholders an acquisition proposal and in connection therewith withdraw or
modify its approval or recommendation of the Merger if (i) the Board of
Directors of Alling & Cory has determined that the acquisition proposal is a
proposal that is more favorable to Alling & Cory and its shareholders than the
Merger, (ii) certain other conditions have been satisfied (including the
payment of a $4,000,000 termination fee) and (iii) simultaneously with such
withdrawal, modification or recommendation, the Merger Agreement is terminated
in accordance with its terms.

CERTAIN REPURCHASE RIGHTS

Approximately fifty percent (50%) of the outstanding shares of Alling &
Cory Common Stock are owned by Alling & Cory employees and retirees who
purchased their shares (the "Option Shares") pursuant to agreements with
Alling & Cory (the "Option Agreements") that place certain restrictions on the
Option Shares (the "Restrictions") and provide Alling & Cory with various
rights, including a right of first refusal and an option to purchase, pursuant
to which Alling & Cory will have the right to repurchase the Option Shares at
their book value prior to or at the time of the Merger (the "Repurchase
Option"). The Option Shares were issued and the Repurchase Options were
created over a period in excess of thirty years. The Alling & Cory Board of
Directors believes that the reasons the Restrictions and the Repurchase
Options were included in the Option Agreements include the following: (i)
restrictions on resale enable Alling & Cory to comply with federal and state
securities laws; (ii) transfer Restrictions enable Alling & Cory to avoid
becoming a reporting company under the Exchange Act by limiting the number of
holders of shares of Alling & Cory Common Stock and to keep shares of Alling &
Cory Common Stock out of the hands of holders who might desire that Alling &
Cory pursue strategic directions contrary to those determined by its Board of
Directors; (iii) the Repurchase Options enable Alling & Cory to protect itself
in the event an unfriendly third party attempts to acquire Option Shares in
order to gain control of Alling & Cory; and (iv) the Repurchase Options enable
Alling & Cory to protect itself if, in the context of a friendly acquisition
such as the Merger, too many holders of Options Shares either vote against the
<PAGE>
transaction or exercise dissenter's rights and cause Alling & Cory to fail to
meet a closing condition, such as that set forth in the Merger Agreement, that
typically would enable the Merger partner to refuse to close if an excessive
number of shares elected to pursue appraisal rights.

After execution of the Merger Agreement, the only reason to continue the
Restrictions and the Repurchase Option would be that enumerated in (iv) above.
If the Merger is consummated, even this rationale would cease to exist,
whereas if the Merger is not consummated, such rationale would continue to
exist.

The Board of Directors has determined to waive the Restrictions and the
Repurchase Options automatically upon consummation of the Merger. However,
Alling & Cory reserves the right to enforce the Restrictions and to exercise
the Repurchase Options prior to the Effective Time in order to protect itself
from eventualities which the Restrictions and Repurchase Options were intended
to address. In particular, Alling & Cory has the right under the Merger
Agreement, with the prior consent of Union Camp which it may withhold in its
sole discretion, to repurchase shares pursuant to the Repurchase Options if
necessary to enable Alling & Cory to comply with the 10% dissenters' shares
limitations contained in the Merger Agreement. For a statement of the income
tax treatment of the cancellation of the Restrictions and the Repurchase
Options, see "Certain United States Federal Income Tax Consequences --
Cancellation of Restrictions."

ACTIONS WITH RESPECT TO CERTAIN TAX MATTERS

In the Merger Agreement, Union Camp and Surviving Corporation have agreed
not to take any action that might reasonably be expected to result in the
failure of the Merger to qualify as a tax-free reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of the material federal income tax
consequences to a holder of shares of Alling & Cory Common Stock who is a
citizen or resident of the United States or which is a corporation created or
organized in or under the laws of the United States or any political
subdivision thereof or therein, or an estate or trust the income of which is
subject to United States federal income taxation regardless of its source (a
"Holder"), and it is not intended to constitute advice regarding the federal
income tax consequences of the Merger to any such Holder. This summary does
not discuss tax consequences under the laws of states or local governments or
of any other jurisdiction or tax consequences to categories of Holders that
may be subject to special rules, such as foreign persons, tax-exempt entities,
insurance companies, financial institutions and dealers in stocks and
securities, to Holders that hold shares of Alling & Cory Common Stock as part
of a position in a "straddle" or as part of a "hedging" or "conversion"
transaction for United States federal income tax purposes, or to Holders with
a "functional currency" other than the United States dollar. In addition,
this summary applies only to shares of Alling & Cory Common Stock which are
held as capital assets. The following discussion may not be applicable to a
Holder who acquired his or her shares of Alling & Cory Common Stock pursuant
to the exercise of stock options or otherwise as compensation.

The following summary is based upon the Code, United States Treasury
Regulations and administrative and judicial interpretations as of the date
hereof. However, legislative, judicial or administrative changes or
interpretations may be forthcoming that could alter or modify the statements
and conclusions set forth herein. Any such changes or interpretations may or
may not be retroactive and could affect the tax consequences described herein
to Holders.
<PAGE>
EACH HOLDER OF SHARES OF ALLING & CORY COMMON STOCK IS URGED TO CONSULT WITH,
AND SHOULD RELY UPON, HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO SUCH HOLDER OF THE TRANSACTIONS DESCRIBED HEREIN, INCLUDING
THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF
CHANGES IN APPLICABLE TAX LAWS.

THE MERGER

Consummation of the Merger is conditioned upon receipt by Alling & Cory
of an opinion of Underberg & Kessler LLP, counsel to Alling & Cory, and by
Union Camp of an opinion of White & Case, counsel to Union Camp (collectively,
the "Tax Opinions"), to the effect that if the Merger is consummated in
accordance with the terms of the Merger Agreement, the Holders of Alling &
Cory Common Stock will not recognize gain or loss for United States federal
income tax purposes in connection with their receipt of Union Camp Common
Stock, except to the extent that such Holders receive (i) cash for their
Alling & Cory Common Stock pursuant to an effective Cash Election, (ii) cash
consisting of Withheld Consideration or (iii) cash in lieu of fractional
shares. No ruling has been or will be requested from the Internal Revenue
Service ("IRS") that, in connection with the Merger, the Holders of Alling &
Cory Common Stock will not recognize gain or loss for United States federal
income tax purposes as set forth above, nor is the receipt of such a ruling a
condition to the obligations of Union Camp and Alling & Cory to consummate the
Merger. The Tax Opinions are not binding on the IRS or the courts.

Alling & Cory has been advised by Underberg & Kessler LLP that the Merger
will constitute a reorganization pursuant to Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code, and Alling & Cory and Union Camp will be parties to
the reorganization pursuant to Section 368(b) of the Code. Such counsel
further has advised Alling & Cory that the Merger will have the following
United States federal income tax consequences to the Holders:

EXCHANGE OF ALLING & CORY COMMON STOCK SOLELY FOR UNION CAMP COMMON STOCK

A Holder who exchanges all of the shares of Alling & Cory Common Stock
that such Holder actually owns for shares of Union Camp Common Stock in the
Merger will recognize no income, gain or loss on such exchange, except to the
extent that such Holder receives cash in lieu of fractional shares. A
Holder's aggregate adjusted tax basis for the shares of Union Camp Common
Stock received in the Merger will equal such Holder's adjusted tax basis in
the shares of Alling & Cory Common Stock surrendered in exchange therefor,
less the portion of such basis, if any, allocable to fractional shares. The
holding period of Union Camp Common Stock received by each Holder of Alling &
Cory Common Stock in the Merger will include the holding period of the Alling
& Cory Common Stock surrendered therefor. Holders of Alling & Cory Common
Stock should consult their own tax advisors as to the determination of their
adjusted tax basis and holding period in particular shares of Union Camp
Common Stock, as several methods of determination may be available.

No fractional shares of Union Camp Common Stock will be issued pursuant
to the Merger. A Holder of Alling & Cory Common Stock who, pursuant to the
Merger, receives cash in lieu of fractional shares of Union Camp Common Stock
will be treated as having received such fractional shares of Union Camp Common
Stock pursuant to the Merger and then as having received such cash in a
redemption of such fractional shares of Union Camp Common Stock. Provided
that the tests under Section 302 of the Code, discussed in detail below, are
met, such Holder will generally recognize capital gain or loss on such deemed
redemption equal to the difference between the amount of cash received and the
Holder's adjusted tax basis in the fractional shares of Union Camp Common
Stock. Holders of Alling & Cory Common Stock should consult their own tax
advisors concerning the application of these tests. Such gain or loss will be
capital and will be treated as long-term capital gain or loss if the holding
period (determined as described above) for the fractional shares of Union Camp
Common Stock deemed to be received and then redeemed is more than one year.
<PAGE>
In order to ensure satisfaction of certain contingent liabilities of
Alling & Cory which may not be finally determined prior to the Closing Date,
Alling & Cory, Union Camp and Merger Sub have agreed pursuant to the
Contingent Liability Letter Agreement that, if such contingent liabilities are
not finally determined on the Closing Date, Union Camp and Merger Sub shall be
entitled to withhold a portion of the merger consideration in an amount not to
exceed $3.50 per share of Alling & Cory Common Stock outstanding on the
Closing Date. Any Withheld Consideration remaining after payment of such
contingent liabilities upon their final determination shall be distributed pro
rata in cash to the former holders of Alling & Cory Common Stock. See "The
Merger Agreement -- The Merger -- Certain Contingencies; Escrow Arrangements."
For certain potential tax consequences of such cash distribution to persons
making a Stock Election see "-- Exchange of Alling & Cory Common Stock for Both
Union Camp Common Stock and Cash."

EXCHANGE OF ALLING & CORY COMMON STOCK SOLELY FOR CASH

A Holder who exchanges all of the shares of Alling & Cory Common Stock
that such Holder actually owns solely for cash in the Merger, and who is not
deemed to own by attribution (as described below) shares of Alling & Cory
Common Stock that are exchanged for shares of Union Camp Common Stock in the
Merger, will recognize gain or loss with respect to the exchange in an amount
equal to the difference between (i) the cash received in the Merger or
pursuant to the exercise of appraisal rights and (ii) such Holder's adjusted
tax basis in the Alling & Cory Common Stock surrendered therefor. In general,
such gain or loss will be computed separately for each block of stock held by
the Holder. Such gain or loss will be capital and will be treated as long-
term capital gain or loss if the holding period for the Alling & Cory Common
Stock exchanged for cash is more than one year.

EXCHANGE OF ALLING & CORY COMMON STOCK FOR BOTH UNION CAMP COMMON STOCK AND
CASH

Pursuant to the terms of the Merger Agreement, Holders may elect to
receive cash, Union Camp Common Stock or a combination of cash and Union Camp
Common Stock for the shares of Alling & Cory Common Stock held by each such
Holder. Pursuant to Section 1.3(e) of the Merger Agreement, only the number
of shares of Alling & Cory Common Stock equal to the Maximum Cash Election
Number will be converted into and receive the Cash Election Price. In the
event that the Cash Elections exceed the Maximum Cash Election Number, shares
of Alling & Cory Common Stock to be converted into the Cash Election Price
shall be selected on a pro rata basis, with adjustments to avoid purchases of
fractional shares, based on the number of shares of Alling & Cory Common Stock
in respect of which an effective Cash Election is made and not revoked prior
to the Effective Date. All shares of Alling & Cory Common Stock in respect of
which an effective Cash Election is received and not revoked prior to the
Effective Date which are not converted into the Cash Election Price shall be
deemed to have made an effective Stock Election and shall be converted into
shares of Union Camp Common Stock. See "The Merger Agreement -- The Merger --
Limitation on Cash Elections."

In addition, a Holder may not be able to exchange all of the shares of
Alling & Cory Common Stock that such Holder actually owns for shares of Union
Camp Common Stock if part of the Merger consideration due to the Alling & Cory
shareholders is placed in a cash escrow fund as a result of the liability of
Alling & Cory in respect of certain contingent liabilities not being finally
determined prior to the Closing Date of the Merger. See "The Merger Agreement
- -- The Merger -- Certain Contingencies; Escrow Arrangements."

If (i) under the circumstances described in the two immediately preceding
paragraphs, a Holder exchanges a portion of Alling & Cory Common Stock for
Union Camp Common Stock and another portion of such Alling & Cory Common Stock
for cash (other than cash received in lieu of fractional shares of Union Camp
Common Stock) in the Merger, or (ii) a Holder exchanges all of the shares of
<PAGE>
Alling & Cory Common Stock that such Holder actually owns solely for cash in
the Merger, but is deemed to own by attribution (as described below) shares of
Alling & Cory Common Stock that are exchanged for shares of Union Camp Common
Stock in the Merger, then the cash such Holder receives in exchange for his or
her shares of Alling & Cory Common Stock will be treated either (i) in its
entirety as a distribution, or (ii) as received pursuant to a sale or exchange
resulting in realization of capital gain or loss.

In the event that the exchange is treated in its entirety as a
distribution, then the cash such Holder receives is treated as a dividend to
the extent of the Holder's ratable share of applicable current and/or
accumulated earnings and profits. For a Holder taxed as a domestic
corporation (other than an S corporation), if the cash received is treated as
a dividend, the corporate Holder may, subject to the conditions set forth in
Section 243 and 246 of the Code, deduct an amount equal to 70 percent of the
amount taxed as a dividend.

In the event that the exchange qualifies as a sale or exchange, a Holder
will realize capital gain or loss equal to the difference between the fair
market value of Union Camp Common Stock plus the cash received by such Holder
in the Merger and the Holder's adjusted tax basis in the Alling & Cory Common
Stock surrendered therefor. In general, such gain or loss will be computed
separately for each block of stock held by the Holder. Such Holder's gain
will be recognized, however, only to the extent of the cash received by such
Holder; any loss will not be recognized. For purposes of determining the
character of any such recognized gain, such Holder will be treated as having
received only Union Camp Common Stock in exchange for such Holder's Alling &
Cory Common Stock, and, immediately thereafter, having such Union Camp Common
Stock redeemed to the extent of the cash actually received by such Holder. In
general, a Holder's aggregate adjusted tax basis for the shares of Union Camp
Common Stock received in the Merger will equal such Holder's adjusted tax
basis in the shares of Alling & Cory Common Stock surrendered in exchange
therefor, decreased by the amount of the cash received and increased by the
amount of gain recognized by such Holder, if any. The holding period of Union
Camp Common Stock received in the Merger by each Holder of Alling & Cory
Common Stock will include the holding period of the Alling & Cory Common Stock
surrendered therefor.

Under Section 302 of the Code, any recognized gain will be capital if,
after giving effect to the constructive ownership rules of the Code, (a) such
deemed redemption qualifies as "substantially disproportionate" with respect
to such Holder under Section 302(b)(2) of the Code, (b) in general, such
deemed redemption is not "essentially equivalent to a dividend" under Section
302(b)(1) of the Code, or (c) the receipt of cash results in a complete
redemption of all of the shares of Alling & Cory Common Stock actually owned
by such Holder under Section 302(b)(3) of the Code and such Holder is eligible
to waive, and effectively waives, constructive ownership of all shares of
Alling & Cory Common Stock that are exchanged for shares of Union Camp Common
Stock in the Merger under procedures described in Section 302(c) of the Code.

In order for a redemption of stock to qualify as "substantially
disproportionate" with respect to a Holder, (1) immediately after the
redemption of stock, the Holder must not own nor be deemed to own by
attribution 50 percent or more of the total combined voting power of all
classes of Union Camp Common Stock, (2) the Holder's percentage interest in
the total outstanding voting stock of Union Camp (including any shares
attributed to the Holder) must be less than 80 percent of the percentage he or
she would have had in the outstanding voting stock of Union Camp if he or she
had exchanged all of his or her Alling & Cory Common Stock (including any
shares attributed to the Holder) for Union Camp Common Stock, and (3) the
Holder's percentage interest of the outstanding common stock (whether voting
or not) of Union Camp (including any shares attributed to the Holder) must be
less than 80 percent of the percentage he or she would have had in the
outstanding common stock of Union Camp if he or she had exchanged all of his
or her Alling & Cory Common Stock (including any shares attributed to the
Holder) for Union Camp Common Stock. The determination of whether an exchange
<PAGE>
is "essentially equivalent to a dividend" depends upon the facts and
circumstances of each case. The IRS has ruled that this determination is made
by comparing the interest that a Holder of Alling & Cory Common Stock actually
received in Union Camp pursuant to the Merger to the interest that such Holder
would have received if only stock had been exchanged. The receipt of cash by
a Holder in exchange for a portion of such Holder's Alling & Cory Common Stock
will not be treated as a dividend if such a comparison results in a
"meaningful" reduction in such Holder's ownership interest in Union Camp
Common Stock. The IRS has ruled that any reduction in interest of a small,
minority shareholder in a publicly held corporation (who exercises no control
with respect to corporate affairs) will be treated as a "meaningful"
reduction, thus ensuring capital gain or loss treatment. Holders of Alling &
Cory Common Stock should consult their own tax advisors concerning the
application of these tests.

The basis for determining whether an exchange qualifies as a
"substantially disproportionate" redemption of stock with respect to a Holder
under Section 302(b)(2) of the Code, or is not "essentially equivalent to a
dividend" under Section 302(b)(1) of the Code, is uncertain in the case of a
Holder who actually receives no Union Camp Common Stock in the Merger.

It should be noted that, under Section 318 of the Code, a Holder will be
deemed to own by attribution any shares of Alling & Cory Common Stock that
are: (i) owned by certain members of his or her family; (ii) by partnerships,
estates, certain trusts and certain corporations in which the Holder has an
interest; or (iii) that are subject to an option held by the Holder. For
example, a Holder who is the beneficiary of a trust that owns shares of Alling
& Cory Common Stock may be deemed to own the shares of the Alling & Cory
Common Stock owned by the trust. In addition, entities in which a Holder is
beneficially interested (partnerships, corporations, trusts and estates) are
treated, subject to certain limitations, as owning stock that is directly
owned by the Holder.

CANCELLATION OF RESTRICTIONS

At the Effective Time, automatically and without further action on Alling
& Cory's part, Alling & Cory will cancel the Restrictions on the Option Shares
for non-compensatory reasons and because the purpose for the Restrictions will
no longer exist. Sections 83(d)(2)(A) and (B) of the Code provide that
holders of Option Shares will avoid compensation income from the cancellation
of the Restrictions by establishing (i) that the cancellation was non-
compensatory and (ii) that Alling & Cory will not treat the cancellation as
compensatory. Under Treasury Regulation Section 1.83-5(b)(1), the fact that
the original purpose of the Restrictions no longer exists may indicate that
the cancellation of the Restrictions is non-compensatory. Under Treasury
Regulation Section 1.83-5(b)(2), Alling & Cory will furnish to each Holder a
written statement that Alling & Cory will not treat the cancellation of the
Restrictions as a compensatory event, and that it will not take a deduction
with respect to such cancellation. The holder must file this written
statement with his income tax return for the taxable year in which such
cancellation occurs.

BACKUP WITHHOLDING

Generally, United States backup withholding tax and information reporting
requirements will apply to payments with respect to the Merger to non-
corporate Holders of Alling & Cory Common Stock (other than "exempt
recipients," including corporations, non-U.S. Holders that provide appropriate
certification and certain other persons). The payor will be required to
withholding 31% of any such payment if the Holder fails to furnish its correct
taxpayer identification number or otherwise fails to comply with such backup
withholding tax requirements. The backup withholding tax and information
reporting rules currently are subject to Proposed United States Treasury
<PAGE>
Regulations and are under review by the United States Treasury Department and,
accordingly, their application to the Merger could be changed.

APPRAISAL RIGHTS OF Dissenting Shareholders

Shareholders who do not vote in favor of approval and adoption of the
Merger Agreement may have the right to seek payment in cash of the fair value
of their Alling & Cory Common Stock by complying with the requirements of
Section 623 of the NYBCL. Failure of a shareholder to strictly adhere to the
requirements of Section 623 will result in the loss of such shareholder's
dissenter's rights.

A Dissenting Shareholder must, before the taking of the vote on the
Merger Agreement, file with Alling & Cory a written objection to the Merger.
The objection must include: a notice of the Dissenting Shareholder's election
to dissent; the shareholder's name and residence address; the number of shares
as to which the shareholder dissents; and a demand for payment of the fair
value of such shares if the Merger is effected. The written objection should
be delivered to The Alling & Cory Company at 1059 West Ridge Road, P.O. Box
20403, Rochester, New York 14602, Attention: R. Macy Harris, III, prior to the
Special Meeting. To effectively exercise dissenters' rights, such shareholder
may not vote any of his, her or its shares for the Merger Agreement. Within
10 days after the vote of shareholders authorizing the Merger Agreement and
the Merger, Alling & Cory must give written notice of such authorization to
each Dissenting Shareholder. Such Dissenting Shareholder may not dissent as
to less than all shares beneficially owned by the shareholder. Upon
consummation of the Merger, a Dissenting Shareholder shall cease to have any
of the rights of a shareholder, except the right to be paid the fair value of
the Dissenting Shareholder's shares, and any other rights under Section 623.
A notice of election to dissent may be withdrawn by the shareholder at any
time prior to his acceptance in writing of an offer made by the corporation
(as described below). At the time of filing the notice of election to dissent
or within one month thereafter, such shareholder must submit certificates
representing all such shares of Alling & Cory Common Stock to Alling & Cory or
its Transfer Agent. Failure to submit the certificates may result in the loss
of such shareholder's dissenter's rights. Within 15 days after the expiration
of the period within which shareholders may file their notices of election to
dissent, or within 15 days after consummation of the Merger, whichever is
later (but not later than 90 days after the shareholders' vote authorizing the
Merger), Alling & Cory must make a written offer (which, if the Merger has not
been consummated upon the expiration of the ninety day period after the vote
on the Merger Agreement, may be conditioned upon such consummation) to each
such Dissenting Shareholder who has filed such notice of election to pay for
the shares at a specified price which Alling & Cory considers to be their fair
value. If Alling & Cory does not make such an offer or Alling & Cory and the
Dissenting Shareholder are unable to agree as to such fair value, Section 623
provides for judicial determination of fair value. A vote AGAINST approval
and adoption of the Merger Agreement does not constitute the written objection
required to be filed by a Dissenting Shareholder. Failure by a shareholder to
vote AGAINST approval and adoption of the Merger Agreement, however, will not
constitute a waiver of rights under Section 623 provided that a written
objection has been properly filed and such shareholder has not voted any of
his, her or its shares FOR the approval and adoption of the Merger Agreement.

The foregoing does not purport to be a complete statement of the
provisions of Section 623 and is qualified in its entirety by reference to
such section, which is reproduced in full as Annex C to this Proxy
Statement/Prospectus.

THE PROVISIONS OF SECTION 623 ARE COMPLEX AND TECHNICAL IN NATURE.
SHAREHOLDERS DESIRING TO EXERCISE DISSENTERS' RIGHTS MAY WISH TO CONSULT
COUNSEL, SINCE THE FAILURE TO COMPLY STRICTLY WITH THESE PROVISIONS WILL
RESULT IN THE LOSS OF THEIR DISSENTERS' RIGHTS.
<PAGE>
COMPARISON OF RIGHTS OF HOLDERS OF
UNION CAMP COMMON STOCK AND ALLING & CORY COMMON STOCK

Union Camp is incorporated under the laws of the Commonwealth of
Virginia, and Alling & Cory is incorporated under the laws of the State of New
York. The Alling & Cory shareholders, whose rights as shareholders are
currently governed by New York law and Alling & Cory's Certificate of
Incorporation and by-laws, will become, upon consummation of the Merger and to
the extent they receive shares of Union Camp Common Stock, shareholders of
Union Camp, and their rights will be governed by Virginia law and Union Camp's
Articles of Incorporation and by-laws. Certain differences between the rights
of holders of Union Camp Common Stock and Alling & Cory Common Stock are set
forth below.

The following summary does not purport to be a complete statement of the
rights of Union Camp shareholders under applicable Virginia law and Union
Camp's Articles of Incorporation and by-laws as compared with the rights of
Alling & Cory shareholders under applicable New York law and Alling & Cory's
Certificate of Incorporation and by-laws. The summary is qualified in its
entirety by the NYBCL and the Virginia Stock Corporation Act ("VSCA") to which
shareholders are referred.

AUTHORIZED CAPITAL STOCK

Alling & Cory's authorized capital stock consists of 1,920,000 shares of
Common Stock, $1.25 par value per share. As of , a total of
shares were issued and outstanding.

Union Camp's Articles of Incorporation authorize the issuance of (i) up
to 125,000,000 shares of Common Stock, par value $1.00 per share; and (ii)
1,000,000 shares of Preferred Stock, par value $1.00 per share. A total of
69,118,211 shares of Common Stock and no shares of Preferred Stock were issued
and outstanding as of March 4, 1996. In addition, Union Camp has a
Shareholders' Rights Plan pursuant to which Rights are issued to holders of
Union Camp Common Stock at the rate of one Right for each share of Common
Stock. Each Right entitles the holder to purchase, under certain conditions
(i) one one-thousandth of a share of Series A Junior Participating Preferred
Stock at an exercise price of $175 or (ii) Union Camp Common Stock having a
value of two times the exercise price. Alternatively, the Board of Directors
may permit holders to surrender each Right in exchange for one share of Union
Camp Common Stock. These rights are exercisable only if a person or group
acquires or announces a tender offer for 15% or more of the outstanding Union
Camp Common Stock or engages in certain other activities. See "Description of
Union Camp Capital Stock."

VOTING RIGHTS

The shares of Alling & Cory Common Stock are the only shares of capital
stock of Alling & Cory outstanding, and the holders thereof are entitled to
one vote per share on all matters on which shareholders of Alling & Cory are
entitled to vote or consent.

Under the VSCA, with certain exceptions, each outstanding share, regard-
less of class, is entitled to one vote on each matter voted on at a
shareholders' meeting, unless the corporation's articles of incorporation
provide otherwise.

The shares of Union Camp Common Stock are the only shares of capital
stock of Union Camp outstanding, and the holders thereof are entitled to one
vote per share on all matters on which shareholders of Union Camp are entitled
to vote or consent. In connection with its Shareholders' Rights Plan, Union
Camp has reserved for issuance 125,000 shares of Junior Preferred Stock, par
value $1 per share. Upon the issuance of the Junior Preferred Stock, each
holder of Junior Preferred Stock is entitled to 1,000 votes per share, subject
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to adjustment, on all matters voted on by shareholders. No shares of Junior
Preferred Stock are currently issued or outstanding. Any additional class or
series of Preferred Stock which may be created, issued or sold by the Board of
Directors of Union Camp in the future and issued and sold by Union Camp will
have such voting rights as the Union Camp Board of Directors may determine.
See "Description of Union Camp Capital Stock."

PREEMPTIVE RIGHTS

Alling & Cory's shareholders are entitled to preemptive rights as
provided under the NYBCL. Unless the certificate of incorporation provides
otherwise, the NYBCL grants preemptive rights to shareholders upon the
issuance of securities that would adversely affect such shareholder's voting
rights or certain dividend rights. Unless otherwise provided in the certi-
ficate of incorporation, however, securities are not subject to preemptive
rights if they are: (i) issued to effect a merger or consolidation or are
offered for consideration other than cash; (ii) issued or subjected to rights
or options granted to directors, officers and employees; (iii) issued to
satisfy conversion or option rights granted by the corporation; (iv) are
treasury shares; (v) certain shares authorized and issued in the original
certificate of incorporation; (vi) issued under certain plans of
reorganization.

Union Camp's Articles of Incorporation deny preemptive and preferential
rights to subscribe for or purchase shares of any class of its stock, as
permitted by the VSCA.

AMENDMENTS TO ARTICLES/CERTIFICATE OF INCORPORATION

Alling & Cory's Restated Certificate of Incorporation may be amended as
provided by the NYBCL, which generally requires an amendment of a company's
certificate of incorporation to be approved by a vote of the Board of
Directors followed by a majority of all outstanding shares entitled to vote
thereon. Certain amendments may be made by the Board of Directors without
shareholder approval.

Under Virginia law, an amendment of a corporation's articles of
incorporation requires the approval of each voting group entitled to vote on
the proposed amendment by more than two-thirds of all votes entitled to be
cast by that voting group unless a greater or lesser (but not less than a
majority of votes cast by such voting group) vote is required by the articles
of incorporation or unless a greater vote is required by the board of
directors. Certain amendments may be made by the board of directors without
shareholder approval.

Union Camp's Articles of Incorporation provide that an amendment or
restatement of such Articles, other than to amend or affect the shareholder
vote required by the VSCA to approve a merger, statutory share exchange, sale
of all or substantially all of Union Camp's assets or the dissolution of Union
Camp, shall be approved by a majority of the votes entitled to be cast by each
voting group that is entitled to vote on the matter. Any amendment to Union
Camp's Articles that amends or affects Article V thereto that addresses the
election or removal of directors, must be approved by at least 66 2/3% of the
votes entitled to be cast by each voting group entitled to vote on the matter.

AMENDMENT OF BY-LAWS

Alling & Cory's by-laws can be amended by a majority of either the
shareholders entitled to vote or the Board of Directors at any meeting
thereof. The NYBCL provides, however, that any by-law adopted by the Board of
Directors may be amended or repealed by the shareholders entitled to vote
thereon.
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The VSCA provides that a corporation's board of directors may amend or
repeal the corporation's by-laws except to the extent that (i) the articles of
incorporation reserve this power exclusively to the shareholders, (ii) the
shareholders, in adopting or amending particular by-laws, provide expressly
that the board of directors may not amend or repeal that by-law or (iii) a
corporation's shareholders may amend or repeal a corporation's by-laws even
though the by-laws may also be amended or repealed by the board of directors.
A by-law fixing a greater quorum or voting requirement for the board of
directors than required by law may be amended or repealed, if originally
adopted by shareholders, only by shareholders and, if originally adopted by
the board of directors, either by the shareholders or the board of directors.
Union Camp's by-laws provide for amendment of the by-laws by either Union
Camp's Board of Directors or shareholders, except as otherwise provided by
law.

APPROVAL OF, AND SPECIAL RIGHTS WITH RESPECT TO, MERGERS OR CONSOLIDATIONS AND
CERTAIN OTHER TRANSACTIONS

Under New York law, the approval of the holders of two-thirds of the
outstanding shares of Alling & Cory Common Stock is required to authorize
mergers, consolidations, share exchanges or the sale, lease or disposition of
all or substantially all of Alling & Cory's assets.

Under Virginia law, with certain exceptions, a merger, share exchange,
sale or other disposition of all or substantially all of the corporation's
assets, and dissolution of the corporation requires the approval of each
voting group entitled to vote thereon by more than two-thirds of all votes
entitled to be cast by that voting group unless a greater or lesser (but not
less than a majority of votes cast by such voting group) vote is required by
the articles of incorporation or unless a greater vote is required by the
board of directors. Action by the shareholders of the surviving corporation
is not required if (i) the articles of incorporation of the surviving
corporation will not differ significantly from its articles before the merger;
(ii) each shareholder of the surviving corporation whose shares were
outstanding before the merger will hold the same number of shares with iden-
tical rights and preferences after the merger; and (iii) the number of voting
or participating shares outstanding immediately after the merger, plus the
number of voting or participating shares issuable as a result of the merger,
either by the conversion of shares issued pursuant to the merger or the
exercise of warrants issued pursuant to the merger, will not exceed by more
than 20% the total number of voting or participating shares, respectively, of
the surviving corporation outstanding immediately before the merger.

CERTAIN ANTI-TAKEOVER PROVISIONS

Under the NYBCL, a corporation is generally prohibited from engaging in
certain business combinations (as defined by the statute to include certain
mergers and consolidations, dispositions of assets and issuances of
securities, as well as certain other transactions) with an interested
shareholder (as defined by the statute generally to include holders of 20% or
more of the outstanding stock of the corporation) for a period of five years
following the date that such shareholder became an interested shareholder,
unless the business combination or the purchase of stock by means of which the
interested shareholder became such is approved by the corporation's board of
directors in advance of such stock purchase. There are limited other
exceptions to this provision. Although a company may opt out of this
provision, Alling & Cory has not done so.

The VSCA provides that a corporation may not engage in an affiliated
transaction with a person who is the beneficial owner of more than 10% of the
voting shares of a corporation and its affiliates (collectively, the "10%
Holder") for three years following the 10% acquisition unless the transaction
is approved by a majority of the disinterested directors and two-thirds of the
shares not owned by the 10% Holder. For purposes of this provision, an
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"affiliated transaction" is defined as one of the following transactions that
has not been approved previously by a corporation's board of directors: a
merger, a share exchange, a sale of assets with a fair market value in excess
of 5% of the corporation's consolidated net worth, a guaranty by the
corporation of the indebtedness of an interested shareholder under certain
circumstances, a dissolution of the corporation and certain securities
transactions. The 10% Holder may effect the affiliated transaction after the
three-year period only if (i) the transaction is approved (a) by two-thirds of
the shares not owned by the 10% Holder or (b) by a majority of the
disinterested directors or (ii) the aggregate consideration to be paid in such
affiliated transaction meets certain fair price criteria. A corporation may
opt out of this provision by amendment to its articles of incorporation or by-
laws approved by the majority of the outstanding shares of stock not owned by
the 10% Holder, provided that (i) such amendment not become effective for 18
months following its approval and (ii) such amendment will not apply to anyone
who became a 10% Holder prior to the amendment. Union Camp has not opted out
of this provision.

In addition, Virginia has also adopted a Control Share Acquisitions
Statute (the "Control Share Statute") that is designed to protect the
interests of all shareholders when one shareholder attempts to acquire
beneficial ownership of enough shares to potentially control the corporation.
If a person (the "Acquiring Person") intends to acquire shares entitled to
vote on the election of directors within the ranges set by the statute (20% or
more and less than 1/3, 1/3 or more but less than a majority, or a majority),
the Acquiring Person automatically loses the right to vote the shares that
fall within such ranges. The voting rights of the "disqualified" shares can
be restored by the affirmative vote of a majority of "disinterested shares" at
a special shareholders meeting called to consider whether to grant the
Acquiring Person voting rights. For purposes of the Control Share Statute,
"disinterested shares" include all outstanding shares except those held by the
Acquiring Person, and the corporation's officers and employee-directors. The
corporation can opt out of the Control Share Statute by amendment to its
articles or by-laws but any such action must be taken no later than four days
following notice of the control share acquisition. Union Camp has opted out
of the Control Share Statute.

APPRAISAL RIGHTS

The NYBCL grants dissenters' rights to shareholders (i.e., the right to
cash payment of the fair value of one's shares determined by judicial
appraisal) in the case of a merger or consolidation, a sale of all or
substantially all of the corporation's assets, and (in the case of a
shareholder whose shares are adversely affected thereby) certain amendments to
the certificate of incorporation, as the case may be. The NYBCL, in
determining the "fair value" for payment of shares, mandates that the court
consider the nature of the transaction and its effect on the corporation and
its shareholders, and the concepts and methods of valuation then customary in
the relevant financial and securities markets. See "Appraisal Rights of
Dissenting Shareholders."

Shareholders who follow prescribed statutory procedures under the VSCA
generally are entitled to appraisal rights in connection with a merger or
share exchange, or sale or exchange of all or substantially all of the
property of a corporation. Shareholders of a Virginia corporation whose
shares (i) are listed on a national securities exchange or (ii) are held by at
least 2,000 record holders do not have appraisal rights unless: (a) the
corporation's articles of incorporation provide otherwise, (b) the
shareholders are required under the plan of merger or business combination to
accept consideration other than cash, shares of the surviving corporation or
another public corporation or a combination of both or (c) the transaction is
an affiliated transaction not approved by a majority of the "disinterested
directors" as described herein.
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DIVIDEND SOURCES

Under the NYBCL, a corporation may declare and pay dividends on its
outstanding shares except when the corporation is insolvent or would thereby
be made insolvent, or when the declaration, payment or distribution would be
contrary to any restrictions contained in the certificate of incorporation.
In general, dividends may be declared or paid out of surplus only. When any
dividend is paid or any other distribution is made, in whole or in part, from
sources other than earned surplus, it must be accompanied by a written notice
disclosing the amounts by which such dividend or distribution affects stated
capital, capital surplus and earned surplus, or if such amounts are not yet
determinable, disclosing the approximate effect of such dividend on stated
capital, capital surplus and earned surplus and stating that such amounts are
not yet determinable. Holders of Alling & Cory Common Stock are entitled to
receive such dividends as may legally be declared by the Board of Directors.

Under Virginia law, Union Camp may pay dividends or any other distribu-
tion to shareholders (i) unless, after the distribution, (a) the corporation
would not be able to pay its debts as they become due in the usual course of
business or (b) the corporation's total assets would be less than the sum of
its total liabilities plus the amount that would be needed to satisfy any
preferential rights upon dissolution, or (ii) unless otherwise provided in the
corporation's articles of incorporation. In addition, the VSCA provides that
share dividends may be issued unless the articles of incorporation provide
otherwise. Holders of Union Camp Common Stock are entitled to receive such
dividends as may legally be declared by the Board of Directors.

SPECIAL MEETINGS OF SHAREHOLDERS; SHAREHOLDER ACTION BY WRITTEN CONSENT

Under New York law, special meetings of shareholders may be called by the
board of directors and such other persons authorized to do so in the
corporation's certificate of incorporation or by-laws. Alling & Cory's by-
laws provide that special meetings of the shareholders for any purpose or
purposes may be called by resolution of the Board of Directors or by the
Chairman or the Chief Executive Officer, and shall be called by the Chairman,
Chief Executive Officer, or Secretary upon the request in writing of a
majority of the Board of Directors or of the holders of not less than thirty-
five percent (35%) of shares of stock outstanding entitled to vote, which
written request shall state the purpose or purposes of the proposed meeting.
In addition, special meetings may be required for the election of directors
pursuant to Section 603 of the NYBCL.

Under Virginia law, special meetings of shareholders may be called, in
the case of corporations with more than 35 shareholders, only by the chairman
of the board of directors, the president, the board of directors or persons
authorized by the articles of incorporation or by-laws. Union Camp's by-laws
provide that special meetings of shareholders may be held at any time or place
and may be called by the Chairman of the Board of Directors, the President and
the Board of Directors. Any action required or permitted to be taken at a
shareholders' meeting may be taken without a meeting and without action by the
Board of Directors if the action is taken by all the shareholders entitled to
vote on the action. The action shall be evidenced by one or more written
consents describing the action taken, signed by all the shareholders entitled
to vote on the action, and delivered to the Secretary of the corporation for
inclusion in the minutes or filing with the corporate record.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Under the NYBCL, indemnification of directors and officers may be
provided to whatever extent shall be authorized by a corporation's certificate
of incorporation or by-laws or vote adopted by the shareholders. However, the
NYBCL does not permit indemnification with respect to any matter as to which
the director or officer has been adjudicated not to have acted in good faith
<PAGE>
in the reasonable belief that his action was in the best interest of the
corporation.

The NYBCL provides that no indemnification of directors in shareholder
derivative suits may be made in respect of (i) a threatened action, or a
pending action which is settled or otherwise disposed of, or (ii) any claim,
issue or matter as to which the director or officer has been adjudged to be
liable to the corporation, unless and only to the extent that the court in
which the action was brought or, if no action is brought, any court of
competent jurisdiction, determines upon application that, in view of the
circumstances of the case, the director or officer is fairly and reasonably
entitled to indemnity for such portion of the settlement amount and expenses
as the court deems proper. The statutory provisions for indemnification and
advancement of expenses are not exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled
independently of the applicable statutory provision.

Alling & Cory's Certificate of Incorporation provides that, subject to
limited exceptions, it will indemnify its officers and directors to the
fullest extent permitted by the NYBCL if they are made a party to an action,
suit or proceeding by reason of the fact that he or she was a director or
officer of Alling & Cory or acting at the request of the company. Alling &
Cory may also similarly indemnify persons who are not directors or officers of
the company to the extent authorized from time to time by the Board of
Directors.

Virginia law places a limit equal to the greater of $100,000 or one
year's compensation on the liability of a director or officer in any
proceeding brought by or in the right of the corporation or brought by or on
behalf of shareholders of the corporation, except for liability resulting from
such person's having engaged in willful misconduct or a knowing violation of
the criminal law or any federal or state securities law, including, without
limitation, any unlawful insider trading or manipulation of the market for any
security. In addition, Virginia law permits the elimination of such liability
in the articles of incorporation or a by-law approved by the shareholders.
Union Camp has not adopted such a provision. Under Virginia law, the articles
of incorporation, a by-law made by the shareholders or any resolution adopted,
before or after the event, by the shareholders may authorize a corporation to
provide indemnity, including the advance of expenses, to any director,
officer, employee or agent against any liability, including liability to the
corporation, or expense except indemnity against willful misconduct or a
knowing violation of criminal law. Unless limited by its articles of
incorporation, a corporation must indemnify a director or officer who entirely
prevails in the defense of proceedings to which he or she was a party because
of his or her affiliation with the corporation. A corporation is statutorily
authorized to indemnify a director, officer, employee or agent who (i) acted
in good faith, (ii) in the case of any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful, and (iii) believed when
acting in his or her official capacity that his or her conduct was in the
corporation's best interest and believed in all other cases that such conduct
was at least not opposed to the corporation's best interests. This statutory
authorization of indemnity does not cover a director, officer, employee or
agent adjudged liable to the corporation or adjudged liable on the basis that
a personal benefit was improperly received by such person. The termination of
a proceeding by judgment, order, settlement or conviction is not, itself,
determinative that the director, officer, employee or agent did not meet the
standard of conduct that would allow the corporation to indemnify such person
under the statutory authorization of indemnification. In a suit by or on
behalf of the corporation against a director, officer, employee or agent,
statutorily authorized indemnification is limited to reasonable expenses
incurred in connection with the proceeding. "Expenses" include attorneys'
fees.

Union Camp's by-laws provide that Union Camp shall indemnify any person
who is or was a party to a proceeding because such person is or was a
director, officer or employee, or is or was serving at Union Camp's request in
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another capacity against any liability incurred by such person in connection
with such proceeding if (i) he or she believed that his or her official
conduct was in Union Camp's best interests, or, in the case of non-official
conduct, that his or her conduct was at least not opposed to Union Camp's best
interests, and, in the case of any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful, (ii) in connection with pro-
ceedings by or in the right of Union Camp, such person was not adjudged liable
to Union Camp and (iii) in connection with any proceeding alleging an improper
personal benefit, whether or not involving action in his or her official
capacity, he or she was not adjudged liable for such improper personal
benefit. In addition, Union Camp's by-laws provide that each director and
officer of Union Camp shall be indemnified by the corporation against all
costs and expenses reasonably incurred by or imposed upon such person in
connection with or resulting from any action, suit or proceeding to which he
or she may be made a party by reason of such person's being or having been a
director or officer of Union Camp (whether or not such person 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 such person
by reason of such person's having been finally adjudged in such action, suit
or proceeding to have been derelict in the performance of his or her duty as
such director or officer. This does not, however, prevent a settlement by
Union Camp prior to final adjudication when such settlement appears to be in
the interest of the corporation.

PROPOSAL TO APPROVE EXECUTIVE COMPENSATION

Under Sections 280G and 4999 of the Code, certain payments made, to be
made or deemed to be made by Alling & Cory to certain of its employees may be
taxable as "excess parachute payments," which would have adverse tax
consequences for both Alling & Cory and the employee who received such
payments. Parachute payments are defined as payments in the nature of
compensation which are contingent on a change of control, such as the Merger,
and which equal or exceed an amount equal to three times the base amount.
Pursuant to the Presumption, parachute payments also may include payments
pursuant to agreements entered into, or amended, within one year of the
merger. Excess parachute payments are the amount by which the parachute
payments exceed the greater of the base amount or "reasonable compensation."
Excess parachute payments will not be deductible by Alling & Cory and will be
subject to a twenty percent excise tax (in addition to regular income and
Social Security taxes) payable by the employee receiving the payments.

Under the above tests, it is possible that certain payments required to
be made to Mr. Hubbard under the Employment Agreement, and certain payments
made or deemed to be made to Mr. Hubbard and to Ms. Supinski, in the form of
stock bonuses and/or pursuant to certain employee benefit plans, may be added
together and taxed as excess parachute payments. On February 8, 1996, the
Compensation Committee authorized and the Alling & Cory Board of Directors
subsequently ratified stock bonuses to Mr. Hubbard, Ms. Supinski and six other
senior executive officers of Alling & Cory. Bonuses were valued at $51.20 per
share, which was the approximate book value of Alling & Cory Common Stock as
of December 31, 1995 and the base price used to compute the rate at which
shareholders participating in the Alling & Cory dividend reinvestment plan
would receive shares in lieu of cash pursuant to the dividend declared by the
Board of Directors on the same day. Mr. Hubbard received a bonus of 7,000
shares of Alling & Cory Common Stock and Ms. Supinski received a bonus of 200
shares. See "Certain United States Federal Income Tax Consequences --
Cancellation of Restrictions."

In addition, on February 8, 1996, the Alling & Cory Board of Directors
approved the Retirement Enhancement Plan and designated Mr. Hubbard and Ms.
Supinski as participants therein. Mr. Hubbard and Ms. Supinski were among
those named as participants in the Retirement Restoration Plan.

The Retirement Enhancement Plan is intended to protect the retirement
benefits of participants who are terminated as a result of a change of control
<PAGE>
of Alling & Cory in a transaction such as the Merger. To receive a benefit
under the Retirement Enhancement Plan, a participant must have his or her
employment terminated without cause (including a constructive termination
through a reduction in salary or a demotion) after a change of control. If
the participant is terminated for cause or voluntarily leaves under circum-
stances not constituting a termination without cause, he or she enjoys no
benefit under the Reitrement Enhancement Plan. The potential benefit under
the Retirement Enhancement Plan decreases with each continued year of
employment after a change of control.

The Retirement Restoration Plan provides a benefit equal to the
difference between the retirement benefit provided by the formula in The
Retirement Plan of Alling & Cory and the actual benefit that can be provided
under The Retirement Plan of Alling & Cory because of limitations imposed by
the Code and certain discrimination requirements in recently enacted
regulations. In the past, the Board of Directors of Alling & Cory had
designated the participants of the Retirement Restoration Plan immediately
prior to their retirement.

Under the Retirement Enhancement and Retirement Restoration Plans, upon
completion of the Merger, Mr. Hubbard is entitled to combined benefits with a
present value of approximately $340,000.00, as determined by the actuaries
regularly serving Alling & Cory. Under the Retirement Enhancement and
Restoration Plans, upon completion of the Merger, Ms. Supinski will receive
combined benefits that will have an estimated present value of $260,000.

At the $51.20 per share valuation, Mr. Hubbard's 7,000 share stock bonus
would have a total value of $358,400. Based on a number of considerations,
including the fact there was no established trading market for Alling & Cory
Common Stock and that all prior transactions in Alling & Cory Common Stock had
been priced at book value, the Compensation Committee and the Board of
Directors determined that a $51.20 per share price was a reasonable value for
the Alling & Cory Common Stock at that time. However, it is possible that
such valuation could be contested by the IRS and that, if the IRS prevailed in
such contest, the per share value could be determined to be higher than the
amount fixed by the Board of Directors. If the stock bonus were valued at the
amount of the Cash Election Price in the Merger or $112.064 per share, Mr.
Hubbard's 7,000 share stock bonus would have a total value of $784,448.

Mr. Hubbard's stock bonus was awarded by the Compensation Committee and
the Board of Directors as compensation for his performance as Chief Executive
Officer of Alling & Cory for the past ten years, based upon their conclusion
that Mr. Hubbard's compensation during that period inadequately rewarded him
for the value of his contributions to Alling & Cory. During that 10 year
period, Mr. Hubbard's average annual compensation was $277,974 and, if the
value of the stock bonus priced at $51.20 per share were spread evenly over
that ten-year period, the 10-year average would have been increased by $35,840
to a total of $313,814 per year. Although the Compensation Committee's
rationale for the award of the stock bonus to Mr. Hubbard indicates otherwise,
under the Presumption, it will be presumed such stock bonus was awarded in
connection with the Merger, and there can be no assurance that the Presumption
can be overcome.

The average compensation paid to Mr. Hubbard during the last five
calendar years was $306,346.00 which, when multiplied by three, equals
$919,038.00. If the stock bonus to Mr. Hubbard is valued at $358,400 by using
the $51.20 per share price, then the $340,000 value of his Retirement
Enhancement and Retirement Restoration Plans benefit plus his stock bonus
would equal $698,400, which is less by $220,638 than the $919.038.00 threshold
above which payments will be presumed to be parachute payments. If the stock
bonus to Mr. Hubbard is valued at $784,448, using the Cash Election of
$112.064 per share, then the value of his Retirement Enhancement and
Retirement Restoration Plans benefit plus his stock bonus would equal
$1,124,448, which exceeds by $205,410 the $919,038 threshold.
<PAGE>
Another factor possibly involving the presumption of a parachute payment
to Mr. Hubbard relates to the Employment Agreement. The Employment Agreement
entitles Mr. Hubbard to receive, for each of the three years following the
effectiveness of the Merger, compensation equal to the total of the salary and
bonus paid to him during the one year period preceding the Merger. The value
of the stock bonus paid to Mr. Hubbard in 1996 could increase the risk that
the amount due to Mr. Hubbard under the Employment Agreement could be deemed a
"parachute payment." However, Mr. Hubbard and Union Camp have negotiated a
three year compensation package for Mr. Hubbard. This compensation package
provides for continuation of Mr. Hubbard's present $350,000 salary plus a
guaranteed bonus of $40,000. Since Mr. Hubbard and Union Camp deem Mr.
Hubbard's compensation to be reasonable compensation for services to be
rendered by him during the next three years, and since Mr. Hubbard and Alling
& Cory have amended the Employment Agreement to limit Mr. Hubbard's required
compensation to the terms contained in the compensation package, Alling & Cory
believes that Mr. Hubbard's future compensation under the amended Employment
Agreement should be excluded from the definition of "parachute payment."

Ms. Supinski received a stock bonus of 200 shares of Alling & Cory Common
Stock which, if valued at the $51.20 per share, would mean that she received
stock with a value of $10,240. If her bonus is valued at a price of $112.064
per share, her stock bonus would be valued at $22,413. The average
compensation paid to Ms. Supinski during the last five calendar years was
$69,780 which, when multiplied by three, equals $209,340. Therefore the stock
bonus plus the $260,000 value under the Retirement Enhancement and Restoration
Plans benefit may constitute "parachute payments."

Under the Code, if receipt or retention of payments which would otherwise
constitute "parachute payments" is conditioned on approval by in excess of 75%
of the outstanding shares of the Alling & Cory Common Stock, on receipt of
such approval, these payments will be exempt from the parachute rules and will
not constitute "parachute payments", and therefore, the payments will not in-
volve the negative tax effects connected with such excess parachute rules.

The Compensation Committee and the Alling & Cory Board of Directors have
determined that the stock bonuses and benefits granted to Mr. Hubbard and Ms.
Supinski (and in the case of Mr. Hubbard, the terms of the Employment
Agreement) are fair and reasonable compensation for past services rendered
and/or are necessary to ensure the continued services of Mr. Hubbard and Ms.
Supinski to Alling & Cory and thus that such payments are in the best
interests of Alling & Cory. The Compensation Committee has further determined
that it is in the best interests of Alling & Cory that neither Alling & Cory
nor Mr. Hubbard and Ms. Supinski suffer the negative tax effects of such
payments being deemed "excess parachute payments."

The validity of the shares of Union Camp Common Stock to be issued in
connection with the Merger is being passed upon for Union Camp by White &
Case, New York, New York.

Certain tax consequences of the Merger have been passed upon by Underberg
& Kessler LLP, Rochester, New York. Alan J. Underberg, a director of Alling &
Cory, is a partner in the law firm of Underberg & Kessler LLP. Mr. Underberg
owns no shares of Alling & Cory Common Stock.

EXPERTS

The consolidated financial statements of Union Camp incorporated in this
Proxy Statement/Prospectus by reference to Union Camp's Annual Report on Form
10-K for the year ended December 31, 1995, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.

The financial statements of Alling & Cory included in this Proxy
Statement/Prospectus and elsewhere in the Registration Statement have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their report with respect thereto, and are included herein in reliance upon
the authority of said firm as experts in giving said reports.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Alling & Cory Company:

We have audited the accompanying consolidated balance sheets of The Alling &
Cory Company (a New York corporation) and subsidiaries as of December 31, 1995
and 1994 and the related consolidated statements of earnings, shareowners'
investment and cash flows for each of the three years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects the financial position of The Alling & Cory Company and
subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

As discussed in Notes C and D to the consolidated financial statements,
effective January 1, 1994, the Company changed its method of accounting for
postemployment benefits, and effective January 1, 1993, the Company changed
its methods of accounting for income taxes and postretirement benefits.

Rochester, New York,
March 15, 1996

ARTHUR ANDERSEN LLP
<PAGE>

CONSOLIDATED BALANCE SHEETS
The Alling & Cory Company and Subsidiaries
<TABLE>
<CAPTION>
As of December 31,
1995 1994

<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,240,816 $ 1,709,058

Trade accounts receivable, less allowances of
$1,560,000 in 1995 and $1,538,000 in 1994 . . . . . . . . . . . . . . 96,591,120 89,201,257
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,951,139 27,581,999
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . 1,154,146 822,455
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . 1,577,231 1,325,713

TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . 124,514,452 120,640,482
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements . . . . . . . . . . . . . . . . . . . . . . . . 1,066,501 1,066,501
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . 4,605,240 4,602,638

Machinery, equipment and fixtures . . . . . . . . . . . . . . . . . . 18,816,606 18,952,920
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . 2,912,384 2,553,236
Construction in progress . . . . . . . . . . . . . . . . . . . . . . 3,152,034 2,149,061
30,552,765 29,324,356

Less: accumulated depreciation and amortization . . . . . . . . . . 16,068,856 17,422,600
14,483,909 11,901,756
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,943,474 2,402,538
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . $140,941,835 $134,944,776

LIABILITIES AND SHAREOWNERS' INVESTMENT
CURRENT LIABILITIES:
Notes Payable to Banks . . . . . . . . . . . . . . . . . . . . . . . $ 34,150,000 $ 31,000,000
Outstanding checks . . . . . . . . . . . . . . . . . . . . . . . . . 17,184,547 13,662,500
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . 25,447,085 31,229,322
Accrued compensation and related taxes . . . . . . . . . . . . . . . 4,390,034 3,358,056

Federal and state income taxes . . . . . . . . . . . . . . . . . . . -- 525,088
Current portion of long-term debt . . . . . . . . . . . . . . . . . . 777,224 427,981
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . 81,948,890 80,202,947
LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,850,980 14,051,022

OTHER LONG-TERM LIABILITIES:
Deferred Compensation . . . . . . . . . . . . . . . . . . . . . . . . 1,205,560 1,094,579
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . 2,306,472 1,189,922
Accrued retirement plan benefits . . . . . . . . . . . . . . . . . . 1,552,782 1,879,861
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173,964 161,020

5,238,778 4,325,382
COMMITMENTS - NOTES E AND F
SHAREOWNERS' INVESTMENT:
Common Stock, Par Value $1.25 per share -
1,920,000 shares authorized and 1,280,000
shares issued, including 503,220 shares in
1995 and 503,097 shares in 1994 held in treasury . . . . . . . . . . 1,600,000 1,600,000
Additional Capital . . . . . . . . . . . . . . . . . . . . . . . . . 6,084,292 5,564,258

Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 47,063,554 43,498,788
54,747,846 50,663,046
Less: cost of treasury shares . . . . . . . . . . . . . . . . . . . 14,844,659 14,297,621
39,903,187 36,365,425
<PAGE>
TOTAL LIABILITIES AND SHAREOWNERS' INVESTMENT . . . . . . . $140,941,835 $134,944,776

The accompanying notes to consolidated financial statements are an integral part of these balance sheets.
</TABLE>
<PAGE>

CONSOLIDATED STATEMENTS OF EARNINGS
The Alling & Cory Company and Subsidiaries
<TABLE>
<CAPTION> Year ended December 31,
1995 1994 1993

<S> <C> <C> <C>
Net Sales . . . . . . . . . . . . . . . . . . . . $763,607,582 $617,518,266 $550,668,244
Cost of Sales . . . . . . . . . . . . . . . . . . 664,309,020 528,856,679 467,671,961
99,298,562 88,661,587 82,996,283

Selling, general and administrative
expenses . . . . . . . . . . . . . . . . . . . . 88,205,723 84,268,055 80,253,191
11,092,839 4,393,532 2,743,092
OTHER INCOME (EXPENSE):
Interest . . . . . . . . . . . . . . . . . . . . (3,936,243) (2,649,078) (1,929,855)

Gain on sale of facilities, net . . . . . . . . . - 1,807,358 995,634
Other . . . . . . . . . . . . . . . . . . . . . . 1,018,683 1,498,081 552,149
(2,917,560) 656,361 (382,072)

EARNINGS BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGES . . . . . . . . . . . 8,175,279 5,049,893 2,361,020
Income tax expense . . . . . . . . . . . . . . . 3,369,476 2,161,569 819,430
Earnings before cumulative effect of accounting
changes . . . . . . . . . . . . . . . . . . . . . 4,805,803 2,888,324 1,541,590

Cumulative Effect of Change in
Method of Accounting for Post-
Employment Benefits, Net of
Related Income Taxes, in 1994
and Income Taxes in 1993 . . . . . . . . . . . . - 287,700 155,600
NET EARNINGS . . . . . . . . . . . . . . $ 4,805,803 $ 2,600,624 $ 1,385,990
EARNINGS PER SHARE BASED ON WEIGHTED
AVERAGE SHARES OUTSTANDING:
Before cumulative effect of accounting
changes . . . . . . . . . . . . . . . . . . . . . $ 6.20 $ 3.68 $ 1.91

Cumulative effect of change in method
of accounting for postemployment
benefits in 1994 and income taxes in 1993 . . . . - .37 .19
NET EARNINGS PER SHARE . . . . . . . . . $ 6.20 $ 3.31 $ 1.72

The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
<PAGE>

CONSOLIDATED STATEMENTS OF SHAREOWNERS' INVESTMENT
The Alling & Cory Company and Subsidiaries
<TABLE>
<CAPTION>

Common Additional Retained Treasury
Stock Capital Earnings Shares Total

<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER
31, 1992 . . . . . . . . $1,600,000 $5,245,646 $41,820,788 $(12,417,288) $36,249,146

Cost of 18,016 shares
of common stock
purchased for
treasury . . . . . . . . -- -- -- (803,414) (803,414)
Dividends on common
stock -- $1.40 per
share: -- -- (960,891) -- (960,891)
-Paid in Cash . . . . . .

-Paid by issuance
of 4,017 shares
of common stock
from treasury . . . . . -- 131,247 (170,116) 38,869 --

Net earnings for
the year . . . . . . . . -- -- 1,385,990 -- 1,385,990
BALANCE AT DECEMBER
31, 1993 . . . . . . . . $1,600,000 $5,376,893 $42,075,771 $(13,181,833) $35,870,831

Cost of 26,180
shares of
common stock
purchased for
treasury . . . . . . . . -- -- -- (1,174,352) (1,174,352)
Sale of 2,161
shares of
common stock
from treasury . . . . . -- 69,736 -- 21,891 91,627

Dividends on common
stock -- $1.50 per
share:
-Paid in Cash . . . . . . -- -- (1,023,305) -- (1,023,305)

-Paid by issuance
of 3,611 shares
of common stock
from treasury . . . . . -- 117,629 (154,302) 36,673 --
Net earnings for
the year . . . . . . . . -- -- 2,600,624 -- 2,600,624

BALANCE AT DECEMBER
31, 1994 . . . . . . . . $1,600,000 $5,564,258 $43,498,788 $(14,297,621) $36,365,425
Cost of 14,904
shares of common
stock purchased
for treasury . . . . . . -- -- -- (701,921) (701,921)

Sale of 11,085
shares of
common stock
from treasury . . . . . -- 401,619 -- 118,593 520,212
<PAGE>
Dividends on common
stock -- $1.60 per
share:
-Paid in Cash . . . . . . -- -- (1,086,332) -- (1,086,332)

-Paid by issuance
of 3,696 shares
of common stock
from treasury . . . . . -- 118,415 (154,705) 36,290 --
Net earnings for
the year . . . . . . . . -- -- 4,805,803 -- 4,805,803

BALANCE AT DECEMBER
31, 1995 . . . . . . . . $1,600,000 $6,084,292 $47,063,554 $(14,844,659) $39,903,187

The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
The Alling & Cory Company and Subsidiaries
<TABLE>
<CAPTION>
Years ended December 31,
1995 1994 1993

<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings . . . . . . . . . . . . . . . . . . . . $ 4,805,803 $ 2,600,624 $ 1,385,990
Adjustments to reconcile net earnings to net
cash used for operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . 1,667,127 1,784,931 1,879,678
Amortization . . . . . . . . . . . . . . . . . . . . 318,000 318,000 318,000

Gain on sale of facilities, net . . . . . . . . . . . -- (1,807,358) (995,634)
Provision for LIFO reserve . . . . . . . . . . . . . 4,163,862 (77,884) (803,936)
Provision for retirement plan benefits . . . . . . . 94,713 (33,358) (26,481)
Deferred income taxes . . . . . . . . . . . . . . . . 784,859 374,012 218,339

Payments of deferred compensation and
retirement plan benefits . . . . . . . . . . . . . . (242,307) (204,910) (260,533)
Deferred compensation and postretirement benefits . . 717,608 1,254,823 368,023
Increase (decrease) in cash from changes in
operating assets and liabilities:
Trade accounts receivable . . . . . . . . . . . . . . (7,389,863) (18,443,231) (2,592,238)
Inventories . . . . . . . . . . . . . . . . . . . . . 466,998 (1,819,727) (2,484,639)

Other current assets . . . . . . . . . . . . . . . . 528,534 (843,625) 320,054
Accounts payable and accrued expenses . . . . . . . . (5,782,237) 8,479,454 (1,154,889)
Accrued compensation and related taxes . . . . . . . 258,678 1,003,875 (307,083)
Federal and state income taxes . . . . . . . . . . . (1,305,140) 263,571 (463,703)

Other, net . . . . . . . . . . . . . . . . . . . . . 50,252 (88,728) 296,061
NET CASH USED FOR OPERATING ACTIVITIES . . . . . . (863,113) (7,239,531) (4,302,991)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net . . . . . . . . . . . . . . (4,249,280) (1,311,630) (2,817,461)
Cash proceeds from sale of facilities . . . . . . . . -- 2,713,676 305,000

Collections on bond receivable . . . . . . . . . . . 78,000 78,000 32,500
NET CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES . . . . . . . . . . . . . . . (4,171,280) 1,480,046 (2,479,961)
CASH FLOWS FROM FINANCING ACTIVITIES:
TRANSACTIONS WITH LENDERS:
Proceeds from notes payable to banks . . . . . . . . 3,150,000 5,900,000 6,100,000
Outstanding checks . . . . . . . . . . . . . . . . . 3,522,047 1,908,485 3,661,228
Proceeds from issuance of long-term debt . . . . . . 546,510 827,031 --

Repayment of long-term debt . . . . . . . . . . . . . (286,537) (824,559) (868,780)
Repayment of capital lease obligations . . . . . . . (97,828) (44,108) --
Transactions with shareowners:
Proceeds from sale of treasury shares . . . . . . . . 520,212 91,627 --
Purchase of treasury shares . . . . . . . . . . . . . (701,921) (1,174,352) (803,414)

Payment of cash dividends . . . . . . . . . . . . . . (1,086,332) (1,023,305) (960,891)
NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . 5,566,151 5,660,819 7,128,143
INCREASE (DECREASE) IN CASH . . . . . . . . . . 531,758 (98,666) 345,191
CASH AT BEGINNING OF YEAR . . . . . . . . . 1,709,058 1,807,724 1,462,533

CASH AT END OF YEAR . . . . . . . . . . . $ 2,240,816 $ 1,709,058 $ 1,807,724
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . . $ 3,932,263 $ 2,453,866 $ 1,993,633
<PAGE>
Income taxes . . . . . . . . . . . . . . . . . . . . $ 3,890,257 $ 1,315,700 $ 1,220,394
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING ACTIVITIES:
Equipment and software purchased
through capital leases . . . . . . . . . . . . . . . $ -- $1,721,769 $ --

The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Alling & Cory Company and Subsidiaries

NOTE A: Significant Accounting Policies

NATURE OF OPERATIONS: The Company is a wholesale distributor with multiple
locations in the Northeast. The Company's principal lines of business are
Printing Papers, Industrial Papers, Packaging Equipment and Business Products.
The principal markets for these products are located in the Northeastern
United States and are primarily sold to publishers, commercial printers and
manufacturers.

CONSOLIDATION: The consolidated financial statements include the accounts of
The Alling & Cory Company and its wholly-owned subsidiaries, including The
Alcor Envelope Company. Together they are referred to as "the Company." All
significant intercompany accounts and transactions are eliminated in
consolidation.

USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

ACCOUNTS RECEIVABLE: Accounts receivable consist of trade accounts receivable
primarily from uncollateralized credit sales, principally to customers in the
printing and publishing industry. A high percentage of sales within an
industry has the potential to impact the Company's exposure to credit risk,
either positively or negatively, because customers may be similarly affected
by changes in economic or other conditions. Management believes there is
significant customer demographic and geographic diversification and that
appropriate credit evaluations are performed, thereby minimizing potential
credit risk to the Company.

INVENTORIES: Inventories consist principally of merchandise held for sale and
are stated at the lower of cost or market, determined by the last-in, first-
out (LIFO) method. If inventories were valued at current cost, they would
have been $18,103,000 and $15,576,000 higher than reported at December 31,
1995, and 1994, respectively.

PROPERTY, PLANT AND EQUIPMENT: These assets are recorded at cost. Major
renewals and betterments are charged to the property accounts while
replacements, maintenance, and repairs which do not improve or extend the life
of the respective assets are expensed currently. Depreciation and
amortization are computed using the straight-line method for financial
statement purposes (except capitalized computer leases and computer equipment
for which accelerated methods are used) and by straight-line and accelerated
methods for tax purposes over their estimated useful lives, as follows:

<TABLE>

<C> <C>
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 to 40 years
Machinery, equipment and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 27 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life of lease
</TABLE>

INTANGIBLES: The excess of aggregate purchase prices over the fair market
value of assets for wholesale distribution companies purchased in the past
have been accounted for as goodwill. Goodwill is being amortized using the
<PAGE>
straight-line method over five years. Accumulated amortization related to
goodwill is $76,667 and $56,667 at December 31, 1995, and 1994, respectively.

Non-competition and confidentiality agreements associated with such purchases
are being amortized using the straight-line method over five years.
Accumulated amortization related to the covenants is $1,073,500 and $775,500
at December 31, 1995, and 1994, respectively.

EARNINGS PER COMMON SHARE: Earnings per common share are based on the weighted
average number of common shares outstanding during the year. The weighted
average number of common shares outstanding for the fiscal years ended
December 31, 1995, 1994, and 1993 were 775,082 shares, 784,802 shares and
807,862 shares, respectively.

SALE OF FACILITIES: During 1994, the Company sold its facility in
Philadelphia, Pennsylvania which had a net book value of approximately
$431,000, for a cash payment of $314,000. The resulting loss of approximately
$117,000 is included in the "Gain on sales of facilities, net" caption in the
accompanying consolidated statements of earnings.

During 1993, the Company sold its facility in Utica, New York, which had a
cost of approximately $1,145,000 and a net book value of approximately
$479,000 for $1,475,000. The resulting gain of approximately $996,000 is
included in the "Gain on sale of facilities, net" caption in the accompanying
consolidated statements of earnings. The proceeds from the sale consisted of
two cash payments totaling $305,000 and a bond receivable of $1,170,000. The
bond accrues interest at 6% tax free and is payable in monthly principal
installments of $6,500 through July, 2003, at which time the remaining
outstanding bond amount of $390,000 will be paid to the Company.

CONDEMNATION PROCEEDINGS: During 1994, the Company received a condemnation
award of approximately $3,150,000 from the City of Rochester related to the
Company's Verona Street facility in Rochester, New York. A gain of
approximately $1,925,000 is included in the "Gain on sale of facilities, net"
caption in the accompanying consolidated statements of earnings.

INCOME TAXES: The Company provides deferred income taxes in recognition of
differences in the timing of certain transactions for income tax and financial
reporting purposes.

CASH EQUIVALENTS: The Company considers investments with a maturity of less
than three months to be cash equivalents.

NEW ACCOUNTING PRONOUNCEMENTS: In March 1995, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." This Statement establishes accounting
standards related to the impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets to be held and used and for
long-lived assets and certain identifiable intangibles to be disposed of.

In October 1995, FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation." This Statement establishes financial accounting and reporting
standards for stock-based employee compensation plans.

The Company has not yet determined the effect, if any, of the adoption of
these Statements. Both SFAS No. 121 and No. 123 must be adopted in fiscal
1996.

RECLASSIFICATIONS: Certain reclassifications have been made to previously
reported balances for 1994 and 1993 to conform to the 1995 presentation.

NOTE B: Debt
<PAGE>
NOTES PAYABLE TO BANKS

In May 1994, the Company amended its $42,500,000 credit facility to provide
for a $49,000,000 credit facility comprised of three notes of $15,000,000,
$16,500,000 and $17,500,000 payable to three individual banks. In June 1995,
the Company amended the facility to provide for a $64,000,000 credit facility
comprised of five notes of $17,500,000, $16,500,000, $15,000,000, $7,500,000
and $7,500,000 payable to five individual banks. Each of these banks, under
the terms and conditions of the credit agreement, as amended (the Agreement),
is committed to providing financing to the Company for the aforementioned
amounts. Except for the repayment structure on borrowings, the terms and
conditions of each note remain substantially uniform. The notes are secured
by a security interest in the Company's consolidated accounts receivable.

Commitment and facility fees are being amortized over the terms of the
Agreement maturing on May 31, 1997. These borrowings can bear the following
interest rates (as defined within the Agreement) and become effective at the
Company's option: alternate base rates, higher of prime rate or federal funds
rate plus applicable margin, LIBOR rate plus applicable margin, or
certificates of deposit rate plus applicable margin. Each of the notes also
includes certain loan covenants including working capital and net worth
requirements, of which the Company was in compliance at December 31, 1995.

The outstanding balances on these notes are due and payable in 1997 unless the
Company violates specified covenants, but may be paid earlier at the
discretion of management. At December 31, 1995, the balances on the
aforementioned notes were $8,750,000, $16,500,000, $8,200,000, $4,950,000 and
$3,750,000, respectively (including $8,000,000 which is classified as long-
term). At December 31, 1994, the balances on the notes then outstanding were
$11,700,000, $13,300,000 and $14,000,000, respectively (including $8,000,000
which is classified as long-term). The weighted average interest rate for
borrowings on these notes during 1995 and 1994 was 7.1% and 5.5%,
respectively.

LONG-TERM DEBT

Long-term debt, excluding current maturities, consists of:
<TABLE>
<CAPTION>
December 31,
1995 1994

<S> <C> <C>
Note payable to banks under credit agreement . . . . . . . . . . . . $ 8,000,000 $ 8,000,000

Mortgage payable to bank, secured by buildings, due
in monthly principal payments of $9,903 plus interest
at 4.48% through December 1996, balance due January
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,765,086 3,883,924

Note payable to health care insurance carrier, due in
monthly installments of $11,475 with variable interest
rates through September 1999 . . . . . . . . . . . . . . . . . . . . 378,681 516,381

Term note payable to bank, due in monthly installments
of $2,500 plus interest at 8.47% through October 1999 . . . . . . . . 85,000 115,000

Obligations under equipment leases, due in monthly
principal installments ranging from $10,000 to $42,000
discounted at 9.20% . . . . . . . . . . . . . . . . . . . . . . . . . 1,230,546 1,535,717

Term note payable to bank, due in monthly installments
of $8,333 plus interest at 6.8% through December 2000 . . . . . . . . 391,667 --
<PAGE>
$13,850,980 $14,051,022
</TABLE>
Based on borrowing rates currently available to the Company for bank loans
with similar terms and average maturities, the fair value of long-term debt
approximates its recorded value.

The amount of assets under capital leases and the related accumulated
amortization are as follows:
<TABLE>

<CAPTION>
December 31,

1995 1994
(000s omitted)
Accumulated Accumulated
Asset Amortization Asset Amortization

<S> <C> <C> <C> <C>
Land and improvements . . . . . . . . . . . $ 216 $100 $ 216 $100
Buildings and improvements . . . . . . . . 1,077 638 1,077 620
Machinery and equipment . . . . . . . . . . 2,045 230 1,777 216
$3,338 $968 $3,070 $936
</TABLE>

Amortization of these assets is included in depreciation expense. Related
capital lease obligations require minimum principal payments of approximately
$376,000 in 1996. The present value of future minimum lease payments is
approximately $1,607,000 plus approximately $311,000 of related interest
expense.

<TABLE>

<CAPTION>
Year Amount
(000s omitted)
<S> <C> <C>

Maturities of debt, including capital lease
obligations, are as follows at December 31, 1995: 1996 $ 777
1997 12,412
1998 683
1999 665

2000 91
Thereafter -
$14,628
</TABLE>

NOTE C: Income Taxes

The Company accounts for income taxes in accordance with the provisions of
SFAS No. 109, "Accounting for Income Taxes." SFAS No. 109 requires a company
to recognize deferred tax liabilities and assets (net of a valuation
allowance) for the expected future tax consequences of events that have been
recognized in a company's financial statements or tax returns. Under this
method, deferred tax liabilities and assets are determined based on the
difference between the financial statement carrying amounts and tax bases of
assets and liabilities using enacted tax rates in effect in the years in which
the differences are expected to reverse.

These temporary differences relate principally to deferred compensation,
postretirement benefits, postemployment benefits, property transactions,
allowance for doubtful accounts and depreciation.
<PAGE>
The provision for federal and state income taxes consists
of the following for the years ended December 31 (000s omitted):

<TABLE>
<CAPTION>
Current: 1995 1994 1993

<S> <C> <C> <C>
Federal . . . . . . . . . . . . . . . . $1,972 $1,216 $ 531
State . . . . . . . . . . . . . . . . . 613 364 225
2,585 1,580 756

Deferred:
Federal . . . . . . . . . . . . . . . . 581 432 47
State . . . . . . . . . . . . . . . . . 203 150 16

784 582 63
$ 3,369 $ 2,162 $ 819
The provision for (benefit from) deferred
taxes before cumulative effect is as follows
for the years ended December 31 (000s
omitted):

1995 1994 1993
Allowance for doubtful accounts . . . . . . . $ 16 $ (25) $ (1)
Inventory . . . . . . . . . . . . . . . . . . - 19 (11)
Deferred compensation . . . . . . . . . . . . (249) (121) (99)

Other . . . . . . . . . . . . . . . . . . . . (39) 61 (21)
Depreciation and amortization . . . . . . . . 1,056 648 195
$ 784 $ 582 $ 63

A reconciliation of the U.S. statutory income
tax rate to the Company's effective income
tax rate is as follows for the years ended
December 31 (000s omitted):
1995 1994 1993
U.S. statutory income tax rate . . . . . . . 34.0% 34.0% 34.0%

State income tax effect, net of federal 6.6% 6.7% 6.7%
benefit . . . . . . . . . . . . . . . . . . .
Adjustment of prior years accruals . . . . . 0.0% 0.0% (6.6%)
Other . . . . . . . . . . . . . . . . . . . . 0.6% 2.1% 0.6%
41.2% 42.8% 34.7%

Deferred tax assets (liabilities) are
comprised of the following at December 31
(000s omitted):
1995 1994 1993
Deferred tax assets:

Current:
Allowance for doubtful accounts . . . . $ 615 $ 631 $ 606
Deferred compensation . . . . . . . . . 450 141 159

Inventory . . . . . . . . . . . . . . . 46 46 65
Other . . . . . . . . . . . . . . . . . 139 - 61
Depreciation and amortization . . . . . 4 4 -
1,154 822 891

Non-current:
Deferred compensation . . . . . . . . . 1,169 1,229 882
1,169 1,229 882

Deferred tax liabilities:
<PAGE>
Non-current:
Depreciation and amortization . . . . . 3,463 2,407 1,755

Other . . . . . . . . . . . . . . . . . 12 12 12
3,475 2,419 1,767
Total $(1,152) $ (368) $ 6

</TABLE>

The utilization of state investment tax credits reduced taxes payable by
approximately $35,000 in 1995 and $15,000 in 1994.
<PAGE>

NOTE D: Pension, Benefit and Insurance Plans

PENSION PLANS:

The Retirement Plan of Alling & Cory (the "Plan") is a noncontributory defined
benefit plan covering a majority of the Company's employees. The Plan's
defined benefit formula generally bases payments to retired employees upon
their length of service multiplied by a percentage of their average monthly
pay. The Company's funding policy is to contribute amounts to the Plan
sufficient to meet the minimum funding requirements set forth in the Employee
Retirement Income Security Act of 1974 (ERISA) plus such additional amounts as
the Company may determine to be appropriate from time to time.

The following table sets forth the Plan's funded status and amounts recognized
in the Company's consolidated financial statements:

<TABLE>
<CAPTION>
December 31,
1995 1994

(000s omitted)
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation including vested benefits
of $27,090 in 1995 and $22,685 in 1994 . . . . . . . . . . . . . . . $(29,174) $(24,524)

Projected benefit obligation for service rendered to date . . . . . . $(34,731) $(30,655)
Plan assets at fair value . . . . . . . . . . . . . . . . . . . . . . 36,995 31,701
Plan assets in excess of projected benefit obligation . . . . . . . . 2,264 1,046
Unrecognized net (gain) loss . . . . . . . . . . . . . . . . . . . . (332) 1,250

Unrecognized net transition asset . . . . . . . . . . . . . . . . . . (1,753) (2,104)

Prepaid pension cost . . . . . . . . . . . . . . . . . . . . . . . . $ 179 $ 192

Assumptions used for the table above were:
Discount rate for benefit obligations . . . . . . . . . . . . . . . . 8.0% 8.5%
Rate of increase in compensation levels . . . . . . . . . . . . . . . 5.0% 5.5%
Expected long-term rate of return on assets . . . . . . . . . . . . . 9.5% 9.5%

Net pension cost included the following components:
Service cost benefits earned during the year . . . . . . . . . . . . $ 988 $ 980
Interest cost on projected benefit obligation . . . . . . . . . . . . 2,513 2,365

Actual return on plan assets, (increase) decrease . . . . . . . . . . (7,506) 1,017
Deferred asset gain (loss) . . . . . . . . . . . . . . . . . . . . . 4,382 (4,110)
Net amortization and deferral . . . . . . . . . . . . . . . . . . . . (365) (365)
Net pension expense (income) . . . . . . . . . . . . . . . . . . . . $ 12 $ (113)

Assumptions used for the table above were:
Discount rate for benefit obligations . . . . . . . . . . . . . . . . 8.5% 8.0%
Rate of increase in compensation levels . . . . . . . . . . . . . . . 5.5% 5.0%
Expected long-term rate of return on assets . . . . . . . . . . . . . 9.5% 9.5%
</TABLE>

The Plan's assets at December 31, 1995 are invested in common stocks, limited
partnership interests, mutual funds, money market instruments, and government
and corporate bonds. In addition to this pension plan, the Company maintains
a supplemental retirement plan for certain employees which is designed to
provide supplemental benefits to those benefits allowable under ERISA.
<PAGE>
Related costs totaled approximately $82,000 in 1995 and $80,000 in 1994 based
on an assumed discount rate of 8.5% in 1995 and 8.0% in 1994. The assumed
salary scale was 5.5% in 1995 and 5.0% in 1994.

During 1993, the Company adopted an unfunded, non-qualified deferred
compensation plan for certain highly compensated employees of the Company.
The plan permits these employees to defer the receipt of a portion of their
salaries and bonuses. The deferred amounts earn interest, as defined in the
plan document. Earnings are paid when the deferred compensation is
distributed. Distribution shall be made upon a date mutually agreed to
between the Company and each participant. The total liability related to this
plan is approximately $180,000 as of December 31, 1995, and $88,000 as of
December 31, 1994.

The Company's required contributions to union-sponsored multi-employer pension
plans were approximately $546,000 in 1995 and $522,000 in 1994. Employees
included in these plans are not included in the Company's plans. Benefit and
asset information comparable to that shown above for the Company's plan is not
readily available. Under ERISA, an employer, upon withdrawal from a multi-
employer plan, is required to continue funding its proportionate share of the
plan's unfunded vested benefits. The Company intends to withdraw from one of
its union-sponsored multi-employer pension plans. Based on actuarial
valuations the Company has been informed that there is no unfunded vested
benefits for withdrawal liability purposes. Since necessary information is
not available from certain other plan administrators, the Company is unable to
determine its proportionate share of unfunded vested benefits, if any, for
withdrawal liability purposes.

POSTRETIREMENT MEDICAL PLAN:

The Company sponsors a defined benefit postretirement medical plan that covers
substantially all full- time employees. Following is a summary of
eligibility, coverage and contributions under the plan.

Eligibility:

Employees: Retirement after age 55 with 10 years of service

-OR-

Permanently disabled and age 55 with 10 years of service

Dependents: Spouse and unmarried children under age 19

Survivor: Six months coverage after death of spouse who was a
retiree or an employee eligible for retirement

Coverage:

Pre-age 65: Comprehensive major medical: $100 deductible; 80%
coinsurance; $600 out-of-pocket limit including deductible

Post-age 65: Same as pre-age 65 with Medicare carve out.

Company Contributions:

For retirees on January 1, 1993, and for active employees who are within
five years of retirement on January 1, 1993: 50% of plan costs based on
blended cost of active employees and retirees under age 65; no
contributions after age 65.

For all others: Plan costs based on blended cost of active employees and
retirees minus the following percent times the lesser of the targeted
benefits and the plan costs. Separate plan costs are developed for
active employees and retirees under and over age 65. The targeted
benefit is $2,600 prior to age 65 and $2,000 after age 65.
<PAGE>
<TABLE>
<CAPTION>
Under 65 65 and Over
Service at
Retirement Retiree Dependent Retiree Dependent

<S> <C> <C> <C> <C>
10-14 years 25.0% 25.0% 50.0% 40.0%
15-19 years 37.5% 37.5% 75.0% 60.0%
20 and over 50.0% 50.0% 100.0% 80.0%
</TABLE>

The Company adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," as of January 1, 1993. This standard requires
that the expected cost of these postretirement benefits be charged to expense
during the years that the employees render service. The Company has elected
to recognize the transition obligation, representing the unfunded and un-
recognized accumulated past-service benefit obligation for all plan
participants, over a 21.6-year amortization period rather than as a cumulative
effect of a change in accounting principle. As prior years' costs were
recognized as expense when the claims were paid by the Company, postretirement
benefit cost is not comparable with periods prior to 1993.
<PAGE>
The following table reconciles the plan's funded status to the accrued
postretirement benefit obligation as of December 31:

<TABLE>
<CAPTION>
December 31,
1995 1994

(000s omitted)
<S> <C> <C>
Accumulated Postretirement Benefit Obligation (APBO):

Retirees . . . . . . . . . . . . . . . . . . . . . . . . . . $2,894 $2,814
Active participants . . . . . . . . . . . . . . . . . . . . 1,624 1,299

Total APBO . . . . . . . . . . . . . . . . . . . . . . . . . 4,518 4,113

Fair value of plan assets . . . . . . . . . . . . . . . . . -- --
Unrecognized actuarial loss . . . . . . . . . . . . . . . . 391 145
Unrecognized transition obligation . . . . . . . . . . . . . 3,638 3,501
Unrecognized prior service cost . . . . . . . . . . . . . . -- --

Accrued postretirement benefit obligation . . . . . . . . . $ 489 $ 467

Net postretirement health care costs for 1995 and 1994
included the following components:

Service cost . . . . . . . . . . . . . . . . . . . . . . . . $ 52 $ 35
Interest cost . . . . . . . . . . . . . . . . . . . . . . . 346 341
Return on plan assets . . . . . . . . . . . . . . . . . . . -- --

Net amortization and deferral . . . . . . . . . . . . . . . 196 196

Net postretirement health care costs . . . . . . . . . . . . $ 594 $ 572

</TABLE>

For measurement purposes, a 12.5% annual rate of increase in the per capita
cost of covered health care claims was assumed; the rate was assumed to
decrease gradually to 6.0% until 2011 and remain at that level thereafter.
The health care cost trend rate assumption has a significant effect on the
amounts reported. To illustrate, increasing the assumed health care cost
trend rates by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1995 by
approximately $72,000 and would decrease the aggregate of the service and
interest cost components of net postretirement health care cost for the year
then ended by a net amount of approximately $22,000. The weighted average
discount rate used in determining the accumulated postretirement benefit
obligation was 8.0% and 8.5% for December 31, 1995 and 1994, respectively.

POSTEMPLOYMENT BENEFITS:

Effective January 1, 1994, postemployment benefits for former or inactive
employees, excluding retirement benefits, are accounted for under the
provisions of SFAS No. 112, "Employers' Accounting for Postemployment
Benefits." SFAS No. 112 requires the Company to accrue the cost of short-term
disability coverage over an employee's service life and estimates of known and
expected workers' compensation claims. The Company recorded the discounted
value of expected future benefits as a one-time charge for the adoption of
SFAS No. 112 of approximately $496,000 (after-tax $287,700, or $0.37 per
share) which has been reported as the cumulative effect of a change in
<PAGE>
accounting principle as of January 1, 1994. The Company uses the services of
an enrolled actuary to calculate the expense.

The Company is self-insured for workers' compensation claims in an amount of
up to $500,000 per claim. The plan deductible is administered by a third
party which processes and pays the claims and then seeks reimbursement from
the Company. Prior to the adoption of SFAS No. 112, the Company recorded a
year-end liability based upon individual case reserves.

At December 31, 1995, and 1994, the Company's liability for postemployment
benefits totaled approximately $1,494,000 and $1,045,000, respectively. A
portion is classified as a current liability based on the Company's experience
of actual claims payments. For measurement purposes, the healthcare cost
increase assumption was 9% for 1995 and 10% for 1994, the salary increase
assumption was 5% and the discount rate was 8% for both years.

INSURANCE:

The Company is self-insured for commercial auto claims of up to $250,000 per
claim. The deductible plan is administered by a third party which processes
and pays claims for which the Company provides reimbursement and pays an
administrative fee. The year-end liability for auto claims is based upon both
individual case reserves and estimates of unreported claims as of year-end.

Associated with the workers' compensation and commercial auto liability plans
is an approximately $1.8 million irrevocable letter of credit with a bank to
guarantee payment to the third party. The aggregate amount of combined
workers' compensation and commercial auto claims in any one year cannot exceed
$2,000,000.

NOTE E: Leases

The Company leases certain warehouse and office facilities, computer equipment
and delivery vehicles under long-term noncancelable operating leases. Certain
of these leases require the Company to pay property taxes, maintenance and
insurance. The future minimum rental commitments as of December 31, 1995, for
all noncancelable operating leases having initial or remaining noncancelable
terms in excess of one year, are as follows:

<TABLE>
<C> <C> <C> <C>
1996 . . . . . . . . . . . . . . . . $5,026,000 1999 . . . . . . . . . . . . . . . . $3,346,000
1997 . . . . . . . . . . . . . . . . 4,635,000 2000 . . . . . . . . . . . . . . . . 3,058,000
1998 . . . . . . . . . . . . . . . . 3,844,000 2001 and after . . . . . . . . . . . 28,770,000

</TABLE>

Two leases for combined warehouse and office space comprise a significant
portion of the future minimum lease payments.

The lease for the facility to be completed in Cleveland, Ohio, is for a period
of twenty years (in addition to two five-year renewal periods). Rent expense
is fixed for each of the five year periods of the lease, with a fifteen
percent increase in the fixed rent after years five, ten and fifteen. The
Company is obligated to pay real estate taxes, insurance, and construction of
specified leasehold improvements.

The Company's sublease for its facility in Rochester, New York is for a period
of twenty years (in addition to two five-year renewal periods). Rent expense
is fixed over the initial twenty-year term of the lease. The Company is
obligated to pay real estate taxes and insurance on the leased facility.

Several of the leases contain options to renew the lease or to purchase the
property at the expiration of the current term. Total rental expense for all
<PAGE>
leases (including maintenance) amounted to $5,887,000, $6,107,000 and
$5,868,000 in 1995, 1994 and 1993, respectively.

NOTE F: Commitments

The Company has agreements with its employee/shareowners which give the
Company the option to purchase their stock under certain conditions. It has
been the Company's policy to purchase for the treasury, at the trading value,
any such shares which become available. The trading value has historically
approximated book value. There were 402,680 and 373,627 shares outstanding
subject to these agreements at December 31, 1995, and 1994, respectively.

In 1994, the Company entered into a ten-year agreement with a third party to
manage the Company's data communications network and voice communications
system. Monthly payments range from $109,000 to $131,000 during the term of
the agreement.

In 1989, the Company entered into an employment agreement with the Company's
President. The agreement provides for a certain level of salary and benefits
to be maintained for a period of three years subsequent to the occurrence of a
triggering event as defined in the agreement.

NOTE G: Subsequent Events

Sale of Facility

Subsequent to year-end, the Company received a letter of intent for the
purchase of its facility in Cleveland, Ohio. The net book value of the
building is not deemed to be material to the balance sheet. In addition,
prior to year-end, the Company entered into a 20 year lease with annual
rentals ranging from approximately $412,000 to $626,000 for a new facility in
Cleveland, Ohio. Monthly payments are to commence the first day of the
calendar month following the date of delivery of possession. Management
believes the date of delivery of possession to be June 30, 1996.

Retirement Plans

Subsequent to year-end, the Board of Directors approved the inclusion in the
Alling & Cory Retirement Restoration Plan (the "Restoration Plan" or
"Supplemental Plan") of ten additional key executives of the Company. The
plan provides retirement benefits to a select group of management and highly
compensated individuals in excess of the amounts permitted by certain IRS
limitations.

Also subsequent to year-end, the Board of Directors approved the Retirement
Enhancement Plan for Certain Highly Compensated Employees of Alling & Cory
(the "Enhancement Plan"). Six of the key executives referred to above were
also made participants in the Enhancement Plan. The benefits pursuant to the
Enhancement Plan apply if the individual is terminated without cause. The
benefits equal the excess of the amounts the participant would have received
under the terms of The Retirement Plan of Alling & Cory and the Restoration
Plan (determined as if the participant was fully vested under such plans and
had accumulated the lesser of ten additional years of service or the period of
service until the participant would have reached age fifty-five) over the sum
of the aggregate monthly amounts of pension payments to which the participant
is actually entitled under the terms of the Retirement Plan of Alling & Cory
and the Restoration Plan.

Stock Bonus

Subsequent to year-end, the Company awarded a discretionary stock bonus to
various officers. In total, 9,450 shares were awarded and have an estimated
value of $484,000.
<PAGE>

ANNEX A

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

BY AND BETWEEN

THE ALLING & CORY COMPANY

AND

UNION CAMP CORPORATION

AND

NORTH MERGER CORP.

DATED: APRIL 13, 1996

AS AMENDED AND RESTATED

AS OF MAY , 1996
<PAGE>

AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER

This Amended and Restated Agreement and Plan of Merger (the
"Agreement") is made as of April 13, 1996, as amended and restated as of May
__, 1996, by and between Union Camp Corporation, a Virginia corporation
("Parent"), North Merger Corp., a New York corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and The Alling & Cory Company, a New York
corporation ("Alling & Cory").

RECITALS

The respective Boards of Directors of Alling & Cory, Parent and
Merger Sub have approved the merger (the "Merger") of Merger Sub with and into
Alling & Cory in accordance with the laws of the State of New York and the
provisions of this Agreement. Alling & Cory, Parent and Merger Sub desire to
make certain representations, warranties and agreements in connection with,
and establish various conditions precedent to, the Merger.

It is the intent of the parties that the Merger constitute a
corporate reorganization both with respect to Parent, Merger Sub and Alling &
Cory and with respect to the holders of shares of the common stock par value
$1.25 per share of Alling & Cory ("Alling & Cory Common Stock") for which
shares of the common stock, par value $1.00 per share of Parent ("Parent
Stock") are received as consideration in the Merger, in accordance with
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986,
as amended (together with the rules and regulations promulgated thereunder,
the "Code").

The Board of Directors of Alling & Cory has unanimously determined
that the Merger is fair to, and in the best interests of, the shareholders of
Alling & Cory.

NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:

ARTICLE I

TERMS OF THE MERGER

1.1 The Merger of Merger Sub into Alling & Cory. Upon the terms
and subject to the conditions of this Agreement, the Merger shall be
consummated in accordance with the New York Business Corporation Law (the
"BCL"). At the Effective Time (as defined in Section 1.2, below), upon the
terms and subject to the conditions of this Agreement, Merger Sub shall be
merged with and into Alling & Cory in accordance with the BCL and the separate
existence of Merger Sub shall thereupon cease, and Alling & Cory, as the
surviving corporation in the Merger (the "Surviving Corporation"), shall
continue its corporate existence under the laws of the State of New York.

1.2 Effective Time. The Merger shall become effective at the time
of the filing of the certificate of merger substantially in the form of
Exhibit 1.2 (see the Alling & Cory Disclosure Memorandum) with the Secretary
of State of New York in accordance with the applicable provisions of the BCL
(the "Certificate of Merger"), or at such later time as may be provided in the
Certificate of Merger. The closing of the Merger (the "Closing") shall take
place, and the Certificate of Merger shall be filed, as soon as practicable
after all of the conditions set forth in this Agreement have been satisfied or
waived by the party or parties entitled to the benefit of the same, but in no
event later than the fifth business day after such satisfaction or waiver,
unless such time period is extended by written agreement of the parties.
<PAGE>
Alling & Cory and Parent shall agree upon the time of such filing and the
place where the Closing shall take place. The time when the Merger shall
become effective is herein referred to as the "Effective Time" and the date on
which the Effective Time occurs is herein referred to as the "Closing Date."

1.3 Merger Consideration. As of the Effective Time, subject to the
provisions of the letter agreement referred to in Section 4.1(h) ("the Letter
Agreement"), by virtue of the Merger and without any action on the part of
Parent, Merger Sub or Alling & Cory or any holder of shares of capital stock
thereof:

(a) Capital Stock of Merger Sub. Each share of the common stock,
$.01 par value per share, of Merger Sub then outstanding shall remain
outstanding and be converted into one share of common stock of the Surviving
Corporation.

(b) Cancellation of Treasury Stock/Close Transfer Books. Each
share of Alling & Cory Common Stock held in the treasury of Alling & Cory or
by a wholly owned subsidiary of Alling & Cory shall be cancelled as of the
Effective Time and no Merger Consideration shall be payable with respect
thereto. From and after the Effective Time, there shall be no further
transfers on the stock transfer books of Alling & Cory of any of the shares of
Alling & Cory Common Stock that are outstanding immediately prior to the
Effective Time (the "Alling & Cory Shares").

(c) Merger Consideration. At the election of each shareholder,
each of the Alling & Cory Shares shall be converted into and become the right
to receive either the amount in cash or the number of shares of Parent Stock
and other consideration described below (the "Merger Consideration"):

(i) Exchange Ratio for Alling & Cory Common Stock: Cash Election
Price. Subject to the provisions of Section 1.3(e) and of Section 1.5 hereof,
each share of Alling & Cory Common Stock for which a Cash Election (as defined
in Section 1.3(d) hereof) is then effective pursuant to the terms hereof
(which shall not include shares held by Dissenting Shareholders) shall be
converted into and become the right to receive an amount in cash (the "Cash
Election Price") equal to the quotient resulting from dividing the total value
attributed to all outstanding shares of Alling & Cory Common Stock (the
"Attributed Value") by 787,496 less the number of shares of Alling & Cory
Common Stock repurchased pursuant to Section 4.1(c)(ii), if any. The
Attributed Value shall be $88,250,000, and the Cash Election Price shall be
$112.064, except that (i) the Attributed Value shall be reduced by the
amount, if any, utilized by Alling & Cory, for stock repurchases pursuant to
Section 4.1(c)(ii), and the Cash Election Price shall be adjusted (up or down)
accordingly and (ii) the Attributed Value shall be adjusted by the amount, if
any, by which any amount paid by Alling & Cory (excluding any amount for which
it is reimbursed) in order to settle the Lieberman Litigation exceeds or is
less than the maximum amount set forth in the Letter Agreement (with any
excess reducing the Attributed Value and the amount by which it is below such
maximum increasing the Attributed Value), and the Cash Election Price shall be
adjusted (up or down) accordingly. All such shares of Alling & Cory Common
Stock shall no longer be outstanding and shall automatically be cancelled and
retired and cease to exist, and each holder of a certificate representing any
such shares shall cease to have any rights with respect thereto, except the
right to receive cash to be paid in consideration therefor, upon the surrender
of such certificate in accordance with Section 1.5 hereof, without interest.

(ii) Exchange Ratio for Alling & Cory Common Stock: Share
Conversion Number. Subject to (x) the provisions relating to fractional
shares set forth in Section 1.3(g) hereof, and (xx) the provisions of the
Letter Agreement, each share of Alling & Cory Common Stock for which a Stock
Election (as defined in Section 1.3(d) hereof) is then effective or deemed
effective pursuant to the terms hereof shall be converted into and become the
right to receive a number (the "Share Conversion Number"), of fully paid and
non-assessable shares of Parent Stock determined as follows: the Share Con-
version Number shall be the number (calculated to three decimal places and
<PAGE>
rounded downward to the nearest one thousandth of a share) that results from
dividing the Cash Election Price by the Fair Market Value of a share of Parent
Stock; provided, however, that, for purposes of this sentence only, if on the
Closing Date any dividend had previously been declared and/or paid by Alling &
Cory as permitted by Section 4.1(c)(i), and if the Closing occurs prior to
the record date for the Parent's second quarter dividend, so that holders of
Alling & Cory Shares who make a Stock Election become, as a result of the Mer-
ger, entitled to payment of such Parent dividend, then the Cash Election Price
shall be reduced by the amount of any such Parent dividend that may be payable
with respect to each share of Parent Stock to be issued to such holders.
"Fair Market Value" with respect to a share of Parent Stock shall mean the
average of the daily closing prices per share of the Parent Stock as reported
in The Wall Street Journal for the twenty (20) consecutive trading days ending
on and including the third trading day preceding but not including the Closing
Date (the "Average Closing Price"); provided, however, that, notwithstanding
the foregoing, (x) if the Average Closing Price is $47 per share of Parent
Stock or less, then the Fair Market Value of a share of Parent Stock shall be
deemed to be $47 and (y) if the Average Closing Price is $57 per share of
Parent Stock or greater, then the Fair Market Value of a share of Parent
Stock shall be deemed to be $57. All such shares of Alling and Cory Common
Stock shall no longer be outstanding and shall automatically be cancelled and
retired and cease to exist, and each holder of a certificate representing any
such shares shall cease to have any rights with respect thereto, except the
right to receive shares of Parent Stock to be issued in consideration
therefor, and such other consideration as may be specified in the Letter
Agreement, upon the surrender of such certificate in accordance with Section
1.5 hereof, without interest.

(d) Method of Election. (i) Any holder of Alling & Cory Common
Stock may, pursuant to the terms of this Section 1.3(d) and of Section 1.3(e),
make an election (an "Election") either to receive the cash payment
contemplated by Section 1.3(c)(i) hereof for any or all shares of Alling &
Cory Common Stock held by such holder (a "Cash Election") or to receive the
shares of Parent Stock and other consideration contemplated by Section
1.03(c)(ii) hereof for any or all shares of Alling & Cory Common Stock held by
such holder (a "Stock Election"). A form of election (the "Form of Election")
shall be mailed to shareholders of Alling & Cory of record as of the record
date for the Special Meeting (as defined in Section 1.10(a) hereof) together
with the Prospectus (as defined in Section 1.10(a) hereof). In addition,
Alling & Cory shall use its best efforts to make the Form of Election together
with copies of the Prospectus available to all persons who become shareholders
of record of Alling & Cory during the period between such record date and the
date of the Special Meeting.

(ii) Any such Cash Election or Stock Election shall have been
properly made and shall be effective only if the transfer agent for the Alling
& Cory Common Stock shall have received at its designated office, by 5:00 P.M.
New York City time, on the last business day preceding the date of the Special
Meeting, a Form of Election properly completed, provided that any holder of
Alling & Cory Common Stock who shall not have properly and timely made any
Election shall be deemed to have properly and timely made a Stock Election for
all purposes of this Agreement with respect to all shares of Alling & Cory
Common Stock held by such holder.

(iii) Any Election may be revoked by the person submitting the
same to the transfer agent for the Alling & Cory Common Stock only by written
notice received by the transfer agent for the Alling & Cory Common Stock (i)
prior to 5:00 P.M. New York City time on the last business day before the date
of the Special Meeting or (ii) after 90 days after the date the Form of
Election is first mailed to Alling & Cory's shareholders, if the Effective
Time of the Merger shall not have occurred prior the expiration of such 90 day
period. In addition, all Forms of Election shall automatically be revoked if
the transfer agent for the Alling & Cory Common Stock is notified in writing
by the parties hereto that the Merger has been abandoned.
<PAGE>
(iv) The transfer agent for the Alling & Cory Common Stock, in
consultation with the Exchange Agent (as defined in Section 1.5(a)), shall
determine whether or not any such Election has been timely and properly made
or deemed made timely and properly or revoked pursuant to this Section 1.3(d),
and any such determination shall be conclusive and binding. The Exchange
Agent may, with the mutual agreement of Alling & Cory and Parent, establish
such procedures, not inconsistent with this Section 1.3, as may be necessary
or desirable to implement this Section 1.3.

(e) Limitation on Cash Election. Notwithstanding anything to the
contrary contained in Section 1.3(c) or (d) hereof, in the event that
effective Cash Elections are received and not revoked prior to the Effective
Date in respect of in excess of 157,400 shares of Alling & Cory Common Stock,
less (i) the number of Dissenting Shares, (ii) the number of shares
repurchased pursuant to Section 4.1(c)(ii), (iii) 322 shares and (iv) the
number of shares resulting from multiplying the total cash withheld pursuant
to the Letter Agreement times a fraction, the numerator of which is the number
of Alling & Cory Shares with respect to which a Stock Election was made and
the denominator of which is the total number of Alling & Cory Shares, and
dividing the product by the Cash Election Price, (the "Maximum Cash Election
Number") then only the number of shares of Alling & Cory Common Stock equal to
the Maximum Cash Election Number shall be converted into and receive the Cash
Election Price. In that case, shares of Alling & Cory Common Stock to be
converted into the Cash Election Price shall be selected on a pro rata basis,
with adjustments to avoid purchases of fractional shares, based on the number
of shares of Alling & Cory Common stock in respect of which an effective Cash
Election is received and not revoked prior to the Effective Date. All shares
of Alling & Cory Common Stock in respect of which an effective Cash Election
is received and not revoked prior to the Effective Date which are not
converted into the Cash Election Price pursuant to Section 1.3(c)(i) by
operation of this Section 1.3(e) shall be converted into shares of Parent
Stock and other consideration in accordance with Section 1.3(c)(ii) hereof
and the Letter Agreement.

(f) Dissenting Shareholders. Notwithstanding anything in this
Agreement to the contrary, but only to the extent required by Sections 910 and
623 of the BCL, shares of Alling & Cory Common Stock that are issued and
outstanding immediately prior to the Effective Time and are held by holders of
Alling & Cory Common Stock who, pursuant to the provisions of the BCL, have
the right as of the Effective Time to dissent from the Merger and receive
payment for their shares (such holders, the "Dissenting Shareholders", and
such shares, the "Dissenting Shares") shall not be converted into the right to
receive the consideration set forth in Section 1.3(c) hereof but shall become
the right to receive, from Alling & Cory, such consideration as may be
determined to be due such Dissenting Shareholder pursuant to the BCL;
provided, however, that (i) if any Dissenting Shareholder shall subsequently
withdraw such Dissenting Shareholder's demand for appraisal in compliance with
the BCL (or with the written approval of Surviving Corporation, if required by
the BCL), or (ii) if any Dissenting Shareholder fails to establish and
perfect, or otherwise loses, the entitlement to appraisal rights as provided
by applicable law, then such Dissenting Shareholder shall forfeit the right to
appraisal of such Dissenting Shares and such Dissenting Shares shall thereupon
be deemed to have been converted into the right to receive, as of the
Effective Time, with respect to each share of Alling & Cory Common Stock, the
consideration set forth in Section 1.3(c)(ii) hereof, without interest.
Alling & Cory shall give Parent and Merger Sub prompt notice of any written
demands for appraisal, withdrawals of demands for appraisal and any other
related instruments received by Alling & Cory. Prior to Closing, Alling &
Cory will not voluntarily make any payment with respect to any demands for
appraisal and will not, except with the prior written consent of Parent,
settle or offer to settle any such demand.

(g) Certain Adjustments; Fractional Shares. The Merger
Consideration and the components thereof shall be subject to appropriate
adjustment in the event of a stock split, stock dividend, subdivision,
reclassification, split-up, combination, recapitalization or similar
<PAGE>
transaction after the date hereof applicable to shares of Parent Stock or the
Alling & Cory Common Stock. No fractional shares of Parent Stock shall be
issued pursuant to the Merger nor will any fractional share interest involved
entitle the holder thereof to vote, to receive dividends or to exercise any
other rights of a shareholder of the Parent. In lieu thereof, any person who
would otherwise be entitled to a fractional share of Parent Stock pursuant to
the provisions hereof shall receive an amount in cash equal to the value of
such fractional share. The value of such fractional share shall be the
product of such fraction multiplied by the Fair Market Value of one share of
Parent Stock.

1.4 Shareholders' Rights upon Merger. Upon consummation of the
Merger, the holders of all certificates which theretofore represented Alling &
Cory Shares shall cease to have any rights with respect thereto, and, subject
to applicable law and this Agreement, shall only have the right to receive the
amount of cash, if any, and the number of shares of Parent Stock and other
consideration, into which their Alling & Cory Shares have been converted
pursuant to this Agreement, it being understood that Parent and Merger Sub
shall have the right to withhold a portion of the Merger Consideration
pursuant to the terms of the Letter Agreement and subject to the terms and
conditions set forth therein.

1.5 Surrender and Exchange of Shares and Options

(a) Exchange Agent. Prior to the Special Meeting, Parent shall
designate The Bank of New York or such other bank or trust company designated
by Parent (and reasonably acceptable to Alling & Cory) as exchange agent (the
"Exchange Agent"), for the purpose of effecting the issuance of certificates
of Parent Stock and/or cash payments (including payments with respect to
fractional shares) due pursuant to this Agreement. Alling & Cory shall cause
the transfer agent for the Alling & Cory Common Stock to deliver to the
Exchange Agent not later than the date of the Special Meeting all Forms of
Election received by such transfer agent. Parent shall make available, or
cause to be made available, to the Exchange Agent the number of shares of
Parent Stock and sufficient funds, and shall make arrangements to provide the
Exchange Agent with share certificates as and when necessary, to enable the
Exchange Agent to effect the exchange of certificates and to make the cash
payments contemplated in this Section 1.5.

(b) Exchange Fund. Not later than the close of business on the
Closing Date, Parent shall deposit or cause to be deposited with the Exchange
Agent (i) certificates representing the shares of Parent Stock issuable
pursuant to Section 1.3(c)(ii) hereof in exchange for outstanding shares of
Alling & Cory Common Stock and the amount of cash in immediately available
funds to which such shares of Parent Stock are entitled under Section 1.3(g)
hereof (such shares of Parent Stock, together with any cash with respect
thereto, the "Common Stock Parent Shares Exchange Fund"), and (ii) an amount
of cash in immediately available funds equal to that amount of cash issuable
pursuant to Section 1.3(c)(i) hereof in exchange for outstanding shares of
Alling & Cory Common Stock (such cash amount, the "Common Stock Cash Election
Exchange Fund" and together with the Common Stock Parent Shares Exchange Fund,
the "Exchange Fund"). In addition, from time to time, Parent shall deposit,
or cause to be deposited (i) in the Common Stock Parent Shares Exchange Fund
the amount of any dividends or other distributions that become payable
pursuant to Section 1.5(d) after the Closing Date and (ii) in the Exchange
Fund, the amount of any consideration that becomes payable pursuant to the
Letter Agreement, in each case, subject to the provisions of Section 1.5(e).

(i) As soon as practicable after the Effective Time, Parent shall
cause the Exchange Agent to mail and make available to each record holder of a
certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Alling & Cory Common Stock (the
"Certificates") (x) a notice and form of letter of transmittal advising such
holder of the effectiveness of the Merger and the procedure for surrendering
<PAGE>
such Certificate or Certificates to the Exchange Agent for exchange pursuant
to this Agreement (which notice shall also specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent, and shall otherwise be in
such form and have such other provisions as Parent and Alling & Cory may rea-
sonably specify) and (y) instructions for use in effecting the surrender of
the Certificates for exchange pursuant to this Agreement. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with a letter of
transmittal duly executed and completed in accordance with the instructions
thereon, the Exchange Agent shall promptly mail to such person (A) in the case
of a holder of Alling & Cory Common Stock who has made or who is deemed to
have made an effective Stock Election in respect of any shares of Alling &
Cory Common Stock held by such holder, the number of shares of Parent Stock
determined in accordance with Section 1.3(c)(ii) hereof and a check payable to
such person representing the payment of cash in lieu of fractional shares
determined in accordance with Section 1.3(g) hereof plus any amount(s) payable
pursuant to Section 1.5(d) or the Letter Agreement attributable to the shares
of Alling & Cory Common Stock held by such holder in respect of which an
effective Stock Election has been made or deemed to have been made, or (B) in
the case of a holder of Alling & Cory Common Stock who has made an effective
Cash Election in respect of any shares of Alling & Cory Common Stock held by
such holder, a check payable to such person in an amount determined in
accordance with Section 1.3(c)(i) hereof and in accordance with the Letter
Agreement attributable to the shares of Alling & Cory Common Stock held by
such holder in respect of which an effective Cash Election has been made. No
interest shall be paid or accrued in connection with such payments, except as
may be provided in the Letter Agreement.

(ii) In the event of a transfer of ownership of Alling & Cory Common
Stock which is not registered in the transfer records of Alling & Cory, a
certificate representing the proper number of shares of Parent Stock and the
proper amount of cash, if any, may be issued to a transferee if the
Certificate representing such Alling & Cory Common Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and by evidence satisfactory to the Exchange Agent that any
applicable stock transfer taxes have been paid. Until surrendered as contem-
plated by this Section 1.5, each Certificate shall be deemed at any time after
the Effective Time to represent only the right to receive upon such surrender
the shares of Parent Stock, consideration payable pursuant to the Letter
Agreement, cash consideration, cash in lieu of any fractional shares of
Parent Stock, and any dividends or distributions payable, as contemplated by
this Section 1.5. In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such certificate to be lost, stolen or destroyed, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the
consideration deliverable in respect thereof, provided that the person to whom
such consideration is paid shall, as a condition precedent to the payment
thereof, give the Surviving Corporation a bond in such sum as it may
reasonably direct or otherwise indemnify the Surviving Corporation in a manner
reasonably satisfactory to it against any claim that may be made against the
Surviving Corporation with respect to the Certificate claimed to have been
lost, stolen or destroyed.

(d) Distributions with Respect to Unexchanged Certificates. No
dividends or other distributions declared or made after the Effective Time
with respect to Parent Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Stock exchangeable therefor, no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 1.3(g)
and no consideration provided for in the Letter Agreement shall be delivered
to such holder, until the holder of record of such Certificate shall surrender
such Certificate to the Exchange Agent or, after the termination of the
Exchange Fund, to Parent. Subject to applicable law, following surrender of
any such Certificate, there shall be paid by the Exchange Agent or, after the
termination of the Exchange Fund, by Parent to the record holder of the
Certificate, certificates representing whole shares of Parent Stock issued in
<PAGE>
exchange therefor, without interest, (i) at the time of such surrender, the
amount of any cash payable in lieu of a fractional share of Parent Stock to
which such holder is entitled pursuant to Section 1.3(g), the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Parent Stock, and any
consideration theretofore delivered to the Exchange Agent pursuant to the
Letter Agreement, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time
but prior to such surrender and a payment date subsequent to such surrender
payable with respect to such whole shares of Parent Stock and any amounts
received by the Exchange Agent pursuant to the Letter Agreement.

(e) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the shareholders of Alling & Cory for six
months after the Effective Time shall be delivered to Parent, upon demand, and
any shareholders of Alling & Cory who have not theretofore complied with this
Section 1.5 shall thereafter look as general creditors only to Parent for
payment of their claim for Parent Stock, any cash in lieu of fractional shares
of Parent Stock, any dividends or distributions with respect to Parent Stock,
any cash consideration issuable in accordance with the terms hereof or any
consideration payable pursuant to the Letter Agreement, in exchange for
Alling & Cory Common Stock.

(f) No Liability. Neither Parent, the Surviving Corporation nor
Alling & Cory shall be liable to any holder of Alling & Cory Shares, for such
shares (or dividends or distributions with respect thereto) or for any cash
issuable in exchange for any Alling & Cory Shares if such shares or cash are
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law, at any time after the expiration of one year after the
Effective Time or earlier, if required by law.

1.6 Articles of Incorporation. The Articles of Incorporation of
Alling & Cory in effect at the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until thereafter amended as
provided by law.

1.7 Bylaws. The Bylaws of Alling & Cory in effect at the Effective
Time shall be the Bylaws of the Surviving Corporation until thereafter
amended.

1.8 Directors and Officers. The directors and officers of the
Surviving Corporation immediately after the Effective Time shall be the
individuals set forth in Exhibit 1.8.

1.9 Other Effects of Merger. The Merger shall have all further
effects as specified in the applicable provisions of the BCL.

1.10 Registration Statement/Prospectus.

(a) For the purposes of (i) registering the Parent Stock to be
issued to holders of the Alling & Cory Shares in connection with the Merger
with the Securities and Exchange Commission ("SEC") under the Securities Act
of 1933, as amended, and the rules and regulations thereunder (the "Securities
Act"), and complying with applicable state securities laws, and (ii) holding
the special meeting of Alling & Cory stockholders (the "Special Meeting") to
vote upon the adoption of this Agreement, as required by Section 4.4, Parent
and Alling & Cory will cooperate in the preparation of a registration
statement on Form S-4 (such registration statement, together with any and all
amendments and supplements thereto, being herein referred to as the
"Registration Statement"), including a combined proxy statement/prospectus
satisfying all applicable requirements of state securities laws, the
Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "Securities Exchange Act"). Such proxy
statement/prospectus in the form mailed by Alling & Cory to its stockholders,
together with any and all amendments or supplements thereto, is herein
referred to as the "Prospectus."
<PAGE>
(b) Alling & Cory will furnish Parent with such information as may
be requested by Parent concerning Alling & Cory and its subsidiaries (the
"Alling & Cory Subsidiaries") as is necessary, in the reasonable judgment of
Parent, in order to cause the Prospectus, insofar as it relates to Alling &
Cory and the Alling & Cory Subsidiaries, to comply with applicable law. None
of the information relating to Alling & Cory and the Alling & Cory
Subsidiaries so requested by Parent and supplied by Alling & Cory for
inclusion in the Prospectus will be false or misleading with respect to any
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. Alling & Cory shall
mail the Prospectus to the shareholders of Alling & Cory at least twenty (20)
business days in advance of the Special Meeting. Alling & Cory agrees
promptly to advise Parent if at any time prior to the Special Meeting any
information so provided by it in the Prospectus becomes incorrect or
incomplete in any material respect, or in any respect which would otherwise
require the filing of an amendment or supplement to the Prospectus, and to
provide Parent with the information needed to correct such inaccuracy or
omission.

(c) Parent, as promptly as practicable, will file the Registration
Statement with the SEC and appropriate materials with applicable state
securities agencies and will use its best efforts to cause the Registration
Statement to become effective under the Securities Act, and to cause all such
state filed materials to comply with applicable state securities laws, at the
earliest practicable date. Alling & Cory authorizes Parent to utilize in the
Registration Statement and in all such state filed materials, the information
concerning Alling & Cory and the Alling & Cory Subsidiaries provided to Parent
in connection with, or contained in, the Prospectus. Parent promptly will
advise Alling & Cory when the Registration Statement has become effective and
of any supplements or amendments thereto. Parent will provide Alling & Cory
(i) with copies of the Registration Statement, the Prospectus and each
supplement or amendment thereto, and with a reasonable opportunity to review
and comment thereon, prior to the filing thereof with the SEC, and (ii) copies
of all of the above-described state filed materials.

1.11 Tax-Free Reorganization. The parties intend that the Merger
qualify as a tax-free reorganization pursuant to Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code. Each agrees that it will use its best efforts to
assure that the Merger shall so qualify, and Parent agrees that, subsequent to
Closing, neither it nor the Surviving Corporation will take any action that
may reasonably be expected to result in the failure of the Merger to so
qualify.

1.12 Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills
of sale, assignments, assurances or any other actions or things are necessary
or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of Alling & Cory or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of Alling & Cory,
all such deeds, bills of sale, assignments and assurances and to take and do,
in the name and on behalf of Alling & Cory, all such other actions and things
as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or assets
in the Surviving Corporation or otherwise to carry out this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF ALLING & CORY

Alling & Cory represents and warrants to the Parent as follows:
<PAGE>
2.1 Organization and Good Standing. Alling & Cory and each of the
Alling & Cory Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. Alling &
Cory and each of the Alling & Cory Subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the
character of the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or licensed and in good
standing would not have a material adverse effect on the business, assets,
prospects, condition (financial or otherwise) or the results of operations of
Alling & Cory and the Alling & Cory Subsidiaries taken as a whole or the
Surviving Corporation and its subsidiaries taken as a whole ("Alling & Cory
Material Adverse Effect"). Exhibit 2.1 contains a complete and accurate list
of the jurisdictions of incorporation and qualification or license of Alling &
Cory. Alling & Cory has heretofore delivered to Parent accurate and complete
copies of the Certificates or Articles of Incorporation and Bylaws, as
currently in effect, of Alling & Cory and each of the Alling & Cory
Subsidiaries.

2.2 Capitalization. The authorized capital stock of Alling & Cory
consists of 1,920,000 shares of Alling & Cory Common Stock, par value $1.25
per share. As of the date of this Agreement, 787,496 shares of Alling & Cory
Common Stock are issued and outstanding, and 492,504 shares of Alling & Cory
Common Stock are issued and held in the treasury of Alling & Cory. No other
capital stock of Alling & Cory is authorized or issued. All issued and
outstanding shares of the Alling & Cory Common Stock are duly authorized,
validly issued, fully paid and, except to the extent provided in Section 630
of the BCL, non-assessable and were issued free of preemptive rights. Except
as set forth on Exhibit 2.2, there are no outstanding rights, subscriptions,
warrants, calls, unsatisfied preemptive rights, options or other agreements of
any kind to purchase or otherwise receive from Alling & Cory any of the
outstanding, authorized but unissued, unauthorized or treasury shares of the
capital stock or any other security of Alling & Cory, and there is no
authorized or outstanding security of any kind convertible into or
exchangeable for any such capital stock or other agreement of any kind
entitling the holder thereof to purchase or receive any such capital stock.
Except as set forth in Exhibit 2.2, there are no restrictions upon the
transfer of or otherwise pertaining to the securities (including, but not
limited to, the ability to pay dividends thereon) or retained earnings of
Alling & Cory and the Alling & Cory Subsidiaries or the ownership thereof
other than those, if any, imposed by applicable corporate law.

2.3 Subsidiaries. Exhibit 2.3 sets forth the name, jurisdiction of
incorporation and qualification or license and percentages of outstanding
capital stock held, directly or indirectly, by Alling & Cory, with respect to
each Alling & Cory Subsidiary. All of such capital stock held by Alling &
Cory is owned of record and beneficially by it free and clear of any claim,
lien, encumbrance, option, security interest or agreement with respect
thereto. Other than the Alling & Cory Subsidiaries or as set forth on
Exhibit 2.3, neither Alling & Cory nor any Alling & Cory Subsidiary owns any
direct or indirect equity interest in any person, domestic or foreign and
neither Alling & Cory nor any Alling & Cory Subsidiary is subject to any
obligation or requirement to provide funds or to make any investment (in the
form of a loan, capital contribution or otherwise) to or in any person. All
of the outstanding shares of capital stock in each of the Alling & Cory
Subsidiaries are duly authorized, validly issued, fully paid and non-
assessable and were issued free of preemptive rights and in compliance with
applicable securities laws and regulations. There are no restrictions of any
kind (except as imposed by applicable law) which prevent the payment of
dividends by any Alling & Cory Subsidiary. Except as set forth on Exhibit
2.3, there are no irrevocable proxies or similar obligations with respect to
such capital stock and no equity securities or other interests of any of the
Alling & Cory Subsidiaries are or may become required to be issued by reason
of any options, warrants, rights to subscribe to, calls or commitments of any
<PAGE>
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any capital stock of any Alling & Cory Subsidiary,
and there are no contracts, commitments, understandings or arrangements by
which any Alling & Cory Subsidiary is bound to issue additional shares of its
capital stock, or options, warrants or rights to purchase or acquire any
additional shares of its capital stock or securities convertible into or
exchangeable for such shares or other agreement of any kind entitling the
holder thereof to purchase or receive any such capital stock.

2.4 Authorization; Binding Agreement. Alling & Cory has all
requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
including but not limited to the Merger, have been duly and validly authorized
by Alling & Cory's Board of Directors and no other corporate proceedings on
the part of Alling & Cory or any Alling & Cory Subsidiary are necessary to
authorize the execution and delivery of this Agreement or to consummate the
transactions contemplated hereby (other than the adoption of this Agreement by
the stockholders of Alling & Cory in accordance with the BCL and the
certificate or incorporation and Bylaws of Alling & Cory). This Agreement has
been duly and validly executed and delivered by Alling & Cory, and constitutes
the legal, valid and binding agreement of Alling & Cory, enforceable against
Alling & Cory in accordance with its terms, except to the extent that
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by principles of equity, whether considered in a
proceeding at law or in equity ("Enforceability Exceptions").

2.5 Governmental Approvals. Except as set forth in Exhibit 2.5, no
consent, approval or authorization of or declaration of or filing with, or
giving of notice to, any governmental agency or regulatory authority on the
part of Alling & Cory or any of the Alling & Cory Subsidiaries is required in
connection with the execution or delivery by Alling & Cory of this Agreement
or the consummation by Alling & Cory of the transactions contemplated hereby
other than (i) the filing of the Certificate of Merger with the Secretary of
State of New York in accordance with the BCL, (ii) filings under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder (the "HSR Act") and (iii) filings required
pursuant to Articles 31 and 31B of the New York State Tax Law.

2.6 No Violations. The execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby and compliance by
Alling & Cory with any of the provisions hereof will not (i) conflict with or
result in any breach of any provision of the Certificate of Incorporation or
Bylaws of Alling & Cory or any of the Alling & Cory Subsidiaries, (ii) except
as set forth on Exhibit 2.6, require any consent, approval or notice under or
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
cancellation, payment or acceleration or augment the performance required)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, lease, agreement or other instrument or obligation to
which Alling & Cory or any Alling & Cory Subsidiary is a party or by which any
of them or any of their properties or assets may be bound, (iii) result in the
creation or imposition of any security interest, lien or encumbrance of any
kind upon any of the assets of Alling & Cory or any Alling & Cory Subsidiary,
or (iv) subject to obtaining the governmental and other consents referred to
in Section 2.5, above, contravene any law, rule or regulation of any
government or any political subdivision thereof, or any order, writ,
injunction, determination or award currently in effect, to which Alling & Cory
or any Alling & Cory Subsidiary or its or any of their respective assets or
properties are subject, except in the case of clauses (ii) and (iii) above,
for any of the foregoing which do not and will not have individually, or in
the aggregate, an Alling & Cory Material Adverse Effect.
<PAGE>
2.7 Alling & Cory Financial Statements. The consolidated balance
sheets as of December 31, 1995, 1994 and 1993, and the consolidated income
statements and consolidated statements of earnings, shareholders' investment
and changes in financial condition or cash flows, as the case may be, for the
fiscal years then ended of Alling & Cory and the Alling & Cory Subsidiaries
(the "Alling & Cory Financial Statements"), as audited by Arthur Andersen &
Co., have been provided to Parent. (The audited consolidated balance sheet of
Alling & Cory dated December 31, 1995 is hereinafter referred to as the
"Balance Sheet"). The Alling & Cory Financial Statements including the notes
thereto, if any, were prepared in accordance with generally accepted
accounting principles applicable to the business of Alling & Cory and the
Alling & Cory Subsidiaries consistently applied in accordance with past
accounting practices, and fairly present the financial condition and assets
and liabilities, the results of operations or cash flows of Alling & Cory and
the Alling & Cory Subsidiaries as of the dates and for the periods indicated
on a consolidated basis. Any financial statements prepared with respect to
Alling & Cory or an Alling & Cory Subsidiary for the quarter ending March 31,
1996 shall be provided to Parent and shall constitute Alling & Cory Financial
Statements for purposes hereof, provided that, as it relates to such financial
statements, the representation set forth in the preceding sentence shall be
subject to normal year end adjustments and accruals and to the fact that such
financial statements will contain no footnote disclosure.

2.8 Absence of Certain Changes or Events. Except as set forth in
Exhibit 2.8, since December 31, 1995, there has not been: (i) any event that
has had, or that Alling & Cory reasonably expects to have, an Alling & Cory
Material Adverse Effect; (ii) any declaration, payment or setting aside for
payment of any dividend or any redemption, purchase or other acquisition of
any shares of capital stock or securities of Alling & Cory or any entity that
was an Alling & Cory Subsidiary as of such date; (iii) any return of any
capital or other distribution of assets to stockholders of Alling & Cory or
any Alling & Cory Subsidiary; (iv) any investment by Alling & Cory or any
Alling & Cory Subsidiary either by the purchase of any property or assets or
by any acquisition (by merger, consolidation or acquisition of stock or
assets) in any corporation, partnership or other business organization or
division thereof other than an entity that was an Alling & Cory Subsidiary as
of such date; (v) other than the sale of inventory in the ordinary course of
business, any sale, disposition or other transfer of assets or properties of
Alling & Cory or any Alling & Cory Subsidiary at a price or having a value in
excess of $100,000 individually or $500,000 in the aggregate; (vi) any
employment or consulting agreement entered into by Alling & Cory or any Alling
& Cory Subsidiary with any shareholder, officer, director, agent, employee or
consultant of Alling & Cory or any Alling & Cory Subsidiary or any amendment
or modification to, or termination of, any current employment or consulting
agreement to which Alling & Cory or any Alling & Cory Subsidiary is a party;
(vii) any agreement presently in effect, whether in writing or otherwise, to
take any action which, if taken prior to the date hereof, would have made any
representation or warranty in this Article II untrue or incorrect in any
respect; (viii) any material change in accounting methods or practices or any
material change in depreciation or amortization policies or rates of or
applicable to Alling & Cory or any Alling & Cory Subsidiary; (ix) any action
taken by Alling & Cory or any Alling & Cory Subsidiary which is referred to in
Section 4.1 hereof, other than as permitted or required thereby and other than
borrowings pursuant to Alling & Cory's existing bank credit agreements, which
may have caused the aggregate outstanding amount of such borrowings to exceed
$55,000,000 from time to time prior to the date hereof; or (x) any material
failure by Alling & Cory or any Alling & Cory Subsidiary to conduct its
business in the ordinary course consistent with past practice.

2.9 Compliance with Laws. To the Knowledge of Alling & Cory, the
business of Alling & Cory and each Alling & Cory Subsidiary has been operated
in compliance with all laws, ordinances, regulations, orders, judgments and
decrees of all governmental entities, domestic or foreign, applicable thereto,
except for any instances of non-compliance which do not and will not have,
individually or in the aggregate, an Alling & Cory Material Adverse Effect.
<PAGE>
2.10 Permits. (i) Except as described in Exhibit 2.10 Alling & Cory
and the Alling & Cory Subsidiaries have all permits, certificates, licenses,
approvals and other authorizations (collectively, "Alling & Cory Permits")
required in connection with the operation of their business, (ii) neither
Alling & Cory nor any Alling & Cory Subsidiary is in violation of any Alling &
Cory Permit applicable to any of them or to the operation of their business,
and (iii) no proceedings are pending or, to the Knowledge of Alling & Cory,
threatened, to revoke or limit any Alling & Cory Permit, except, in the case
of clause (i) or (ii) above, those the absence or violation of which do not
and will not have, individually or in the aggregate, an Alling & Cory Material
Adverse Effect. Exhibit 2.10 sets forth a list, of all (x) Alling & Cory
Permits and their expiration or renewal dates, dealing with environmental and
zoning matters and (xx) all other Alling & Cory Permits except those the
absence or violation of which do not and will not have an Alling & Cory
Material Adverse Effect.

2.11 Finders and Investment Bankers. Neither Alling & Cory nor any
of its officers or directors has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby, except for Alling & Cory's
engagement of Bear, Stearns & Co. Inc., for whose compensation Alling & Cory
is responsible.

2.12 Contracts. Except as set forth in Exhibit 2.12, neither Alling
& Cory nor any Alling & Cory Subsidiary is a party to, nor is it bound by, (a)
any agreement, contract or commitment to employ any person by Alling & Cory or
any Alling & Cory Subsidiary, or any agreement, contract or commitment
relating to the compensation of any of its officers, sales managers,
salespeople, or customer service representatives, (b) any agreement, contract
or commitment, or group of related agreements, contracts or commitments,
providing for capital expenditures by Alling & Cory or any Alling & Cory
Subsidiary which either individually requires expenditures in excess of
$100,000 in any calendar year, or in the aggregate requires expenditures in
excess of $500,000, (c) any loan or advance by Alling & Cory or any Alling &
Cory Subsidiary to, or investment by Alling & Cory or any Alling & Cory
Subsidiary in, any person or any agreement, contract or commitment relating to
the making of any such loan, advance or investment which individually exceeds
$10,000 or in the aggregate exceeds $100,000, other than trade credit extended
in the ordinary course of business, (d) any guarantee or other contingent
liability in respect of any indebtedness for borrowed money or any other
financing obligation of any person (other than the endorsement of negotiable
instruments for collection in the ordinary course of business), (e) any
management service, consulting or any other similar type contract, which
individually exceeds $10,000 or in the aggregate exceeds $100,000, (f) any
agreement, contract or commitment limiting the freedom of Alling & Cory or any
Alling & Cory Subsidiary to engage in any line of business or to compete with
any person, (g) any contract, agreement, bid or proposal (other than sale and
purchase orders with customers and suppliers in the ordinary course of
business) pursuant to which the financial obligation of Alling & Cory or an
Alling & Cory Subsidiary thereunder or applicable to the assets or properties
of Alling & Cory or an Alling & Cory Subsidiary could exceed $100,000 in any
12-month period or $500,000 during the term thereof, (h) any other agreement
which might reasonably be expected to have an Alling & Cory Material Adverse
Effect or (i) any other material agreement not entered into in the ordinary
course of business (each agreement, contract or commitment described in
clauses (a) through (i) above, a "Contract"). All such Contracts set forth in
Exhibit 2.12 (or required to be set forth on Exhibit 2.12) are valid and
binding and are in full force and effect and enforceable in accordance with
their respective terms. Except as set forth in Exhibit 2.6, (i) no approval
or consent of, or notice to, any person is needed in order that each such
Contract shall continue in full force and effect in accordance with its terms
without penalty, acceleration or rights of early termination by reason of the
consummation of the transactions contemplated by this Agreement, and
(ii) neither Alling & Cory nor any Alling & Cory Subsidiary is in violation or
breach of or default under any such Contract nor does there exist any event,
condition, occurrence or act (including the execution, delivery and
<PAGE>
performance of this Agreement or the consummation of the Merger) which, with
the giving of notice, the lapse of time or the happening of any other event or
condition, would become a default or event of default thereunder on the part
of Alling & Cory or any Alling & Cory Subsidiary, nor to the Knowledge of
Alling & Cory, is any other party to any such Contract in violation or breach
of or default under any such Contract, except in the case of clauses (i) and
(ii) above, any of the foregoing which do not and will not have an Alling &
Cory Material Adverse Effect. Except as set forth in Exhibit 2.12, the
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not constitute a triggering event under
any Contract relating to the employment of any person by Alling & Cory or any
Alling & Cory Subsidiary or any Contract relating to the compensation of any
of their officers or salespeople, whether or not legally enforceable, which
(either alone or upon the occurrence of any additional or subsequent event)
will or may (x) entitle any individual to any payment (whether severance pay
or otherwise), or (y) accelerate the time of payment, vesting of benefits or
increase the amount of compensation due to any individual, and no such
Contract provides for the payment of severance benefits upon the termination
of an employee's employment.

2.13 Employee Benefit Plans. Set forth in Exhibit 2.13 is an
accurate and complete list of all domestic and foreign (i) employee benefit
plans, as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended, and the rules and regulations thereunder ("ERISA");
and (ii) pension, profit-sharing, retirement, thrift, stock purchase, stock
option, bonus, restricted stock, incentive and deferred compensation plans,
and any other compensation, welfare, fringe benefit, medical, life,
disability, accident, accrued leave, vacation, sick pay, sick leave,
supplemental retirement, unemployment benefit and retirement plans, including
programs and policies, and also including understandings, commitments,
practices and arrangements that are either authorized by appropriate corporate
action, set forth in writing or cover or relate to more than ten (10) persons
or involve assets, liabilities or obligations aggregating more than $10,000,
of any kind whatsoever, whether or not any such plans, programs, policies,
understandings, commitments, arrangements, contracts, agreements or practices
(referred to in (i) and (ii) above) are in writing, formal or informal,
insured or uninsured or are otherwise exempt from the provisions of ERISA, for
any or all current, retired or former employees, directors or agents, or their
beneficiaries or dependents, that have been established, maintained or
contributed to (or with respect to which an obligation to contribute has been
undertaken) or under which any liability could be borne by Alling & Cory or an
Alling & Cory Subsidiary (including, for this purpose and for the purpose of
all of the representations in this Section 2.13, any predecessors to Alling &
Cory or to any Alling & Cory Subsidiary and all employers (whether or not
incorporated) that are by reason of common control treated together with
Alling & Cory and/or any Alling & Cory Subsidiary as a single employer within
the meaning of Section 414 of the Code), since January 1, 1989, or by the
Surviving Corporation as the successor to Alling & Cory ("Benefit Plans").

Alling & Cory has made available to Parent complete and accurate
copies of all material documents in connection with each Benefit Plan,
including, without limitation (where applicable): (i) all plan texts and
agreements, as in effect on the date hereof, together with all amendments
thereto, including, in the case of any Benefit Plan not set forth in writing,
a written description thereof, all contracts relating to each Benefit Plan,
including, without limitation, service provider agreements, annuity contracts,
investment management agreements, subscription agreements, participation
agreements, record keeping agreements, current trust agreements, declarations
of trust, insurance contracts and other documents establishing funding
arrangements (and all amendments thereto and the latest financial statements
thereof, if any); (ii) the annual reports on the Form 5500 series for each of
the last three years for each Benefit Plan required to file such form;
(iii) the most recent financial statements and/or annual and periodic
accounting of plan assets; (iv) the most recent determination letter received
from the Internal Revenue Service (the "IRS"); (v) the most recent actuarial
<PAGE>
valuation; and (vi) the most recent summary plan description and summaries of
material modifications as defined in ERISA.

With respect to each Benefit Plan: (i) if such Benefit Plan is
intended to qualify under Code Sections 401(a), the IRS has determined that
such Benefit Plan so qualifies, and the IRS has determined that its trust is
exempt from taxation under Code Section 501(a) and since the date of each of
the most recent such IRS determination, no event has occurred and no condition
or circumstance has existed that resulted or, to the Knowledge of Alling &
Cory, is likely to result in the revocation of any such determination or that
could adversely affect the qualified status of any such Benefit Plan or the
exempt status of any such trust; (ii) such Benefit Plan at all times has been
administered in substantial compliance with its terms and all applicable laws,
rules, regulations, releases and other official pronouncements applicable
thereto; (iii) no accumulated funding deficiency, as defined in Code Section
412 or 418B or Section 302 of ERISA has occurred and no Benefit Plan has
applied for or obtained a waiver from the IRS of any minimum funding
requirement under Section 412 of the Code; (iv) no prohibited transaction as
defined under ERISA and the Code has occurred and no breach of fiduciary
duties or obligations under Title I of ERISA has occurred; (v) no reportable
event as defined in Section 4043 of ERISA has occurred or is expected to
occur; (vi) all contributions and premiums (including any interest and
penalties) required to be paid have been fully paid; (vii) all contributions
made or required to be made under any Benefit Plan have been fully deducted
for income tax purposes and no such deduction has been challenged or
disallowed by any governmental entity, and to the Knowledge of Alling & Cory
no event has occurred and no condition or circumstance has existed that could
give rise to any such challenge or disallowance, and all contributions which
have not been made have been properly recorded on the books of Alling & Cory;
(viii) no complete or partial termination of such plan has occurred or, to the
Knowledge of Alling & Cory, is expected to occur; (ix) except as set forth in
Exhibit 2.13, and except as required by applicable law, no condition or
circumstance exists that would prevent the amendment or termination of any
material Benefit Plan; (x) except as set forth in Exhibit 2.13, no event has
occurred and no condition or circumstance has existed that could result in a
material increase in the benefits under or the expense of maintaining such
plan from the level of benefits or expense incurred for the most recent fiscal
year ended thereof; (xi) there are no actions, suits or claims pending, or, to
the Knowledge of Alling & Cory, threatened, anticipated or expected to be
asserted against such plan or the assets of such plan (other than routine
claims for benefits and appeals of denied routine claims); (xii) no civil or
criminal action brought pursuant to the provisions of Title I, Subtitle B,
Part 5 of ERISA is pending or is anticipated or expected by the Alling & Cory
Executive Officers, or, to the Knowledge of Alling & Cory, threatened to be
asserted against Alling & Cory or any of the Alling & Cory Subsidiaries or any
fiduciary of such plan, in any case with respect to such plan; (xiii) neither
such plan nor any fiduciary thereof has been the direct or indirect subject of
an audit, investigation or examination by any governmental or quasi-
governmental agency; and (xiv) neither Alling & Cory nor any Alling & Cory
Subsidiary has incurred any liability for any tax or excise tax arising under
Section 4971, 4977, 4978, 4978B or 4979 of the Code, and to the Knowledge of
Alling & Cory, no event has occurred and no condition or circumstance has
existed that could give rise to any such liability. Neither Alling & Cory nor
any Alling & Cory Subsidiary has any unfunded liabilities pursuant to any
Benefit Plan that is not intended to be qualified under Section 401(a) of the
Code. Except as set forth in Exhibit 4.7, neither Alling & Cory nor any
Alling & Cory Subsidiary has any commitment, intention or understanding to
create, modify or terminate any Benefit Plan. Benefits under all Benefit
Plans are as represented and have not been increased subsequent to the date as
of which documents have been provided.

Neither Alling & Cory nor any Alling & Cory Subsidiary has any
liability, joint or otherwise, for any withdrawal liability (potential,
contingent or otherwise) under Title IV of ERISA for a complete or partial
withdrawal from any Benefit Plan that is a multiemployer plan, as defined in
Section 3(37) of ERISA (a "Multiemployer Plan"), and no event has occurred,
<PAGE>
and no condition or circumstance has existed, that presents a material risk of
the occurrence of any withdrawal from or, to the Knowledge of Alling & Cory,
the partition, termination, reorganization or insolvency of any such
Multiemployer Plan which could result in any liability of Alling & Cory or any
Alling & Cory Subsidiaries to any such Multiemployer Plan. As of the date of
the Agreement, to the Knowledge of Alling & Cory, the aggregate liabilities of
Alling & Cory and the Alling & Cory Subsidiaries to all Multiemployer Plans in
the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each Multiemployer Plan ended prior to the date hereof,
is as set forth in Exhibit 2.13. To the Knowledge of Alling & Cory, there has
been no material change in the financial condition of any Multiemployer Plan,
in any such actuarial assumption or computation method or in the benefits
under any Multiemployer Plan as a result of collective bargaining or otherwise
since the close of each such fiscal year which, individually or in the
aggregate, would materially increase such liability.

With respect to each Benefit Plan which is subject to Title IV of
ERISA: (i) As of January 1, 1995, the current fair market value of its assets
(exclusive of any contribution due to such Benefit Plan) equals or exceeds the
current value of the accumulated benefit obligations of such plan, determined
on the basis of a shutdown of Alling & Cory and the Alling & Cory Subsidiaries
in accordance with actuarial assumptions used by the Pension Benefit Guaranty
Corporation (the "PGBC") in single-employer plan terminations and since the
date of the most recent Alling & Cory Financial Statements, there have been
(x) no amendments to such plan, written interpretations, or announcements
(whether written or not), changes in applicable law or any other conditions
that increase the benefits under such plan, (y) no material adverse changes in
the financial condition of such plan and (z) no change in the actuarial
assumptions with respect to such plan, which, in the case of (x), (y) and (z),
individually or in the aggregate, would result in the current value of such
plan's accrued benefits exceeding the current value of all such plan's assets;
(ii) neither Alling & Cory nor any Alling & Cory Subsidiary has incurred nor
is reasonably expected by the Alling & Cory Executive Officers to incur any
actual or contingent liability arising from a partial or complete plan
termination; and (iii) except for payments of premiums to the PBGC, neither
Alling & Cory nor any Alling & Cory Subsidiaries has incurred any liability
(including, for this purpose and for the purpose of all of the representations
in this Section 2.13, any indirect, contingent, or secondary liability) to the
PBGC in connection with such plan covering any active, retired or former
employees or directors of Alling & Cory or any Alling & Cory Subsidiaries,
including, without limitation, any liability under Section 4069 or 4212(c) of
ERISA or any penalty imposed under Section 4071 of ERISA, or ceased operations
at any facility or withdrawn from any such plan in a manner which could
subject it to liability under Section 4062, 4063 or 4064 of ERISA, and to the
Knowledge of Alling & Cory, there are no facts or circumstances that might
give rise to any liability of Alling & Cory or any Alling & Cory Subsidiaries
to the PBGC under Title IV of ERISA that could reasonably be anticipated to
result in any claims being made against Parent by the PBGC.

With respect to each Benefit Plan which is a "welfare plan" (as
defined in ERISA Section 3(1)): (i) except as set forth in Exhibit 2.13, no
such plan provides medical or death benefits with respect to current or former
employees beyond their termination of employment (except as required by
Section 601 of ERISA); (ii) there are no reserves, assets, surplus or prepaid
premiums under any such plan; (iii) if such plan is a "group health plan" (as
such term is defined in Code Section 5000(b)(1)), it has been administered and
operated in all material respects in compliance with the applicable
requirements of Section 601 of ERISA and Code Section 4980B, and neither
Alling & Cory nor any Alling & Cory Subsidiaries are subject to any material
liability, including, without limitation, additional contributions, fines,
penalties or loss of tax deduction as a result of such administration and
operation; and (iv) such plan has not provided any "disqualified benefit" (as
such term is defined in Code Section 4976(b)) with respect to which a material
excise tax could be imposed.
<PAGE>
No asset of Alling & Cory or any Alling & Cory Subsidiary is subject
to any lien arising under Section 302(f) of ERISA or Section 412(n) of the
Code, and, to the Knowledge of Alling & Cory, no event has occurred and no
condition or circumstance has existed that could give rise to any such lien.
Neither Alling & Cory nor any Alling & Cory Subsidiaries has been required to
provide any security under Section 307 of ERISA or Section 401(a)(29) or
412(f) of the Code, and, to the Knowledge of Alling & Cory, no event has
occurred and no condition or circumstance has existed that could give rise to
any such requirement to provide any such security.

The execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not constitute a triggering
event under any Benefit Plan, policy, arrangement, statement, commitment or
agreement, whether or not legally enforceable, which (either alone or upon the
occurrence of any additional or subsequent event) will or may (i) entitle any
individual to any payment (whether severance pay or otherwise), or
(ii) accelerate the time of payment, vesting of benefits or increase the
amount of compensation due to any individual. Except as set forth in Exhibit
2.13 and in Contracts referred to in Exhibit 2.12, no Benefit Plan provides
for the payment of severance benefits upon the termination of any employee's
employment.

2.14 Taxes and Returns. (a) All material taxes, assessments,
charges, duties, fees, levies, or other governmental charges, including
without limitation, all federal, state, county and local, and all foreign and
other, income, franchise, excise, tariff, gross receipts, sales and use,
payroll, real and personal property , profits, capital gains, capital stock
transfer, occupation, severance, windfall profits, stamp, license, withholding
and other taxes, assessments, charges, duties, fees, levies or other
governmental charges of any kind whatsoever (whether payable directly or by
withholding and whether or not requiring the filing of a return), and all
estimated taxes, deficiency assessments, additions to tax, penalties, and
interest (collectively "Taxes") for which Alling & Cory or any Alling & Cory
Subsidiary is or may be liable, required to be paid, collected or withheld
with respect to all open years have been paid, collected or withheld and
remitted to the appropriate governmental agency except (i) for any Taxes which
Alling & Cory or an Alling & Cory Subsidiary is contesting in good faith which
have been included in the Alling & Cory Financial Statements, (ii) for Taxes
not yet payable which have been adequately provided for in the Alling & Cory
Financial Statements and (iii) for amounts payable as set forth in Section
8.7(c) of this Agreement. True and materially complete and correct returns
(including, without limitation, information returns and other material
information), statements, forms and reports for Taxes (the "Returns") have
been filed with the appropriate governmental agency with respect to all Taxes
and the copies thereof which have been provided to Parent are true, accurate
and complete. The Returns accurately reflect all material liability for Taxes
of each of Alling & Cory or any Alling & Cory Subsidiary for the periods
covered thereby. Except as disclosed in Exhibit 2.14, none of Alling & Cory,
an Alling & Cory Subsidiary or any group of which Alling & Cory or any Alling
& Cory Subsidiary is now a member, is subject to any material election,
consent, extension agreement or waiver that extends any applicable statute of
limitations or the time within which a return must be filed. Except as
disclosed in Exhibit 2.14, none of Alling & Cory, an Alling & Cory Subsidiary
or any group of which Alling & Cory or any Alling & Cory Subsidiary is now or
ever was a member, is a party to any action, suit or proceeding pending or to
the Knowledge of Alling & Cory threatened by any governmental authority for
assessment or collection of Taxes, no unresolved claim for assessment or
collection of Taxes has been asserted, no audit or investigation by any
governmental authority is pending or to the Knowledge of Alling & Cory
threatened and no such matters are under discussion with any governmental
authority. Except as disclosed in Exhibit 2.14, no deficiencies for Taxes
have been claimed, proposed or assessed by any taxing or other governmental
authority. Except as disclosed in Exhibit 2.14, neither Alling & Cory nor any
Alling & Cory Subsidiary is, or ever has been, an "S" corporation under the
Code (for purposes of this Section 2.14, the "Code" shall include predecessors
<PAGE>
of the Code) and no act or omission has occurred which could result in the
termination of any status as an "S" corporation.

(b) All elections currently in effect with respect to Taxes
affecting Alling & Cory and the Alling & Cory Subsidiaries are made in
accordance with established Alling & Cory policy and with IRS published
procedures and policies and are disclosed on federal and state income tax
returns or in Alling & Cory's books and records. Neither Alling & Cory nor
any Alling & Cory Subsidiary: (i) has made or will make either an election to
treat a deemed distribution and recontribution under Treas. Reg. Section
1.1502-32(f)(2) (as formerly in effect) as an actual distribution and
recontribution or a consent dividend election under Section 565 of the Code;
(ii) has consented at any time under Section 341(f)(1) of the Code to have the
provisions of Section 341(f)(2) of the Code apply to any disposition of the
assets of Alling & Cory or any Alling & Cory Subsidiary; (iii) has made an
election, or is required, to treat any asset of Alling & Cory or any Alling &
Cory Subsidiary as owned by another person for federal income tax purposes or
as tax-exempt bond financed property or tax-exempt use property within the
meaning of Section 168 of the Code; or (iv) has made any of the foregoing
elections or is required to apply any of the foregoing rules under any
comparable state or local income tax provision.

(c) Except as set forth; an Exhibit 2.14, Alling & Cory and the
Alling & Cory Subsidiaries are not and have never been includable corporations
in an affiliated group of corporations, within the meaning of Section 1504 of
the Code, other than in the affiliated group of which Alling & Cory is the
common parent corporation.

(d) Except as set forth in Exhibit 2.14 there are no tax sharing
agreements or similar arrangements in effect as between or among Alling & Cory
and the Alling & Cory Subsidiaries or any affiliate thereof and any other
person.

(e) Neither Alling & Cory nor any of the Alling & Cory Subsidiaries
has made an election under Section 338 of the Code or has taken any action
that would result in any tax liability of Alling & Cory or any of the Alling &
Cory Subsidiaries as a result of a deemed election within the meaning of
Section 338 of the Code.

(f) Except as set forth in Exhibit 2.14, neither Alling & Cory nor
any of the Alling & Cory Subsidiaries has made or become obligated to make, or
will, as a result of the transactions contemplated by this Agreement, make or
become obligated to make, any "excess parachute payment" as defined in
Sections 280G and 4999 of the Code (without regard to subsection (b) (4)
thereof).

(g) Except as set forth in Exhibit 2.14, there have not been any
transactions or events by or between Alling & Cory and the Alling & Cory
Subsidiaries which have resulted or result in any deferred intercompany
transactions, initial inventory adjustments, excess loss accounts, or deferred
gain on stock or obligations of members, that may cause Alling & Cory and the
Alling & Cory Subsidiaries to incur any Taxes.

(h) The amount of consolidated net operating losses, net capital
losses, foreign tax credits, investment and other tax credits of the
consolidated group of which Alling & Cory is the common parent allocable to
Alling & Cory and the Alling & Cory Subsidiaries under Treas. Reg. Section
1.1502-79 are set forth in Exhibit 2.14.

(i) Neither Alling & Cory nor any Alling & Cory Subsidiary is or
has been a "United States real property holding corporation" (as defined in
Section 897(c)(2) of the Code) during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.

(j) Except as provided in Exhibit 2.14, none of Alling & Cory, an
Alling & Cory Subsidiary or, to the Knowledge of Alling & Cory, a stockholder
<PAGE>
of Alling & Cory, is a person other than a United States person within the
meaning of the Code.

(k) The transactions contemplated herein are not subject to the tax
withholding provisions of Code Section 3406, or of Subchapter A of Chapter 3
of the Code or of any other provision of law.

(l) Neither Alling & Cory nor any Alling & Cory Subsidiary has
violated any of the COBRA continuation coverage requirements set forth in
Section 4980B of the Code.

(m) Except as provided in Exhibit 2.14, neither Alling & Cory nor
any of the Alling & Cory Subsidiaries has been included in any "consolidated"
or "combined" Returns provided for under the laws of any state or locality
with respect to Taxes for any taxable period for which the statute of
limitations has not expired.

(n) Neither Alling & Cory nor any of the Alling & Cory Subsidiaries
has applied for, been granted, or agreed to any accounting method change for
which it will be required to take into account any adjustment under Section
481 of the Code or any similar provision of the Code or the corresponding tax
laws of any nation, state or locality.

(o) No indebtedness of Alling & Cory or any of the Alling & Cory
Subsidiaries consists of "corporate acquisition indebtedness" within the
meaning of Section 279 of the Code.

(p) Since December 31, 1986, there has not been an "ownership
change" within the meaning of Section 382(g) of the Code, involving Alling &
Cory or any of the Alling & Cory Subsidiaries.

(q) Neither Alling & Cory nor any members of its affiliated group
(as such term is defined in Section 1504 of the Code) has made any election
under Proposed Treasury Regulations Section 1.1502-20(g) with respect to
Alling & Cory and any of the Alling & Cory Subsidiaries.

2.15 Liabilities. Except as set forth on Exhibit 2.15, since
December 31, 1995, neither Alling & Cory nor the Alling & Cory Subsidiaries
has incurred any outstanding claims, liabilities, obligations or indebtedness,
contingent or otherwise, that are material, individually or in the aggregate,
to the business or financial condition of Alling & Cory and the Alling & Cory
Subsidiaries taken as a whole, other than claims, liabilities, obligations or
indebtedness incurred in the ordinary course of business and not involving
borrowings by Alling & Cory or any Alling & Cory Subsidiary.

2.16 Environmental Matters.

(a) Except as set forth on Exhibit 2.16: (i) Alling & Cory and the
Alling & Cory Subsidiaries are in compliance with all applicable Environmental
Laws (as hereinafter defined) and the requirements of any permits applicable
to their business issued under Environmental Laws, (ii) there is no
Environmental Claim pending or, to the Knowledge of Alling & Cory, threatened
against Alling & Cory, an Alling & Cory Subsidiary or any of their properties
pursuant to Environmental Laws, (iii) there are no past or present events,
conditions, circumstances, activities, practices, incidents, agreements,
actions or plans regarding Alling & Cory or any of the Alling & Cory
Subsidiaries, or any of their operations, or any Alling & Cory Property, or,
to the Knowledge of Alling & Cory, any property adjoining or in the vicinity
of any Alling & Cory Property, that could (A) form the basis of an
Environmental Claim against Alling & Cory or any of the Alling & Cory
Subsidiaries or any currently owned or operated Alling & Cory Property or
asset, (B) cause any currently owned or operated Alling & Cory Property or
asset to be subject to any restrictions on its ownership, occupancy, use or
transferability under any Environmental Law, or (C) which may prevent
compliance with, or which have given rise to or could reasonably be expected
to give rise to liability under, Environmental Laws, (iv) except in normal
<PAGE>
operation of the business and in accordance with applicable Environmental
Laws, Hazardous Materials have not at any time been generated, used, treated
or stored on, or transported to or from, any currently owned or operated
Alling & Cory Property during the period of such ownership or operation or to
the Knowledge of Alling & Cory during prior ownership (by prior owners) or, to
the Knowledge of Alling & Cory, any previously owned or operated Alling & Cory
Property or any property adjoining, adjacent to or in the vicinity of any
Alling & Cory Property, (v) Hazardous Materials have not at any time been
released on any currently owned or operated Alling & Cory Property during the
period of such ownership or operation or to the Knowledge of Alling & Cory
during prior ownership (by prior owners) or, to the Knowledge of Alling &
Cory, any previously owned or operated Alling & Cory Property or any property
adjoining, adjacent to or in the vicinity of any Alling & Cory Property, and
(vi) there are not now and never have been any underground storage tanks
located on any currently owned or operated Alling & Cory Property or, to the
Knowledge of Alling & Cory, on any previously owned or operated Alling & Cory
Property or on any property adjoining or adjacent to any Alling & Cory
Property.

(b) As used herein, "Alling & Cory Property" means any real
property and improvements owned, leased, used, operated or occupied, at any
time, by Alling & Cory or any of the Alling & Cory Subsidiaries;
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any Environmental Law or any permit issued under any such Law (hereafter
"Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment;
"Environmental Law" means any federal, state, foreign or local statute, law,
rule, regulation, ordinance, code, guideline, policy or rule of common law in
effect and in each case as amended as of the Closing Date, and any judicial or
administrative interpretation thereof as of the Closing Date, including any
judicial or administrative order, consent decree or judgment, relating to the
environment, health, safety or Hazardous Materials, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq.; the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et
seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; the Oil Pollution Act of 1990, 33
U.S.C Section 2701 et seq.; and their state and local counterparts and
equivalents; and "Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, friable asbestos, urea formaldehyde foam
insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls; (b) any chemicals, materials
or substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority.

2.17 Intellectual Property. Exhibit 2.17 sets forth a list of all
United States and foreign patents, trademarks, service marks, trade names,
copyrights, franchises and other intellectual property (the "Intellectual
Property") that are material to the business of Alling & Cory and the Alling &
Cory Subsidiaries, all applications for any of the foregoing and all permits,
grants and licenses or other rights running to or from Alling & Cory or any of
the Alling & Cory Subsidiaries relating to any of the Intellectual Property
that are material to the business of Alling & Cory or the Alcor Envelope
<PAGE>
Company, Inc. ("Alcor"). Except as set forth on said Exhibit 2.17, (i) Alling
& Cory or one of the Alling & Cory Subsidiaries, as indicated thereon, own, or
are licensed to, or otherwise have, the right to use all Intellectual Property
set forth thereon, (ii) the grant of each right to use listed in Exhibit 2.17
is in full force and effect and without material default, and no consent is
required thereunder with respect to Alling & Cory's execution, delivery and
performance of this Agreement or for the consummation of the Merger, (iii) the
rights of Alling & Cory and the Alling & Cory Subsidiaries in the Intellectual
Property are free and clear of any liens or other encumbrances, (iv) neither
Alling & Cory nor the Alling & Cory Subsidiaries have received notice of any
claim of adverse ownership to any Intellectual Property, or of any charge or
claim of any person that the operation of the business of Alling & Cory or the
Alling & Cory Subsidiaries has infringed or otherwise violated any
intellectual property rights, (v) Alling & Cory, the Alling & Cory
Subsidiaries and their respective predecessors, if any, have not conducted
business at any time during the period beginning five years prior to the date
hereof under any corporate, trade or fictitious names other than their current
corporate names, and (vi) all material patents, and trademark and copyright
registrations included on said Exhibit 2.17 have been duly issued by the
United States Patent and Trademark Office, the United States Copyright Office,
or corresponding foreign administrative agencies, and have been appropriately
maintained and renewed as required by law in the applicable jurisdiction. All
intellectual property necessary for the operation of the business of Alling &
Cory and the Alling & Cory Subsidiaries as presently conducted is listed on
Exhibit 2.17.

2.18 Real Estate.

(a) Exhibit 2.18(a) sets forth a true, correct and complete
schedule of all real property owned by Alling & Cory or any of the Alling &
Cory Subsidiaries, which schedule includes, with respect to each property,
(i) the address of the property, (ii) the square footage of the property,
(iii) the assessed value of the property and (iv) the use conducted on the
property. Alling & Cory or one of the Alling & Cory Subsidiaries, as
indicated thereon, is the owner of fee title to the real property described on
said Exhibit 2.18(a) and to all of the buildings, structures and other
improvements located thereon free and clear of any mortgage, deed of trust,
lien, pledge, security interest, claim, lease, charge, option, right of first
refusal, easement, restrictive covenant, encroachment or other survey defect,
encumbrance or other restriction or limitation except for the matters listed
on said Exhibit 2.18(a) and for any exceptions or restrictions which,
individually or in the aggregate, do not and will not materially restrict the
use or impair the value of such real property. All of the buildings,
structures and appurtenances situated on the real property owned in whole or
in part by Alling & Cory or any Alling & Cory Subsidiary are in good operating
condition and in a state of good maintenance and repair, are adequate and
suitable for the purposes for which they are presently being used and, with
respect to each, Alling & Cory or such Alling & Cory Subsidiary, as the case
may be, has adequate rights of ingress and egress for operation of the
business of Alling & Cory or such subsidiary in the ordinary course. No
condemnation proceeding is pending or, to the Knowledge of Alling & Cory,
threatened which would preclude or impair the use of any such property by
Alling & Cory or such Alling & Cory Subsidiary, as the case may be, for the
purposes for which it is currently used.

(b) Exhibit 2.18(b) sets forth a true, correct and complete
schedule of all leases, subleases, licenses or other agreements under which
Alling & Cory or any of the Alling & Cory Subsidiaries uses or occupies, or
has the right to use or occupy, now or in the future, any real property or
improvements thereon (the "Alling & Cory Real Property Leases"), which
schedule sets forth the date of and parties to each Alling & Cory Real
Property Lease and the date of and parties to each amendment, modification and
supplement thereto. The schedule set forth on Exhibit 2.18(b) shall also
include, with respect to each Alling & Cory Real Property Lease, (i) the
commencement and expiration dates of the Alling & Cory Real Property Lease,
(ii) the rent payable under the Alling & Cory Real Property Lease, (iii) the
<PAGE>
address of the property which is subject to the Alling & Cory Real Property
Lease, (iv) the square footage of the property referred to in (iii) above and
(v) the use conducted on the property referred to in (iii) above. Except for
the matters listed on said Exhibit 2.18(b), Alling & Cory or an Alling & Cory
Subsidiary, as indicated thereon, holds the leasehold estate under and
interest in each Alling & Cory Real Property Lease free and clear of all
liens, encumbrances and other rights of occupancy. Each Alling & Cory Real
Property Lease set forth on Exhibit 2.18(b) (or required to be set forth on
Exhibit 2.18(b)) is in full force and effect; all rents and additional rents
due to date on each such Alling & Cory Real Property Lease have been paid.
Neither Alling & Cory nor any Alling & Cory Subsidiary has violated any of the
terms or conditions under any such Alling & Cory Real Property Lease in any
material respect; and to the Knowledge of Alling & Cory, there exists no event
of default or event, occurrence, condition or act (including the consummation
of the Merger) which, with the giving of notice, the lapse of time or the
happening of any further event or condition, would become a default under such
Alling & Cory Real Property Lease. The property leased by Alling & Cory or
any Alling & Cory Subsidiary pursuant to each Alling & Cory Real Property
Lease is in a state of good maintenance and repair and is adequate and
suitable for the purposes for which it is presently being used.

2.19 Corporate Records. The respective corporate record books of or
relating to Alling & Cory and each of the Alling & Cory Subsidiaries made
available to Parent contain accurate and complete records of (i) all corporate
actions of the respective shareholders and directors (and committees thereof)
of Alling & Cory and the Alling & Cory Subsidiaries, and (ii) the Certificate
and/or Articles of Incorporation and Bylaws, as amended, of Alling & Cory and
the Alling & Cory Subsidiaries. Except as set forth on Exhibit 2.19, neither
Alling & Cory nor any Alling & Cory Subsidiary has any of its records or
information recorded, stored, maintained or held off the premises of Alling &
Cory and the Alling & Cory Subsidiaries.

2.20 Title to and Condition of Personal Property. Except as set
forth in Exhibit 2.20, Alling & Cory and each of the Alling & Cory
Subsidiaries have good and marketable title to any personal property reflected
in the Alling & Cory Financial Statements or currently used in the operation
of their business, and such property is free and clear of all liens, claims,
charges, security interests, options, or other title defects or encumbrances,
other than those which do not and will not have individually or in the
aggregate either an Alling & Cory Material Adverse Effect or materially
interfere with the use or impair the value thereof. All such personal
property is in good operating condition and repair, ordinary wear and tear
excepted, is suitable for the use to which the same is currently put, and is
of a quality and quantity presently usable in the ordinary course of the
operation of the business of Alling & Cory and the Alling & Cory Subsidiaries,
other than such matters as do not and will not have individually or in the
aggregate an Alling & Cory Material Adverse Effect.

2.21 No Adverse Actions. Except as set forth in Exhibit 2.21, to
the Knowledge of Alling & Cory there is no existing, pending or threatened
termination, cancellation, limitation, modification or change in the business
relationship of Alling & Cory or any of the Alling & Cory Subsidiaries, with
any material supplier, customer or other person or entity. None of Alling &
Cory, any Alling & Cory Subsidiary or, to the Knowledge of Alling & Cory, any
shareholder, director, officer, agent, employee or other person associated
with and acting on behalf of any of the foregoing has used any corporate funds
for unlawful contributions, payments, gifts, entertainment or other unlawful
expenses relating to political activity, or for any direct or indirect
unlawful payments to governmental or regulatory officials or others.

2.22 Labor Matters. Except as set forth in Exhibit 2.22, neither
Alling & Cory nor any of the Alling & Cory Subsidiaries has any obligations,
contingent or otherwise, under any employment or consulting agreement (except
if and as set forth in the exhibits hereto), collective bargaining agreement
or other contract with a labor union or other labor or employee group. Except
as set forth in Exhibit 2.22, no unfair labor practice complaint against
<PAGE>
Alling & Cory or any Alling & Cory Subsidiary is pending or, to the Knowledge
of Alling & Cory, threatened before the National Labor Relations Board or
comparable agency; there is no labor strike, dispute, slowdown or stoppage
pending or, to the Knowledge of Alling & Cory, threatened against or involving
Alling & Cory or any Alling & Cory Subsidiary; no representation question
exists respecting the employees of Alling & Cory or any Alling & Cory
Subsidiary; no grievance or internal or informal complaint exists, no
arbitration proceeding arising out of or under any collective bargaining
agreement is pending and no claim therefor has been asserted; no collective
bargaining agreement is currently being negotiated by Alling & Cory or any
Alling & Cory Subsidiary; there are no charges pending before the Equal
Employment Opportunity Commission or charges or claims pending against Alling
& Cory or any Alling & Cory Subsidiary before any comparable state or federal
agency; and Alling & Cory and the Alling & Cory Subsidiaries are in compliance
in all material respects with all federal, state or other applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours.

2.23 Insurance. Exhibit 2.23 sets forth a complete list of all
insurance policies (true and correct copies of which have been delivered to
Parent) which Alling & Cory and the Alling & Cory Subsidiaries maintain with
respect to their businesses, properties or employees. Such policies are in
full force and effect and are free from any right of termination on the part
of the insurance carriers which (x) is presently exercisable or (y) will
become exercisable as a result of the consummation of the Merger or the other
transactions contemplated hereby. Except as provided in Exhibit 2.23, no such
policy contains provisions providing for or requiring the payment of
retrospective premiums. Since December 31, 1995, there has not been any
adverse change in Alling & Cory's or the Alling & Cory Subsidiaries'
relationships with their insurers or in the premiums payable pursuant to such
policies. Neither Alling & Cory nor any Alling & Cory Subsidiary has received
notice of default under, or intended cancellation or nonrenewal of, any
policies of insurance which insure a material part of the properties, business
or liability of Alling & Cory or any Alling & Cory Subsidiary.

2.24 Litigation. Except as described in Exhibit 2.24 and
except for litigation or proceedings related to the environment (which were
exclusively provided for in Section 2.16 above), and except for matters
seeking only money damages which involve amounts less than $25,000
individually or collectively involving less than $100,000 in the aggregate,
there is no arbitration, suit, claim, litigation, or proceeding, in law or in
equity, pending or, to the Knowledge of Alling & Cory, threatened before any
court or governmental agency or instrumentality, or other body, in which
Alling & Cory or any Alling & Cory Subsidiary is a party or otherwise involved
or to which its business or property is subject. To the Knowledge of Alling &
Cory, there are no preliminary proceedings or governmental investigations
before any such court or governmental agency or instrumentality, or other
body, pending or threatened against Alling & Cory or any Alling & Cory
Subsidiary. Neither Alling & Cory nor any Alling & Cory Subsidiary is a party
to any order, writ, injunction, decree or arbitration award (or agreement
entered into in connection therewith) with respect to their properties,
assets, personnel or business activities related to their business as
presently conducted except for matters seeking only money damages which
involve amounts less than $25,000 individually or collectively involving less
than $100,000 in the aggregate.

2.25. Alling & Cory Shareholders. Exhibit 2.25 contains the
name and address of record, and the number of shares of Alling & Cory Common
Stock owned, of each record owner of Alling & Cory Shares, as of April 1,
1996.

2.26 Disclosure. Neither this Agreement (including any Exhibit) nor
any information or document provided prior to the date of this Agreement, nor
the information and document subsequently provided, to Parent or its
representatives by or on behalf of Alling & Cory contains, or will contain as
to subsequently provided information or documents, any untrue statement of a
<PAGE>
material fact, or omits any statement of a material fact necessary in order to
make the statements contained herein or therein not misleading, in light of
the circumstances under which they were made. There is no fact within the
Knowledge of Alling & Cory which Alling & Cory expects to have an Alling &
Cory Material Adverse Effect which has not been set forth in this Agreement,
the Alling & Cory Financial Statements (including the footnotes thereto), any
Exhibit or certificate or delivered in accordance with the terms hereof or any
document or statement in writing which has been supplied by or on behalf of
Alling & Cory or by any of Alling & Cory's executive officers in connection
with the transactions contemplated by this Agreement.

2.27 Accounts Receivable. The amount of all accounts receivable,
and any unbilled invoices, recorded subsequent to December 31, 1995, in the
accounting records of Alling & Cory and each Alling & Cory Subsidiary as being
due to Alling & Cory or such Alling & Cory Subsidiary, as the case may be,
(less the amount of any provision or reserve applicable thereto made in the
accounting records of Alling & Cory and each Alling & Cory Subsidiary) were
calculated in accordance with generally accepted accounting principles in a
manner consistent with past practice. Since December 31, 1995 there has been
no change in the collectibility of the accounts receivable of Alling & Cory
and the Alling & Cory Subsidiaries that would constitute an Alling & Cory
Material Adverse Effect. Exhibit 2.27 lists each account receivable debtor
which had, as of March 31, 1996, and as of a date not earlier than the last
day of the month preceding the month in which the Closing takes place, an
aggregate account receivable indebtedness to Alling & Cory and the Alling &
Cory Subsidiaries (i) exceeding $50,000, (ii) all or part of which was sixty
(60) days or more overdue and (iii) all or part of which was of questionable
collectibility, which Exhibit describes any security held for such
indebtedness, the total balance owed, and whether a bad debt reserve has been
established with respect thereto.

2.28 Inventories. Except as used or sold in the ordinary course of
business, the inventories shown on the Balance Sheet are, except as set forth
in Exhibit 2.28, located on Alling & Cory property or in transit. Alling &
Cory has the type and quantities of inventories appropriate to conduct the
operations of Alling & Cory as they have heretofore been conducted.

2.29 Alling & Cory Not Subject to Securities Exchange Act Reporting
Requirements. Alling & Cory is not subject to the reporting requirements
imposed by Section 13 of the Securities Exchange Act with respect to shares of
any class or series of its equity securities. No class or series of shares of
Alling & Cory entitled to vote generally in the election of directors of
Alling & Cory is registered, or required to be registered, under the
Securities Exchange Act.

2.30 Interests in Clients, Suppliers, etc. Except as set forth in
Exhibit 2.30, to the Knowledge of Alling & Cory, no officer or director of
Alling & Cory possesses, directly or indirectly, any financial interest in, or
is a director, officer or employee of, any corporation, firm, association or
business organization or other person which is a client, supplier, customer,
lessor, lessee, or competitor or potential competitor of Alling & Cory.
Ownership of securities of a company whose securities are registered under the
Securities Exchange Act not in excess of 1% of any class of such securities
shall not be deemed to be a financial interest for purposes of this Section
2.30.

2.31 Continuity of Interest. Alling & Cory knows of no plan or
intention by Alling & Cory's shareholders to sell, exchange, transfer by gift
or otherwise dispose of any or all of the Parent Stock, if any, to be received
in the Merger.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
<PAGE>
Each of Parent and Merger Sub represents and warrants to Alling &
Cory as follows:

3.1 Organization and Good Standing. Each of Parent and the Merger
Sub is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Each of Parent and Merger Sub
is duly qualified or licensed and in good standing to do business in each
jurisdiction in which the character of the property owned, leased or operated
by it or the nature of the business conducted by it makes such qualification
or licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not have a material adverse effect on the
business, assets, prospects, condition (financial or otherwise) or the results
of operations of Parent and the Parent's active operating subsidiaries (the
"Parent Subsidiaries") taken as a whole ("Parent Material Adverse Effect").
Parent has heretofore made available to Alling & Cory accurate and complete
copies of the Certificates or Articles of Incorporation and Bylaws, as
currently in effect, of Parent and Merger Sub.

3.2 Capitalization. As of the date hereof, the authorized capital
stock of Parent consists of 125,000,000 shares of Parent Stock, par value
$1.00 per share, and 1,000,000 shares of preferred stock, par value $1.00 per
share (the "Preferred Stock"). As of March 4, 1996, (a) 69,118,211 shares of
Parent Stock were issued and outstanding, and (b) no shares of Preferred Stock
were authorized, issued and outstanding. No other capital stock of Parent is
authorized or issued. As of the date hereof, the authorized capital stock of
Merger Sub consists of 10,000 shares, par value $.01 per share, and of such
shares, 100 shares were issued and outstanding, all of which are owned by the
Parent.

3.3 Authorization; Binding Agreement.

(a) Parent has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby, including but not limited to the issuance of the Parent
Stock to be delivered by the Merger Sub as part of the Merger Consideration,
have been duly and validly authorized by Parent's Board of Directors and no
other corporate proceedings on the part of Parent or any Parent Subsidiary are
necessary to authorize the execution and delivery of this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Parent and constitutes the legal, valid
and binding agreement of Parent, enforceable against Parent in accordance with
its terms, subject to the Enforceability Exceptions.

(b) Merger Sub has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby, including but not limited to the Merger, have been duly
and validly authorized by the Merger Sub's Board of Directors, and except for
the approval by Parent, as the sole shareholder of Merger Sub (which approval
has been authorized by Parent's Board of Directors), no other corporate
proceedings on the part of Merger Sub are necessary to authorize the execution
and delivery of this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Merger Sub and constitutes the legal, valid and binding agreement of Merger
Sub, enforceable against Merger Sub in accordance with its terms, subject to
the Enforceability Exceptions.

3.4 Governmental Approvals. Except as set forth in Exhibit 3.4, no
consent, approval or authorization of or declaration or filing with, or giving
of notice to, any governmental agency or regulatory authority on the part of
Parent, any of the Parent Subsidiaries or Merger Sub is required in
<PAGE>
connection with the execution or delivery by Parent or Merger Sub of this
Agreement or the consummation by Parent or Merger Sub of the transactions
contemplated hereby other than (i) the filing of the Certificate of Merger
with the Secretary of State of New York in accordance with the BCL,
(ii) filings with the SEC, the New York Stock Exchange Inc. and appropriate
state securities authorities in respect of the Registration Statement and the
delivery of Parent Stock as part of the Merger Consideration, and
(iii) filings under the HSR Act.

3.5 No Violations. The execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby and compliance by
Parent and Merger Sub with any of the provisions hereof will not (i) conflict
with or result in any breach of any provision of the Certificate of
Incorporation or Bylaws or other governing instruments of Parent and Merger
Sub, (ii) except as set forth in Exhibit 3.5, require any consent, approval or
notice under or result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, payment or acceleration or augment the
performance required) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, lease, agreement or other instrument
or obligation to which Parent, Merger Sub or any Parent Subsidiary is a party
or by which any of them or any of their properties or assets may be bound,
(iii) result in the creation or imposition of any security interest, lien or
encumbrance of any kind upon any of the assets of Parent or Merger Sub, or
(iv) subject to obtaining the governmental and other consents referred to in
Section 3.4, above, contravene any law, rule or regulation of any government
or any political subdivision thereof, or any order, writ, injunction,
determination or award currently in effect, to which Parent, Merger Sub or any
Parent Subsidiary or its or any of their respective assets or properties are
subject, except in the case of clauses (ii) and (iii) above, any of the
foregoing which do not and will not have individually or in the aggregate a
Parent Material Adverse Effect.

3.6 SEC Filings. Parent has made available to Alling & Cory true
and complete copies of (i) its Annual Reports on Form 10-K, as amended, for
the years ended December 31, 1993, 1994 and 1995, as filed with the SEC,
(ii) its proxy statements relating to all of the meetings of shareholders
(whether annual or special) of Parent since January 1, 1993, as filed with the
SEC, and (iii) all other reports filed pursuant to the Securities Exchange Act
(including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
amended) filed by Parent with the SEC since January 1, 1993 and all
registration statements filed by Parent with the SEC since January 1, 1996
(the reports and statements set forth in clauses (i), (ii) and (iii), above,
are referred to collectively as the "Parent Securities Filings"). As of their
respective dates, none of the Parent Securities Filings (including all
exhibits and schedules thereto and documents incorporated by reference
therein), contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of the Parent Securities Filings at the time of filing
complied in all material respects with the Securities Exchange Act or the
Securities Act, as the case may be. As of the date hereof there are no
claims, actions, proceedings or investigations pending or, to the best
knowledge of Parent, threatened against Parent or any Parent Subsidiary, or
any properties or rights of Parent or any of the Parent Subsidiaries, before
any court, administrative, governmental or regulatory authority or body which
is or will be required to be described in any Parent Securities Filing that is
not so described. Since January 1, 1993, other than the Parent Securities
Filings, Parent has not been required to file any report or other document
with the SEC pursuant to the requirements of the Securities Exchange Act which
has not been timely filed with the SEC. Any documents filed by Parent with
the SEC after the date hereof, that would have constituted Parent Securities
Filings if filed prior to the date hereof, shall be provided to Alling & Cory;
and each such document, along with the Registration Statement and the
Prospectus, at the time the Registration Statement becomes effective, shall
constitute Parent Securities Filings for purposes hereof.
<PAGE>
3.7 Absence of Certain Changes or Events. Except as set forth in
the Parent Securities Filings, since December 31, 1995, there has not been any
event that has had, or that Parent reasonably expects to have, a Parent
Material Adverse Effect.

3.8 Compliance with Laws. The business of Parent has been operated
in compliance with all laws, ordinances, regulations, orders, judgments and
decrees of all governmental entities, domestic or foreign, applicable thereto,
except for any instances of non-compliance which do not and will not
individually or in the aggregate have a Parent Material Adverse Effect.

3.9 Finders and Investment Bankers. Neither Parent nor any of its
officers or directors has employed any broker or finder other than Goldman,
Sachs & Co. or otherwise incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.

3.10 Disclosure. All information and documents provided prior to
the date of this Agreement, and all information and documents subsequently
provided, including (except with respect to information provided by Alling &
Cory) the Registration Statement and the Prospectus, to Alling & Cory or its
shareholders or representatives by or on behalf of Parent are or contain, or
will be or will contain as to subsequently provided information or documents,
true, accurate and complete information in all material respects with respect
to the subject matter thereof and are, or will be as to subsequently provided
information or documents, fully responsive to any specific requirement of this
Agreement or to any specific request made by or on behalf of Alling & Cory or
its representatives.

ARTICLE IV

COVENANTS OF ALLING & CORY

Alling & Cory covenants and agrees as follows:

4.1 Conduct of Business of Alling & Cory and Alling & Cory
Subsidiaries. Except as expressly contemplated by this Agreement, during the
period from the date of this Agreement to the Effective Time, Alling & Cory
shall, and it shall cause the Alling & Cory Subsidiaries to, conduct its or
their businesses in the ordinary course and consistent with past practice, and
Alling & Cory shall, and it shall cause the Alling & Cory Subsidiaries to, use
its or their reasonable efforts to preserve intact its business organization,
to keep available the services of its officers and employees and to maintain
satisfactory relationships with all persons with whom it does business.
Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Agreement, prior to the Effective Time, neither
Alling & Cory nor any Alling & Cory Subsidiary will, without the prior written
consent of Parent:

(a) amend or propose to amend its Certificate or Articles of
Incorporation or Bylaws;

(b) authorize for issuance, issue, grant, sell, pledge, dispose of
or propose to issue, grant, sell, pledge or dispose of any shares of, or any
options, warrants, commitments, subscriptions or rights of any kind to acquire
any shares of, the capital stock of Alling & Cory or any Alling & Cory
Subsidiary or any securities convertible into or exchangeable for shares of
stock of any class of Alling & Cory or any Alling & Cory Subsidiary;

(c) split, combine or reclassify any shares of its capital stock or
declare, pay or set aside any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
or redeem, purchase or otherwise acquire or offer to acquire any shares of its
capital stock, provided, however, that (i) Alling & Cory shall be permitted to
declare and pay in cash a dividend of up to $.35 per share, and (ii) Alling &
<PAGE>
Cory shall have the right, provided that it obtains the prior written approval
of Parent, which may be withheld by Parent at its sole discretion, to exercise
its rights, pursuant to agreements with certain of its shareholders, to
purchase shares of Alling & Cory Common Stock in order to satisfy the
condition set forth in Section 6.3(k) of this Agreement;

(d) (i) except for debt from time to time advanced and repaid
pursuant to Alling & Cory's existing bank credit agreements, not in excess of
$55,000,000 in the aggregate at any time outstanding, create, incur or assume
any short-term debt, long-term debt or obligations in respect of capital
leases; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, indirectly, contingently or otherwise) for the
obligations of any person, except in the ordinary course of business
consistent with past practice; (iii) make any capital expenditures or make any
loans, advances or capital contributions to, or investments in, any other
person (other than (x) customary travel or business advances to employees made
in the ordinary course of business consistent with past practice,
(xx) currently committed capital expenditures disclosed to Parent and set
forth in Exhibit 4.1 and (xxx) capital expenditures not exceeding $100,000
individually, provided that all of such capital expenditures do not exceed
$1,000,000 in the aggregate); (iv) acquire the stock or assets of, or merge or
consolidate with, any other person; or (v) incur any material liability or
obligation (absolute, accrued, contingent or otherwise), outside the ordinary
course of business;

(e) except as set forth in Exhibit 4.1, sell, transfer, mortgage,
or otherwise dispose of, or encumber, or agree to sell, transfer, mortgage or
otherwise dispose of or encumber, any material assets or properties, real,
personal or mixed, or release or relinquish any material contract rights,
outside the ordinary course of business;

(f) increase in any manner the compensation of any of its officers
or employees or enter into any employment, consulting or similar agreement
with, any shareholder, officer, director, agent, employee or consultant of
Alling & Cory or an Alling & Cory Subsidiary outside the ordinary course of
business, except as may be necessary to keep available the services of
officers and employees as required pursuant to the initial paragraph of this
Section 4.1;

(g) fail to perform any material obligation or commitment under any
Contract (other than those obligations or commitments being contested in good
faith);

(h) settle or compromise any claim or litigation other than (i)
those involving an alleged or potential liability of Alling & Cory and the
Alling & Cory Subsidiaries not exceeding $25,000 individually or $100,000 in
the aggregate, (ii) claims by Alling & Cory and the Alling & Cory Subsidiaries
for recovery of amounts not exceeding $25,000 individually or $100,000 in the
aggregate, and (iii) disputes with customers and suppliers which are not
material individually and which are resolved in the ordinary course of
business and consistent with past practices, provided, that Alling & Cory
shall be authorized to settle the pending litigation entitled P.A. Building
Company v. Elwyn D. Lieberman, Inc. et al. (the "Lieberman Litigation") for
the payment of cash or a promissory note, as long as the settlement terms are
consistent with the terms of a certain letter agreement (defined in Section
1.3 as the "Letter Agreement") between Parent and Alling & Cory dated the date
hereof;

(i) take any action, engage in any transaction or enter into any
agreement which would cause the representations and warranties set forth in
Article II hereof to be untrue; or

(j) agree, commit or arrange to do any of the foregoing.

4.2 Notification of Certain Matters. Alling & Cory shall give
prompt notice to Parent of: (i) any notice of, or other communication
<PAGE>
relating to, a default or event which, with notice or lapse of time or both,
would become a default under any Contract or other agreement, indenture or
instrument material to the business, assets, prospects, condition (financial
or otherwise) or the results of operations of Alling & Cory and the Alling &
Cory Subsidiaries, taken as a whole, to which Alling & Cory or any Alling &
Cory Subsidiary is a party or is subject; (ii) any notice or other
communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions contemplated
by this Agreement; (iii) any notice or other communication from any regulatory
authority in connection with the transactions contemplated by this Agreement;
(iv) the occurrence of an event which, so far as reasonably can be foreseen at
the time of its occurrence, could have an Alling & Cory Material Adverse
Effect or which would render any representation or warranty of Alling & Cory
untrue, including the name of any account debtors whose identity is required
to be listed on Exhibit 2.27 at any time between the date of this Agreement
and the Closing Date; and (v) any claims, actions, proceedings or
investigations commenced or, to the Knowledge of Alling & Cory, threatened,
involving or affecting Alling & Cory or any Alling & Cory Subsidiary, or any
of their respective property or assets, or, to the Knowledge of Alling & Cory,
any employee, consultant, director or officer, in his or her capacity as such,
of Alling & Cory or any Alling & Cory Subsidiary which, if pending on the date
hereof, would have been required to have been disclosed in this Agreement or
which relates to the consummation of the Merger.

4.3 Access and Information. Between the date of this Agreement and
the Effective Time, Alling & Cory will and will cause the Alling & Cory
Subsidiaries to give Parent, and their respective authorized representatives
(including financial advisors, accountants and legal counsel) at all
reasonable times access to all plants, offices, warehouses and other
facilities and to all contracts, agreements, commitments, books and records
(including tax returns) of Alling & Cory and the Alling & Cory Subsidiaries,
will permit the foregoing to make such inspections as they may require and
will cause its officers promptly to furnish Parent with such financial and
operating data and other information, all with respect to the business and
properties of Alling & Cory and the Alling & Cory Subsidiaries as Parent may
from time to time request.

In connection with the continued operation of the business of Alling
& Cory and the Alling & Cory Subsidiaries between the date of this Agreement
and the Effective Date, Alling & Cory shall confer in good faith and on a
regular and frequent basis with one or more representatives of Parent
designated in writing to report operational matters of materiality and the
general status of ongoing operations. In addition, Alling & Cory will allow
Parent employees and agents to be present at Alling & Cory's business location
to observe the business and operation of Alling & Cory and the Alling & Cory
Subsidiaries. Alling & Cory acknowledges that Parent does not and will not
waive any rights it may have under this Agreement as a result of the
inspections and consultations permitted by this Section 4.3 nor shall Parent
be responsible for any decisions made by Alling & Cory's officers and
directors with respect to matters which are the subject of such consultation.

4.4 Stockholder Approval. As soon as practicable, subject to the
effectiveness of the Registration Statement, to any required compliance by
Parent with state securities laws, and to the fiduciary obligations of its
directors under applicable law as advised by counsel, Alling & Cory will take
all steps necessary to duly call, give notice of, convene and hold a meeting
of its stockholders for the purpose of adopting this Agreement and for such
other purposes as may be necessary or desirable in connection with
effectuating the transactions contemplated hereby. Subject to directors'
fiduciary obligations under applicable law (based upon the written advice of
independent outside counsel), (i) the Board of Directors of Alling & Cory will
recommend to the stockholders of Alling & Cory that they adopt this Agreement
and approve the transactions contemplated hereby, (ii) the Board of Directors
of Alling & Cory shall cause to be solicited proxies from the holders of
Alling & Cory Common Stock to be voted at the Special Meeting in favor of the
approval and adoption of this Agreement and the approval of the Merger and the
<PAGE>
other transactions contemplated hereby and shall take (consistent with the
exercise of their fiduciary duties) all other actions necessary or advisable
to secure the vote of the shareholders of Alling & Cory required to effect the
Merger; and (iii) Alling & Cory agrees that it will cause to be included in
the proxy statement the recommendation of its Board of Directors that the
holders of Alling & Cory Common Stock approve and adopt this Agreement and
approve the Merger and the other transactions contemplated hereby.

4.5 Efforts Toward Closing. Subject to the terms and conditions
herein provided, and to the fiduciary obligations of its directors under
applicable law as advised by counsel, Alling & Cory agrees to use all
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the Merger and the transactions
contemplated by this Agreement including, but not limited to (i) obtaining the
consent of Alling & Cory's lenders to this Agreement and the transactions
contemplated hereby, (ii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, (iii) obtaining all
governmental consents required for the consummation of the Merger and the
transactions contemplated thereby, and (iv) all things necessary to satisfy
the other conditions of Closing set forth herein; provided, however, that no
loan agreement or contract for borrowed money shall be repaid, except as
currently required by its terms, in whole or in part, and no contract or other
agreement shall be amended to increase the amount payable thereunder or
otherwise be more burdensome to Alling & Cory or any Alling & Cory Subsidiary,
in order to obtain such consent, approval or authorization without the express
written consent of Parent. Alling & Cory will consult with counsel for Parent
as to, and will permit such counsel to participate in, at Parent's expense,
any lawsuits or proceedings referred to in clause (ii) above brought against
or involving Alling & Cory.

4.6 Public Announcements. So long as this Agreement is in effect,
Alling & Cory shall not, and shall cause its affiliates not to, issue or cause
the publication of any press release or any other announcement with respect to
the Merger or the transactions contemplated by this Agreement without the
consent of Parent, which consent may not unreasonably be withheld, except
where such release or announcement is required by applicable law, in which
case Alling & Cory shall consult with Parent regarding the same.

4.7 Benefit Plans. No award or grant under any Benefit Plan of
Alling & Cory or an Alling & Cory Subsidiary shall be made without the consent
of Parent except for awards in the ordinary course of business pursuant to
such Benefit Plans as presently in effect; nor shall Alling & Cory or an
Alling & Cory Subsidiary take any action to accelerate the vesting of any
options previously granted pursuant to any such Benefit Plan. Except as set
forth in Exhibit 4.7, neither Alling & Cory nor any Alling & Cory Subsidiary
shall make any amendment to any Benefit Plan, any awards thereunder or the
terms of any security convertible into or exchangeable for capital stock
without the consent of Parent.

4.8 No Inconsistent Activities.

(a) Neither Alling & Cory nor any Alling & Cory Subsidiary, shall,
directly or indirectly, take (and Alling & Cory shall not authorize or permit
its or any Alling & Cory Subsidiary's, officers, directors, employees,
representatives, consultants, investment bankers, attorneys, accountants or
other agents or affiliates, to so take and shall so inform such individuals)
any action to (i) solicit or initiate the submission of any Acquisition
Proposal, (ii) enter into an agreement for the sale or other disposition by
Alling & Cory or any Alling & Cory Subsidiary of a material amount of assets
or a sale of shares of capital stock whether by merger or other business
combination or tender or exchange offer or (iii) participate in any way in
discussions or negotiations with, or, furnish any information to, any person
(other than Parent or Merger Sub) in connection with, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes, or
<PAGE>
may reasonably be expected to lead to, any Acquisition Proposal; provided,
however, that Alling & Cory and such individuals may participate in
discussions or negotiations with or furnish information to any third party
which proposes a transaction which the Board of Directors of Alling & Cory
reasonably believes will be likely to result in an Acquisition Proposal, if
the Board of Directors believes (based upon the written advice of independent
outside counsel) that failing to take such action would likely constitute a
breach of its fiduciary duties. In addition, neither the Board of Directors
of Alling & Cory nor any Committee thereof shall withdraw or modify in a
manner adverse to Parent the approval and recommendation of this Agreement and
the Merger or approve or recommend any Acquisition Proposal; provided that
Alling & Cory may recommend to its shareholders an Acquisition Proposal and in
connection therewith withdraw or modify its approval or recommendation of the
Merger if (i) the Board of Directors of Alling & Cory has determined that the
Acquisition Proposal is a Superior Proposal, (ii) all the conditions to Alling
& Cory's right to terminate this Agreement in accordance with Section 7.1(f)
have been satisfied (including the payment of the amount required by Section
8.7) and (iii) simultaneously with such withdrawal, modification or
recommendation, this Agreement is terminated in accordance with Section
7.1(f). Any actions permitted under, and taken in compliance with, this
Section 4.8 shall not be deemed a breach of any other covenant or agreement of
such party contained in this Agreement.

"Acquisition Proposal" shall mean any proposed merger or other
business combination, sale or other disposition of any material amount of
assets, sale of shares of capital stock, tender offer or exchange offer or
similar transactions involving Alling & Cory or any Alling & Cory Subsidiary.
"Superior Proposal" shall mean a bona fide proposal made by a third party to
acquire all of the outstanding shares of Alling & Cory pursuant to a tender
offer or a merger, or to purchase all or substantially all of the assets of
Alling & Cory on terms which a majority of the members of the Board of
Directors of Alling & Cory determines in its good faith judgment (based on the
written advice of its financial and legal advisors) to be more favorable to
Alling & Cory and its shareholders than the transactions contemplated hereby.

(b) In addition to the obligations of Alling & Cory set forth in
paragraph (a), Alling & Cory shall promptly advise Parent of any request for
information or of any Acquisition Proposal, or any proposal with respect to
any Acquisition Proposal, the material terms and conditions of such request or
takeover proposal, and the identity of the person making any such takeover
proposal or inquiry. After the giving of such initial notice, Alling & Cory
will, consistent with what the Board reasonably believes (based upon the
written advice of independent outside counsel) to be its fiduciary duty, keep
Parent informed of the status and details (including amendments or proposed
amendments) of any such request, takeover proposal or inquiry.

4.9 Stockholder Reports. Alling & Cory shall send to Parent a copy
of all reports and materials as and when it sends the same to its
stockholders.

4.10 Tax Opinion Certification and Affiliate Agreements. Alling &
Cory shall use its best efforts to cause

(a) Such of its executive officers and shareholders as its tax
counsel or tax counsel of Parent may reasonably request to timely execute and
deliver a certificate that such person has no plan or intention to sell,
exchange or otherwise dispose of the Parent Stock received in the Merger and
is not aware of any such plan or intention on the part of others. Alling &
Cory shall execute and deliver a certificate that it is not aware of any such
plan or intention.

(b) At least thirty (30) days prior to the Effective Time, Alling &
Cory will deliver to Parent a list of each person who is or may be an
"affiliate" of Alling & Cory within the meaning of Rule 145 of the rules and
regulations of the SEC promulgated under the Securities Act and shall use its
best efforts to cause each such person to enter into an agreement with Parent
<PAGE>
prior to the Effective Time, in the form customarily given in similar
transactions, with respect to the resale restrictions set forth in Rule 145.

4.11 Resignations/Replacement of Directors and Officers. Alling &
Cory shall use its best efforts to cause such officers and directors of the
Alling & Cory Subsidiaries as Parent may request to resign their positions as
such at or prior to the Effective Time and/or shall arrange for the election
or appointment as officers and directors of the Alling & Cory Subsidiaries, at
the Effective Time, of the persons designated by Parent. The instruments
effecting the foregoing resignations, appointments and/or elections to act are
herein referred to as the "Director and Officer Actions."

4.12 HSR Act. Alling & Cory shall, in cooperation with Parent and
as soon as practicable, file Notification and Report Forms under the HSR Act
with the Federal Trade Commission (the "FTC") and the Antitrust Division of
the Department of Justice (the "Antitrust Division") and shall use its best
efforts to respond as promptly as practicable to all inquiries received from
the FTC or the Antitrust Division for additional information or documentation.

4.13 Comfort Letters. Alling & Cory shall cause to be delivered to
Parent "comfort letters" from the independent certified public accountants for
Alling & Cory prepared in accordance with SFAS No. 72, dated a date within two
business days before each of the dates on which the Registration Statement
shall become effective and the Closing Date, addressed to the Boards of
Directors of each of Parent and Alling & Cory, covering such matters as Parent
shall reasonably request with respect to facts concerning the financial
condition of Alling & Cory and customary for such certified public accountants
to deliver in connection with transactions such as the Merger.

ARTICLE V

COVENANTS OF PARENT AND MERGER SUB

Parent and Merger Sub covenant and agree as follows:

5.1 Notification of Certain Matters. Parent shall give prompt
notice to Alling & Cory of: (i) any notice or other communication from any
third party alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any regulatory authority
(including, but not limited to the SEC, the New York Stock Exchange or the
NASD) in connection with the transactions contemplated by this Agreement;
(iii) the occurrence of an event which, so far as reasonably can be foreseen
at the time of its occurrence, could have a Parent Material Adverse Effect or
which would render any representation or warranty of Parent or Merger Sub
untrue; and (iv) any claims, actions, proceedings or investigations commenced
or, to the knowledge of its executive officers, threatened, involving or
affecting Parent or Merger Sub or any of their respective property or assets,
which, if pending on the date hereof, would have been required to be disclosed
in this Agreement or the Parent Securities Filings, or which relates to the
consummation of the Merger.

5.2 Access and Information. Between the date of this Agreement and
the Effective Time, Parent will give Alling & Cory and its authorized
representatives (including its financial advisors, accountants and legal
counsel) a copy of each report, schedule and other document that is filed by
Parent or Merger Sub with the SEC or otherwise pursuant to the requirements of
federal or state securities laws or with the NASD.

5.3 Efforts Toward Closing. Subject to the terms and conditions
herein provided, Parent and Merger Sub each agrees to use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the Merger and the transactions
contemplated by this Agreement including, but not limited to (i) the defending
<PAGE>
of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, (ii) obtaining all governmental consents
required for the consummation of the Merger and the transactions contemplated
thereby, and (iii) all things necessary to satisfy the other conditions of
Closing set forth herein. Parent and Merger Sub each will consult with
counsel for Alling & Cory as to, and will permit such counsel to participate
in, at Alling & Cory's expense, any lawsuits or proceedings referred to in
clause (i) above brought against or involving Parent.

5.4 Public Announcements. So long as this Agreement is in effect,
Parent and Merger Sub shall not, and each shall cause its affiliates not to,
issue or cause the publication of any press release or any other announcement
with respect to the Merger or the transactions contemplated by this Agreement
without the consent of Alling & Cory, which consent may not unreasonably be
withheld, except where such release or announcement is required by applicable
law or pursuant to any applicable listing agreement with, or rules or
regulations of, the New York Stock Exchange or the NASD, in which case Parent
will consult with Alling & Cory regarding the same.

5.5 Securities Exchange Act and Securities Act Compliance. In
consummating the Merger and the transactions contemplated hereby, Parent and
Merger Sub shall comply in all material respects with the applicable
provisions of the Securities Exchange Act and the Securities Act and the rules
and regulations thereunder.

5.6 SEC and Stockholder Filings. Parent shall send to Alling &
Cory a copy of all public reports and materials as and when it sends the same
to its shareholders or the SEC.

5.7 Listing of Parent Stock. Parent will use its best efforts to
cause the Parent Stock that will be issued as part of the Merger Consideration
to be approved for listing on the New York Stock Exchange, subject to official
notice of issuance, prior to the Effective Time.

5.8 HSR Act. Parent shall, in cooperation with Alling & Cory and as
soon as practicable, file Notification and Report Forms under the HSR Act with
the FTC and the Antitrust Division and shall use its best efforts to respond
as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or documentation.

5.9 Comfort Letters. Parent shall cause to be delivered to Alling
& Cory "comfort letters" from the independent certified public accountants for
Parent prepared in accordance with SFAS No. 72, dated a date within two
business days before each of the dates on which the Registration Statement
shall become effective and the Closing Date, addressed to the Boards of
Directors of each of Alling & Cory and Parent, covering such matters as Alling
& Cory shall reasonably request with respect to facts concerning the financial
condition of Parent and customary for such certified public accountants to
deliver in connection with transactions such as the Merger.

ARTICLE VI

CONDITIONS

6.1 Conditions to Each Party's Obligations. The respective
obligations of each party to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the following
conditions:

(a) Stockholder Approval. This Agreement shall have been adopted
at or prior to the Effective Time by the requisite vote of the stockholders of
Alling & Cory in accordance with the BCL.
<PAGE>
(b) No Injunction or Action. No order, statute, rule, regulation,
executive order, stay, decree, judgment or injunction shall have been enacted,
entered, promulgated or enforced by any court or governmental authority, and
no action, suit or proceeding shall have been instituted or threatened, which
prohibits or prevents, or seeks to prohibit or prevent, the consummation of
the Merger or that could reasonably be expected to have an Alling & Cory
Material Adverse Effect or a Parent Material Adverse Effect and which has not
been vacated, dismissed or withdrawn by the Effective Time. Alling & Cory,
Parent and Merger Sub shall use their best efforts to have any of the
foregoing vacated, dismissed or withdrawn by the Effective Time.

(c) HSR Act. Any waiting period applicable to the Merger under the
HSR Act shall have expired or earlier termination thereof shall have been
granted and no action shall have been instituted by either the United States
Department of Justice or the Federal Trade Commission to prevent the
consummation of the transactions contemplated by this Agreement or to modify
or amend such transactions in any material manner or, if any such action shall
have been instituted, it shall have been withdrawn or a final judgment shall
have been entered against such Department or Commission, as the case may be.

(d) Registration Statement. The Registration Statement shall have
been declared effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the SEC.

(e) Blue Sky. Parent shall have received all state securities law
authorizations necessary to consummate the transactions contemplated hereby.

6.2 Conditions to Obligations of Alling & Cory. The obligation of
Alling & Cory to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the following additional conditions, any one or
more of which may be waived by Alling & Cory:

(a) Parent Representations and Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement shall be true
and correct in all respects on the date hereof and, except as otherwise
contemplated by this Agreement, as of the Effective Time; provided that the
condition set forth in this Section 6.2(a) shall be deemed satisfied
notwithstanding the failure of any representation or warranty of Parent
contained herein to be true and correct on the date hereof and as of the
Effective Time, if, assuming all standards regarding materiality, and all
qualifications with respect to a Parent Material Adverse Effect, set forth in
such representations and warranties are disregarded, the facts or
circumstances which would then render any such representations or warranties
untrue or inaccurate or incorrect when made or deemed made would in the
aggregate not have a Parent Material Adverse Effect.

(b) Performance by Parent. Parent and Merger Sub shall have
performed and complied with all of the covenants and agreements in all
material respects and satisfied in all material respects all of the conditions
required by this Agreement to be performed or complied with or satisfied by
Parent and Merger Sub at or prior to the Effective Time.

(c) No Material Adverse Change. There shall not have occurred
after the date hereof any event that could reasonably be expected to have a
Parent Material Adverse Effect.

(d) Certificates and Other Deliveries. Parent shall have delivered
to Alling & Cory (i) a certificate executed on its behalf by its President,
any Vice President or another authorized officer in their corporate capacity
to the effect that the conditions set forth in Subsections 6.2(a), 6.2(b) and
6.2(c), above, have been satisfied; (ii) certificates of existence from the
State Corporation Commission of the Commonwealth of Virginia and the Secretary
of State of the State of New York stating that Parent and Merger Sub,
respectively, are validly existing corporations; (iii) duly adopted
resolutions of the Boards of Directors of Parent and of Merger Sub, and of the
<PAGE>
Parent as sole stockholder of Merger Sub, approving the execution, delivery
and performance of this Agreement and the instruments contemplated hereby,
certified by the Secretary or Assistant Secretary of each; and (iv) such other
documents and instruments as Alling & Cory reasonably may request.

(e) Opinion of Parent Counsel. Alling & Cory shall have received
an opinion of counsel to Parent, substantially in the form agreed upon by
Alling & Cory and Parent.

(f) Fairness Opinion. Alling & Cory shall have received from its
financial advisors a written opinion addressed to it, in form and substance
reasonably satisfactory to Alling & Cory, for inclusion in the Prospectus,
dated on or about the date thereof, substantially to the effect that the
Merger Consideration is fair to the holders of the Alling & Cory Shares from a
financial point of view.

(g) Comfort Letters. Alling & Cory shall have received "comfort
letters" from the independent certified public accountants for Parent prepared
in accordance with Statement of Accounting Standards No. 72, dated the date on
which the Registration Statement, or the last amendment thereto, shall become
effective, and dated the Closing Date, addressed to the Board of Directors of
each of Alling & Cory and Parent, covering such matters as Alling & Cory shall
reasonably request with respect to facts concerning the financial condition of
Parent and customary for such certified public accountants to deliver in
connection with a transaction similar to the Merger.

(h) Exchange Listing. The Parent Stock that will be issued in the
Merger shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.

(i) Government Approvals. All consents, approvals and
authorizations and all notices and filings which are referred to in Exhibit
3.4 shall have been received or made by Alling & Cory, Parent or Merger Sub,
as the case may be, from the pertinent domestic or foreign governmental
department, commission, board, bureau, agency or instrumentality (collectively
"Governmental Authorities").

(j) Consents. All consents, approvals or notices which have been
referred to in Exhibit 3.5 shall have been made or obtained and shall be in
full force and effect.

(k) Tax Opinion. Alling & Cory shall have received an opinion of
Underberg & Kessler to the effect that, if the Merger is consummated in
accordance with the terms of this Agreement, the shareholders of Alling & Cory
will not recognize gain or loss for United States Federal Income Tax purposes
in connection with their receipt of Parent Stock, except to the extent that
such stockholders receive (i) cash for their Alling & Cory Common Stock
pursuant to an effective Cash Election or (ii) cash in lieu of fractional
shares.

6.3 Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following additional
conditions, any one or more of which may be waived by Parent:

(a) Alling & Cory Representations and Warranties. The
representations and warranties of Alling & Cory contained in this Agreement
shall be true and correct in all respects on the date hereof and, except as
otherwise contemplated by this Agreement, as of the Effective Time; provided
that the condition set forth in this Section 6.3(a) shall be deemed satisfied
notwithstanding the failure of any representation or warranty of Alling & Cory
contained herein to be true and correct on the date hereof and as of the
Effective Time, if, assuming all standards regarding materiality, and all
qualifications with respect to an Alling & Cory Material Adverse Effect, set
forth in such representations and warranties are disregarded, the facts or
circumstances which would then render any such representations or warranties
<PAGE>
untrue or inaccurate or incorrect when made or deemed made would in the
aggregate not have an Alling & Cory Material Adverse Effect (which term shall,
for this purpose, not include any effect on the prospects of Alling & Cory due
to a general deterioration in economic conditions).

(b) Performance by Alling & Cory. Alling & Cory shall have
performed and complied with all the covenants and agreements in all material
respects and satisfied in all material respects all the conditions required by
this Agreement to be performed or complied with or satisfied by Alling & Cory
at or prior to the Effective Time.

(c) No Material Adverse Change. There shall have not occurred
after the date hereof any event that could reasonably be expected to have an
Alling & Cory Material Adverse Effect (which term shall, for this purpose, not
include any effect on the prospects of Alling & Cory due to a general
deterioration in economic conditions).

(d) Certificates and Other Deliveries. Alling & Cory shall have
delivered, or caused to be delivered, to Parent (i) a certificate executed on
its behalf by its President or another duly authorized officer in their
corporate capacity to the effect that the conditions set forth in Subsections
6.3(a), 6.3(b) and 6.3(c), above, have been satisfied; (ii) a certificate of
good standing from the Secretary of State of each state in which Alling & Cory
and the Alling & Cory Subsidiaries are incorporated or qualified to do
business stating that each is a validly existing corporation in good standing;
(iii) duly adopted resolutions of the Board of Directors and stockholders of
Alling & Cory approving the execution, delivery and performance of this
Agreement and the instruments contemplated hereby, certified by the Secretary
of Alling & Cory; (iv) a true and complete copy of the Certificate and
Articles of Incorporation, as amended, of Alling & Cory and each of the Alling
& Cory Subsidiaries certified by the Secretary of State of the state of
incorporation, and a true and complete copy of the Bylaws, as amended, of
Alling & Cory and each of the Alling & Cory Subsidiaries certified by the
Secretary thereof; (v) the duly executed Director and Officer Actions; (vi) a
list of the stockholders of Alling & Cory entitled to vote on the adoption of
this Agreement and as of the Effective Time, each certified by the transfer
agent of Alling & Cory; and (vii) such other documents and instruments as
Parent reasonably may request.

(e) Opinion of Alling & Cory Counsel. Parent shall have received
the opinion of counsel to Alling & Cory, substantially in the form agreed upon
by Parent and Alling & Cory.

(f) Comfort Letters. Parent shall have received "comfort letters"
from the independent certified public accountants for Alling & Cory prepared
in accordance with Statement of Accounting Standards No. 72, dated the date on
which the Registration Statement, or the last amendment thereto, shall become
effective, and dated the Closing Date, addressed to the Board of Directors of
each of Alling & Cory and Parent, covering such matters as Parent shall
reasonably request with respect to facts concerning the financial condition of
Alling & Cory and the Alling & Cory Subsidiaries and customary for such
certified public accountants to deliver in connection with a transaction
similar to the Merger.

(g) Government Approvals. All consents, approvals and
authorizations and all notices and filings which are referred to in Exhibit
2.5 shall have been received or made by Alling & Cory, Parent or Merger Sub,
as the case may be, from the pertinent Governmental Authority.

(h) Consents. All consents, approvals or notices which have been
referred to in Exhibit 2.6 shall have been made or obtained and shall be in
full force and effect, including, without limitation the consent of Eastman
Kodak Company to the deemed assignment of the Sublease between Rochester
Economic Development Corporation and Alling & Cory dated August 5, 1994 for
property located at 1041 West Ridge Road, Rochester, New York.
<PAGE>
(i) Tax Opinion. Parent shall have received an opinion of White &
Case to the effect that, if the Merger is consummated in accordance with the
terms of this Agreement, the shareholders of Alling & Cory will not recognize
gain or loss for United States Federal Income Tax purposes in connection with
their receipt of Parent Stock, except to the extent that such shareholders
receive (i) cash for their Alling & Cory Common Stock pursuant to an effective
Cash Election or (ii) cash in lieu of fractional shares.

(j) Affiliate Letters. Parent shall have received from each
"affiliate" of Alling & Cory identified pursuant to Section 4.10(b), the
agreement described in such Section, in form and substance satisfactory to
Parent.

(k) Dissenting Shareholders. The number of shares of Alling & Cory
Common Stock held by Dissenting Shareholders shall not exceed 10% of the
aggregate number of issued and outstanding shares of Alling & Cory Common
Stock as of the Effective Date.

(l) Settlement of Litigation. The Lieberman Litigation shall have
been settled within the constraints set forth in Section 4.1(h), or other
provision, acceptable to Parent, shall have been made with respect to such
litigation.

ARTICLE VII

TERMINATION AND ABANDONMENT

7.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
whether before or after approval by the stockholders of Alling & Cory:

(a) by action authorized by the vote of a majority of the members
of the Board of Directors of each of Alling & Cory and Parent;

(b) by Alling & Cory or Parent if the Merger shall not have been
consummated on or before August 31, 1996 (or such later date as may be agreed
to by Alling & Cory and Parent), by reason of the failure of any condition to
the consummation of the Merger which must be fulfilled to its satisfaction,
provided, that, no party may terminate this Agreement under this Section
7.1(b) if the failure has been caused primarily by such party's material
breach of this Agreement;

(c) by Alling & Cory if (a) there are any inaccuracies,
misrepresentations or breaches of any of Parent's representations or
warranties in this Agreement, such that the condition set forth in Section
6.2(a) to Alling & Cory's obligation to effect the Merger cannot be met, or
(b) Parent has breached or failed to perform in all material respects any of
its material covenants or agreements contained herein as to which notice has
been given to Parent and Parent has failed to cure or otherwise resolve the
same to the reasonable satisfaction of Alling & Cory within thirty (30) days
after receipt of such notice;

(d) by Parent if (a) there are any inaccuracies, misrepresentations
or breaches of any of Alling & Cory's representations or warranties in this
Agreement, such that the condition set forth in Section 6.3(a) to Parent's and
Merger Sub's obligation to effect the Merger cannot be met, or (b) Alling &
Cory has breached or failed to perform in all material respects any of its
material covenants or agreements contained herein as to which notice has been
given to Alling & Cory and Alling & Cory has failed to cure or otherwise
resolve the same to the reasonable satisfaction of Parent within 30 days after
receipt of such notice;

(e) by Alling & Cory or Parent if a court of competent jurisdiction
or other governmental body shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
<PAGE>
Merger and such order, decree, ruling or other action shall have become final
and nonappealable;

(f) by Parent or Alling & Cory if the Board of Directors of Alling
& Cory determines that an Acquisition Proposal is a Superior Proposal and
believes in the exercise of its good faith judgment (which judgment is based
upon the written advice of independent outside counsel) that a failure to
terminate this Agreement and enter into an agreement to effect the Superior
Proposal would likely constitute a breach of its fiduciary duties under
applicable law; provided, however, Alling & Cory may not terminate this
Agreement pursuant to this Section 7.1(f) unless (i) Alling & Cory has fully
complied with Section 4.8(b) hereof and (ii) prior to such termination Parent
has received the amount set forth in Section 8.7 by wire transfer in same day
funds;

(g) by Parent or Alling & Cory if the Board of Directors of Alling
& Cory has withdrawn or modified in a manner adverse to Parent its approval or
recommendation to the shareholders of Alling & Cory of this Agreement, the
Merger and the other transactions contemplated hereby; provided that Alling &
Cory may not terminate this agreement pursuant to this Section 7.1(g) unless
it believes in the exercise of its good faith judgment (which judgment is
based upon the written advice of independent outside counsel) that a failure
to withdraw or modify such approval or recommendation would likely constitute
a breach of its fiduciary duties under applicable law; or

(h) by Alling & Cory, if the Average Closing Price per share of
Parent Stock is less than $42.50 and by Parent, if the Average Closing Price
is greater than $61.50.

7.2 Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the Merger by Alling & Cory
or Parent pursuant to Section 7.1, above, written notice thereof shall
forthwith be given to the other party hereto and this Agreement shall
terminate and the Merger shall be abandoned without further action by either
of the parties hereto. If this Agreement is terminated as provided herein,
neither party hereto shall have any liability or further obligation to the
other party under the terms of this Agreement except for breach of this
Agreement by such party or with respect to the provisions of Sections 8.1 and
8.7, hereof.

ARTICLE VIII

MISCELLANEOUS

8.1 Confidentiality. Unless (i) otherwise expressly provided in
this Agreement, (ii) required by applicable law or any listing agreement with,
or the rules and regulations of, any applicable national securities exchange,
(iii) necessary to secure any required approvals or consents as to which the
other party has been advised, (iv) necessary to enforce any rights granted
under this Agreement, or (v) consented to in writing by Parent and Alling &
Cory, this Agreement and any information or documents furnished in connection
herewith shall be kept strictly confidential by Alling & Cory, Parent and
Merger Sub, and their respective officers, directors, employees and agents.
Prior to any disclosure pursuant to the preceding sentence, the party
intending to make such disclosure shall consult with the other party regarding
the nature and extent of the disclosure. Nothing contained herein shall
preclude disclosures to the extent necessary to comply with accounting, SEC
and other disclosure obligations imposed by law or with any applicable listing
agreement or rule or regulation of the New York Stock Exchange. To the extent
required by such disclosure obligations, Parent, after consultation with
Alling & Cory, may file with the SEC a Report on Form 8-K pursuant to the
Securities Exchange Act with respect to the Merger, which report may include,
among other things, financial statements and pro forma financial information
with respect to Alling & Cory. In connection with any filing with the SEC of
a Registration Statement or any amendment thereto under the Securities Act,
<PAGE>
Parent, after consultation with Alling & Cory, may include in the Registration
Statement any information required to be included therein with respect to the
Merger, including but not limited to financial statements and pro forma
financial information with respect to Alling & Cory, and thereafter the
Prospectus will be distributed to the Alling & Cory stockholders in connection
with the Special Meeting. Parent and Alling & Cory shall cooperate with the
other and provide such information and documents as may be required in
connection with any such filings. In the event the Merger is not consummated,
each party shall return to the other all documents furnished by the other and
will hold in absolute confidence any information obtained from the other party
except to the extent (i) such party is required to disclose such information
by law or regulation or such disclosure is necessary or desirable in
connection with the pursuit or defense of a claim, (ii) such party can
demonstrate that such information was known by such party prior to such
disclosure, or (iii) such information becomes generally available to the
public other than in violation of this provision. Prior to any disclosure of
information pursuant to the exception in clause (i) of the preceding sentence,
the party intending to disclose the same shall so notify the party which
provided the same in order that such party may seek a protective order or
other appropriate remedy should it choose to do so.

8.2 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by a written agreement
between Alling & Cory, Parent and Merger Sub at any time prior to the
Effective Time with respect to any of the terms contained herein.

8.3 Waiver of Compliance; Consents. Any failure of Alling & Cory
on the one hand, or Parent or Merger Sub on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by Parent
and Merger Sub on the one hand, or Alling & Cory on the other hand, only by a
written instrument signed by the party granting such waiver, but such waiver
or failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 8.3.

8.4 Survival of Representations and Warranties. The respective
representations and warranties of Alling & Cory, Parent and Merger Sub
contained herein or in any certificates or other documents delivered prior to
or at the Closing shall survive the execution and delivery of this Agreement
but shall terminate upon the consummation of the Merger.

8.5 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given when delivered in
person, by facsimile, receipt confirmed, or on the next business day when sent
by overnight courier or on the third succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

(a) if to Alling & Cory, to:

The Alling & Cory Company
1059 West Ridge Road
P. O. Box 20403
Rochester, New York 14602-0403
Attention: Samuel T. Hubbard, Jr., President
Telecopy: (716) 581-4333

with a copy to:

Underberg & Kessler LLP
1800 Chase Square
Rochester, New York 14604
<PAGE>
Attention: Alan J. Underberg, Esq.
Telecopy: (716) 258-2821

and

(b) if to Parent or Merger Sub, to:

Union Camp Corporation
1600 Valley Road
Wayne, New Jersey 07470
Attention:
Telecopy:

with a copy to:

Union Camp Corporation
1600 Valley Road
Wayne, New Jersey 07470
Attention: Vice President and General Counsel
Telefax: (201) 628-2640

with a further copy to:

White & Case
1155 Avenue of the Americas
New York, New York 10036
Attention: Kevin Keogh, Esq.
Telefax: (212) 354-8113

8.6 Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by either of the parties hereto prior to the Effective Time
without the prior written consent of the other party hereto. This Agreement
is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.

8.7 Expenses.

(a) Except as provided in (b) and (c) below, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs or expenses, subject to
the rights of such party in the event of a breach by the other, as
contemplated under Section 7.2, above.

(b) If (i) this Agreement is terminated pursuant to Section 7.1(f))
or (g), or (ii) on or before August 31, 1996 and while this Agreement remains
in effect, Alling & Cory enters into a definitive agreement with respect to an
Acquisition Proposal with any person (other than Parent or an affiliate of
Parent) and such transaction (including any revised transaction based upon the
Acquisition Proposal) is thereafter consummated (whether before or after
August 31, 1996) then Alling & Cory shall pay to Parent a fee of $4,000,000,
which shall constitute, among other things, reimbursement for Parent's
documented fees, costs and expenses (including, but not limited to, Parent's
legal and accounting fees and fees payable to Parent's financial advisors)
incurred by Parent in connection with the transactions contemplated by this
Agreement.

(c) Alling & Cory will be responsible for paying any amounts that
may be payable by it or its shareholders by reason of the Merger pursuant to
Articles 31 and 31B of the New York Tax Law.

8.8 Governing Law and Consent to Jurisdiction. This Agreement
shall be governed by the internal laws of the State of New York, applicable to
agreements made and to be performed entirely within such state. The parties
<PAGE>
hereby consent to the jurisdiction of the courts of the State of New York in
connection with any dispute, controversy or other matter relating to or
arising out of this Agreement.

8.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

8.10 Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (i) the term
"person" shall mean and include an individual, a partnership, a joint venture,
a corporation, a trust, an association, an unincorporated organization and a
government or any department or agency thereof; (ii) the term "affiliate,"
with respect to any person, shall mean and include any person controlling,
controlled by or under common control with such person; (iii) the term
"subsidiary" of any specified person shall mean any corporation 50 percent or
more of the outstanding voting power of which, or any partnership, joint
venture or other entity 50 percent or more of the total equity interest of
which, is directly or indirectly owned by such specified person; and (iv) the
term "Knowledge of Alling & Cory" shall mean the knowledge of each of the
President and Chief Executive Officer, each Senior Vice President, the Vice
President, Human Resources, the Vice President, Secretary and Advertising
Manager, and the Vice President and Treasurer of Alling & Cory, and of the
President and General Manager of The Alcor Envelope Company, Inc.
(collectively, the "Alling & Cory Executive Officers"), it being understood
that the "knowledge" of each such person shall mean actual knowledge, and it
being further understood that each such person shall be deemed to possess the
actual knowledge that could be gained through appropriate inquiry of persons
whom they reasonably anticipate have, or have the ability and authority to
obtain, the information at issue.

8.11 Entire Agreement. This Agreement and the documents or
instruments referred to herein including, but not limited to, the Exhibits,
which Exhibits are incorporated herein by reference, embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
representations, warranties, covenants, or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and the understandings between the parties with respect to
such subject matter.

8.12 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby unless such provision was material in inducing a
party to enter into this Agreement and such party therefor elects in good
faith to terminate this Agreement.

8.13 Indemnity of Alling & Cory Directors and Officers. The parties
agree that the Surviving Corporation will observe any indemnification
provisions either set forth in the BCL or now existing in either the
certificate of incorporation or bylaws of Alling & Cory, for the benefit of
any individual who served as a director or officer of Alling & Cory, at any
time prior to the Effective Time; provided, notwithstanding the foregoing,
that Parent and Merger Sub may amend the indemnification provisions of the
certificate of incorporation and bylaws of Alling & Cory in any manner that
does not affect the rights to indemnification of any individual who served as
an officer or director of Alling & Cory at any time prior to the Effective
Time.

8.14 Exhibits. All references in this Agreement to Exhibits shall,
except as the context may otherwise require, refer to Exhibits of the same
number set forth in the Alling & Cory Disclosure Memorandum, to be exchanged
between Alling & Cory and Parent separately from this Agreement.
<PAGE>

IN WITNESS WHEREOF, Alling & Cory, Parent and Merger Sub have caused
this Agreement to be signed and delivered by their respective duly authorized
officers as of the date first above written.

THE ALLING & CORY COMPANY

By /s/ SAMUEL T. HUBBARD, JR.
Name: Samuel T. Hubbard, Jr.
Title: President and Chief
Executive Officer

UNION CAMP CORPORATION

By /s/ JAMES M. REED
Name: James M. Reed
Title: Vice Chairman

NORTH MERGER CORP.

By /s/ DIRK R. SOUTENDIJK
Name: Dirk R. Soutendijk
Title: Vice President and
General Counsel
<PAGE>

ANNEX B

OPINION ALLING & CORY
FINANCIAL ADVISORS

TO BE DELIVERED PRIOR TO THE EFFECTIVE DATE
<PAGE>

ANNEX C

SEC. 623. PROCEDURE TO ENFORCE SHAREHOLDER'S
RIGHT TO RECEIVE PAYMENT FOR SHARES

(a) A shareholder intending to enforce his right under a section of
this chapter to receive payment for his shares if the proposed corporate
action referred to therein is taken shall file with the corporation, before
the meeting of shareholders at which the action is submitted to a vote, or at
such meeting but before the vote, written objection to the action. The
objection shall include a notice of his election to dissent, his name and
residence address, the number and classes of shares as to which he dissents
and a demand for payment of the fair value of his shares if the action is
taken. Such objection is not required from any shareholder to whom the
corporation did not give notice of such meeting in accordance with this
chapter or where the proposed action is authorized by written consent of
shareholders without a meeting.

(b) Within ten days after the shareholders' authorization date, which
term as used in this section means the date on which the shareholders' vote
authorizing such action was taken, or the date on which such consent without a
meeting was obtained from the requisite shareholders, the corporation shall
give written notice of such authorization or consent by registered mail to
each shareholder who filed written objection or from whom written objection
was not required, excepting any shareholder who voted for or consented in
writing to the proposed action and who thereby is deemed to have elected not
to enforce his right to receive payment for his shares.

(c) Within twenty days after the giving of notice to him, any
shareholder from whom written objection was not required and who elects to
dissent shall file with the corporation a written notice of such election,
stating his name and residence address, the number and classes of shares as to
which he dissents and a demand for payment of the fair value of his shares.
Any shareholder who elects to dissent from a merger under section 905 (Merger
of subsidiary corporation) or paragraph (c) of section 907 (Merger or
consolidation of domestic and foreign corporations) or from a share exchange
under paragraph (g) of section 913 (Share exchanges) shall file a written
notice of such election to dissent within twenty days after the giving to him
of a copy of the plan of merger or exchange or an outline of the material
features thereof under section 905 or 913.

(d) A shareholder may not dissent as to less than all of the shares, as
to which he has a right to dissent, held by him of record, that he owns
beneficially. A nominee or fiduciary may not dissent on behalf of any
beneficial owner as to less than all of the shares of such owner, as to which
such nominee or fiduciary has a right to dissent, held of record by such
nominee or fiduciary.

(e) Upon consummation of the corporate action, the shareholder shall
cease to have any of the rights of a shareholder except the right to be paid
the fair value of his shares and any other rights under this section. A
notice of election may be withdrawn by the shareholder at any time prior to
his acceptance in writing of an offer made by the corporation, as provided in
paragraph (g), but in no case later than sixty days from the date of
consummation of the corporate action except that if the corporation fails to
make a timely offer, as provided in paragraph (g), the time for withdrawing a
notice of election shall be extended until sixty days from the date an offer
is made. Upon expiration of such time, withdrawal of a notice of election
shall require the written consent of the corporation. In order to be
effective, withdrawal of a notice of election must be accompanied by the
return to the corporation of any advance payment made to the shareholder as
<PAGE>
provided in paragraph (g). If a notice of election is withdrawn, or the
corporate action is rescinded, or a court shall determine that the shareholder
is not entitled to receive payment for his shares, or the shareholder shall
otherwise lose his dissenter's rights, he shall not have the right to receive
payment for his shares and he shall be reinstated to all his rights as a
shareholder as of the consummation of the corporate action, including any
intervening preemptive rights and the right to payment of any intervening
dividend or other distribution or, if any such rights have expired or any such
dividend or distribution other than in cash has been completed, in lieu
thereof, at the election of the corporation, the fair value thereof in cash as
determined by the board as of the time of such expiration or completion, but
without prejudice otherwise to any corporate proceedings that may have been
taken in the interim.

(f) At the time of filing the notice of election to dissent or within
one month thereafter the shareholder of shares represented by certificates
shall submit the certificates representing his shares to the corporation, or
to its transfer agent, which shall forthwith note conspicuously thereon that a
notice of election has been filed and shall return the certificates to the
shareholder or other person who submitted them on his behalf. Any shareholder
of shares represented by certificates who fails to submit his certificates for
such notation as herein specified shall, at the option of the corporation
exercised by written notice to him within forty-five days from the date of
filing of such notice of election to dissent, lose his dissenter's rights
unless a court, for good cause shown, shall otherwise direct. Upon transfer
of a certificate bearing such notation, each new certificate issued therefor
shall bear a similar notation together with the name of the original
dissenting holder of the shares and a transferee shall acquire no rights in
the corporation except those which the original dissenting shareholder had at
the time of transfer.

(g) Within fifteen days after the expiration of the period within which
shareholders may file their notices of election to dissent, or within fifteen
days after the proposed corporate action is consummated, whichever is later
(but in no case later than ninety days from the shareholders' authorization
date), the corporation or, in the case of a merger or consolidation, the
surviving or new corporation, shall make a written offer by registered mail to
each shareholder who has filed such notice of election to pay for his shares
at a specified price which the corporation considers to be their fair value.
Such offer shall be accompanied by a statement setting forth the aggregate
number of shares with respect to which notices of election to dissent have
been received and the aggregate number of holders of such shares. If the
corporate action has been consummated, such offer shall also be accompanied by
(1) advance payment to each such shareholder who has submitted the
certificates representing his shares to the corporation, as provided in
paragraph (f), of an amount equal to eighty percent of the amount of such
offer, or (2) as to each shareholder who has not yet submitted his
certificates a statement that advance payment to him of an amount equal to
eighty percent of the amount of such offer will be made by the corporation
promptly upon submission of his certificates. If the corporate action has not
been consummated at the time of the making of the offer, such advance payment
or statement as to advance payment shall be sent to each shareholder entitled
thereto forthwith upon consummation of the corporate action. Every advance
payment or statement as to advance payment shall include advice to the
shareholder to the effect that acceptance of such payment does not constitute
a waiver of any dissenters' rights. If the corporate action has not been
consummated upon the expiration of the ninety day period after the
shareholders' authorization date, the offer may be conditioned upon the
consummation of such action. Such offer shall be made at the same price per
share to all Dissenting Shareholders of the same class, or if divided into
series, of the same series and shall be accompanied by a balance sheet of the
corporation whose shares the dissenting shareholder holds as of the latest
available date, which shall not be earlier than twelve months before the
making of such offer, and a profit and loss statement or statements for not
less than a twelve month period ended on the date of such balance sheet or, if
the corporation was not in existence throughout such twelve month period, for
<PAGE>
the portion thereof during which it was in existence. Notwithstanding the
foregoing, the corporation shall not be required to furnish a balance sheet or
profit and loss statement or statement to any shareholder to whom such balance
sheet or profit and loss statement or statements were previously furnished,
nor if in connection with obtaining the shareholders' authorization for
consent to the proposed corporate action the shareholders were furnished with
a proxy or information statement, which included financial statements,
pursuant to Regulation 14A or Regulation 14C of the United States Securities
and Exchange Commission. If within thirty days after the making of such
offer, the corporation making the offer and any shareholder agree upon the
price to be paid for his shares, payment therefor shall be made within sixty
days after the making of such offer or the consummation of the proposed
corporate action, whichever is later, upon the surrender of the certificates
for any such shares represented by certificates.

(h) The following procedure shall apply if the corporation fails to make
such offer within such period of fifteen days, or if it makes the offer and
any dissenting shareholder or shareholders fail to agree with it within the
period of thirty days thereafter upon the price to be paid for their shares:

(1) The corporation shall, within twenty days after the expiration
of whichever is applicable of the two periods last mentioned, institute a
special proceeding in the supreme court in the judicial district in which
the office of the corporation is located to determine the rights of
Dissenting Shareholders and to fix the fair value of their shares. If,
in the case of merger or consolidation, the surviving or new corporation
is a foreign corporation without an office in this state, such proceeding
shall be brought in the county where the office of the domestic
corporation, whose shares are to be valued, was located.

(2) If the corporation fails to institute such proceeding within
such period of twenty days, any dissenting shareholder may institute such
proceeding for the same purpose not later then thirty days after the
expiration of such twenty day period. If such proceeding is not
instituted within such thirty day period, all dissenter's rights shall be
lost unless the supreme court, for good cause shown, shall otherwise
direct.

(3) All Dissenting Shareholders, excepting those who, as provided
in paragraph (g), have agreed with the corporation upon the price to be
paid for their shares, shall be made parties to such proceeding, which
shall have the effect of an action quasi in rem against their shares.
The corporation shall serve a copy of the petition in such proceeding
upon each dissenting shareholder who is a resident of this state in the
manner provide by law for the service of a summons, and upon each
nonresident dissenting shareholder either by registered mail and
publication, or in such other manner as is permitted by law. The
jurisdiction of the court shall be plenary and exclusive.

(4) The court shall determine whether each dissenting shareholder,
as to whom the corporation requests the court to make such determination,
is entitled to receive payment for his shares. If the corporation does
not request any such determination or if the court finds that any
dissenting shareholder is so entitled, it shall proceed to fix the value
of the shares, which, for the purposes of this section, shall be the fair
value as of the close of business on the day prior to the shareholders'
authorization date. In fixing the fair value of the shares, the court
shall consider the nature of the transaction giving rise to the
shareholder's right to receive payment for shares and its effects on the
corporation and its shareholders, the concepts and methods then customary
in the relevant securities and financial markets for determining fair
value of shares of a corporation engaging in a similar transaction under
comparable circumstances and all other relevant factors. The court shall
determine the fair value of the shares without a jury and without
referral to an appraiser or referee. Upon application by the corporation
or by any shareholder who is a party to the proceeding, the court may, in
<PAGE>
its discretion, permit pretrial disclosure,including, but not limited to,
disclosure of any expert's reports relating to the fair value of the
shares whether or not intended for use at the trial in the proceeding and
notwithstanding subdivision (d) of section 3101 of the civil practice law
and rules.

(5) The final order in the proceeding shall be entered against the
corporation in favor of each dissenting shareholder who is a party to the
proceeding and is entitled thereto for the value of his shares so
determined.

(6) The final order shall include an allowance for interest at such
rate as the court finds to be equitable, from the date the corporate
action was consummated to the date of payment. In determining the rate
of interest, the court shall consider all relevant factors, including the
date of interest which the corporation would have had to pay to borrow
money during the pendency of the proceeding. If the court finds that the
refusal of any shareholder to accept the corporate offer of payment for
his shares was arbitrary, vexatious or otherwise not in good faith, no
interest shall be allowed to him.

(7) Each party to such proceeding shall bear its own costs and
expenses, including the fees and expenses of its counsel and of any
experts employed by it. Notwithstanding the foregoing, the court may, in
its discretion, apportion and assess all or any part of the costs,
expenses and fees incurred by the corporation against any or all of the
Dissenting Shareholders who are parties to the proceeding, including any
who have withdrawn their notices of election as provided in paragraph
(e), if the court finds that their refusal to accept the corporate offer
was arbitrary, vexations or otherwise not in good faith. The court may,
in its discretion, apportion and assess all or any part of the costs,
expenses and fees incurred by any or all of the Dissenting Shareholders
who are parties to the proceeding against the corporation if the court
finds any of the following: (A) that the fair value of the shares as
determined materially exceeds the amount which the corporation offered to
pay; (B) that no offer or required advance payment was made by the
corporation; (C) that the corporation failed to institute the special
proceeding within the period specified therefor; or (D) that the action
of the corporation in complying with its obligations as provided in this
section was arbitrary, vexatious or otherwise not in good faith. In
making any determination as provided in clause (A), the court may
consider the dollar amount or the percentage, or both, by which the fair
value of the shares as determined exceeds the corporate offer.

(8) Within sixty days after final determination of the proceeding,
the corporation shall pay to each dissenting shareholder the amount found
to be due him, upon surrender of the certificates for any such shares
represented by certificates.

(i) Shares acquired by the corporation upon the payment of the agreed
value therefor or of the amount due under the final order as provided in this
section, shall become treasury shares or be cancelled as provided in section
515 (Reacquired shares), except that, in the case of a merger or
consolidation, they may be held and disposed of as the plan of merger or
consolidation may otherwise provide.

(j) No payment shall be made to a dissenting shareholder under this
section at a time when the corporation is insolvent or when such payment would
make it insolvent. In such event, the dissenting shareholder shall, at his
option:

(1) Withdraw his notice of election, which shall in such event be
deemed withdrawn with the written consent of the corporation; or

(2) Retain his status as a claimant against the corporation and, if
it is liquidated, be subordinated to the rights of creditors of the
<PAGE>
corporation, but have rights superior to the Non-Dissenting Shareholders,
and if it is not liquidated, retain his right to be paid for his shares,
which right the corporation shall be obliged to satisfy when the
restrictions of this paragraph do not apply.

(3) The dissenting shareholder shall exercise such option under
subparagraph (1) and (2) by written notice filed with the corporation
within thirty days after the corporation has given him written notice
that payment for his shares cannot be made because of the restrictions of
this paragraph. If the dissenting shareholder fails to exercise such
option as provided, the corporation shall exercise the option by written
notice given to him within twenty days after the expiration of such
period of thirty days.

(k) The enforcement by a shareholder of his right to receive payment for
his shares in the manner provided herein shall exclude the enforcement by such
shareholder of any other right to which he might otherwise be entitled by
virtue of share ownership, except as provided in paragraph (e), and except
that this section shall not exclude the right of such shareholder to bring or
maintain an appropriate action to obtain relief on the ground that such
corporate action will be or is unlawful or fraudulent as to him.

(l) Except as otherwise expressly provided in this section, any notice
to be given by a corporation to a shareholder under this section shall be
given in the manner provided in section 605 (Notice of meetings of
shareholders).

(m) This section shall not apply to foreign corporations except as
provided in subparagraph (e)(2) of section 907 (Merger or consolidation of
domestic and foreign corporations). (Last amended by L. 1986, Ch 117, Section
3.
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The by-laws of Union Camp provide that each person who now is, was or
hereafter becomes a director or officer shall be indemnified by the registrant
against liabilities and expenses reasonably incurred by or imposed on such
person, including liabilities arising under the Securities Act, in connection
with any action, suit or proceeding in which such person was, is or is
threatened to be made a party by reason of such person now or hereafter being
or having been a director or officer of the registrant, only if (i) such
person believed, in the case of conduct in his or her official capacity, that
such conduct was in the best interests of the registrant, and in all other
cases his or her conduct was at least not opposed to the registrant's best
interests, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such conduct was unlawful, (ii) in connection with
a proceeding by or in the right of the registrant, such person was not
adjudged liable to the registrant and (iii) in connection with any proceeding
charging improper benefit to such person, whether or not involving action in
his or her official capacity, such person was not adjudged liable on the basis
that personal benefit was improperly received by him or her. Such rights of
indemnification are in addition to any other rights to which any such person
may otherwise be entitled. In addition, directors have indemnification
contracts with the registrant that provide for substantially similar
indemnification as that provided for by the by-laws.

The Virginia Stock Corporation Act also provides that a corporation may
indemnify any officer or director against loss and expense reasonably incurred
in connection with a civil suit or proceeding to which such person is a party
by reason of being such officer or director, on condition that such person
acted in good faith and believed his or her conduct was in the corporation's
best interest in the case of conduct in his or her official capacity, or, in
all the other cases, believed his or her conduct was not opposed to the best
interests of the corporation. With respect to a criminal proceeding, a
corporation may indemnify an officer or director under the same conditions as
set forth above if such person had no reasonable cause to believe his or her
conduct was unlawful. With respect to suit brought by or in the right of the
corporation to which an officer or director is adjudged liable,
indemnification may be made only if a court determines such person is fairly
and reasonably entitled to indemnification in view of the relevant
circumstances, provided any such indemnification shall be limited to
reasonable expenses incurred.

The registrant maintains both Directors' and Officers' Liability and
Corporate Reimbursement insurance which provides for payments on behalf of the
directors and officers of all losses of such persons (other than matters
uninsurable under the law) arising from claims, including claims arising under
the Securities Act, for acts or omissions by such persons while acting as
directors or officers.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

2.1 -- Amended and Restated Agreement and Plan of Merger, dated April 13,
1996 as amended and restated as of May 13, 1996, by and among The
Alling & Cory Company, the registrant, and North Merger Corp.
(included as Annex A to the Proxy Statement/Prospectus)(1)

2.2 -- Form of Voting Agreement and Irrevocable Proxy among the
registrant, North Merger Corp. and various shareholders of The
Alling & Cory Company(1)
<PAGE>
2.3 -- Agreement, dated April 13, 1996, by and among the registrant and
The Alling & Cory Company in respect of certain tax matters.(1)

2.4 -- Letter Agreement, dated April 13, 1996, by and among the
registrant, North Merger Corp. and The Alling & Cory Company in
respect of certain contingent liabilities.(2)

4.1 -- Rights Agreement dated January 25, 1996 between Union Camp and The
Bank of New York, as Rights Agent.(3)

5.1 -- Opinion of White & Case(1)

8.1 -- Opinion of Underberg & Kessler LLP(1)

23.1 -- Consent of White & Case (included in opinion filed as Exhibits 5.1
hereto)(1)

23.2 -- Consent of Price Waterhouse LLP(1)

23.3 -- Consent of Arthur Andersen LLP(1)

24.1 -- Power of Attorney (Set forth on II-4)

99.1 -- Employment Agreement by and among Samuel T. Hubbard, Jr. and The
Alling & Cory Company(1)

99.2 -- Amendment to Employment Agreement by and among Samuel T. Hubbard,
Jr. and The Alling & Cory Company(1)

________________
(1) Filed herewith.
(2) To be filed by amendment.
(3) Incorporated by reference to Union Camp's Registration Statement on
Form 8-A, dated February 22, 1996 which became effective on February 29, 1996.

(b) Financial Statement Schedules

See Schedule II.

ITEM 22. UNDERTAKINGS.

(a) The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(b) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of
a Proxy Statement/Prospectus which is a part of this registration statement,
by any person or party who is deemed to be an underwriter within the meaning
of Rule 145(c), the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other Items of the applicable form.

(c) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (b) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
<PAGE>
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(d) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

(e) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the Proxy
Statement/Prospectus pursuant to Items 4, 10(b), 11 or 13 in this Form, within
one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of
the registration statement through the date of responding to the request.

(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wayne, New Jersey on
May 14, 1996.

UNION CAMP CORPORATION

By: /s/ W. Craig McClelland
W. Craig McClelland
Chairman of the Board of Directors
and Chief Executive Officer

POWER OF ATTORNEY

Each of the undersigned hereby appoints James M. Reed and Dirk R.
Soutendijk, and each of them (with full power to act alone), as attorneys and
agents for the undersigned, with full power of substitution for and in the
name, place and stead of the undersigned, to sign and file with the Securities
and Exchange Commission under the Securities Act of 1933 and any and all
amendments (including post-effective amendments) and exhibits to this
Registration Statement and any and all applications, instruments and other
documents to be filed with the Securities and Exchange Commission pertaining
to the registration of the securities covered hereby, with full power and
authority to do and perform any and all acts and things whatsoever requisite
or desirable.

Pursuant to the requirements of the Securities Exchange Act of 1933, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities on May 14, 1996.

<TABLE>

<C> <C>

/s/ W. Craig McClelland Chairman of the Board of Directors and Chief
W. Craig McClelland Executive Officer
(Principal Executive Officer)

/s/ Jerry H. Ballengee President, Chief Operating Officer and Director
Jerry H. Ballengee

/s/ James M. Reed Vice Chairman of the Board of Directors and
James M. Reed Chief Financial Officer
(Principal Financial Officer)

/s/ Robert E. Moore Vice President and Comptroller
Robert E. Moore (Principal Accounting Officer)

/s/ George D. Busbee Director
George D. Busbee

/s/ Raymond E. Cartledge Director
Raymond E. Cartledge

/s/ Colin R. Corness Director
Sir Colin R. Corness
<PAGE>

/s/ Robert D. Kennedy Director
Robert D. Kennedy

Director
Gary E. MacDougal

/s/ Ann D. McLaughlin Director
Ann D. McLaughlin

/s/ George J. Sella, Jr. Director
George J. Sella, Jr.

Director
Ted D. Simmons
</TABLE>
<PAGE>

ARTHUR ANDERSEN LLP

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Alling & Cory Company:

We have audited in accordance with generally accepted auditing standards, the
financial statements of The Alling & Cory Company and subsidiaries included in
this Registration Statement and have issued our report thereon dated March 15,
1996. Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Item 21(b) of
the accompanying Form S-4 is the responsibility of the Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

Rochester, New York,
March 15, 1996

ARTHUR ANDERSEN LLP
<PAGE>
SCHEDULE II

ALLING & CORY AND SUBSIDIARIES

CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

For the Years Ended December 31, 1995, 1994, 1993
(000s)
<TABLE>
<CAPTION>
Balance Charged Net Balance
at to Costs Accounts at End
Beginning and Written of
of Period Expenses Off Period
<S> <C> <C> <C> <C>

YEAR ENDED DECEMBER 31, 1995
Allowance for doubtful accounts . . . . . . . $1,538 $1,751 $1,729 $1,560

YEAR ENDED DECEMBER 31, 1994
Allowance for doubtful accounts . . . . . . . $1,477 $1,411 $1,350 $1,538

YEAR ENDED DECEMBER 31, 1993
Allowance for doubtful accounts . . . . . . . $1,476 $ 929 $ 928 $1,477

</TABLE>

VOTING AGREEMENT AND IRREVOCABLE PROXY

VOTING AGREEMENT AND IRREVOCABLE PROXY (this "Agreement"), dated as of
___________________, 1996, among ______________________ (the "Shareholder"),
UNION CAMP CORPORATION, a Virginia corporation ("Parent") and NORTH MERGER
CORP., a New York corporation ("Merger Sub").

WITNESSETH:

WHEREAS, simultaneously with the execution of this Agreement, Parent,
Merger Sub and The Alling & Cory Company, a New York corporation (the
"Company") are entering into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which Merger Sub will be merged with and into the
Company (the "Merger");

WHEREAS, the Shareholder owns, of record and beneficially, ________ shares
of common stock of the Company (the "Shares", which term shall include for the
purposes of this Agreement all other shares of common stock of the Company
acquired or otherwise received by the Shareholder on or after the date of this
Agreement);

WHEREAS, in order to induce Parent and Merger Sub to execute the Merger
Agreement, the Shareholder has agreed to grant to Merger Sub the proxy and
other rights herein provided;

NOW THEREFORE, for and in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as follows:
<PAGE>
1. Irrevocable Proxy.

(a) Grant of Proxy. The Shareholder hereby constitutes and appoints
James M. Reed and Dirk R. Soutendijk, and each of them, (the "Proxyholders"),
each with the power of substitution, as the lawful proxies for the Shareholder
to vote all of the Shares which the Shareholder is entitled to vote, for and
in the name, place and stead of the Shareholder, at any annual, special or
other meeting of the stockholders of the Company and at any adjournment
thereof, or pursuant to any consent in lieu of a meeting, at which meeting or
in connection with which consent action shall be taken, and such proxy shall
be for the sole purpose of acting (i) in favor of the Merger Agreement and the
Merger, or an amended Merger Agreement designed to enable Parent or any of its
affiliates to acquire the Company with the tax effects set forth in the Merger
Agreement and for the consideration set forth in the Merger Agreement or for
any greater consideration in respect of all of the outstanding shares of
capital stock of the Company, (ii) against any action or agreement that would
impede, interfere with or attempt to discourage the Merger, including, but not
limited to: (A) any extraordinary corporate transaction (other than the
Merger), such as a merger, reorganization or liquidation involving the Company
or any of its subsidiaries; (B) a sale or transfer of a material amount of
assets of the Company or any of its subsidiaries; (C) any change in the
management or Board of Directors of the Company, except as otherwise agreed to
in writing by Merger Sub; (D) any material change in the present
capitalization or dividend policy of the Company; or (E) any other material
change in the Company's corporate structure or business, and (iii) in respect
of any amendments of the Certificate of Incorporation or By-Laws of the
Company required to effect the Merger.

(b) Irrevocability of Proxy. The proxy granted by the preceding
paragraph (a) is coupled with an interest and is therefore not revocable by
the Shareholder without the consent of Parent and Merger Sub. Notwithstanding
the foregoing, such proxy shall terminate upon the termination of the
Agreement.

2. Representations of the Shareholder. The Shareholder represents and
warrants to Parent and Merger Sub that: (i) the Shareholder has the full legal
power and authority to execute and deliver this Agreement, and such execution
and delivery does not violate or conflict with any other contract, commitment,
obligation or other agreement (including without limitation any voting
agreement, stockholders agreement or voting trust) to which the Shareholder is
a party or by which the Shareholder is bound; (ii) the Shareholder has not
previously granted, nor will the Shareholder so grant during the term of this
Agreement, any other proxy in respect of the matters set forth in Section 1
above or enter any other agreement with respect to the Shares; (iii) the
Shareholder has no intention to sell or otherwise distribute any shares of
Parent Stock (as defined in the Merger Agreement) that the Shareholder may
receive in connection with the consummation of the Merger; and (iv) this
Agreement constitutes the legal, valid and binding obligation of the
Shareholder enforceable against the Shareholder in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency and other
similar laws affecting creditors' rights generally or by general principles of
equity.

3. Representations of Parent and Merger Sub. Each of Parent and Merger
Sub represents and warrants to the Shareholder that: (i) such entity is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation with full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; (ii) the execution and delivery of this Agreement by such entity
and the performance by it of its obligations hereunder have been duly
authorized by all necessary corporate action on the part of such entity; and
(iii) this Agreement constitutes the legal, valid and binding obligation of
such entity enforceable against such entity in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency and other
similar laws affecting creditors' rights generally or by general principles of
equity.
<PAGE>
4. No Dissent. The Shareholder agrees that the Shareholder will not
become a Dissenting Shareholder (as such term is defined in the Merger
Agreement) with respect to any of the Shares in connection with the Merger.

5. No Sale Period. The Shareholder hereby covenants with Parent and Merger
Sub that the Shareholder will not offer to sell, assign, transfer or otherwise
dispose of any of the Parent Stock received in exchange for the Shares
pursuant to the Merger Agreement for a period of one year commencing at the
Effective Time (as defined in the Merger Agreement) unless the Shareholder
first obtains a ruling from the Internal Revenue Service or an opinion of
Underberg & Kessler or other nationally or regionally recognized tax counsel
acceptable to Parent, to the effect that such sale, exchange or other
disposition will not adversely affect the status of the Merger as a
reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended.

6. No Inconsistent Actions. (a) During the term of this Agreement the
Shareholder shall not transfer, by sale, gift or otherwise, or encumber in any
manner, any of the Shares.

(b) During the term of this Agreement, the Shareholder shall not,
directly or indirectly, take (or authorize or permit any of Shareholder's
employees, representatives, attorneys, or other agents or affiliates, to so
take) any action, solely as a shareholder of the Company, to (i) solicit or
initiate the submission of any Acquisition Proposal, or (ii) participate in
any way in discussions or negotiations with, or, furnish any information to,
any person (other than Parent or Merger Sub) in connection with, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal; provided, however, that the foregoing shall not in any respect
restrict or affect the Shareholder's right, duty or ability to act as a
director or officer of the Company.

For purposes hereof, "Acquisition Proposal" shall mean any proposed merger
or other business combination, sale or other disposition of any material
amount of assets, sale of shares of capital stock, tender offer or exchange
offer or similar transactions involving the Company or any subsidiary of the
Company.

(c) In addition to the obligations of Shareholder set forth in
paragraph (b), in the event that (i) any person or entity requests any
information from Shareholder, solely as a shareholder of the Company, in
respect of the Company or approaches Shareholder, solely as a shareholder of
the Company, with respect to any Acquisition Proposal in respect of the
Company or any proposal with respect to any Acquisition Proposal in respect of
the Company and (ii) such request or approach is not simultaneously directed
to the Company or any member of its Board of Directors, Shareholder shall
promptly advise Parent of any such request for information or of any such
Acquisition Proposal, or any such proposal with respect to any Acquisition
Proposal, the material terms and conditions of such request or takeover
proposal, and the identity of the person or entity making any such takeover
proposal or inquiry. Shareholder, solely as a shareholder of the Company,
will use its best efforts to keep Parent informed of the status and details
(including amendments or proposed amendments) of any such request, takeover
proposal or inquiry; provided, however, that the foregoing shall not in any
respect restrict or affect the Shareholder's right, duty or ability to act as
a director or officer of the Company.

7. Approval of Merger. The Shareholder agrees that, if requested by the
Proxyholders, the Shareholder will vote or cause to be voted all the Shares in
favor of the Merger and the Merger Agreement (and the documents and
transactions related thereto) at any meeting of the shareholders of the
Company held for the purpose of approving the Merger Agreement and the Merger.

8. Further Assurances and Adjustments. The Shareholder shall, upon the
reasonable request of Parent or Merger Sub, execute and deliver any additional
<PAGE>
documents necessary or desirable to effect any of the terms and provisions of
this Agreement. If at any time the Shares are changed into a different number
of Shares or a different class by reason of any reclassification,
recapitalization, split-up, combination, exchange of Shares or readjustment of
the Company's capital stock or if a stock dividend thereon is declared with a
record date prior to the termination of this Agreement, then the number of
Shares subject to the proxy granted hereby and the voting rights to be
exercised upon exercise thereof shall be appropriately adjusted.

9. Specific Performance. The parties hereto agree that if for any reason
the Shareholder failed to perform any of the Shareholder's obligations under
this Agreement, Parent and Merger Sub would be damaged and that money damages
would not constitute an adequate remedy. Accordingly, Parent and Merger Sub
shall be entitled to specific performance and injunctive and other equitable
relief to enforce the performance of such obligations by the Shareholder.
This provision is without prejudice to any other rights Parent or Merger Sub
may have against the Shareholder for failure to perform any of the
Shareholder's obligations under this Agreement.

10. Term. This Agreement shall commence on the date hereof and shall
end on the earlier of (i) the termination of Merger Agreement in accordance
with its terms and (ii) the Effective Time (as defined in the Merger
Agreement), except that, if the Effective Time occurs, the obligations under
Section 5 hereof shall terminate on the first anniversary of the Effective
Time.

11. Binding Agreement. All authority and rights herein conferred or
agreed to be conferred by the Shareholder shall survive the death or
incapacity of the Shareholder. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns. Merger Sub may, without the consent
of the Shareholder, assign its rights hereunder to Parent or to any wholly-
owned subsidiary of Parent, provided that any such assignment shall not affect
the obligations of Merger Sub or Parent hereunder.

12. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be hand delivered, delivered by
courier with receipt acknowledged or mailed first class, registered with
postage prepaid, as follows:

If to Parent or Merger Sub, to:

Union Camp Corporation
1600 Valley Road
Wayne, New Jersey 07470
Attention: Dirk R. Soutendijk, Esq.

With a copy to:

White & Case
1155 Avenue of the Americas
New York, New York 10036
Attention: Kevin Keogh, Esq.

If to the Shareholder, to:

_______________________________
_______________________________
_______________________________
_______________________________

With a copy to:

Underberg & Kessler LLP
1800 Chase Square
Rochester, New York 14604
<PAGE>
Attention: Alan J. Underberg, Esq.

13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed and to be performed entirely within said state.

14. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which, taken together, shall
constitute one instrument.

15. Severability. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions hereof will not in any way be affected or impaired
thereby, unless the provisions held invalid shall substantially impair the
benefits of the remaining portions of this Agreement.

16. Amendments. This Agreement may not be changed orally, but only by
an agreement in writing signed by Parent, Merger Sub and the Shareholder.

IN WITNESS WHEREOF, each of Parent and Merger Sub has caused this
Agreement to be executed by its officer thereunto duly authorized and the
Shareholder has duly executed this Agreement, all as of the day and year first
written above.

UNION CAMP CORPORATION

_______________________________
Name:
Title:

NORTH MERGER CORP.

_______________________________
Name:
Title:

_______________________________
[Shareholder]

AGREEMENT

This Agreement made on April 13, 1996, by and among Union Camp
Corporation, a Virginia corporation ("Union Camp"), and the Alling & Cory
Company, a New York corporation ("Alling & Cory").

Recitals

WHEREAS, Union Camp, North Merger Corp., a wholly owned subsidiary of
Union Camp, and Alling & Cory have executed an agreement providing for the
acquisition of Alling & Cory by Union Camp by means of a reverse triangular
merger (the "Merger") whereby Alling & Cory will become a subsidiary of Union
Camp; and
<PAGE>
WHEREAS, approximately fifty percent (50%) of Alling & Cory's outstanding
shares are subject to various restrictions (the "Restricted Shares") which
had been imposed for the following reasons:

1. Restrictions on resale were inserted to enable Alling & Cory to
comply with federal and state securities laws; and transfer
restrictions were needed to avoid becoming a reporting company under
the Securities Exchange Act of 1934 and to keep shares out of
unfriendly hands.

2. Certain repurchase options on Restricted Shares at book value would
enable Alling & Cory to protect itself in the event an unfriendly
third party attempted to acquire shares in order to gain control of
Alling & Cory.

3. Certain repurchase options on Restricted Shares would enable Alling
& Cory to protect itself if, in the context of a friendly
acquisition, too many shareholders either voted against the
transaction or exercised dissenter's rights and thereby caused
Alling & Cory to fail to meet a closing condition that would be
typical of such transactions.

4. To protect Alling & Cory in the event that minority shareholders
created difficulties for Alling & Cory in pursuing its corporate
strategies and objectives; and

WHEREAS, upon the Merger becoming effective, Alling & Cory will cancel the
restrictions on the Restricted Shares since the original purposes of such
restrictions will then no longer exist, and since the parties, for various
other reasons such as bank debt restrictions, believe that it will not be
feasible for Alling & Cory to exercise any of its rights set forth with
respect to such restrictions; and

WHEREAS, the shareholders will avoid compensation income arising from such
cancellation provided Alling & Cory does not treat the increase in value of
the Restricted Shares caused by the cancellation as compensatory, and it is an
important condition and inducement to Alling & Cory's agreeing to the Merger
that Union Camp execute this Agreement.

NOW THEREFORE, in consideration of the promises and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:

1. Union Camp will take no actions, and subsequent to the consummation of
the Merger, will not permit Alling & Cory to take any actions, which could
reasonably be expected to be inconsistent with the treatment of the
cancellation of restrictions as noncompensatory.

2. Union Camp agrees that Alling & Cory will not take any income tax
deduction for the cancellation of the restrictions and recognizes that Alling
& Cory will supply each shareholder with a written statement which indicates
that Alling & Cory is not going to treat the cancellation as compensatory and
is not claiming any federal or state income tax deduction for such
cancellation.

3. Notwithstanding the above, in the event that the Internal Revenue
Service ("IRS") asserts that the cancellation of the restrictions on the
Restricted Shares is taxable compensation to any former Alling & Cory
shareholder who receives cash or Union Camp stock in the Merger, and such
shareholder so informs either Union Camp or Alling & Cory, Union Camp or
Alling & Cory shall be permitted to so inform any duly appointed
representative of the Alling & Cory shareholders and to negotiate with such
representative or, if there is none, such shareholder, with regard to
participating in negotiations between the IRS and such shareholder regarding
the treatment of such cancellation as non-compensatory or, if the IRS should
prevail in a contrary position, establishing a compensation deduction as a
result of such contrary position. Upon the mutual agreement of Alling & Cory
<PAGE>
with each respective affected former Alling & Cory shareholder, Alling & Cory
shall be permitted to amend any tax return necessary to claim any tax
deduction properly allowable in respect of such compensation, if such contrary
position is either conceded by the affected shareholder or is determined in a
final and non-appealable decision in the favor of the IRS.

4. Upon allowance by the IRS of the tax deduction, Union Camp agrees that
it will distribute, or cause to be distributed, one-half the value of any
deduction described in paragraph three to the affected former Alling & Cory
shareholder. For purposes of this computation, the value of the deduction
shall be equal to the highest corporate marginal tax rate in effect for the
tax year of the deduction times the amount of deduction. The affected former
Alling & Cory shareholder shall receive the distribution within 30 days of the
date of the allowance of the tax deduction determined to the reasonable
satisfaction of Union Camp increased by the statutory rate of interest for
refunds from the date of the filing of the corporate income tax return or
amended return claiming the deduction to the date of the distribution. The
distribution to the affected former Alling & Cory shareholder shall not be
dependent upon the generation of an actual cash refund or the timing of the
benefit of such deduction.

5. This Agreement is intended to benefit the holders of the Restricted
Shares, and it may be enforced by any such holder as a third party beneficiary
of this Agreement.

IN WITNESS WHEREOF, Union Camp and Alling & Cory have caused this
Agreement to be signed and delivered by the respective duly authorized
officers as of the date first above written.

UNION CAMP CORPORATION

By /s/ James M. Reed
Name: James M. Reed
Title: Vice Chairman of the
Board of Directors and
Chief Financial Officer

THE ALLING & CORY COMPANY

By /s/ Samuel T. Hubbard, Jr.
Name: Samuel T. Hubbard, Jr.
Title: President and Chief
Executive Officer

White & Case

May 14, 1996

Union Camp Corporation
1600 Valley Road
Wayne, New Jersey 07470
<PAGE>

Dear Sirs:

We refer to the Registration Statement on Form S-4 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), in the form in which it is to be filed today by Union Camp Corporation,
a Virginia corporation ("Union Camp"), with the Securities and Exchange
Commission (the "Commission"), relating to the merger of The Alling & Cory
Company, a New York corporation ("Alling & Cory"), with and into North Merger
Corp., a New York corporation and a wholly-owned subsidiary of Union Camp,
pursuant to which shares of Common Stock, $1 par value per share, of Union
Camp (the "Securities") will be issued to holders of Common Stock, $1.25 par
value per share, of Alling & Cory (the "Alling & Cory Common Stock") who elect
to receive the Securities in exchange for their shares of Alling & Cory Common
Stock in the merger.

We have examined the originals, or photostatic or certified copies, of
such records of Union Camp, certificates of officers of Union Camp and of
public officials and such other documents as we have deemed relevant and
necessary as the basis for the opinion set forth below. We have relied upon
such certificates of public officials and such certificates of officers of
Union Camp and statements and information furnished by officers of Union Camp
with respect to the accuracy of material factual matters contained therein
which were not independently established. In such examination we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as photostatic or certified copies, and the authenticity of
the originals of such copies.

Based upon our examination mentioned above, subject to the assumptions
stated, it is our opinion that the Securities, upon issuance by Union Camp as
contemplated in the Registration Statement and any amendments thereto, will
have been duly authorized by Union Camp, will be legally issued, fully paid
and nonassessable.

We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm appearing under the
caption "Legal Matters" in the Proxy Statement/Prospectus forming part of the
Registration Statement. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section
7 of the Securities Act or the Rules and Regulations of the Commission.

Very truly yours,

White & Case

May 10, 1996

The Alling & Cory Company
P.O. Box 20403
Rochester, NY 14602-0403

Ladies & Gentlemen:
<PAGE>
You have requested our opinion regarding the discussions of the material
U.S. federal income tax consequences under the captions "SUMMARY--The Merger--
Certain Federal Income Tax Consequences" and "CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES" in the Proxy Statement/Prospectus (the "Proxy
Statement/Prospectus") which will be included in the Registration Statement on
Form S-4 (the "Registration Statement") filed on the date hereof with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"). The Proxy Statement/Prospectus relates to the
proposed merger (the "Merger") of North Merger Corp., a wholly owned
subsidiary of Union Camp Corporation, with and into The Alling & Cory Company.

In delivering our opinion, we have reviewed the Proxy
Statement/Prospectus and have assumed that the statements therein are and will
remain true, correct and complete. Any variation or difference in the facts
from those set forth or assumed either herein or in the Proxy
Statement/Prospectus may affect the conclusions stated herein. Based on the
Internal Revenue Code of 1986, as amended, the Treasury Regulations
promulgated thereunder and our consideration of other pertinent authorities,
all as in effect on the date hereof, it is our opinion that the statements
made under the captions "SUMMARY--Certain Federal Income Tax Consequences" and
"CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES" in the Proxy
Statement/Prospectus, to the extent that they constitute matters of law or
legal conclusions, are correct in all material respects. We express no
opinion (i) as to whether such statements address all of the United States
federal income tax consequences of the Merger that may be applicable to The
Alling & Cory Company, Union Camp Corporation or any particular stockholder of
the Alling & Cory Company or (ii) as to the United States federal, state,
local, foreign or other tax consequences, other than as set forth in the Proxy
Statement/Prospectus under the caption "SUMMARY--Certain Federal Income Tax
Consequences" and "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES."
There can be no assurance that contrary positions may not be asserted by the
Internal Revenue Service.

This opinion is being furnished in connection with the Proxy
Statement/Prospectus and you may rely upon and refer to it therein. We
consent to the filing of this opinion as an exhibit to the Registration
Statement and to any references to this opinion in the Proxy
Statement/Prospectus.

Very truly yours,

Underberg & Kessler, LLP

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of Union Camp
Corporation of our report dated February 7, 1996, which appears on page 28 of
Union Camp Corporation's 1995 Annual Report to Stockholders, which is
incorporated by reference in its Annual Report on Form 10-K for the year ended
December 31, 1995. We also consent to the incorporation by reference of our
report on the Financial Statement Schedule, which appears on page 30 of such
Annual Report on Form 10-K. We also consent to the references to us under the
<PAGE>
headings "Experts" and "Selected Financial Data" in such Prospectus. However,
it should be noted that Price Waterhouse LLP has not prepared or certified
such "Selected Financial Data."

PRICE WATERHOUSE LLP

Morristown, NJ
May 10, 1996

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
Registration Statement.

Arthur Andersen LLP

Rochester, New York
May 9, 1996

EMPLOYMENT AGREEMENT

AGREEMENT made by and between The Alling & Cory Company, 25 Verona
Street, Rochester, New York 14608 ("Employer"), and Samuel T. Hubbard, Jr., 56
Oak Lane, Rochester, New York 14610 ("Employee").

WHEREAS, Employee is currently employed as the President and Chief
Executive Officer of Employer.

WHEREAS, Employer and Employee desire that upon the occurrence of
any of certain specified events, Employee shall continue to be employed in an
executive capacity and that in such event the terms of this contract shall
apply.

NOW, THEREFORE, in consideration of the foregoing, and other good
and valuable consideration, the receipt of which is hereby acknowledged,
Employer and Employee agree as follows:

1. Definitions. For purposes of this Agreement, a Triggering
Event shall mean (a) the death of Richard M. Harris, Jr.; (b) any disability
of Richard M. Harris, Jr., if, as a result, all of the voting stock of
Employer owned by Mr. Harris, or the right to vote such stock, is transferred
or required to be transferred, pursuant to a power of attorney, shareholders'
agreement or otherwise; (c) a change in ownership of 51% or more of the
Employer's voting stock, the sale of all or substantially all of Employer's
assets or a merger or other reorganization of Employer in which Employer is
not the surviving entity; or (d) the execution of an agreement providing for
<PAGE>
any of the events described in (c) above; provided that no such event shall be
deemed a Triggering Event unless it occurs while Employee is employed by
Employer or, in the event Employee had previously been involuntarily
terminated by Employer, unless such event occurs within six (6) months after
the last day Employee was employed by Employer. The Starting Date shall mean
the date on which a Triggering Event occurs, or if Employee is no longer
employed by Employer on such date, the last day prior thereto on which
Employee was employed by Employer.

2. Employment, Term and Duties. Upon the occurrence of a
Triggering Event, Employer shall employ Employee and Employee hereby accepts
such employment upon the terms hereinafter set forth, in an executive capacity
with similar duties and at the same location as Employee was engaged in on the
Starting Date. The term of this Agreement shall be for a period of three (3)
years commencing on the later of the Starting Date or the date on which the
Triggering Event occurred, subject only to earlier termination as set forth in
Paragraph 5 hereof.

3. Compensation. Employee shall be compensated by Employer for
all services to be rendered by him pursuant to this Agreement in the following
manner:

(a) (i) During the first year of his employment under this
Agreement, a base salary payable at an annual rate equal to the highest
base salary Employee was being paid at any time during the one (1) year
period immediately preceding the Starting Date. Such base salary shall
be paid in accordance with the normal payroll periods of Employer during
the term of this Agreement.

(ii) Notwithstanding the provisions of subparagraph (i) above,
in the event Employee's base salary had not been increased during the six
months immediately preceding the Triggering Event, the cost of living
provisions set forth in Paragraph 3(c) below, shall be applicable to the
base salary payable during the first and all subsequent years of this
Agreement, computed using the highest base salary for the one-year period
immediately preceding the Starting Date as the basis for all cost of
living increases under this Paragraph.

(b) A bonus payable annually in addition to Employee's base salary,
in an amount equal to the amount of any bonus or bonuses paid or payable
to Employee during the one-year period immediately preceding the Starting
Date or pursuant to any incentive compensation plan of Employer. Any
bonus shall become payable on the day before each anniversary of the
commencement of his term of employment hereunder during the term of this
Agreement or any extension hereof.

(c) An annual cost of living increase in Employee's base salary set
forth in Paragraph 3(a) and bonus, if any, set forth in Paragraph 3(b),
computed in the following manner:

(i) The Consumer Price Index (1967 = 100), All Items For All
Urban Consumers (the "Index"), as published by the Bureau of Labor
Statistics of the United States Department of Labor, shall provide
the reference data for the determination of any increase in
Employee's base salary or bonus pursuant to this Agreement.

(ii) The index number for the category entitled "All Items" for
the full calendar month immediately preceding the commencement of
Employee's term of employment under this Agreement (or if Paragraph
3(a)(ii) is applicable, the calendar month that is thirteen months
immediately preceding the commencement of such term), which shall be
the "Base Index Number" ("BIN") and the corresponding index number
for each succeeding anniversary of such month, which shall be the
"Current Index Number" ("CIN") upon which any determination of
additional base salary or bonus due hereunder shall be based.
<PAGE>
(iii) The percentage change between the BIN and the CIN for each
period during the term of this Agreement shall be determined by
dividing the CIN by the BIN, subtracting the interger "1" from the
quotient and multiplying by 100 in accordance with the following
formula:

CIN/BIN - 1 x 100 = percentage change.

(iv) Such percentage change shall be multiplied by Employee's
base salary or bonus, as the case may be, for the first year of this
Agreement and the resulting amount shall be added by Employer to
Employee's base salary or bonus, as the case may be, for each
succeeding year of the term of this Agreement, or any extension
thereof. In the event Paragraph 3(a)(ii) is applicable, such
percentage change shall be multiplied by Employee's highest base
salary for the 12-month period immediately preceding the Starting
Date, and the resulting amount shall be added to Employee's base
salary for the first and each succeeding year of the term of this
Agreement or any extension hereof.

(v) During the term of this Agreement or any extension
thereof, the above computations shall be made annually as soon as
the CIN for the applicable month is published by the United States
Bureau of Labor Statistics. In the event that any future CIN is
less than the corresponding Index Number for the preceding year,
then Employees' base salary and bonus, if any, for the next year
shall be the same as that for the preceding year.

(vi) If the calculation and/or publication of such Index shall
be transferred to any other governmental department, bureau or
agency or shall be discontinued, Employer and Employee shall agree
upon some alternate, reasonably comparable index or method to
compute any such increase in Employee's base salary and bonus, if
any.

4. Benefits. During the term of this Agreement and any extension
thereof, Employee shall be entitled to receive all benefits, including but not
limited to any incentive compensation plan or arrangement, to which he was
entitled under his employment arrangement as it existed on the Starting Date
or if greater, to which he was entitled at any time during the one (1) year
period immediately preceding the Starting Date.

5. Term of Employment. The term of employment pursuant to this
Agreement shall be for a period of three (3) years subject to earlier
termination (a) by Employer upon Employee's death or willful misconduct in the
performance of his duties hereunder, or (b) by Employee, upon thirty (30)
days' notice to Employer.

6. Liquidated Damages. In the event Employer breaches this
Agreement by terminating Employee or making any material change in his duties
except as may be agreed to by Employee or if the location at which he is asked
to perform such duties is moved outside of Monroe County, New York, Employee
shall be entitled to liquidated damages in an amount equal to the entire
unpaid amount of salary, bonus and cash value of any unpaid benefits due
hereunder for the balance of the term of the Agreement, discounted, other than
vested amounts in pension, deferred compensation and similar employee benefit
plans or arrangements which shall not be discounted, at a rate equal to the
average increase in the Index for the three calendar years preceding such
termination. Payment shall be made within ninety (90) days of the occurrence
of the event which constitutes the breach.

7. Notices. Any notice required or desired to be given hereunder
relating to this Agreement shall be effective if in writing and delivered
personally or by registered or certified mail, postage prepaid, return receipt
requested to a party at the address for such party previously set forth in
<PAGE>
this Agreement or to such other address as a party may specify by written
notice to the other party similarly given.

8. Benefit. This Agreement and the rights and obligations
contained herein shall be binding upon and inure to the benefit of Employer,
its successors and assigns, and upon Employee, his legal representatives,
heirs and distributees.

9. Waiver. The waiver by any party of a breach of any provision
of this Agreement shall not operate as or be construed as a waiver of any
subsequent breach.

10. Entire Agreement. This Agreement contains the entire agreement
between the parties and may not be altered, amended or terminated except by an
instrument in writing signed by all parties hereto. In the event of any
conflict between this Agreement and the terms of any of Employer's employment
policies, manuals, or other statements regarding employment generally, now
existing or hereafter promulgated, the terms of this Agreement shall control.

11. Partial Invalidity. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.

12. Applicable Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of New York.

13. Headings. The headings contained in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of January 31st, 1989.

EMPLOYER:

THE ALLING & CORY COMPANY

By: /s/Richard M. Harris, Jr.
Chairman of the Board

EMPLOYEE:

/s/Samuel T. Hubbard, Jr.
Samuel T. Hubbard, Jr.

AMENDMENT

This Amendment, dated May 6, 1996, is made by and between The Alling &
Cory Company, 1059 West Ridge Road, Rochester, New York 14615 ("Employer") and
Samuel T. Hubbard, Jr., 296 Sandringham Road, Rochester, New York 14610
("Employee") relating to that certain Employment Agreement, dated January 31,
1989, between Employer and Employee (the "Employment Agreement").

R E C I T A L S:

A. The Alling & Cory Company, Union Camp Corporation and North Merger
Corp. have entered into an Agreement and Plan of Merger, dated April 13, 1996
<PAGE>
(the "Merger Agreement"), pursuant to which Employer will become a wholly-
owned subsidiary of Union Camp.

B. Employer and Employee have agreed to amend the Employment Agreement
effective upon the closing under the Merger Agreement (the "Closing").

NOW, THEREFORE, the parties agree as follows:

1. The Closing under the Merger Agreement is a "Triggering Event" under
the Employment Agreement.

2. Effective upon the Closing, Paragraph 3(b) of the Employment
Agreement shall be amended to read in its entirety as follows:

"(b) A bonus payable annually in addition to Employee's base salary,
in an amount equal to $40,000 or such greater amount determined in
the sole discretion of Employer. Any bonus shall become payable on
the day before each anniversary of the commencement of his term or
employment hereunder during the term of this Agreement or any
extension hereof."

3. Until the Closing and if the Closing does not occur for any reason
whatsoever, the amendment set forth in Paragraph 2 hereof shall not become
effective and the Employment Agreement shall remain unaltered and in full
force and effect in accordance with its terms.

4. From and after the Closing, the Employment Agreement, as amended
hereby, shall continue in full force and effect in accordance with its terms.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.

THE ALLING & CORY COMPANY

By: /s/ Richard M. Harris, Jr.
Richard M. Harris, Jr.,
Chairman

/s/ Samuel T. Hubbard, Jr.
Samuel T. Hubbard, Jr.