<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 10-K405
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
--------------- ---------------
Commission File Number 1-3506
GEORGIA-PACIFIC CORPORATION
------------------------------------
(exact name of registrant as specified in its Charter)
Georgia 93-0432081
------------------------------- ------------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
133 Peachtree Street, N.E., Atlanta, Georgia 30303
-------------------------------------------- ------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 652-4000
-----------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------------------- ------------------------
Common Stock ($.80 par value) New York Stock Exchange
------------------------------- ------------------------
Junior Preferred Stock Purchase
Rights New York Stock Exchange
------------------------------- ------------------------
Securities registered pursuant to Section 12(g) of the Act: None
--------
<PAGE> 2
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of March 14, 1995, was $6,672,806,651.
As of the close of business on March 14, 1995,the Registrant had
90,552,404 shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Listed hereunder are the documents any portions of which are incorporated
by reference and the Parts of this Form 10-K into which such portions are
incorporated:
1. The Corporation's Annual Report to Shareholders for the fiscal
year ended December 31, 1994, portions of which are incorporated by
reference in Parts I, II and IV of this Form 10-K; and
2. The Corporation's definitive Proxy Statement expected to be dated
March 24, 1995, for use in connection with the Annual Meeting of
Shareholders to be held on May 2, 1995, portions of which are
incorporated by reference into Part III of this Form 10-K.
<PAGE> 3
Georgia-Pacific Corporation
Table of Contents
<TABLE>
<CAPTION>
PART I Page
----
<S> <C> <C>
Item 1. Business 1
Item 2. Properties 1
Item 3. Legal Proceedings 2
Item 4. Submission of Matters to a Vote of Security Holders 3
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 3
Item 6. Selected Financial Data 3
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 4
Item 8. Financial Statements and Supplementary Data 4
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 4
PART III
Item 10. Directors and Executive Officers of the Registrant 5
Item 11. Executive Compensation 8
Item 12. Security Ownership of Certain Beneficial Owners
and Management 8
Item 13. Certain Relationships and Related Transactions 8
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 9
</TABLE>
<PAGE> 4
PART I
ITEM 1. BUSINESS
Georgia-Pacific Corporation (together with its subsidiaries herein referred to
as the "Corporation") was organized in 1927 under the laws of the State of
Georgia.
Information pertaining to the Corporation's business, including industry
segments, set forth under the captions "Building Products," "Pulp and Paper,"
"Management's Discussion and Analysis," Note 2 of the Notes to Financial
Statements, "Sales and Operating Profits by Industry Segment," and "Operating
Statistics" of the Corporation's 1994 Annual Report to Shareholders is
incorporated herein by reference.
TIMBER RESOURCES
Information pertaining to the Corporation's timber resources set forth under the
captions "Building Products - Forest Resources" and "Operating Statistics" of
the Corporation's 1994 Annual Report to Shareholders is incorporated herein by
reference.
MINERAL RESOURCES
Information pertaining to the Corporation's gypsum resources set forth under the
caption "Building Products - Gypsum Products" of the Corporation's 1994 Annual
Report to Shareholders is incorporated herein by reference.
ENVIRONMENT
Information pertaining to environmental issues and the Corporation's
expenditures for pollution control facilities and equipment set forth under the
captions "Environment," "Management's Discussion and Analysis - Investment
Activities" and Note 10 of the Notes to Financial Statements of the
Corporation's 1994 Annual Report to Shareholders is incorporated herein by
reference.
EMPLOYEES
Information pertaining to persons employed by the Corporation set forth under
the caption "Management's Discussion and Analysis - Other" of the Corporation's
1994 Annual Report to Shareholders is incorporated herein by reference.
ITEM 2. PROPERTIES
Information pertaining to the number of manufacturing facilities as of December
31, 1994 and capacity and historical production volumes as of December 31, 1994
by plant type set forth under the caption "Operating Statistics" of the
Corporation's 1994 Annual Report to Shareholders is incorporated herein by
reference.
Information pertaining to the Corporation's lease obligations set forth in Note
1 of the Notes to Financial Statements of the Corporation's 1994 Annual Report
to Shareholders is incorporated herein by reference.
Information concerning the Corporation's timber and mineral resources is
presented under Item 1 of this Form 10-K.
1
<PAGE> 5
ITEM 3. LEGAL PROCEEDINGS
The information contained in Note 10 of the Notes to Financial Statements of the
Corporation's 1994 Annual Report to Shareholders ("Note 10") is incorporated
herein by reference.
ENVIRONMENTAL PROCEEDINGS
Pursuant to the rules of the Securities and Exchange Commission, the Corporation
is required to describe environmental proceedings to which a governmental
authority is a party and which involve potential monetary sanctions, exclusive
of interest and costs, of at least $100,000. Following are descriptions of the
legal proceedings which may meet this criteria.
As last reported in the Corporation's Annual Report on Form 10-K for the year
ended December 31, 1993, about July 20, 1992, the Corporation received from the
Environmental Protection Agency ("EPA") a Notice of Violation ("NOV") alleging
past violations of a construction permit regulating air emissions at the
Corporation's Gaylord, Michigan facility. On March 31, 1993, the Corporation
received a second NOV alleging additional past violations at the same facility.
The Corporation is presently discussing settlement of these claims with the U.S.
Department of Justice and the State of Michigan.
As last reported in the Corporation's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, the Western Environmental Law Center, on behalf of
the Oregon Natural Resources Council ("ONRC"), filed a citizen's suit against
the Corporation (ONRC v. Georgia-Pacific Corporation) in the U.S. District Court
in Oregon on February 16, 1994, alleging violations of wastewater discharge
permit limits at the Corporation's Toledo, Oregon plant. Although the
Corporation believes it is in compliance with all the requirements of the
permit, it has reached a tentative agreement with the plaintiff to settle the
matter on terms involving a payment by the Corporation of less than $100,000.
As reported in the Corporation's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994, in May 1994, the Corporation's Olympia, Washington facility
received a notice of intent to sue from the Atlantic States Legal Foundation
("ASLF"), an environmental group, and a NOV from the Washington Department of
Ecology, each making substantially the same allegations of more than 100
violations of the Corporation's permit to discharge waste water into the City of
Olympia Publicly Owned Treatment Works. On July 13, 1994, the Corporation and
ASLF reached an agreement in principle pursuant to which ASLF has agreed not to
bring suit, and the Corporation has agreed to make a donation of $99,900 to an
environmental project to be mutually agreed upon by the Corporation and ASLF.
Among other conditions outlined in the agreement, the Corporation has also
agreed to pay $12,500 in attorneys' fees and costs. The Washington Department
of Ecology has advised the Corporation that it will not assess a fine or penalty
with respect to its NOV.
As reported in the Corporation's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994, the EPA filed a Complaint and Compliance Order
("Order") against the Corporation on September 30, 1994, for alleged violations
of the Resource Conservation and Recovery Act at its Brunswick, Georgia pulp and
paper mill. The Order alleges disposal of black liquor without a permit,
treatment of wastewater from accumulated lime mud without a permit, and failure
to respond to a spill of sulfuric acid in a manner adequate to minimize the flow
of hazardous waste. The EPA has proposed a penalty of $160,256. The
Corporation responded to the Order on November 4, 1994, and the matter is
currently pending assignment to an EPA administrative law judge for resolution.
DIOXIN PROCEEDINGS
With respect to the cases pending against the Corporation in Mississippi state
court relating to the alleged discharge of dioxin into the Leaf River by a
subsidiary of the Corporation, which cases are further described in Note 10 of
the Notes to Financial Statements, on February 16, 1995, plaintiffs in one such
lawsuit filed a motion requesting the court to set a priority trial date. The
court has not yet ruled on this motion.
2
<PAGE> 6
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of 1994, there were no matters submitted to a vote of
security holders through the solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information with respect to the Market for the Corporation's Common Equity and
Related Stockholder Matters set forth under the captions "Highlights," Note 12
of the Notes to Financial Statements and "Investor Information" of the
Corporation's 1994 Annual Report to Shareholders is incorporated herein by
reference. As of the close of business on March 14, 1995, the Corporation's
common stock price was $74.63.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to Selected Financial Data set forth under the captions
"Selected Financial Data - Operations" and "Selected Financial Data - Financial
Position, End of Year" of the Corporation's 1994 Annual Report to Shareholders
is incorporated herein by reference.
3
<PAGE> 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information with respect to Management's Discussion and Analysis set forth under
the caption "Management's Discussion and Analysis" of the Corporation's 1994
Annual Report to Shareholders is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information with respect to Financial Statements and Supplementary Data as set
forth under the captions "Statements of Income," "Statements of Cash Flows,"
"Balance Sheets," "Statements of Shareholders' Equity," "Notes to Financial
Statements" and "Report of Independent Public Accountants" of the Corporation's
1994 Annual Report to Shareholders is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants on accounting
and financial disclosure within the twenty-four months prior to the date of the
most recent financial statements filed as part of the 1994 Annual Report on Form
10-K.
4
<PAGE> 8
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to Directors of the Corporation is incorporated herein
by reference to the Corporation's Notice of 1995 Annual Meeting of Shareholders
and Proxy Statement expected to be dated March 24, 1995.
Executive Officers of the Registrant
The executive officers of the Corporation are as follows:
<TABLE>
<CAPTION>
Date first
elected as
Name Age an officer Position or office
- ----- --- ---------- --------------------
<S> <C> <C> <C>
A. D. Correll 53 1988 Chairman and Chief Executive
Officer and a Director
W. E. Babin 59 1990 Executive Vice President -
Pulp and Paper
Davis K. Mortensen 62 1982 Executive Vice President -
Building Products
James E. Bostic, Jr. 47 1991 Senior Vice President -
Environmental, Government
Affairs and Communications
Gerard R. Brandt 55 1990 Senior Vice President -
Human Resources
Donald L. Glass 46 1982 Senior Vice President -
Building Products
Manufacturing and Sales
James F. Kelley 53 1993 Senior Vice President - Law
and General Counsel
Clint M. Kennedy 45 1988 Senior Vice President - Pulp,
Bleached Board and Logistics
Maurice W. Kring 58 1983 Senior Vice President -
Containerboard and Packaging
George A. MacConnell 47 1983 Senior Vice President -
Distribution and Millwork
John F. McGovern 48 1983 Senior Vice President - Finance
and Chief Financial Officer
John F. Rasor 51 1983 Senior Vice President -
Forest Resources
</TABLE>
5
<PAGE> 9
<TABLE>
<S> <C> <C> <C>
David W. Reynolds 63 1983 Senior Vice President -
Administration
Lee M. Thomas 50 1993 Senior Vice President - Paper
James E. Terrell 45 1989 Vice President and Controller
</TABLE>
Alston D. Correll has been Chief Executive Officer since May 4, 1993, and
Chairman since December 2, 1993. He served as President and Chief Operating
Officer of the Corporation from August 1991 until May 4, 1993, and as
President and Chief Executive Officer from May 4, 1993, until December 2,
1993. Mr. Correll became an officer of the Corporation in 1988, and served as
Senior Vice President - Pulp and Printing Paper from February 1988 through
March 1989, and Executive Vice President - Pulp and Paper from April 1989
through July 1991.
W.E. Babin has been Executive Vice President - Pulp and Paper since January
1993. Prior to that time, Mr. Babin served as Executive Vice President - Pulp
and Paperboard from May 1992 to January 1993, Senior Vice President -
Containerboard and Packaging from January 1991 to May 1992, and Group Vice
President - Containerboard and Packaging from February 1990 to January 1991.
Prior to joining the Corporation, Mr. Babin held the position of Group Vice
President with Inland Container Corporation (a forest products company) for
approximately eight years.
Davis K. Mortensen has been Executive Vice President - Building Products since
1989. He became an executive officer in 1987, when he was elected Executive
Vice President - Building Products Manufacturing.
James E. Bostic, Jr. has been Senior Vice President - Environmental, Government
Affairs and Communications since February 1995. Prior to that time, he served
as Group Vice President - Communication Papers from April 1992 through January
1995, Group Vice President - Butler Paper and Mail-Well from January 1992 to
April 1992, and Vice President - Butler Paper and Mail-Well from January 1991 to
January 1992. In addition, Mr. Bostic was General Manager, Commercial Products
and Systems Division, from 1990 to 1991 and Director of Sales Operations,
Consumer Paper Group, from 1988 to 1989.
Gerard R. Brandt has been Senior Vice President - Human Resources since February
1995. Prior to that time, he served as Group Vice President - Packaged Products
from July 1993 through January 1995, Group Vice President - Butler Paper and
Mail-Well from May 1992 to July 1993, Vice President - Butler Paper and Mail-
Well from April 1992 to May 1992, Vice President - Communication Papers
Manufacturing from May 1990 to April 1992, and Director - Printing Paper
Manufacturing from December 1988 to May 1990.
Donald L. Glass has been Senior Vice President - Building Products Manufacturing
and Sales since 1991, served as Senior Vice President - Building Products
Manufacturing from 1989 to 1991, and served as Vice President - Gypsum and
Roofing Division from 1987 to 1989.
James F. Kelley joined the Corporation as Senior Vice President - Law and
General Counsel in December 1993. Prior to that time, he was a partner in the
law firm of Jones, Day, Reavis & Pogue.
6
<PAGE> 10
Clint M. Kennedy has been Senior Vice President - Pulp, Bleached Board and
Logistics since February 1995. Prior to that time, he served as Group Vice
President - Pulp and Bleached Board from July 1992 through January 1995, Vice
President - Sales and Marketing, Pulp and Bleached Board from May 1990 to July
1992, and Vice President - Pulp, Kraft Paper and Containerboard Sales from
January 1988 to May 1990.
Maurice W. Kring has been Senior Vice President - Containerboard and Packaging
since February 1994. Prior to that time, he served as Group Vice President -
Containerboard and Packaging from July 1993 until February 1994 and Group Vice
President - Packaged Products from 1987 to July 1993.
George A. MacConnell has been Senior Vice President - Distribution and Millwork
since February 1993, served as Senior Vice President - Distribution and
Specialty Operations from 1989 to February 1993, and served as Senior Vice
President - Distribution Division from 1987 to 1989.
John F. McGovern has been Senior Vice President - Finance since January 1993 and
Chief Financial Officer since February 1994. He served as Vice President -
Finance from 1983 until January 1993, and as Treasurer from March 1992 to
October 1993.
John F. Rasor has been Senior Vice President - Forest Resources since February
1995. Prior to that time, he served as Group Vice President - Forest Resources
from May 1992 through January 1995, Group Vice President - Timber from January
1992 to May 1992, Vice President - Forest Resources from 1991 to January 1992,
Vice President - Eastern Wood Products Manufacturing Division from 1989 to
1991 and Vice President - Mid-Continent Wood Products Manufacturing Division
from 1983 until 1989.
David W. Reynolds has been Senior Vice President - Administration since February
1995. Prior to that time, he served as Senior Vice President - Human Resources
and Administration from 1989 through January 1995.
Lee M. Thomas has been Senior Vice President - Paper since February 1995. Prior
to that time, he served as Senior Vice President - Environmental, Government
Affairs and Communications from February 1994 through January 1995, and Senior
Vice President - Environmental and Government Affairs from March 1993 through
January 1994. Prior to joining the Corporation in March 1993, Mr. Thomas served
as Chairman and Chief Executive Officer of Law Companies Environmental Group,
Inc. (an engineering and environmental services company) from 1989 until March
1993.
James E. Terrell was elected Vice President of the Corporation in January 1991
and has served as Controller since 1989. Mr. Terrell served as Group Controller
- - Administration and Financial Reporting from 1987 to 1989.
The Corporation's Board of Directors elects officers of the Corporation who hold
the offices to which they are elected until the next annual organizational
meeting of the Board. The Compensation Committee recommends to the Board of
Directors the amount of compensation for all officers of the Corporation. The
amount of compensation is then determined by the Board of Directors based on
such recommendation. There are no other arrangements or understandings between
the respective officers and any other person pursuant to which such officers are
elected.
7
<PAGE> 11
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to Executive Compensation is incorporated herein by
reference to the Corporation's Notice of 1995 Annual Meeting of Shareholders and
Proxy Statement expected to be dated March 24, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to Security Ownership of Certain Beneficial Owners and
Management is incorporated herein by reference to the Corporation's Notice of
1995 Annual Meeting of Shareholders and Proxy Statement expected to be dated
March 24, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to Certain Relationships and Related Transactions is
incorporated herein by reference to the Corporation's Notice of 1995 Annual
Meeting of Shareholders and Proxy Statement expected to be dated March 24, 1995.
8
<PAGE> 12
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this Annual Report for
Georgia-Pacific Corporation and subsidiaries:
(1) The Financial Statements, Notes to Financial Statements and the
Report of Independent Public Accountants dated February 16,
1995 listed below are incorporated herein by reference to the
Corporation's 1994 Annual Report to Shareholders:
Statements of Income for the years ended
December 31, 1994, 1993 and 1992.
Statements of Cash Flows for the years ended
December 31, 1994, 1993 and 1992.
Balance Sheets as of December 31, 1994 and 1993.
Statements of Shareholders' Equity for the years ended December
31, 1994, 1993 and 1992.
Notes 1 through 12 of the Notes to Financial Statements.
Report of Independent Public Accountants.
(2) Financial Statement Schedules:
Report of Independent Public Accountants as to Schedule
II Valuation and Qualifying Accounts for the years ended
December 31, 1994, 1993 and 1992.
Schedules other than that listed above are omitted because they
are not required, are inapplicable or the information is
otherwise shown in the financial statements or notes thereto.
(3) Exhibits
The exhibits required to be filed as part of this Annual Report
on Form 10-K are as follows:
NUMBER DESCRIPTION
3.1 Articles of Incorporation, restated as of October 30,
1989.
3.2 Bylaws as amended to date (Filed as Exhibit 3.2 to the
Corporation's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994, and incorporated herein
by this reference thereto).
4.1(i) Credit Agreement, dated as of June 30, 1993, among
Georgia-Pacific Corporation, as borrower, the lenders
named therein, and Bank of America National Trust and
Savings Association, as agent (Filed as Exhibit 4.1(i)
to the Corporation's Quarterly Report on Form
9
<PAGE> 13
10-Q for the quarter ended June 30, 1993, and
incorporated herein by this reference thereto).
4.1(ii) Amendment No. 1 to Credit Agreement, dated as of
November 30, 1994, among Georgia-Pacific Corporation,
the lenders named therein and Bank of America National
Trust and Savings Association, as agent.
4.2 In reliance upon Item 601(b)(4)(iii) of Regulation
S-K, various instruments defining the rights of
holders of long-term debt of the Corporation are not
being filed herewith because the total of securities
authorized under each such instrument does not exceed
10% of the total assets of the Corporation. The
Corporation hereby agrees to furnish a copy of any
such instrument to the Commission upon request.
4.3 Rights Agreement, dated as of July 31, 1989, between
Georgia-Pacific Corporation and First Chicago Trust
Company of New York, with form of Rights Certificate
attached as Exhibit A.
4.4(i) Indenture, dated as of March 1, 1983, between
Georgia-Pacific Corporation and The Chase Manhattan
Bank (National Association), Trustee (Filed as Exhibit
4(a) to the Corporation's Registration Statement on
Form S-3 dated May 9, 1990, and incorporated herein
by this reference thereto).
4.4(ii) First Supplemental Indenture, dated as of July 27,
1988, among Georgia-Pacific Corporation, The Chase
Manhattan Bank (National Association), Trustee, and
Morgan Guaranty Trust Company of New York (Filed as
Exhibit 4.4(ii) to the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1992, and
incorporated herein by this reference thereto).
10.1 Directors Group Life Insurance Program (Filed as
Exhibit 10.1 to the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1993, and
incorporated herein by this reference thereto).*
10.2(i) Executive Retirement Agreement (Officers Retirement
Plan) (Filed as Exhibit 10.2(i) to the Corporation's
Annual Report on Form 10-K for the year ended
December 31, 1991, and incorporated herein by this
reference thereto).*
10.2(ii) Amendment No. 1 to Executive Retirement Agreement
(Officers Retirement Plan) (Filed as Exhibit 10.2(ii)
to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1991, and incorporated
herein by this reference thereto).*
*Management contract or compensatory plan or arrangement required to be filed
pursuant to Item 14(c) of this Annual Report on Form 10-K.
10
<PAGE> 14
10.2(iii) Executive Retirement Agreement (Officers Retirement
Plan), as amended, as in effect after January 1, 1992
(Filed as Exhibit 10.2(iii) to the Corporation's
Annual Report on Form 10-K for the year ended December
31, 1992, and incorporated herein by this reference
thereto).*
10.2(iv) Amendment No. 2 to the Executive Retirement Agreement
of Winfred E. Babin (entered into August 3, 1993)
(Filed as Exhibit 10.2(ix) to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993, and incorporated herein by this
reference thereto).*
10.2(v) Executive Retirement Agreement of James F. Kelley
(entered into December 6, 1993).*
10.2(vi) Amendment No. 2 to Executive Retirement Agreement for
James C. Van Meter (entered into as of February 28,
1994) (Filed as Exhibit 10.2(v) to the Corporation's
Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by this reference
thereto).*
10.3(i) Key Salaried Employees Group Insurance Plan - Pre-1987
Group (As Amended and Restated Effective January 1,
1987) (Filed as Exhibit 10.3(i) to the Corporation's
Annual Report on Form 10-K for the year ended December
31, 1991, and incorporated herein by this reference
thereto).*
10.3(ii) Amendment No. 1 (Effective January 1, 1991) to the Key
Salaried Employees Group Insurance Plan - Pre-1987
Group (As Amended and Restated Effective January 1,
1987) (Filed as Exhibit 10.3(ii) to the Corporation's
Annual Report on Form 10-K for the year ended December
31, 1991, and incorporated herein by this reference
thereto).*
10.3(iii) Key Salaried Employees Group Insurance Plan -
Post-1986 Group (Effective January 1, 1987) (Filed as
Exhibit 10.3(iii) to the Corporation's Annual Report
on Form 10-K for the year ended December 31, 1991, and
incorporated herein by this reference thereto).*
10.3(iv) Amendment No. 1 (Effective January 1, 1991) to the Key
Salaried Employees Group Insurance Plan - Post-1986
Group (Effective January 1, 1987) (Filed as Exhibit
10.3(iv) to the Corporation's Annual Report on Form
10-K for the year ended December 31, 1991, and
incorporated herein by this reference thereto).*
10.3(v) Amendment No. 2 to the Key Salaried Employees Group
Insurance Plan - Post-1986 Group (Effective January
1, 1987) (Filed as Exhibit 10.3(v) to the
Corporation's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, and incorporated
herein by this reference thereto).*
*Management contract or compensatory plan or arrangement required to be filed
pursuant to Item 14(c) of this Annual Report on Form 10-K.
11
<PAGE> 15
10.3(vi) Amendment No. 3 to the Key Salaried Employees Group
Insurance Plan - Post-1986 Group (effective August 1,
1994) (Filed as Exhibit 10.3(vi) to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994, and incorporated herein by this
reference thereto).*
10.4 Directors Retirement Program (Filed as Exhibit 10.4 to
the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1991, and incorporated herein
by this reference thereto).*
10.5(i) 1990 Long-Term Incentive Plan (Filed as Exhibit 10.8
to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1990, and incorporated
herein by this reference thereto).*
10.5(ii) Amendment No. 1 to 1990 Long-Term Incentive Plan
(Filed as Exhibit 10.8(ii) to the Corporation's Annual
Report on Form 10-K for the year ended December 31,
1991, and incorporated herein by this reference
thereto).*
10.6 Retirement Letter Agreement of James C. Van Meter
dated February 28, 1994 (Filed as Exhibit 10.7 to the
Corporation's Annual Report on Form 10-K for the year
ended December 31, 1993, and incorporated herein by
this reference thereto).*
10.7 Consulting Agreement between Georgia-Pacific
Corporation and James C. Van Meter dated February 28,
1994 (Filed as Exhibit 10.8 to the Corporation's
Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by this reference
thereto).*
10.8 1993 Management Incentive Plan (Filed as Exhibit 10.11
to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1992, and incorporated
herein by this reference thereto).*
10.9 1994 Management Incentive Plan (Filed as Exhibit 10.11
to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1993, and incorporated
herein by this reference thereto).*
10.10 1995 Economic Value Incentive Plan.*
10.11(i) 1995 Shareholder Value Incentive Plan.*
10.11(ii) Form of Shareholder Value Incentive Stock Option.*
*Management contract or compensatory plan or arrangement required to be filed
pursuant to Item 14(c) of this Annual Report on Form 10-K.
12
<PAGE> 16
10.12(i) Receivables Purchase Agreement dated as of June 1,
1990, among Georgia-Pacific Corporation, as the
Seller, and Asset Securitization Cooperative
Corporation, Corporate Asset Funding Company, Inc.,
Falcon Asset Securitization Corporation and Matterhorn
Capital Corporation, as the Purchasers, and Canadian
Imperial Bank of Commerce, as the Administrative Agent
(Filed as Exhibit 10.17(i) to the Corporation's Annual
Report on Form 10-K for the year ended December 31,
1990, and incorporated herein by this reference
thereto).
10.12(ii) Receivables Purchase Agreement dated as of June 1,
1990, among Georgia-Pacific Corporation, as the
Seller, and Canadian Imperial Bank of Commerce,
Citibank, N.A. and The First National Bank of Chicago,
as the Secondary Purchasers, and Matterhorn Capital
Corporation and Canadian Imperial Bank of Commerce, as
the Administrative Agent (Filed as Exhibit 10.17(ii)
to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1990, and incorporated
herein by this reference thereto).
10.13 Agreement, effective as of March 15, 1993, among
Georgia-Pacific Corporation, Hercules Incorporated,
and Lee. M. Thomas.
11 Statements of Computation of Per Share Earnings.
12 Statements of Computation of Ratio of Earnings to
Fixed Charges.
13 Portions of Georgia-Pacific Corporation's 1994 Annual
Report to Shareholders. Such Report is not deemed to
be filed with the Commission as part of this Annual
Report on Form 10-K, except for the portions thereof
expressly incorporated by reference.
21 Subsidiaries.
23 Consent of Independent Public Accountants.
24 Powers of Attorney.
27 Financial Data Schedule.
99 Parts 2 and 3 of Article 11 of the Georgia Business
Corporation Code (successor to Articles 11 and 11A of
the Georgia Business Corporation Code and Section
14-2-230 through 14-2-235 and 14-2-235 through
14-2-238 of the Official Code of Georgia Annotated)
(Filed as Exhibit 28 to the Corporation's Annual
Report on Form 10-K for the year ended December 31,
1990, and incorporated herein by this reference
thereto).
(b) Reports on Form 8-K
No Current Reports on Form 8-K were filed during the fourth quarter
of fiscal 1994.
13
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GEORGIA-PACIFIC CORPORATION
(Registrant)
By: /s/ A. D. Correll
----------------------
(A. D. Correll,
Chairman and Chief
Executive Officer)
Date: March 17,1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
As Officers or Directors of GEORGIA-PACIFIC CORPORATION
<S> <C> <C>
/s/ A. D. Correll Director, Chairman and March 17, 1995
- ---------------------------- Chief Executive Officer
(A. D. Correll) (Principal Executive Officer)
/s/ John F. McGovern Senior Vice President - Finance March 17, 1995
- ---------------------------- and Chief Financial Officer
(John F. McGovern) (Principal Financial Officer)
/s/ James E. Terrell Vice President and Controller March 17, 1995
- ---------------------------- (Principal Accounting Officer)
(James E. Terrell)
* Director March 17, 1995
- ----------------------------
(Robert Carswell)
* Director March 17, 1995
- ----------------------------
(Jewel Plummer Cobb)
* Director March 17, 1995
- ----------------------------
(Jane Evans)
* Director March 17, 1995
- ----------------------------
(Donald V. Fites)
* Director March 17, 1995
- ----------------------------
(Harvey C. Fruehauf, Jr.)
</TABLE>
14
<PAGE> 18
<TABLE>
<S> <C> <C>
* Director March 17, 1995
- ----------------------------
(Richard V. Giordano)
* Director March 17, 1995
- ----------------------------
(David R. Goode)
* Director March 17, 1995
- ----------------------------
(T. Marshall Hahn, Jr.)
* Director March 17, 1995
- ----------------------------
(M. Douglas Ivester)
* Director March 17, 1995
- ----------------------------
(Francis Jungers)
* Director March 17, 1995
- ----------------------------
(Robert E. McNair)
* Director March 17, 1995
- ----------------------------
(Louis W. Sullivan)
* Director March 17, 1995
- ----------------------------
(James B. Williams)
*By/s/ James F. Kelley
- ----------------------------
(James F. Kelley)
</TABLE>
*As Attorney-in-Fact for the Directors or Officers by whose names an asterisk
appears.
15
<PAGE> 19
Report of Independent Public Accountants as to Schedule
To the Shareholders and the Board of
Directors of Georgia-Pacific Corporation:
We have audited in accordance with generally accepted auditing standards, the
financial statements of Georgia-Pacific Corporation incorporated by reference in
this Form 10-K, and have issued our report thereon dated February 16, 1995. Our
audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. Schedule II is the responsibility of the
Corporation's management and is presented for the purpose 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.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 16, 1995
16
<PAGE> 20
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Millions)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- ----------- ---------- ---------- ---------- ----------
Additions
--------------------------
Balance at Charged to Charged to Balance at
beginning costs and other end
Description of period expenses accounts Deductions of period
- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1994
- ----------------------------
Allowance for doubtful
accounts $ 32 $ 3 $ 1 (2) $ (8) (3) $ 28
---------- ---------- ---------- ---------- ----------
Year ended December 31, 1993
- ----------------------------
Allowance for doubtful
accounts $ 35 $ 8 $ - $ (11) (1) $ 32
---------- ---------- ---------- ---------- ----------
Year ended December 31, 1992
- ----------------------------
Allowance for doubtful
accounts $ 36 $ 10 $ 1 (2) $ (12) (3) $ 35
---------- ---------- ---------- ---------- ----------
</TABLE>
(1) Includes $2 million deducted with the sale of Butler Paper Company assets
and $9 million of accounts written off.
(2) Recoveries of accounts previously written off.
(3) Accounts written off.
17
<PAGE> 21
GEORGIA-PACIFIC CORPORATION
INDEX TO EXHIBITS
FILED WITH THE ANNUAL REPORT
ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1994
NUMBER DESCRIPTION
3.1 Articles of Incorporation, restated as of October 30, 1989. (1)
3.2 Bylaws as amended to date (Filed as Exhibit 3.2 to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994,
and incorporated herein by this reference thereto).
4.1(i) Credit Agreement, dated as of June 30, 1993, among Georgia-Pacific
Corporation, as borrower, the lenders named therein, and Bank of
America National Trust and Savings Association, as agent (Filed as
Exhibit 4.1(i) to the Corporation's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1993, and incorporated herein by this
reference thereto).
4.1(ii) Amendment No. 1 to Credit Agreement, dated as of November 30, 1994,
among Georgia-Pacific Corporation, the lenders named therein and Bank
of America National Trust and Savings Association, as agent. (1)
4.2 In reliance upon Item 601(b)(4)(iii) of Regulation S-K, various
instruments defining the rights of holders of long-term debt of the
Corporation are not being filed herewith because the total of
securities authorized under each such instrument does not exceed 10%
of the total assets of the Corporation. The Corporation hereby agrees
to furnish a copy of any such instrument to the Commission upon
request.
4.3 Rights Agreement, dated as of July 31, 1989, between Georgia-Pacific
Corporation and First Chicago Trust Company of New York, with form of
Rights Certificate attached as Exhibit A. (1)
4.4(i) Indenture, dated as of March 1, 1983, between Georgia-Pacific
Corporation and The Chase Manhattan Bank (National Association),
Trustee (Filed as Exhibit 4(a) to the Corporation's Registration
Statement on Form S-3 dated May 9, 1990, and incorporated herein by
this reference thereto).
4.4(ii) First Supplemental Indenture, dated as of July 27, 1988, among
Georgia-Pacific Corporation, The Chase Manhattan Bank (National
Association), Trustee, and Morgan Guaranty Trust Company of New York
(Filed as Exhibit 4.4(ii) to the Corporation's Annual Report on Form
10-K for the year ended December 31, 1992, and incorporated herein
by this reference thereto).
(1) Filed via EDGAR
18
<PAGE> 22
10.1 Directors Group Life Insurance Program (Filed as Exhibit 10.1 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by this reference thereto).
10.2(i) Executive Retirement Agreement (Officers Retirement Plan) (Filed as
Exhibit 10.2(i) to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1991, and incorporated herein by this
reference thereto).
10.2(ii) Amendment No. 1 to Executive Retirement Agreement (Officers Retirement
Plan) (Filed as Exhibit 10.2(ii) to the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1991, and incorporated
herein by this reference thereto).
10.2(iii) Executive Retirement Agreement (Officers Retirement Plan), as amended,
as in effect after January 1, 1992 (Filed as Exhibit 10.2(iii) to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1992, and incorporated herein by this reference thereto).
10.2(iv) Amendment No. 2 to the Executive Retirement Agreement of Winfred E.
Babin (entered into August 3, 1993) (Filed as Exhibit 10.2(ix) to the
Corporation's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993, and incorporated herein by this reference
thereto).
10.2(v) Executive Retirement Agreement of James F. Kelley (entered into
December 6, 1993). (1)
10.2(vi) Amendment No. 2 to Executive Retirement Agreement for James C. Van
Meter (entered into as of February 28, 1994) (Filed as Exhibit 10.2(v)
to the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1993, and incorporated herein by this reference thereto).
10.3(i) Key Salaried Employees Group Insurance Plan - Pre-1987 Group (As
Amended and Restated Effective January 1, 1987) (Filed as Exhibit
10.3(i) to the Corporation's Annual Report on Form 10-K for the year
ended December 31, 1991, and incorporated herein by this reference
thereto).
10.3(ii) Amendment No. 1 (Effective January 1, 1991) to the Key Salaried
Employees Group Insurance Plan - Pre-1987 Group (As Amended and
Restated Effective January 1, 1987) (Filed as Exhibit 10.3(ii) to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1991, and incorporated herein by this reference thereto).
10.3(iii) Key Salaried Employees Group Insurance Plan - Post-1986 Group
(Effective January 1, 1987) (Filed as Exhibit 10.3(iii) to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1991, and incorporated herein by this reference thereto).
(1) Filed via EDGAR
19
<PAGE> 23
10.3(iv) Amendment No. 1 (Effective January 1, 1991) to the Key Salaried
Employees Group Insurance Plan - Post-1986 Group (Effective January 1,
1987) (Filed as Exhibit 10.3(iv) to the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1991, and incorporated
herein by this reference thereto).
10.3(v) Amendment No. 2 to Key Salaried Employees Group Insurance Plan -
Post-1986 Group (effective January 1, 1987) (Filed as Exhibit
10.3(v) to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, and incorporated herein by this
reference thereto).
10.3(vi) Amendment No. 3 to Key Salaried Employees Group Insurance Plan -
Post-1986 Group (effective August 1, 1994) (Filed as Exhibit
10.3(vi) to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, and incorporated herein by this
reference thereto).
10.4 Directors Retirement Program (Filed as Exhibit 10.4 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1991, and incorporated herein by this reference thereto).
10.5(i) 1990 Long-Term Incentive Plan (Filed as Exhibit 10.8 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1990, and incorporated herein by this reference thereto).
10.5(ii) Amendment No. 1 to 1990 Long-Term Incentive Plan (Filed as Exhibit
10.8(ii) to the Corporation's Annual Report on Form 10-K for the year
ended December 31, 1991, and incorporated herein by this reference
thereto).
10.6 Retirement Letter Agreement of James C. Van Meter dated February 28,
1994 (Filed as Exhibit 10.7 to the Corporation's Annual Report on Form
10-K for the year ended December 31, 1993, and incorporated herein by
this reference thereto).
10.7 Consulting Agreement between Georgia-Pacific Corporation and James C.
Van Meter dated February 28, 1994 (Filed as Exhibit 10.8 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by this reference thereto).
10.8 1993 Management Incentive Plan (Filed as Exhibit 10.11 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1992, and incorporated herein by this reference thereto).
10.9 1994 Management Incentive Plan (Filed as Exhibit 10.11 to the
Corporation's Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by this reference thereto).
10.10 1995 Economic Value Incentive Plan. (1)
10.11(i) 1995 Shareholder Value Incentive Plan. (1)
(1) Filed via EDGAR
20
<PAGE> 24
10.11(ii) Form of Shareholder Value Incentive Stock Option. (1)
10.12(i) Receivables Purchase Agreement dated as of June 1, 1990, among
Georgia-Pacific Corporation, as the Seller, and Asset Securitization
Cooperative Corporation, Corporate Asset Funding Company, Inc., Falcon
Asset Securitization Corporation and Matterhorn Capital Corporation,
as the Purchasers, and Canadian Imperial Bank of Commerce, as the
Administrative Agent (Filed as Exhibit 10.17(i) to the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1990, and
incorporated herein by this reference thereto).
10.12(ii) Receivables Purchase Agreement dated as of June 1, 1990, among
Georgia-Pacific Corporation, as the Seller, and Canadian Imperial
Bank of Commerce, Citibank, N.A. and The First National Bank of
Chicago, as the Secondary Purchasers, and Matterhorn Capital
Corporation and Canadian Imperial Bank of Commerce, as the
Administrative Agent (Filed as Exhibit 10.17(ii) to the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1990, and
incorporated herein by this reference thereto).
10.13 Agreement, effective as of March 15, 1993, among Georgia-Pacific
Corporation, Hercules Incorporated, and Lee M. Thomas. (1)
11 Statements of Computation of Per Share Earnings. (1)
12 Statements of Computation of Ratio of Earnings to Fixed Charges. (1)
13 Portions of Georgia-Pacific Corporation's 1994 Annual Report to
Shareholders. Such Report is not deemed to be filed with the
Commission as part of this Annual Report on Form 10-K, except for the
portions thereof expressly incorporated by reference. (1)
21 Subsidiaries. (1)
23 Consent of Independent Public Accountants. (1)
24 Powers of Attorney. (1)
27 Financial Data Schedule. (1)
99 Parts 2 and 3 of Article 11 of the Georgia Business Corporation Code
(successor to Articles 11 and 11A of the Georgia Business Corporation
Code and Section 14-2-230 through 14-2-235 and 14-2-235 through 14-2-
238 of the Official Code of Georgia Annotated) (Filed as Exhibit 28 to
the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1990, and incorporated herein by this reference thereto).
(1) Filed via EDGAR
21
<PAGE> 1
EXHIBIT 3.1
RESTATED ARTICLES OF INCORPORATION
OF
GEORGIA-PACIFIC CORPORATION
PURSUANT TO SECTION 14-2-1007 OF THE
GEORGIA BUSINESS CORPORATION CODE
I.
The name of the Corporation is:
"GEORGIA-PACIFIC CORPORATION."
II.
The Restated Articles of Incorporation do not contain any amendment
requiring shareholder approval, were approved by the Board of Directors of the
Corporation on October 27, 1989, and restate all those provisions of the
Articles of Incorporation of the Corporation (being the Restated Articles of
Incorporation dated May 23, 1980, as amended on May 11, 1984, May 5, 1988, May
3, 1989 and August 3, 1989 by the filing of articles of amendment), so that, as
amended and restated, said Restated Articles of Incorporation shall read as
follows:
RESTATED ARTICLES OF INCORPORATION
OF
GEORGIA-PACIFIC CORPORATION
ARTICLE I.
The name of the Corporation is:
"GEORGIA-PACIFIC CORPORATION."
ARTICLE II.
The Corporation is organized pursuant to the provisions of the Georgia
Business Corporation Code.
ARTICLE III.
The purposes for which the Corporation is organized are to purchase and
sell timber and timber products and gypsum and gypsum products; to engage in a
general import and export business and the handling of timber, timber products,
gypsum and gypsum products; to conduct manufacturing operations employed in the
conversion of forest products and gypsum into manufactured materials of all
kinds; to deal
1
<PAGE> 2
in every way in and with mineral products and chemicals of every kind; to buy,
sell, and deal in any and all forms of real and personal property (including,
without limitation, timbered lands); to conduct all forms of merchandising; to
operate any business connected with or convenient to the doing of any or all of
the businesses herein set forth; and to conduct any other business and engage in
any other activities not specifically prohibited to corporations for profit
under the laws of the State of Georgia. The Corporation shall have all powers
necessary to conduct such businesses and engage in such activities, including,
but not limited to, the powers enumerated in the Georgia Business Corporation
Code or any amendment thereto.
ARTICLE IV.
The maximum number of shares of stock of the Corporation authorized to be
outstanding at any one time shall consist of three classes, one of 10,000,000
shares of Preferred Stock, without par value, one of 25,000,000 shares of Junior
Preferred Stock, without par value, and one of 150,000,000 shares of Common
Stock of the par value of 80 cents each.
The authorized but unissued shares of Preferred Stock, Junior Preferred
Stock and Common Stock shall be available for issue and sale at any time and
from time to time, either in whole or in part, and upon such terms and
conditions and for such consideration, not less than the par value thereof, if
any, as may be provided by the Board of Directors of the Corporation.
The Common Stock shall be deemed to be stock entitled to vote within the
meaning of any of the provisions of the laws of the State of Georgia and each
holder of Common Stock shall, at every meeting of shareholders, be entitled to
one vote, in person or by proxy, for each share of such stock held by him.
The following is a description of the terms, provisions, preferences,
rights, voting powers, restrictions and qualifications of the Preferred Stock:
A. Dividends on the Preferred Stock shall be cumulative.
B. At any time after full cumulative dividends for all previous dividend
periods shall have been paid on the Preferred Stock and each other class of
stock (if any) ranking prior to or on a parity with the Preferred Stock as
to dividends, and after declaring and setting aside a sum sufficient for
the payment in full of the quarterly dividends on the Preferred Stock and
each such other class of stock for the then current dividend period, then,
but not prior thereto, out of any funds of the Corporation lawfully
available therefor, dividends may be declared on the class or classes of
stock junior to the Preferred Stock as to dividends, subject to the
respective terms and provisions (if any) applying thereto. If at any time
the Corporation shall fail to pay full cumulative dividends on any shares
of the Preferred Stock, thereafter until such dividends shall have been
paid or declared and set apart for payment, the Corporation shall not
purchase, redeem or otherwise acquire for consideration any shares of any
class of stock then outstanding and ranking on a parity with or junior to
the Preferred Stock.
2
<PAGE> 3
C. In the event of any voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Corporation, after payment or provision
for payment of the debts, preferred stock senior to the Preferred Stock and
other liabilities of the Corporation and before any distribution to the
holders of the Common Stock, the Junior Preferred Stock or any other
subordinate preferred stock, the holders of each series of the Preferred
Stock shall be entitled to receive out of the net assets of the Corporation
an amount in cash for each share equal to the amount fixed and determined
by the Board of Directors in the resolution providing for the issuance of
the particular series of Preferred Stock, plus all dividends accumulated
and unpaid on each such share of Preferred Stock up to the date fixed for
distribution, and no more. If the above-stated amount payable in such
event to the holders of the Preferred Stock cannot be paid in full, the
holders of the shares of Preferred Stock shall share ratably in any
distribution of assets in proportion to the sums which would have been paid
to them upon such distribution if all sums payable were paid and discharged
in full. Neither the merger or consolidation of the Corporation, nor the
sale, lease or conveyance of all or a part of its assets, shall be deemed
to be a liquidation, dissolution or winding up of the affairs of the
Corporation.
D. The Preferred Stock shall rank prior to the Common Stock and the
Junior Preferred Stock both as to dividends and assets, and any class or
classes of stock shall be deemed to rank (i) prior to the Preferred Stock
either as to dividends or assets if the holders of such class or classes
shall be entitled to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of the Preferred Stock; (ii) on a
parity with the Preferred Stock either as to dividends or assets, whether
or not the dividend rates, dividend payment dates or redemption or
liquidation prices per share thereof be different from those of the
Preferred Stock, if the holders of such class or classes of stock shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in proportion
to their respective dividend rates or liquidation prices, without
preference or priority one over the other with respect to the holders of
the Preferred Stock; and (iii) junior to the Preferred Stock either as to
dividends or assets, if the rights of the holders of such class or classes
shall be subject or subordinate to the rights of the holders of the
Preferred Stock in respect of the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may
be.
E. All shares of Preferred Stock shall be identical except that the Board
of Directors of the Corporation is hereby expressly authorized and
empowered to divide the class of Preferred Stock into one or more series,
and, prior to the issuance of any of such shares in any particular series,
to fix and determine, in the manner provided by law, the number of shares
to constitute such series as well as the provisions of such series
described in clauses (a) through (h) below, and, after a series has been
established hereunder by the Board of Directors and unless otherwise
specifically provided in the original resolution establishing such series,
to increase or decrease at any time and from time to time, in the manner
provided by law, the number of shares included in such series (but not
below the number of shares thereof then issued) by subsequent resolutions
adopted by the Board of Directors (provided, however, that the Board of
Directors shall not be authorized to increase or decrease the number of
shares included in the Series A Adjustable Rate Convertible Preferred
Stock, in the Series B Adjustable Rate Convertible Preferred Stock or in
the Series B Adjustable Rate Convertible Preferred Stock (2nd Issue)):
3
<PAGE> 4
(a) The distinctive designation of such series;
(b) The rate of dividends, the times of payment and the date from
which the dividends shall be accumulated;
(c) Whether shares can be redeemed and, if so, the redemption price
and terms and conditions of redemption;
(d) The amount payable upon shares in the event of voluntary or
involuntary liquidation;
(e) Purchase, retirement or sinking fund provisions, if any, for the
redemption or purchase of shares;
(f) The terms and conditions, if any, on which shares may be
converted;
(g) Whether or not shares have voting rights, and the extent of any
such voting rights (including, without limitation, the right to elect
directors); and
(h) Any other preferences, rights, restrictions and qualifications of
shares of such class or series permitted by law and these Articles of
Incorporation.
F. Each share of Preferred Stock within an individual series shall be
identical in all respects with the other shares of such series, except for
such changes in dates from which dividends shall first accrue and other
details which because of the passage of time are required to be made in
order for the substantive rights of the holders of the shares of such
series to be identical.
The following is a description of the terms, provisions, preferences,
rights, voting powers, restrictions and qualifications of the Junior Preferred
Stock:
A. Dividends on the Junior Preferred Stock shall be cumulative.
B. At any time after full cumulative dividends for all previous dividend
periods shall have been paid on the Junior Preferred Stock and each other
class of stock ranking prior to or on a parity with the Junior Preferred
Stock as to dividends, and after declaring and setting aside a sum
sufficient for the payment in full of the quarterly dividends on the Junior
Preferred Stock and each such other class of stock for the then current
dividend period, then, but not prior thereto, out of any funds of the
Corporation lawfully available therefor, dividends may be declared on the
class or classes of stock junior to the Junior Preferred Stock as to
dividends, subject to the respective terms and provisions (if any) applying
thereto. If at any time the Corporation shall fail to pay full cumulative
dividends on any shares of the Junior Preferred Stock, thereafter until
such dividends shall have been paid or declared and set apart for payment,
the Corporation shall not purchase, redeem or otherwise acquire for
consideration any shares of any class of stock then outstanding and ranking
on a parity with or junior to the Junior Preferred Stock.
4
<PAGE> 5
C. In the event of any voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Corporation, after payment or provision
for payment of the debts, the Preferred Stock, any other preferred stock
senior to the Junior Preferred Stock and other liabilities of the
Corporation and before any distribution to the holders of the Common Stock
or any subordinate preferred stock, the holders of each series of the
Junior Preferred Stock shall be entitled to receive out of the net assets
of the Corporation an amount in cash for each share equal to the amount
fixed and determined by the Board of Directors in the resolution providing
for the issuance of the particular series of Junior Preferred Stock, plus
all dividends accumulated and unpaid on each such share of Junior Preferred
Stock up to the date fixed for distribution, and no more. If the above-
stated amount payable in such event to the holders of the Junior Preferred
Stock cannot be paid in full, the holders of the shares of Junior Preferred
Stock shall share ratably in any distribution of assets in proportion to
the sums which would have been paid to them upon such distribution if all
sums payable were paid and discharged in full. Neither the merger or
consolidation of the Corporation, nor the sale, lease or conveyance of all
or a part of its assets, shall be deemed to be a liquidation, dissolution
or winding up of the affairs of the Corporation.
D. The Junior Preferred Stock shall rank prior to the Common Stock both
as to dividends and assets, and any class or classes of stock shall be
deemed to rank (i) prior to the Junior Preferred Stock either as to
dividends or assets if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of the Junior Preferred Stock; (ii) on a parity
with the Junior Preferred Stock either as to dividends or assets, whether
or not the dividend rates, dividend payment dates or redemption or
liquidation prices per share thereof be different from those of the Junior
Preferred Stock, if the holders of such class or classes of stock shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in proportion
to their respective dividend rates or liquidation prices, without
preference or priority one over the other with respect to the holders of
the Junior Preferred Stock; and (iii) junior to the Junior Preferred Stock
either as to dividends or assets, if the rights of the holders of such
class or classes shall be subject or subordinate to the rights of the
holders of the Junior Preferred Stock in respect of the receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be.
5
<PAGE> 6
E. All shares of Junior Preferred Stock shall be identical except that
the Board of Directors of the Corporation is hereby expressly authorized
and empowered to divide the class of Junior Preferred Stock into one or
more series, and, prior to the issuance of any of such shares in any
particular series, to fix and determine, in the manner provided by law, the
number of shares to constitute such series as well as the provisions of
such series described in clauses (a) through (h) below, and, after a series
has been established hereunder by the Board of Directors and unless
otherwise specifically provided in the original resolution establishing
such series, to increase or decrease at any time and from time to time, in
the manner provided by law, the number of shares included in such series
(but not below the number of shares thereof then issued) by subsequent
resolutions adopted by the Board of Directors:
(a) The distinctive designation of such series;
(b) The rate of dividends, the times of payment and the date from
which the dividends shall be accumulated;
(c) Whether shares can be redeemed and, if so, the redemption price
and terms and conditions of redemption;
(d) The amount payable upon shares in the event of voluntary or
involuntary liquidation;
(e) Purchase, retirement or sinking fund provisions, if any, for the
redemption or purchase of shares;
(f) The terms and conditions, if any, on which shares may be
converted;
(g) Whether or not shares have voting rights, and the extent of any
such voting rights (including, without limitation, the right to elect
directors); and
(h) Any other preferences, rights, restrictions and qualifications of
shares of such class or series, permitted by law and these Articles of
Incorporation.
F. Each share of the Junior Preferred Stock within an individual series
shall be identical in all respects with the other shares of such series,
except for such changes in dates from which dividends shall first accrue
and other details which because of the passage of time are required to be
made in order for the substantive rights of the holders of the shares of
such series to be identical.
G. The Board of Directors of the Corporation is hereby expressly
authorized and empowered to declare and pay dividends, in the manner
provided by law, in shares of Junior Preferred Stock in respect to any
class of stock of the Corporation, without the consent of any of the
holders of Junior Preferred Stock then outstanding.
6
<PAGE> 7
The Corporation shall have the full power to purchase and otherwise acquire
and dispose of its own shares and securities granted by the laws of the State of
Georgia and shall have the right to purchase its shares out of its unreserved
and unrestricted capital surplus available therefor, out of its unreserved and
unrestricted earned surplus available therefor, as well as out of any other
funds legally available therefor. Any Preferred Stock and Junior Preferred
Stock reacquired by the Corporation shall automatically be cancelled upon such
reacquisition but shall remain as authorized Preferred Stock and Junior
Preferred Stock hereunder.
No holder of any stock of any class of the Corporation shall, as such
holder, have any preemptive or preferential right of subscription for any stock
of any class of the Corporation or for any obligations convertible into stock or
for any right of subscription for, or any warrant or option for, the purchase of
any thereof, other than such (if any) as the Board of Directors of the
Corporation in its discretion may determine from time to time.
The following are the voting powers, designation, preferences and relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions, in addition to those previously set forth in this
Article IV, of "Series A Junior Preferred Stock":
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Preferred Stock" and the number of shares
constituting such series shall be 5,000,000.
Section 2. Dividends and Distributions. (A) Subject to the prior and
superior rights of the holders of any shares of any other series of Junior
Preferred Stock or any other shares of preferred stock of the Corporation
ranking prior and superior to the shares of Series A Junior Preferred Stock
with respect to dividends, each holder of one one-hundredth (1/100) of a
share (a "Unit") of Series A Junior Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for that purpose, (i) quarterly dividends payable in cash
on the first day of January, April, July and October in each year (each
such date being a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of such Unit
of Series A Junior Preferred Stock, in an amount per Unit (rounded to the
nearest cent) equal to the greater of (a) $0.35 or (b) subject to the
provision for adjustment hereinafter set forth, the aggregate per share
amount of all cash dividends declared on shares of the Common Stock since
the immediately preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of a
Unit of Series A Junior Preferred Stock, and (ii) subject to the provision
for adjustment hereinafter set forth, quarterly distributions (payable in
kind) on each Quarterly Dividend Payment Date in an amount per Unit equal
to the aggregate per share amount of all non-cash dividends or other
distributions (other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock, by reclassification
or otherwise) declared on shares of Common Stock since the immediately
preceding Quarterly Dividend Payment Date, or with respect to the first
Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series A Junior Preferred
7
<PAGE> 8
Stock. In the event that the Corporation shall at any time after July 31,
1989 (the "Rights Declaration Date") (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock or (iii) combine outstanding
shares of Common Stock into a smaller number of shares, then in each such
case the amount to which the holder of a Unit of Series A Junior Preferred
Stock was entitled immediately prior to such event pursuant to the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common
Stock that are outstanding immediately after such event and the denominator
of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on Units
of Series A Junior Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the shares of
Common Stock (other than a dividend payable in shares of Common Stock);
provided, however, that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $0.35 per Unit on the Series A Junior Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding Unit of Series A Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issuance of such Unit of
Series A Junior Preferred Stock, unless the date of issuance of such Unit
is prior to the record date for the first Quarterly Dividend Payment Date,
in which case, dividends on such Unit shall begin to accrue from the date
of issuance of such Unit, or unless the date of issuance is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of Units of Series A Junior Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
Units of Series A Junior Preferred Stock in an amount less than the
aggregate amount of all such dividends at the time accrued and payable on
such Units shall be allocated pro rata on a unit-by-unit basis among all
Units of Series A Junior Preferred Stock at the time outstanding. The
Board of Directors may fix a record date for the determination of holders
of Units of Series A Junior Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no
more than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of Units of Series A Junior
Preferred Stock shall have the following voting rights:
8
<PAGE> 9
(A) Subject to the provision for adjustment hereinafter set forth,
each Unit of Series A Junior Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the shareholders
of the Corporation. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on outstanding shares
of Common Stock payable in shares of Common Stock, (ii) subdivide
outstanding shares of Common Stock or (iii) combine the outstanding shares
of Common Stock into a smaller number of shares, then in each such case the
number of votes per Unit to which holders of Units of Series A Junior
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which
shall be the number of shares of Common Stock outstanding immediately after
such event and the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
Units of Series A Junior Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a
vote of shareholders of the Corporation.
(C) (i) If at any time dividends on any Units of Series A Junior
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, then during the period (a "default period") from the
occurrence of such event until such time as all accrued and unpaid
dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all Units of Series A Junior Preferred Stock
then outstanding shall have been declared and paid or set apart for
payment, all holders of Units of Series A Junior Preferred Stock, voting
separately as a class, shall have the right to elect two Directors.
(ii) During any default period, such voting rights of the
holders of Units of Series A Junior Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii)
of this Section 3(C) or at any annual meeting of shareholders, and
thereafter at annual meetings of shareholders, provided that neither
such voting rights nor any right of the holders of Units of Series A
Junior Preferred Stock to increase, in certain cases, the authorized
number of Directors may be exercised at any meeting unless one-third
of the outstanding Units of Series A Junior Preferred Stock shall be
present at such meeting in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect the exercise by
the holders of Units of Series A Junior Preferred Stock of such
rights. At any meeting at which the holders of Units of Series A
Junior Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting
separately as a class, to elect Directors to fill up to two vacancies
in the Board of Directors, if any such vacancies may then exist, or,
if such right is exercised at an annual meeting, to elect two
Directors. If the number which may be so elected at any special
meeting does not amount to the required number, the holders of the
Series A Junior Preferred Stock shall have the right to make such
increase in the number of Directors as shall be necessary to permit
the election by them of the required number. After the holders of
Units of Series A Junior Preferred Stock shall have exercised their
right to elect Directors during any default period, the number of
Directors shall not be increased or decreased except as approved by a
vote of the holders of Units of Series A Junior Preferred Stock as
herein provided or pursuant to the rights of any equity securities
ranking senior to the Series A Junior Preferred Stock.
9
<PAGE> 10
(iii) Unless the holders of Series A Junior Preferred Stock
shall, during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may order, or
any shareholder or shareholders owning in the aggregate not less than
25% of the total number of Units of Series A Junior Preferred Stock
outstanding may request in writing, the calling of a special meeting
of the holders of Units of Series A Junior Preferred Stock, which
meeting shall thereupon be called by the Secretary of the Corporation.
Notice of such meeting and of any annual meeting at which holders of
Units of Series A Junior Preferred Stock are entitled to vote pursuant
to this paragraph (C) (iii) shall be given to each holder of record of
Units of Series A Junior Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the books of
the Corporation. Such meeting shall be called for a time not earlier
than 10 days and not later than 60 days after such order or request or
in default of the calling of such meeting within 60 days after such
order or request, such meeting may be called on similar notice by any
shareholder or shareholders owning in the aggregate not less than 25%
of the total number of outstanding Units of Series A Junior Preferred
Stock.
(iv) During any default period, the holders of shares of Common
Stock and Units of Series A Junior Preferred Stock, and other classes
or series of stock of the Corporation, if applicable, shall continue
to be entitled to elect all the Directors until the holders of Units
of Series A Junior Preferred Stock shall have exercised their right to
elect two Directors voting as a separate class, after the exercise of
which right (x) the Directors so elected by the holders of Units of
Series A Junior Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in paragraph (C)(ii) of this Section
3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of capital stock which
elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders
of a particular class of capital stock shall include Directors elected
by such Directors to fill vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Units of Series A Junior Preferred Stock as a
separate class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Units of Series A Junior Preferred
Stock as a separate class shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the Articles
or by-laws irrespective of any increase made pursuant to the
provisions of paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law
or in the Articles or by-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining
Directors.
10
<PAGE> 11
(vi) The provisions of this paragraph (C) shall govern the
election of Directors by holders of Units of Series A Junior Preferred
Stock during any default period notwithstanding any provisions of the
Articles to the contrary.
(D) Except as set forth herein, holders of Units of Series A Junior
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with
holders of Shares of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions. (A) Whenever quarterly dividends
or other dividends or distributions payable on Units of Series A Junior
Preferred Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on outstanding Units of Series A Junior Preferred Stock shall
have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of junior stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of parity stock, except dividends paid ratably on Units
of Series A Junior Preferred Stock and shares of all such parity stock
on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of such Units and all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any parity stock, provided, however, that the Corporation
may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any junior stock; or
(iv) purchase or otherwise acquire for consideration any Units
of Series A Junior Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such Units.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any Units of Series A Junior Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled automatically upon the
acquisition thereof. All such Units shall, upon their cancellation, become
authorized but unissued Units of Junior Preferred Stock and may be reissued
as part of a new series of Junior Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
11
<PAGE> 12
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
junior stock unless the holders of Units of Series A Junior Preferred Stock
shall have received, subject to adjustment as hereinafter provided in
paragraph (B), the greater of either (a) $.01 per Unit plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
earned or declared, to the date of such payment, or (b) the amount per Unit
equal to the aggregate per share amount to be distributed to holders of
shares of Common Stock, or (ii) to the holders of shares of parity stock,
unless simultaneously therewith distributions are made ratably on Units of
Series A Junior Preferred Stock and all other shares of such parity stock
in proportion to the total amounts to which the holders of Units of Series
A Junior Preferred Stock are entitled under clause (i)(a) of this sentence
and to which the holders of shares of such parity stock are entitled, in
each case upon such liquidation, dissolution or winding up.
(B) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares
of Common Stock, or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, then in each such case the aggregate amount to
which holders of Units of Series A Junior Preferred Stock were entitled
immediately prior to such event pursuant to clause (i)(b) of paragraph (A)
of this Section 6 shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common
Stock that are outstanding immediately after such event and the denominator
of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or converted into
other stock or securities, cash and/or any other property, then in any such
case Units of Series A Junior Preferred Stock shall at the same time be
similarly exchanged for or converted into an amount per Unit (subject to
the provision for adjustment hereinafter set forth) equal to the aggregate
amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common
Stock is converted or exchanged. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock, or (iii) combine outstanding
Common Stock into a smaller number of shares, then in each such case the
amount set forth in the immediately preceding sentence with respect to the
exchange or conversion of Units of Series A Junior Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which
shall be the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which shall be the
number of shares of Common Stock that were outstanding immediately prior to
such event.
12
<PAGE> 13
Section 8. Redemption. The Units of Series A Junior Preferred Stock
shall not be redeemable.
Section 9. Ranking. The Units of Series A Junior Preferred Stock
shall rank junior to all other series of the Junior Preferred Stock and to
any other class of preferred stock that hereafter may be issued by the
Corporation as to the payment of dividends and the distribution of assets,
unless the terms of any such series or class shall provide otherwise.
Section 10. Amendment. The Articles, including, without limitation,
this resolution, shall not hereafter be amended, either directly or
indirectly, or through merger or consolidation with another corporation, in
any manner that would alter or change the powers, preferences or special
rights of the Series A Junior Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority or more
of the outstanding Units of Series A Junior Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. The Series A Junior Preferred Stock
may be issued in Units or other fractions of a share, which Units or
fractions shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Junior Preferred Stock.
Section 12. Certain Definitions. As used herein with respect to the
Series A Junior Preferred Stock, the following terms shall have the
following meanings:
(A) The term "Common Stock" shall mean the class of stock designated
as the common stock, par value $.80 per share, of the Corporation at the
date hereof or any other class of stock resulting from successive changes
or reclassification of the common stock.
(B) The term "junior stock" (i) as used in Section 4, shall mean the
Common Stock and any other class or series of capital stock of the
Corporation hereafter authorized or issued over which the Series A Junior
Preferred Stock has preference or priority as to the payment of dividends
and (ii) as used in Section 6, shall mean the Common Stock and any other
class or series of capital stock of the Corporation over which the Series A
Junior Preferred Stock has preference or priority in the distribution of
assets on any liquidation, dissolution or winding up of the Corporation.
(C) The term "parity stock" (i) as used in Section 4, shall mean any
class or series of stock of the Corporation hereafter authorized or issued
ranking pari passu with the Series A Junior Preferred Stock as to dividends
and (ii) as used in Section 6, shall mean any class or series of capital
stock ranking pari passu with the Series A Junior Preferred Stock in the
distribution of assets on any liquidation, dissolution or winding up.
ARTICLE V.
The Corporation shall have perpetual existence.
13
<PAGE> 14
ARTICLE VI.
Subject to the provisions of Section 22-512 of the Georgia Business
Corporation Code, the Board of Directors of the Corporation shall have the power
to distribute a portion of the assets of the Corporation, in cash or in
property, to holders of shares of the Corporation out of the capital surplus of
the Corporation.
ARTICLE VII.
A. Notwithstanding any provision of the Bylaws of the Corporation (and
notwithstanding that some lesser percentage may be permissible in law), the
following provisions of the Bylaws of the Corporation, as in effect on March 3,
1984, shall not be amended, modified or repealed by the shareholders of
the Corporation, nor shall any provision of the Bylaws of the Corporation
inconsistent with such provisions be adopted by the shareholders of the
Corporation, except pursuant to the affirmative vote of at least seventy-five
percent (75%) of the voting power of the outstanding capital stock of the
Corporation entitled to vote generally in the election of directors, voting as a
class: Article I, Section 2; Article II, Section 1(A); Article II, Section
1(D); Article II, Section 8; and Article II, Section 9.
B. Notwithstanding that some lesser percentage may be permissible in law,
no provision of Article IV of these Articles of Incorporation regarding Junior
Preferred Stock of the Corporation and no provision of this Article VII shall be
amended, modified or repealed by the shareholders of the Corporation, nor shall
any provision of these Articles of Incorporation inconsistent with any such
provision be adopted by the shareholders of the Corporation, except pursuant to
the affirmative vote of at least seventy-five percent (75%) of the voting power
of the outstanding capital stock of the Corporation entitled to vote generally
in the election of directors, voting as a class.
ARTICLE VIII.
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of duty of care
or other duty as a Director, except for liability (i) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation, (ii)
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) for the types of liability set forth in
Section 14-2-831 of the Georgia Business Corporation Code or any successor
provision, or (iv) for any transaction from which the Director received an
improper personal benefit. Neither the amendment or repeal of this Article nor
the adoption of any provision of these Articles of Incorporation inconsistent
with this Article shall eliminate or adversely affect any right or protection of
a Director of the Corporation existing immediately prior to such amendment,
repeal or adoption.
ARTICLE IX.
In discharging the duties of their respective positions and in
determining what is believed to be in the best interests of the Corporation,
the Board of Directors, committees of the Board of Directors and individual
directors, in addition to considering the effects of any action on the
Corporation and its shareholders, may consider the interests of the employees,
customers, suppliers and creditors of the Corporation and its subsidiaries, the
communities in which offices or other establishments of the Corporation and its
subsidiaries are located, and all other factors such directors consider
pertinent; provided, however, that no constituency shall be deemed to have been
given any right to consideration hereby.
14
<PAGE> 15
IN WITNESS WHEREOF, GEORGIA-PACIFIC CORPORATION has caused these Restated
Articles of Incorporation to be executed and its corporate seal to be affixed
and has caused its seal and the execution hereof to be attested, all by its duly
authorized officers, this 30th day of October, 1989.
GEORGIA-PACIFIC CORPORATION
By: /s/ Diane Durgin
-----------------------
Diane Durgin
Senior Vice President -
Law
[CORPORATE SEAL]
Attest:
/s/ Cornelia B. Brewer
- ----------------------
Cornelia B. Brewer
Assistant Secretary
15
<PAGE> 1
EXHIBIT 4.1(ii)
AMENDMENT NO. 1
TO CREDIT AGREEMENT
This Amendment No. 1 to Credit Agreement (this "Amendment") is entered into
as of November 30, 1994 among GEORGIA-PACIFIC CORPORATION, a Georgia corporation
(the "Company"), the various financial institutions named on the signature pages
hereof (the "Lenders") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION as Agent for the Lenders (the "Agent").
WHEREAS, the Company, the Lenders and the Agent are party to that certain
Credit Agreement dated as of June 30, 1993 (the "Credit Agreement"); and
WHEREAS, the Company has requested the Lenders to extend the Termination
Date, to decrease the rate of interest and fees payable by the Company and to
make certain other changes to the Credit Agreement and the Lenders are willing
to agree to the Company's request on the terms and subject to the conditions set
forth herein, including the addition of Georgia-Pacific West, Inc., a newly
formed Subsidiary of the Company to which the Company will transfer certain of
its assets, including certain assets located in the States of California, Oregon
and Washington, as a Principal Subsidiary providing a Subsidiary Guaranty;
NOW THEREFORE, the parties hereto hereby agree as follows:
Section 1. Defined Terms. Unless otherwise defined in this Amendment,
defined terms used herein shall have the meanings assigned to such terms in the
Credit Agreement.
Section 2. Amendments to Credit Agreement.
(a) The definition of the term "Principal Subsidiary" contained in
Section 1.01 of the Credit Agreement is hereby amended to read as follows:
"`Principal Subsidiary' means each of Great Northern Nekoosa
Corporation, a Maine corporation; Brunswick Pulp & Paper Company, a
Delaware corporation; Georgia-Pacific West, Inc. an Oregon
corporation; Leaf River Forest Products, Inc., a Delaware
corporation; Nekoosa Packaging Corporation, a Delaware corporation,
and Nekoosa Papers Inc., a Wisconsin corporation."
(b) The definition of the term "Termination Date" contained in
Section 1.01 of the Credit Agreement is hereby amended to read as follows:
"`Termination Date' means November 30, 1999".
(c) Paragraph (a) of Section 2.09 of the Credit Agreement is hereby
amended to read as follows:
"(a) Each Committed Loan shall bear interest on the outstanding
principal amount thereof from the date when made until paid in full,
at the option of the Company, as set forth in its Notice of Borrowing
or in its Notice of Conversion/Continuation,
(i) if such Loan is a Reference Rate Loan, at a rate per
annum equal to the Adjusted Reference Rate; or
<PAGE> 2
(ii) if such Loan is a Eurodollar Loan, at a rate per
annum equal to the sum of (A) LIBOR plus (B) the applicable
margin, as follows:
<TABLE>
<CAPTION>
Debt Rating Applicable
Margin on
Eurodollar Loans
Moody's S&P
<S> <C> <C>
Baa1 or higher or BBB+ or higher .3125%
Baa2 or Baa3 or BBB or BBB-- .37%
Ba1 or lower or BB+ or lower .625%
</TABLE>
provided, however, that if at any time no Debt Rating is
available, the applicable margin shall be .625%."
(d) Clause (i) of paragraph (a) of Section 3.01 of the Credit
Agreement is hereby amended to read as follows:
"(i) The Company agrees to pay to the Agent for the account of
each Lender, a commitment fee on the average daily unused portion of
such Lender's Commitment from the Closing Date until the Termination
Date at a rate per annum as follows:
<TABLE>
<CAPTION>
Debt Rating Commitment Fee
Moody's S&P
<S> <C> <C>
Baa1 or higher or BBB+ or higher .0625%
Baa2 or Baa3 or BBB or BBB-- .0800%
Ba1 or lower or BB+ or lower .125%
</TABLE>
provided, however, that if at any time no Debt Rating is available,
the commitment fee shall be .125% per annum."
(e) Clause (i) of paragraph (b) of Section 3.01 of the Credit
Agreement is hereby amended to read as follows:
<PAGE> 3
"(i) The Company agrees to pay to the Agent for the account of
each Lender, a facility fee from the Closing Date until the
Termination Date at a rate per annum times the Commitment of such
Lender (regardless of utilization thereof) as follows:
<TABLE>
<CAPTION>
Debt Rating Facility Fee
Moody's S&P
<S> <C> <C>
Baa1 or higher or BBB+ or higher .0625%
Baa2 or Baa3 or BBB or BBB-- .0800%
Ba1 or lower or BB+ or lower .12S%
</TABLE>
provided, however, that if at any time no Debt Rating is available the
facility fee shall be .125% per annum."
(f) [Intentionally Omitted]
(g) [Intentionally Omitted]
(h) Clause (i) of paragraph (a) of Section 11.08 of the Credit
Agreement is hereby amended to read as follows:
"(a) (i) Any Lender may with the prior consent of the Company
(which will not be unreasonably withheld) at any time assign to one or
more commercial banks all or any fraction of its Commitment and
outstanding Committed Loans in a minimum amount of $25,000,000 and in
multiples of $1,000,000 in excess thereof or, if its Commitment is
less than $25,000,000, in the amount of its Commitment."
Section 3. Representations and Warranties.
The Company represents and warrants that:
(a) (i) the execution and delivery of this Amendment have been duly
authorized by all necessary corporate action; and (ii) do not violate any
Requirement of Law nor conflict with or result in the breach of any
Contractual Obligation binding on the Company; and
(b) after giving effect to this Amendment, the representations and
warranties of the Company contained in Article V of the Credit Agreement
(except for representations and warranties relating to a particular point
in time) and in each other Loan Document are true and correct in all
material respects as if made on and as of the date of this Amendment and no
Default or Event of Default has occurred and is continuing.
<PAGE> 4
Section 4. Effectiveness.
(a) This Amendment shall become effective (and interest, the
commitment fee and the facility fee shall commence accruing at the rates
specified in Sections 2.09 and 3.01 of the Credit Agreement as amended by
paragraphs (c), (d) and (e) of Section 2 of this Amendment) as of the date
first above written when the Agent has received the following:
(i) counterparts hereof executed by the Company, all the
Lenders and the Agent and signed by the Principal Subsidiaries of the
Company as consenting parties;
(ii) copies of the resolutions of the Board of Directors of the
Company authorizing the execution and delivery of this Amendment and
the performance of the transactions contemplated hereby, certified by
the Secretary or an Assistant Secretary of the Company;
(iii) counterparts of Amendment No. 1 to the Subsidiary
Guaranty executed by all Principal Subsidiaries of the Company,
including Georgia-Pacific West, Inc., the Agent and the Lenders as
consenting parties; and
(iv) copies of the resolutions of the Board of Directors of
Georgia-Pacific West, Inc. authorizing the execution and delivery by
Georgia-Pacific West, Inc. of Amendment No. 1 to the Subsidiary
Guaranty and Georgia-Pacific West Inc.'s becoming a party to the
Subsidiary Guaranty.
(b) Upon the effectiveness of this Amendment (i) each reference in
the Credit Agreement to "this Agreement", "hereunder", hereof", "herein",
or words of like import shall mean and be a reference to the Credit
Agreement as amended hereby and (ii) each reference in each other Loan
Document to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.
(c) Except as specifically amended above, the Credit Agreement shall
remain in full force and effect.
(d) The execution, delivery, and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of any Lender or the Agent under the Credit
Agreement or any of the other Loan Documents, nor constitute a waiver of
any provision of any of the Loan Documents.
Section 5. Miscellaneous.
(a) This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument.
(b) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
<PAGE> 5
GEORGIA-PACIFIC CORPORATION
By: /s/ John F. McGovern
Title: Senior Vice President - Finance
and Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ Laura Knight
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Bob Kilgannon
Title: Senior Vice President
BANK OF AMERICA ILLINOIS
(Formerly known as Continental Bank)
By: /s/ Bob Kilgannon
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Alan F. Lyster, Jr.
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ W. E. Zarrett
Title: Relationship Manager
THE BANK OF TOKYO TRUST COMPANY
By: /s/ William J. Darby
Title: Assistant Vice President
BANQUE PARIBAS
By: /s/ Richard G. Burrows
Title: Vice President
By: /s/ Stanley P. Berkman
Title: Senior Vice President
<PAGE> 6
CANADIAN IMPERIAL BANK OF
COMMERCE
By: /s/ Roger Colden
Title: Authorized Signatory
CITIBANK N.A.
By: /s/ Barbara A. Cohen
Title: Vice President
COMMERZBANK AG, ATLANTA AGENCY
By: /s/ Eric Kagerer
Title: Assistant Vice President
By: /s/ Claudia Rost
Title: Assistant Treasurer
CREDIT LYONNAIS
NEW YORK BRANCH
By: /s/ W.J. Buckley
Title: Vice President and Manager
CREDIT LYONNAIS
CAYMAN ISLAND BRANCH
By: /s/ W.J. Buckley
Title: Authorized Signature
CREDIT SUISSE
By: /s/ William P. Murray
Title: Member of Senior Management
By: /s/ Kristinn R. Kristinsson
Title: Associate
<PAGE> 7
THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ Steven B. Failey
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ T. Mitsui
Title: Vice President & Manager
MIDLAND BANK PLC, NEW YORK
BRANCH
By: /s/ Patricia E. Apelian
Title: Director
NATIONAL WESTMINSTER BANK PLC
By: /s/ David Apps
Title: Vice President
NATIONSBANK OF NORTH CAROLINA,
N.A.
By: /s/ R. Saasvand
Title: Assistant Vice President
THE SANWA BANK, LIMITED
By: /s/ John E. Hanson
Title: Senior Vice President
THE SUMITOMO BANK LIMITED
By: /s/ Hiroyuki Ueda
Title: Joint General Manager
<PAGE> 8
THE TORONTO-DOMINION BANK
By: /s/ Lisa Allison
Title: Manager Credit Administration
TRUST COMPANY BANK
By: /s/ J. Christopher Deisley
Title: Vice President
By: /s/ Dennis James
Title: Banking Officer
UNION BANK OF SWITZERLAND
By: /s/ Robert W. Casey, Jr.
Title: Vice President
By: /s/ Laurent Chaix
Title: Assistant Vice President
WACHOVIA BANK OF GEORGIA
By: /s/ J. Timothy Tolar
Title: Vice President
Consenting Parties:
BRUNSWICK PULP AND PAPER COMPANY
By: /s/ John F. McGovern
Title: Senior Vice President - Finance
and Chief Financial Officer
GEORGIA-PACIFIC WEST, INC.
By: /s/ John F. McGovern
Title: Senior Vice President - Finance
and Chief Financial Officer
<PAGE> 9
GREAT NORTHERN NEKOOSA CORPORATION
By: /s/ John F. McGovern
Title: Senior Vice President - Finance
and Chief Financial Officer
LEAF RIVER FOREST PRODUCTS, INC.
By: /s/ John F. McGovern
Title: Senior Vice President - Finance
and Chief Financial Officer
NEKOOSA PACKAGING CORPORATION
By: /s/ John F. McGovern
Title: Senior Vice President - Finance
and Chief Financial Officer
NEKOOSA PAPERS INC.
By: /s/ John F. McGovern
Title: Senior Vice President - Finance
and Chief Financial Officer
<PAGE> 1
EXHIBIT 4.3
GEORGIA-PACIFIC CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
Rights Agreement
Dated as of July 31, 1989
<PAGE> 2
<TABLE>
<CAPTION>
Table of Contents
Section
- --------
<S> <C>
1 Certain Definitions
2 Appointment of Rights Agent
3 Issue of Rights Certificates
4 Form of Rights Certificates
5 Countersignature and Registration
6 Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates
7 Exercise of Rights; Purchase Price; Expiration Date of Rights
8 Cancellation and Destruction of Rights Certificates
9 Reservation and Availability of Capital Stock
10 Junior Preferred Stock Record Date
11 Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights
12 Certificate of Adjusted Purchase Price or Number of Shares
13 Consolidation, Merger or Sale or Transfer of Assets or Earning Power
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
14 Fractional Rights and Fractional Shares
15 Rights of Action
16 Agreement of Rights Holders
17 Rights Certificate Holder Not Deemed a Shareholder
18 Concerning the Rights Agent
19 Merger or Consolidation or Change of Name of Rights Agent
20 Duties of Rights Agent
21 Change of Rights Agent
22 Issuance of New Rights Certificates
23 Redemption and Termination
24 Notice of Certain Events
25 Notices
26 Supplements and Amendments
27 Successors
28 Determinations and Actions by the Board of Directors, etc.
29 Benefits of this Agreement
30 Severability
31 Governing Law
32 Counterparts
33 Descriptive Headings
</TABLE>
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
Exhibit C -- Articles of Amendment
<PAGE> 4
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July 31, 1989 (the "Agreement"), between
Georgia-Pacific Corporation, a Georgia corporation (the "Company"), and First
Chicago Trust Company of New York, a New York corporation (the "Rights Agent").
WHEREAS, on July 31, 1989 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a distribution of one
Right for each share of common stock, par value $.80 per share, of the Company
(the "Company Common Stock") outstanding at the Close of Business on August 10,
1989 (the "Record Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant hereto) for each share of Company
Common Stock issued between the Record Date (whether originally issued or
delivered from the Company's treasury) and, except as otherwise provided in
Section 22, the Distribution Date, each Right initially representing the right
to purchase upon the terms and subject to the conditions hereinafter set forth
one Unit of Series A Junior Preferred Stock (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the Company
or any of its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity) which shall be the Beneficial Owner of 15% or more of
the shares of Company Common Stock then outstanding.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
(i) of which such Person or any of such Person's Affiliates or Associates
is considered to be a "beneficial owner" under Rule 13d-3 of the General Rules
and Regulations under the Exchange Act (the "Exchange Act Regulations") as in
effect on the date hereof; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own", any securities under this
subparagraph (i) as a result of an agreement, arrangement or understanding to
vote such securities if such agreement, arrangement or understanding (A)
arises solely from a revocable proxy given in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the Exchange Act and the Exchange Act Regulations, and (B) is not
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report);
(ii) which are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate of such other Person) with which such
Person (or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in
the proviso to subparagraph (i) of this paragraph (c)) or disposing of such
securities; or
(iii) which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right to acquire (whether such right is
exercisable immediately or only after the passage of time or upon the
satisfaction of conditions) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise; provided,
however, that under this paragraph (c) a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", (A) securities tendered
pursuant to a tender or exchange offer made in accordance with Exchange Act
Regulations by such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, (B)
securities that may be issued upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities that may be
<PAGE> 5
issued upon exercise of Rights from and after the occurrence of a Triggering
Event, which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(c) or Section 22 hereof (the "Original Rights") or pursuant to Section 11.(i)
hereof in connection with an adjustment made with respect to any Original
Rights.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in New York City are authorized or obligated
by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(f) "Common Stock" of any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or, if such Person
shall have no capital stock, the equity securities or other equity interest
having power to control or direct the management of such Person.
(g) "Company Common Stock" has the meaning set forth in the Whereas
Clause.
(h) "Distribution Date" has the meaning set forth in Section 3(a).
(i) "Expiration Date" has the meaning set forth in Section 7(a).
(j) "Independent Director" shall mean a member of the Board of Directors
of the Company who is not, and has never been, an officer or employee of the
Company, who is not an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or a representative or nominee of an Acquiring Person or of any
such Affiliate or Associate, and who either (i) was a member of the Board of
Directors of the Company prior to the date hereof or (ii) subsequently becomes a
director of the Company and whose election or nomination for election is
approved or recommended by a vote of a majority of the Board of Directors of the
Company, which majority includes a majority of the Independent Directors then on
the Board of Directors.
(k) "Junior Preferred Stock" shall mean the Series A Junior Preferred
Stock, without par value, of the Company having the voting powers, designation,
preferences and relative, participating, optional or other special rights and
qualifications, limitations and restrictions described in the Articles of
Amendment set forth as Exhibit C hereto.
(l) "Person" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange
Act.
(m) "Purchase Price" has the meaning set forth in Section 7(b).
(n) "Record Date" has the meaning set forth in the Whereas Clause.
(o) "Right" has the meaning set forth in the Whereas Clause.
(p) "Rights Certificate" has the meaning set forth in Section 3(a).
(q) "Rights Dividend Declaration Date" has the meaning set forth in the
Whereas Clause.
(r) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii)(A), (B) or (C) hereof.
(s) "Section 13 Event" shall mean any event described in clause (x), (y)
or (z) of Section 13(a) hereof.
(t) "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(u) "Subsidiary" shall mean, with reference to any Person, any other
Person of which an amount of voting securities or equity interests sufficient to
elect at least a majority of the directors or equivalent governing body of such
other Person is beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such first-mentioned Person.
(v) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(w) "Unit" has the meaning set forth in Section 7(b).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby
<PAGE> 6
accepts such appointment. With the consent of the Rights Agent, the Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the
Close of Business on the tenth day after the Stock Acquisition Date, and (ii)
the Close of Business on the tenth business day after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 30% or more of
the shares of Company Common Stock then outstanding (the earlier of (i) and (ii)
above being the "Distribution Date"), the Rights will be evidenced (subject to
the provisions of paragraph (b) of this Section 3) by the certificates for
shares of Company Common Stock registered in the names of the holders of shares
of Company Common Stock as of and subsequent to the Record Date (which
certificates for shares of Company Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Company Common Stock (including a transfer to the Company). As soon
as practicable after the Distribution Date, the Rights Agent will send by first-
class, insured, postage prepaid mail, to each record holder of shares of Company
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Company Common Stock has been made pursuant
to Section 11(p) hereof, at the time of distribution of the Rights Certificates,
the Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Junior Preferred Stock, in a form
which may be appended to certificates that represent shares of Company Common
Stock, in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of shares
of Company Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in respect of all
shares of Company Common Stock which are issued (including any shares of Company
Common Stock held in treasury) after the Record Date but prior to the earlier of
the Distribution Date and the Expiration Date. Certificates, representing such
shares of Company Common Stock, issued after the Record Date shall bear the
following legend:
"This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between Georgia-Pacific Corporation
(the "Company") and First Chicago Trust Company of New York (the "Rights Agent")
dated as of July 31, 1989 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal office of the stock transfer administration office of the Rights
Agent. Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any subsequent
holder, may become null and void."
With respect to certificates representing shares of
<PAGE> 7
Company Common Stock (whether or not such certificates include the
foregoing legend or have appended to them the Summary of Rights), until the
earlier of the Distribution Date and the Expiration Date, the Rights associated
with the shares of Company Common Stock represented by such certificates shall
be evidenced by such certificates alone and registered holders of the shares of
Company Common Stock shall also be the registered holders of the associated
Rights, and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the shares of Company Common Stock
represented by such certificates.
Section 4. Form of Rights Certificates. (a) The Rights Certificates (and
the forms of election to purchase, assignment and certificate to be printed on
the reverse thereof) shall each be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or any rule or
regulation thereunder or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such number of Units of
Junior Preferred Stock as shall be set forth therein at the price set forth
therein, but the amount and type of securities, cash or other assets that may be
acquired upon the exercise of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and which receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person for any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred Rights,
shares of Company Common Stock or the Company or (B) a transfer which a majority
of the Independent Directors has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section
7(e) hereof shall, upon the written direction of a majority of the Independent
Directors, contain (to the extent feasible), the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified
in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. (a) Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Rights Certificates may be manual or
facsimile. Rights Certificates bearing the manual or facsimile signatures of
the individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature of such Rights
Certificates or did not hold such offices at the date of such Rights
Certificates. No Rights Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature duly executed by the Rights Agent by manual
signature of an authorized officer, and such countersignature upon any Rights
Certificate shall be conclusive evidence, and the only evidence, that such
Rights Certificate has been duly countersigned as required hereunder.
<PAGE> 8
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such Books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates: Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like
number of Units of Junior Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Certificates
to be transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and executed the certificate set forth in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request;
whereupon the Rights Agent shall, subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) If a Rights Certificate shall be mutilated, lost, stolen or destroyed,
upon request by the registered holder of the Rights represented thereby and upon
payment to the Company and the Rights Agent of all reasonable expenses incident
thereto, there shall be issued, in exchange for and upon cancellation of the
mutilated Rights Certificate, or in substitution for the lost, stolen or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and representing the
equivalent number of Rights, but, in the case of loss, theft or destruction,
only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested
by the Company or the Rights Agent, indemnity also satisfactory to it.
Section 7. Exercise of Rights: Purchase Price: Expiration Date of Rights.
(a) Prior to the earlier of (i) the Close of Business on the tenth anniversary
hereof (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and (ii) being the
"Expiration Date"), the registered holder of any Rights Certificate may, subject
to the provisions of Sections 7(e) and 9(c) hereof, exercise the Rights
evidenced thereby in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price (as hereinafter defined) for the
number of Units of Junior Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) for which such
surrendered Rights are then exercisable.
(b) The purchase price for each one one-hundredth of a share (each such
one one-hundredth of a share being a "Unit") of Junior Preferred Stock upon
exercise of Rights shall be $175.00, subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof (such purchase price, as so adjusted,
being the "Purchase Price"), and shall be payable in accordance with paragraph
(c) below.
<PAGE> 9
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation in good standing
organized under the laws of the United States or any State of the United States,
which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority (such institution being the "Depositary Agent") certificates
representing the shares of Junior Preferred Stock that may be acquired upon
exercise of the Rights and shall cause such Depositary Agent to enter into an
agreement pursuant to which the Depositary Agent shall issue receipts
representing interests in the shares of Junior Preferred Stock so deposited.
Upon receipt of a Rights Certificate representing exercisable Rights, with the
form of election to purchase and the certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price for the
Units of Junior Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased thereby as
set forth below and an amount equal to any applicable transfer tax or evidence
satisfactory to the Company of payment of such tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) requisition from the
Depositary Agent depositary receipts representing such number of Units of Junior
Preferred Stock as are to be purchased and the Company will direct the
Depositary Agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue Company Common Stock, other
securities of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such Company Common Stock, other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made in cash or by certified or bank check or money
order payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
the Rights remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and which receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or any such Associate or Affiliate) or to any Person with whom
the Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, shares
of Company Common Stock or the Company or (B) a transfer which a majority of the
Independent Directors has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action, and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights or any other Person as a result of its failure to make any
determination under this Section 7(e) or such Section 4(b) with respect to an
Acquiring Person or its Affiliates, Associates or transferees.
<PAGE> 10
(f) Notwithstanding anything in this Agreement or any Rights Certificate
to the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise by such registered holder unless such registered holder
shall have (i) completed and executed the certificate following the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The
Company shall at all times prior to the Expiration Date cause to be reserved
and kept available out of its authorized and unissued shares of Junior
Preferred Stock, the number of shares of Junior Preferred Stock that, as
provided in this Agreement, will be sufficient to permit the exercise in full
of all outstanding Rights. Upon the occurrence of any events resulting in an
increase in the aggregate number of shares of Junior Preferred Stock (or other
equity securities of the Company) issuable upon exercise of all outstanding
Rights above the number then reserved, the Company shall make appropriate
increases in the number of shares so reserved.
(b) So long as the shares of Junior Preferred Stock to be issued and
delivered upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall during the period from the Distribution
Date through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) hereof of the consideration to be
delivered by the Company upon exercise of the Rights or, if so required by law,
as soon as practicable following the Distribution Date (such date being the
"Registration Date"), to file a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities that may be acquired upon exercise of the Rights (the
"Registration Statement"), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws.
(d) The Company shall take such action as may be necessary to ensure that
all shares of Junior Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax imposed
in connection with the issuance or delivery of the Rights Certificates or upon
the exercise of Rights; provided, however, the
<PAGE> 11
Company shall not be required to pay any such tax imposed in connection with
the issuance or delivery of Units of Junior Preferred Stock, or any
certificates or depositary receipts for such Units of Junior Preferred Stock
(or, following the occurrence of a Triggering Event, any other securities,
cash or assets, as the case may be) to any person other than the registered
holder of the Rights Certificates evidencing the Rights surrendered for
exercise. The Company shall not be required to issue or deliver any
certificates or depositary receipts for Units of Junior Preferred Stock (or,
following the occurrence of a Triggering Event, any other securities, cash or
assets, as the case may be) to, or in a name other than that of, the
registered holder upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Junior Preferred Stock Record Date. Each Person in whose name
any certificate for Units of Junior Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Units of Junior Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Junior Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) transfer books
of the Company are closed, such Person shall be deemed to have become the record
holder of such securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Junior Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) transfer books of the
Company are open and, further provided, however, that if delivery of Units of
Junior Preferred Stock is delayed pursuant to Section 9(c) hereof, such Persons
shall be deemed to have become the record holders of such Units of Junior
Preferred Stock only when such Units first become deliverable. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to securities for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Junior Preferred Stock payable in shares
of Junior Preferred Stock, (B) subdivide the outstanding Junior Preferred Stock,
(C) combine the outstanding Junior Preferred Stock into a smaller number of
shares, or (D) issue any shares of its capital stock in a reclassification of
the Junior Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Junior Preferred Stock or capital stock, as the
case may be, issuable on such date upon exercise of the Rights, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Junior Preferred Stock or
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
<PAGE> 12
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring
Person, at any time after the date of this Agreement, directly or indirectly,
(1) shall merge into the Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of such merger or
combination and Company Common Stock shall remain outstanding and unchanged, (2)
shall, in one transaction or a series of transactions, transfer any assets to
the Company or to any of its Subsidiaries in exchange (in whole or in part) for
shares of Company Common Stock, for other equity securities of the Company or
any such Subsidiary, or for securities exercisable for or convertible into
shares of equity securities of the Company or any of its Subsidiaries (whether
Company Common Stock or otherwise) or otherwise obtain from the Company or any
of its Subsidiaries, with or without consideration, any additional shares of
such equity securities or securities exercisable for or convertible into such
equity securities (other than pursuant to a pro rata distribution to all holders
of Company Common Stock), (3) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with (as the case may be) the Company or any
of its Subsidiaries or any employee benefit plan maintained by the Company or
any of its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, assets (including securities) on terms and conditions
less favorable to the Company or such Subsidiary or plan than those that could
have been obtained in arm's-length negotiations with an unaffiliated third
party, other than pursuant to a transaction set forth in Section 13(a) hereof,
(4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series of transactions,
to, from or with the Company or any of the Company's Subsidiaries or any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity
(other than transactions, if any, consistent with those engaged in, as of the
date hereof, by the Company and such Acquiring Person or such Associate or
Affiliate), assets (including securities) having an aggregate fair market value
of more than $10,000,000, other than pursuant to a transaction set forth in
Section 13(a) hereof, (5) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with the Company or any of its Subsidiaries
or any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity, any material trademark or material service mark, other than
pursuant to a transaction set forth in Section 13(a) hereof, (6) shall receive,
or any designee, agent or representative of such Acquiring Person or any
Affiliate or Associate of such Acquiring Person shall receive, any compensation
from the Company or any of its Subsidiaries other than compensation for full-
time employment as a regular employee at rates in accordance with the Company's
(or its Subsidiaries') past practices, or (7) shall receive the benefit,
directly or indirectly (except proportionately as a holder of Company Common
Stock or as required by law or governmental regulation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or other
tax advantage provided by the Company or any of its Subsidiaries or any employee
benefit plan maintained by the Company or any of its Subsidiaries or any trustee
or fiduciary with respect to such plan acting in such capacity; or
(B) any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity)
shall become the Beneficial Owner of 15% or more of the shares of Company Common
Stock then outstanding, other than pursuant to any transaction set forth in
Section 13(a) hereof; or
(C) during such time as there is an Acquiring Person, there shall be any
reclassification of securities (including any reverse stock split), or
recapitalization of the Company, or any merger or consolidation of the Company
with any of its Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries, other than a transaction or
transactions to which the provisions of Section 13(a) apply (whether or not with
or into or otherwise involving an Acquiring Person), which has the effect,
directly or indirectly, of increasing by more than 1% the proportionate share of
the
<PAGE> 13
outstanding shares of any class of equity securities of the Company or any
of its Subsidiaries which is directly or indirectly beneficially owned by
any Acquiring Person or any Associate or Affiliate of any Acquiring Person;
then, immediately upon the date of the occurrence of an event described in
Section 11(a)(ii)(A)-(C) hereof (a "Section 11(a)(ii) Event"), proper
provision shall be made so that each holder of a Right (except as provided
below and in Section 7(e) hereof) shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, in lieu of the number of Units of Junior
Preferred Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, such number of Units of
Junior Preferred Stock as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of Units of Junior Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event (such product thereafter being, for
all purposes of this Agreement other than Section 13 hereof, the "Purchase
Price"), and (y) dividing that product by 50% of the then current market price
(determined pursuant to Section 11(d) hereof) per Unit of Junior Preferred
Stock on the date of such first occurrence (such Units of Junior Preferred
Stock being the "Adjustment Shares").
(iii) In the event that the number of shares of Junior Preferred Stock
which are authorized by the Company's Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company, by the vote of a majority of the Independent Directors, shall: (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value") over (2) the Purchase Price
(such excess being the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for such Adjustment Shares, upon payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Company Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
(such other shares being "preferred stock equivalents")), (4) debt securities
of the Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such aggregate
value has been determined by a majority of the Independent Directors, after
receiving advice from a nationally recognized investment banking firm;
provided, however, that if the Company shall not have made adequate provision
to deliver value pursuant to clause (B) above within thirty days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date
on which the Company's right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the "Section 11(a)(iii)
Trigger Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, Units of Junior Preferred Stock (to the extent available) and then, if
necessary, cash, which Units of Junior Preferred Stock and/or cash shall have
an aggregate value equal to the Spread. To the extent that the Company
determines that some action need be taken pursuant to the first sentence of
this Section 11(a)(iii), the Company shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a Unit of Junior Preferred
Stock shall be the current market price (as determined pursuant to Section
11(d) hereof) per Unit of Junior Preferred Stock on the Section 11(a)(iii)
Trigger Date and the value of any preferred stock equivalent shall be deemed
to have the same value as the Junior Preferred Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Junior Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five
calendar days after such record date) shares of Junior Preferred Stock (or
shares having substantially the same rights, privileges and preferences as
shares of Junior Preferred Stock ("equivalent preferred stock")) or securities
convertible into Junior Preferred Stock or equivalent preferred stock at a
price per share of Junior Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security convertible into
Junior Preferred Stock or equivalent preferred stock) less than the current
market price (as determined pursuant to Section 11(d) hereof) per share of
Junior Preferred Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by
<PAGE> 14
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction. the numerator of which shall be the sum of the number of shares
of Junior Preferred Stock outstanding on such record date plus the number of
shares of Junior Preferred Stock which the aggregate offering price of the
total number of shares of Junior Preferred Stock and/or equivalent preferred
stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of shares of Junior
Preferred Stock outstanding on such record date plus the number of additional
shares of Junior Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price
may be paid by delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as determined in
good faith by a majority of the Independent Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. Shares of Junior
Preferred Stock owned by or held for the account of the Company or any
Subsidiary shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all
holders of shares of Junior Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in shares of Junior Preferred
Stock, but including any dividend payable in stock other than Junior Preferred
Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current market price (as determined pursuant to Section 11(d) hereof) per share
of Junior Preferred Stock on such record date less the fair market value (as
determined in good faith by a majority of the Independent Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holder of the Rights) of the cash,
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants distributable in respect of a share of Junior Preferred Stock
and the denominator of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) per share of Junior Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current market
price" per share of Company Common Stock or Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such shares
for the ten consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, if prior to the expiration of
such requisite ten Trading Day period the issuer announces either (A) a dividend
or distribution on such shares payable in such shares or securities convertible
into such shares (other than the Rights), or (B) any subdivision, combination or
reclassification of such shares, then, following the ex-dividend date for such
dividend or the record date for such subdivision, as the case may be, the
"current market price" shall be properly adjusted to take into account such
event. The closing price for each day shall be, if the shares are listed and
admitted to trading on a national securities exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such shares are
listed or admitted to trading or, if such shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
<PAGE> 15
Inc. Automated Quotation System ("NASDAQ") or such other system then in use,
or, if on any such date such shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in such shares selected by a majority of the
Independent Directors. If on any such date no market maker is making a market
in such shares, the fair value of such shares on such date as determined in good
faith by a majority of the Independent Directors shall be used. If such shares
are not publicly held or not so listed or traded, "current market price" per
share shall mean the fair value per share as determined in good faith by a
majority of the Independent Directors, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. The term "Trading Day" shall mean, if such shares are listed or
admitted to trading on any national securities exchange, a day on which the
principal national securities exchange on which such shares are listed or
admitted to trading is open for the transaction of business or, if such shares
are not so listed or admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of Junior Preferred Stock shall be determined in the same
manner as set forth above for Company Common Stock in clause (i) of this Section
11(d) (other than the fourth sentence thereof). If the current market price per
share of Junior Preferred Stock cannot be determined in the manner provided
above or if the Junior Preferred Stock is not publicly held or listed or traded
in a manner described in clause (i) of this Section 11(d), the "current market
price" per share of Junior Preferred Stock shall be conclusively deemed to be an
amount equal to 100 (as such amount may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with respect to
Company Common Stock occurring after the date of this Agreement) multiplied by
the current market price per share of Company Common Stock. If neither Company
Common Stock nor Junior Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Junior Preferred Stock shall mean the
fair value per share as determined in good faith by a majority of the
Independent Directors whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. For all purposes of this Agreement, the "current market
price" of a Unit of Junior Preferred Stock shall be equal to the "current market
price" of one share of Junior Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Company Common Stock or
Common Stock or other share or one-millionth of a share of Junior Preferred
Stock, as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which mandates
such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Sections 11(a)(ii) or
13(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock other than Junior Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Junior Preferred Stock contained in Sections
11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Junior
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Junior
Preferred Stock (or other securities or amount of cash or combination thereof)
that may be acquired from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
<PAGE> 16
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Units of Junior
Preferred Stock (calculated to the nearest one-ten thousandth of a Unit)
obtained by (i) multiplying (x) the number of Units of Junior Preferred Stock
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of Units of Junior Preferred Stock that may be acquired upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of Units of Junior Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least
ten days later than the date of such public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates to be so distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Units of Junior Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Unit and the number of Units of Junior
Preferred Stock which was expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value of the number of Units of Junior
Preferred Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue such fully paid and non-
assessable number of Units of Junior Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of that
number of Units of Junior Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Junior Preferred Stock and shares of other capital stock
or securities of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
<PAGE> 17
additional shares (fractional or otherwise) or securities upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment a majority of the Independent
Directors shall determine to be advisable in order that any (i) consolidation or
subdivision of the Junior Preferred Stock, (ii) issuance wholly for cash of any
shares of Junior Preferred Stock at less than the current market price, (iii)
issuance wholly for cash of shares of Junior Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Junior
Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holders of its Junior Preferred Stock, shall not be taxable to such holders or
shall reduce the taxes payable by such holders.
(n) The Company shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge with or into
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
Person which constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have distributed or otherwise transferred
to its shareholders or other persons holding an equity interest in such Person
Rights previously owned by such Person or any of its Affiliates and Associates;
provided, however, this Section 11(n) shall not affect the ability of any
Subsidiary of the Company to consolidate with, merge with or into, or sell or
transfer assets or earning power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 26 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Company Common Stock payable in shares of Company Common
Stock, (ii) subdivide the outstanding shares of Company Common Stock, (iii)
combine the outstanding shares of Company Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
Company Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each share of Company Common
Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Company Common Stock following
any such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Company Common Stock immediately prior to
such event by a fraction the numerator of which shall be the total number of
shares of Company Common Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total number of shares of
Company Common Stock outstanding immediately following the occurrence of such
event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a
<PAGE> 18
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent, and
with each transfer agent for the Junior Preferred Stock and the Company Common
Stock, a copy of such certificate, and (c) mail a brief summary thereof to each
holder of a Rights Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Company Common Stock) in
accordance with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) In the event that, following the Stock Acquisition Date, directly
or indirectly, either (x) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Company Common Stock shall be
converted into or exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer) to any
Person or Persons (other than the Company or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
(any such event being a "Section 13 Event"), then, and in each such case, proper
provision shall be made so that: (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price, such number of validly
authorized and issued, fully paid and non-assessable shares of Common Stock of
the Principal Party (as such term is hereinafter defined), which shares shall
not be subject to any liens, encumbrances, rights of first refusal, transfer
restrictions or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of Units of
Junior Preferred Stock for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such Units for which a Right would be exercisable hereunder but for
the occurrence of such Section 11(a)(ii) Event by the Purchase Price which would
be in effect hereunder but for such first occurrence) and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall be
the "Purchase Price" for all purposes of this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of such Section
13 Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to ensure that
the provisions of this Agreement shall thereafter be applicable to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no further effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), (A) the Person that is the issuer of any
securities into which shares of Company Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of Common Stock that has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof) and
<PAGE> 19
(B) if no securities are so issued, the Person that is the other party to such
merger or consolidation, or, if there is more than one such Person, the Person
the Common Stock of which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
largest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to section 11(d) hereof);
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act
("Registered Common Stock"), or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person that has Registered
Common Stock outstanding, "Principal Party" shall refer to such other Person;
(2) if the Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is a direct or indirect Subsidiary
of another Person but is not a direct or indirect Subsidiary of another Person
which has Registered Common Stock outstanding, "Principal Party" shall refer to
the ultimate parent entity of such first-mentioned Person; (3) if the Common
Stock of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and one or more of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever of such other Persons
is the issuer of the Registered Common Stock having the highest aggregate
current market price (determined pursuant to Section 11(d) hereof); and (4) if
the Common Stock of such Person is not Registered Common Stock or such Person
is not a corporation, and such Person is directly or indirectly controlled by
more than one Person, and none of such other Persons have Registered Common
Stock outstanding, "Principal Party" shall refer to whichever ultimate parent
entity is the corporation having the greatest shareholders equity or, if no
such ultimate parent entity is a corporation, shall refer to whichever ultimate
parent entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13, and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable following the
execution of such agreement, a registration statement under the Securities Act
with respect to the Common Stock that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain effective (and to
include a prospectus complying with the requirements of the Securities Act)
until the Expiration Date, and (C) as soon as practicable following the
execution of such agreement, take such action as may be required to ensure that
any acquisition of such Common Stock upon the exercise of the Rights complies
with any applicable state security or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 under the Exchange Act.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special payment, tax or
similar provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13; then, in such event,
the Company shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that
<PAGE> 20
the applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if
the Rights are listed or admitted to trading on a national securities exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by a majority
of the Independent Directors. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by a majority of the Independent Directors shall be
used and such determination shall be described in a statement filed with the
Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions of shares of
Junior Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Junior Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence such fractional shares of Junior
Preferred Stock (other than fractions which are integral multiples of one one-
hundredth of a share of Junior Preferred Stock). In lieu of such fractional
shares of Junior Preferred Stock that are not integral multiples of one one-
hundredth of a share, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the then current market price of a share
of Junior Preferred Stock on the day of exercise, determined in accordance with
Section 11(d) hereof.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of Company Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company or any
other Person to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
<PAGE> 21
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and certificates
duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Company Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or any other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as promptly as practicable.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Junior Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, except as provided in Section 24
hereof, to receive notice of meetings or other actions affecting shareholders,
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, including reasonable fees and disbursements of its counsel, incurred
in connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder. The Company shall indemnify
the Rights Agent for, and hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability hereunder.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Junior Preferred Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to have been signed, executed and,
where necessary, verified or acknowledged by the proper Person or Persons.
<PAGE> 22
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or shareholder services businesses of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any document or any further act on the part
of any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Rights Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be specified herein) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; provided, however, that so long as any Person is an
Acquiring Person hereunder, such certificate shall be signed and delivered by a
majority of the Independent Directors; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for the validity of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or for the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or failure by the Company to
satisfy conditions contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any adjustment required under the
<PAGE> 23
provisions of Section 11 or Section 13 hereof or for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after receipt by the Rights Agent of
the certificate describing any such adjustment contemplated by Section 12);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Junior
Preferred Stock or any other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Junior
Preferred Stock or any other securities will, when so issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the performance by the Rights Agent of its duties under this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer;
provided, however, that so long as any Person is an Acquiring Person hereunder,
the Rights Agent shall accept such instructions and advice only from a majority
of the Independent Directors and shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with such instructions of
the majority of the Independent Directors. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any such officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent shall have reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company. If such certificate has been completed and signed and shows a negative
response to clauses 1 and 2 of such certificate, unless previously instructed
otherwise in writing by the Company (which instructions may impose on the Rights
Agent additional ministerial
<PAGE> 24
responsibilities, but no discretionary responsibilities), the Rights Agent may
assume without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) hereof and shall not be
charged with any knowledge to the contrary.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' prior notice in writing mailed to the Company, and to each
transfer agent of the Junior Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days' prior notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Junior Preferred Stock and the Company Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then any
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
any state of the United States in good standing, shall be authorized to do
business as a banking institution in the State of New York, shall be authorized
under such laws to exercise corporate trust or stock transfer powers, shall be
subject to supervision or examination by federal or state authorities and shall
have at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (b) an Affiliate of a corporation described
in clause (a). After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Junior Preferred Stock and the Company Common Stock, and mail a notice
thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent.
Section 22. Issuance of New Rights Certificate. Notwithstanding any of
the provisions of this Agreement or the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by a majority of the Independent Directors to reflect any
adjustment or change made in accordance with the provisions of this Agreement in
the Purchase Price or the number or kind or class of shares or other securities
or property that may be acquired under the Rights Certificates. In addition, in
connection with the issuance or sale of shares of Company Common Stock following
the Distribution Date and prior to the Expiration Date, the Company (a) shall,
with respect to shares of Company Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by a
majority of the Independent Directors, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
<PAGE> 25
Section 23. Redemption and Termination. (a) Subject to Section 30 hereof,
the Company may, at its option, by action of a majority of the Independent
Directors, at any time prior to the earlier of (i) the Close of Business on the
tenth day following the Stock Acquisition Date, or (ii) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being the "Redemption Price"), and
the Company may, at its option, by action of a majority of the Independent
Directors, pay the Redemption Price either in shares of Company Common Stock
(based on the current market price), as defined in Section 11(d) hereof, of the
shares of Company Common Stock at the time of redemption) or cash.
(b) Immediately upon the action of a majority of the Independent Directors
ordering the redemption of the Rights, evidence of which shall be filed with the
Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of a majority of the Independent Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for Company
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption Price
will be made.
Section 24. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Junior Preferred Stock or to
make any other distribution to the holders of Junior Preferred Stock (other than
a regular quarterly cash dividend out of earnings or retained earnings of the
Company), (ii) to offer to the holders of Junior Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Junior
Preferred Stock or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Junior Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Junior Preferred Stock), (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
or (v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Junior Preferred Stock, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least twenty (20) days prior
to the record date for determining holders of the shares of Junior Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of Junior
Preferred Stock whichever shall be the earlier; provided, however, no such
notice shall be required pursuant to this Section 24, if any Subsidiary of the
Company effects a consolidation or merger with or into, or effects a sale or
other transfer of assets or earnings power to, any other Subsidiary of the
Company.
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the
<PAGE> 26
extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including by
telex, telegram or cable) and mailed or sent or delivered, if to the Company, at
its address at:
Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Senior Vice President-Law
And if to the Rights Agent, at its address at:
First Chicago Trust Company of New York
30 West Broadway
New York, New York 10007
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing shares of Company Common Stock. From and after the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect
the interests of the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided, however,
this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) subject to Section 30 hereof, a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for
the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company or, so long as any Person is an Acquiring
Person hereunder, from the majority of the Independent Directors which states
that the proposed supplement or amendment is in compliance with the terms of
this Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Purchase Price, the Expiration Date or the number of Units of Junior Preferred
Stock for which a Right is exercisable without the approval of a majority of
the Independent Directors. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Company Common Stock.
<PAGE> 27
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, the Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
or by a majority of the Independent Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board or any member
thereof to any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock).
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Independent Directors determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the Rights shall not then be redeemable, the right
of redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by a majority of the Independent Directors.
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Georgia applicable to contracts executed in and
to be performed entirely in such State; provided, however, that Sections 18, 19,
20 and 21 hereof shall be governed by, and construed in accordance with, the
laws of the State of New York.
Section 32. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same instrument.
Section 33. Descriptive Headings. The headings contained in this
Agreement are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
ATTEST: GEORGIA-PACIFIC CORPORATION
By: /s/ Cornelia B. Brewer By /s/ James C. Van Meter
Name: Cornelia B. Brewer Name: James C. Van Meter
Title: Assistant Secretary Title: Executive Vice President-Finance
ATTEST: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ John Bagdonas By: /s/ John Bambach
Name: John Bagdonas Name: John Bambach
Title: Production Officer Title: Vice President
<PAGE> 28
EXHIBIT A
[Form of Rights Certificate]
Certificate No. __________ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS
AGREEMENT REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT REFERRED TO
BELOW). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.]*
Rights Certificate
GEORGIA-PACIFIC CORPORATION
This certifies that __________________________ , or registered assigns,
is the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of July 31, 1989 (the "Rights Agreement"; terms
defined therein are used herein with the same meaning unless otherwise defined
herein) between Georgia-Pacific Corporation, a Georgia corporation (the
"Company"), and First Chicago Trust Company of New York, a New York
corporation, as Rights Agent (which term shall include any successor Rights
Agent under the Rights Agreement), to purchase from the Company at any time
after the Distribution Date and prior to the Expiration Date at the office of
the Rights Agent, one one-hundredth of a fully paid and non-assessable share of
Series A Junior Preferred Stock, without par value (the "Junior Preferred
Stock"), of the Company at the Purchase Price initially of $175.00 per one
one-hundredth share (each such one one-hundredth of a share being a "Unit") of
Junior Preferred Stock, upon presentation and surrender of this Rights
Certificate with the Election to Purchase and related certificate duly
executed. The number of Rights evidenced by this
- ------------------------
*The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
<PAGE> 29
Rights Certificate (and the number of Units which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per
Unit set forth above shall be subject to adjustment in certain events as
provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person or, under certain
circumstances described in the Rights Agreement, a transferee of any such
Acquiring Person, Associate or Affiliate, such Rights shall become null and void
and no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or receive cash or other assets, all
as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and conditions of
the Rights Agreement, which terms and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available from the
Company upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company under certain circumstances at
its option at a redemption price of $.01 per Right, payable at the Company's
option in cash or in common stock of the Company, subject to adjustment in
certain events as provided in the Rights Agreement.
No fractional shares of Junior Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Junior Preferred Stock),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Junior Preferred
Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of , 19 --
ATTEST: GEORGIA-PACIFIC CORPORATION
By ____________________________ By _______________________
Name: Name:
Title: Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK, as Rights Agent
By ___________________________
Name:
Title:
<PAGE> 30
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED_____________________________________________________________
hereby sells, assigns and transfers unto_______________________________________
(Please print name and address of
transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint_____________Attorney, to
transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated:______________, 19__
_____________________________________
Signature
Signature Guaranteed:
<PAGE> 31
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:____________, 19____ ___________________________
Signature
Signature Guaranteed:
- --------------------------------------------------------------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
<PAGE> 32
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: GEORGIA-PACIFIC CORPORATION
The undersigned hereby irrevocably elects to exercise________________Rights
represented by this Rights Certificate to purchase the Units of Junior Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units be issued
in the name of and delivered to:________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security
or other identifying
number:______________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:____________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security
or other identifying
number:______________________
Dated:_____________, 19____
____________________________
Signature
<PAGE> 33
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated:____________, 19____ _________________________
Signature
Signature Guaranteed:
- --------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Election to Purchase and Certificate must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
<PAGE> 34
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
JUNIOR PREFERRED STOCK
On July 31, 1989 the Board of Directors of Georgia-Pacific Corporation (the
"Company") declared a distribution of one Right for each outstanding share of
Common Stock, par value $.80 per share (the "Company Common Stock"), to
shareholders of record at the close of business on August 10, 1989 and for each
share of Company Common Stock issued (including shares distributed from
Treasury) by the Company thereafter and prior to the Distribution Date. Each
Right entitles the registered holder, subject to the terms of the Rights
Agreement, to purchase from the Company one one-hundredth of a share (a "Unit")
of Series A Junior Preferred Stock, without par value (the "Junior Preferred
Stock"), at a Purchase Price of $175.00 per Unit, subject to adjustment. The
Purchase Price is payable in cash or by certified or bank check or money order
payable to the order of the Company. The description and terms of the Rights
are set forth in a Rights Agreement between the Company and First Chicago Trust
Company of New York as Rights Agent (the "Rights Agreement").
Copies of the Rights Agreement and the Certificate of Designation for the
Junior Preferred Stock have been filed with the Securities and Exchange
Commission as exhibits to a Registration Statement on Form 8-K dated _________,
1989 (the "Form 8-K"). Copies of the Rights Agreement and the Certificate of
Designation are available free of charge from the Company. This summary
description of the Rights and the Junior Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the provisions of
the Rights Agreement and the Certificate of Designation, including the
definitions therein of certain terms, which Rights Agreement and Certificate of
Designation are incorporated herein by reference.
The Rights Agreement
Initially, the Rights will attach to all certificates representing shares
of outstanding Company Common Stock, and no separate Rights Certificates will be
distributed. The Rights will separate from the Company Common Stock and the
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement (the date of such announcement being the "Stock Acquisition Date")
that a person or group of affiliated or associated persons (other than the
Company, any Subsidiary of the Company or any employee benefit plan of the
Company or such Subsidiary) (an "Acquiring Person") has acquired, obtained the
right to acquire, or otherwise obtained beneficial ownership of 15% or more of
the then outstanding shares of Company Common Stock, or (ii) 10 days following
the commencement of a tender offer or exchange offer that would result in a
person or group beneficially owning 30% or more of the then outstanding shares
of Company Common Stock. Until the Distribution Date, (i) the Rights will be
evidenced by Company Common Stock certificates and will be transferred with and
only with such Company Common Stock certificates, (ii) new Company Common Stock
certificates issued after August 10, 1989 (also including shares distributed
from Treasury) will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates representing
outstanding Company Common Stock will also constitute the transfer of the Rights
associated with the Company Common Stock represented by such certificate.
<PAGE> 35
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the tenth anniversary of the Rights Agreement unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in a merger
with an Acquiring Person and shares of Company Common Stock shall remain
outstanding, (ii) a Person becomes the beneficial owner of 15% or more of the
then outstanding shares of Company Common Stock, (iii) an Acquiring Person
engages in one or more "self-dealing" transactions as set forth in the Rights
Agreement, or (iv) during such time as there is an Acquiring Person, an event
occurs which results in such Acquiring Person's ownership interest being
increased by more than 1% (e.g., by means of a reverse stock split or
recapitalization), then, in each such case, each holder of a Right will
thereafter have the right to receive, upon exercise, Units of Junior Preferred
Stock (or, in certain circumstances, Company Common Stock, cash, property or
other securities of the Company) having a value equal to two times the exercise
price of the Right. The exercise price is the Purchase Price multiplied by the
number of Units of Junior Preferred Stock issuable upon exercise of a Right
prior to the events described in this paragraph. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
and the Company is not the surviving corporation (other than a merger described
in the preceding paragraph), (ii) any Person consolidates or merges with the
Company and all or part of the Company Common Stock is converted or exchanged
for securities, cash or property of any other Person or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as described above) shall
thereafter have the right to receive, upon exercise, common stock of the
Acquiring Person having a value equal to two times the exercise price of the
Right.
The Purchase Price payable, and the number of Units of Junior Preferred
Stock issuable, upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Junior Preferred Stock,
(ii) if holders of the Junior Preferred Stock are granted certain rights or
warrants to subscribe for Junior Preferred Stock or convertible securities at
less than the current market price of the Junior Preferred Stock, or (iii) upon
the distribution to the holders of the Junior Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Junior
Preferred Stock prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, a majority
of the Independent Directors may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption
<PAGE> 36
Price"), payable, at the election of such majority of Independent Directors,
in cash or shares of Company Common Stock. Immediately upon the action of a
majority of the Independent Directors ordering the redemption of the Rights,
the Rights will terminate and the only right of the holders of Rights will be
to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Junior Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended at any time
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
Description of Junior Preferred Stock
The Units of Junior Preferred Stock that may be acquired upon exercise of
the Rights will be nonredeemable and subordinate to any other shares of
preferred stock that may be issued by the Company.
Each Unit of Junior Preferred Stock will have a minimum preferential
quarterly dividend rate of $0.35 per Unit but will, in any event, be entitled to
a dividend equal to the per share dividend declared on the Company Common Stock.
In the event of liquidation, the holder of a Unit of Junior Preferred Stock
will receive a preferred liquidation payment equal to the greater of $.01 per
Unit or the per share amount paid in respect of a share of Company Common Stock.
Each Unit of Junior Preferred Stock will have one vote, voting together
with the Company Common Stock. The holders of Units of Junior Preferred Stock,
voting as a separate class, shall be entitled to elect two directors if
dividends on the Junior Preferred Stock are in arrears for six fiscal quarters.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Junior Preferred
Stock will be entitled to receive the per share amount paid in respect of each
share of Company Common Stock.
The rights of holders of the Junior Preferred Stock to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary antidilution provisions.
Because of the nature of the Junior Preferred Stock's dividend, liquidation
and voting rights, the economic value of one Unit of Junior Preferred Stock that
may be acquired upon the exercise of each Right should approximate the economic
value of one share of Company Common Stock.
<PAGE> 1
EXECUTIVE RETIREMENT AGREEMENT
THIS AGREEMENT entered into and effective the 6th day of December,
l993, between GEORGIA-PACIFIC CORPORATION, a Georgia corporation, having its
principal office in Atlanta, Georgia (hereinafter referred to as "G-P"), and
JAMES F. KELLEY (hereinafter referred to as "Employee");
W I T N E S S E T H :
WHEREAS, Employee is and will be rendering valuable services to G-P
and its subsidiaries, and G-P desires to receive the benefit of Employee's
continued loyalty, service and counsel and to assist Employee in providing for
the contingencies of death, disability and old age dependency;
IT IS HEREBY AGREED:
1. General.
Provided that the eligibility conditions of continued employment
of Employee by G-P and/or its subsidiaries as set forth in Paragraphs 2
through 7 of this Agreement are met, G-P agrees to make monthly payments
("Retirement Payments") to Employee or to Employee's surviving spouse as
hereinafter provided.
2. Normal Retirement.
(a) Employee will be eligible for Normal Retirement as of the
date the Employee's employment terminates after attaining age sixty-five (65)
after continuous service with G-P and/or its subsidiaries (as defined in
Paragraph 8) from the date of this Agreement (or any predecessor agreement
described in Paragraph 17).
(b) If Employee is eligible for such payments under Paragraph
2(a), Retirement Payments to Employee upon Normal Retirement shall commence on
the first day of the month following the last day for which the Employee
receives either vacation pay or base salary after termination of employment
with G-P and its subsidiaries ("pay-through date"). Such payments shall
continue monthly on the first day of each month during the lifetime of the
Employee and, subject to the survivor annuity provisions of Paragraph 7, shall
end with the payment for the month of his or her death.
(c) The monthly Retirement Payment to Employee if eligible for
Normal Retirement under Paragraph 2(a) shall be calculated as follows:
(1) Fifty percent (50%) of the Employee's average monthly
cash salary (as defined below), including any cash salary which he or she
elected to defer, for the last forty-eight (48) full calendar months of
his or her employment by G-P and/or its subsidiaries (or, if fewer, all
full calendar months of his or her employment with G-P and/or its
subsidiaries which immediately precede termination of such employment);
(2) Less, the annuity equivalent (as defined below) of
benefits, if any, payable to or on behalf of Employee under all other
retirement compensation plans maintained by G-P and/or its subsidiaries
(as defined below), which are attributable to contributions made by G-P
and/or its subsidiaries (excluding any cash salary which he or she elected
to defer under such plans). For purposes of this paragraph the following
terms are defined as follows:
(A) "Cash salary" - shall mean base salary and
annual management incentive bonuses only and excludes without
limitation deferred compensation under any long-term incentive
program, bonuses for purpose of offsetting taxation and any other
incentive compensation; provided that annual management incentive
bonuses shall be counted in the year(s) or partial year(s) with
respect to which they are earned (rather than in the year of payment)
and shall be prorated for partial years (if not already prorated to
reflect partial year participation) included in the forty-eight (48)
month averaging period and provided, further, that if the annual
management incentive bonus amount with respect to any part of that
period is unavailable at the time Retirement Payments are to
commence,
<PAGE> 2
an estimated benefit will be paid based on the available
compensation data, subject to a retroactive adjustment when final
data are available.
(B) "Annuity equivalent" - of a given benefit shall
mean the actuarial equivalent, single life (in the case of an
Employee who is single when benefits commence) or joint and fifty
percent (50%) survivor annuity (in all other situations) determined
as of the Employee's last day worked for G-P or its subsidiaries
("Employee's last day worked") using (without limitation) the then
applicable actuarial equivalence factors adopted for the Georgia-
Pacific Corporation Salaried Employees Retirement Plan (the "SERP"),
statutory restrictions on qualified plan benefits as in effect on the
Employee's last day worked and the methods and assumptions which were
published and used by the Pension Benefit Guaranty Corporation for
plan terminations occurring during the first month of the calendar
quarter during which Employee's last day worked occurs; provided
however that notwithstanding the foregoing, if the Employee elects to
retain his or her SERP benefits in that plan after the Employee's
last day worked and the amount of those benefits is increased due to
adjustments in the statutory restrictions on qualified plan benefits
between the Employee's last day worked and the date of distribution
of his or her SERP benefits, the Employee's benefits under this
Agreement will be recalculated with respect to the first payment due
after the date of the SERP distribution (and all future payments)
solely to reflect the greater offset necessitated by the above-
described increase in the SERP benefit; and provided further that
with respect to benefits under retirement compensation plans
maintained by G-P and/or its subsidiaries which depend on investment
performance and which have been distributed to the Employee prior to
his last day worked, G-P's actuarial equivalent calculation shall
take into account such investment performance by deeming the
appropriate investment gain between the date of any such distribution
of benefits the Employee's last day worked to be the Periodic
Adjustment percentage under the SERP as in effect from time to time
during that period and the investment gain for periods after the
Employee's last day worked to be the Periodic Adjustment percentage
for the SERP as of the Employee's last day worked.
(C) "Retirement compensation plans maintained by G-
P and/or its subsidiaries" - shall mean any qualified or non-
qualified retirement plans covering the Employee (including, without
limitation, the Georgia-Pacific Corporation Savings and Capital
Growth Plan - formerly the Georgia-Pacific Stock Bonus Trust - and
the SERP but excluding the former Georgia-Pacific Corporation Payroll-
Based Employee Stock Ownership Plan) to the extent that benefits
under such plans are attributable to contributions made by G-P and/or
its subsidiaries.
3. Early Retirement.
(a) Employee will be eligible for Early Retirement as of the
date Employee's employment terminates after reaching age fifty-five (55) and
completing at least fifteen (15) years of continuous service with G-P and/or
its subsidiaries (as defined in Paragraph 8).
(b) If Employee is eligible for such payments under Paragraph
3(a), Retirement Payment to Employee upon Early Retirement shall commence on
the first day of the month following the Employee's pay-through date or the
Employee's attainment of the age of sixty-two (62) years, whichever last
occurs. Such payments shall continue monthly on the first day of each month
during the lifetime of the Employee and, subject to the survivor annuity
provisions of Paragraph 7, shall end with the payment for the month of his or
her death.
(c) The monthly Retirement Payment payable to Employee if
eligible for Early Retirement under Paragraph 3(a) shall be equal to the
Retirement Payment to which the Employee
-2-
<PAGE> 3
would be entitled if the Employee were eligible for Normal Retirement under
Paragraph 2(a) as of the Employee's date of termination of employment.
4. Termination.
(a) Employee will be eligible for Termination benefits as of
the date Employee's employment terminates for any reason other than Normal
Retirement, Early Retirement, Pre-Termination Disability or Pre-Termination
Death (under Paragraphs 2(a), 3(a), 5(a) or 6(a), respectively).
(b) If Employee is eligible for such payments under Paragraph
4(a), Retirement Payments to Employee upon Termination shall commence on the
first day of the month following the Employee's pay-through date or the
Employee's attainment of the age of sixty-two (62) years, whichever last
occurs. Such payments shall continue monthly on the first day of each month
during the lifetime of the Employee and, subject to the survivor annuity
provisions of Paragraph 7, shall end with the payment for the month of his or
her death.
(c) The monthly Retirement Payment payable to Employee if
eligible for Termination benefits under Paragraph 4(a) shall be calculated as
follows:
(1) Determine the Retirement Payment to which the
Employee would be entitled if the Employee were eligible for Normal
Retirement under Paragraph 2(a) as of the date of the Employee's
termination of employment;
(2) Multiply that amount by a fraction, the numerator of
which shall equal the number of full years of continuous service which
Employee has completed with G-P and/or its subsidiaries (as defined in
Paragraph 8) on or before the date his or her employment terminates or
fifteen (l5), whichever is less, and the denominator of which shall be
fifteen (l5).
5. Pre-Termination Disability.
(a) Employee will be eligible for Pre-Termination Disability
benefits as of the date Employee's employment terminates by reason of
disability - as determined by the Stock Option Plan and Management
Compensation Committee of G-P's Board of Directors (the "Committee").
(b) If Employee is eligible for such benefits under Paragraph
5(a), Retirement Payments to Employee upon Pre-Termination Disability shall
commence on the first day of the month following the Employee's pay-through
date (as determined by the Committee). Such payments shall continue monthly
on the first day of each month during the lifetime of the Employee and,
subject to the survivor annuity provisions of Paragraph 7, shall end with the
payment for the month of his or her death.
(c) The amount of the monthly Retirement Payment payable to
Employee if eligible under Paragraph 5(a) for Pre-Termination Disability
benefits shall be calculated as follows:
(1) Determine the monthly Retirement Payment to which the
Employee would be entitled if the Employee were eligible for Normal
Retirement under Paragraph 2(a) as of the Employee's date of termination
due to disability;
(2) Multiply the result in subparagraph (c)(1) by the
appropriate early commencement percentage as indicated below:
-3-
<PAGE> 4
<TABLE>
<CAPTION>
Age of Employee
At Termination
Because of Disability Percentage
<S> <C>
64 100%
63 100%
62 100%
61 94%
60 88%
59 82%
58 76%
57 70%
56 64%
55 58%
54 and prior 50%
</TABLE>
6. Pre-Termination Death.
(a) Employee's surviving spouse (as defined in Paragraph 6(d))
will be eligible for Pre-Termination Death benefits as of the date Employee's
employment terminates by reason of death.
(b) If Employee's surviving spouse (as defined in Paragraph
6(d)) is eligible for such benefits under Paragraph 6(a), Retirement Payments
to Employee's surviving spouse by reason of Employee's death prior to
termination shall commence on the first day of the month following the later
of the date of death of Employee or the Employee's pay-through date. Such
payments shall continue monthly on the first day of each month during the
lifetime of the Employee's surviving spouse only and shall end with the
payment for the month of his or her death.
(c) The amount of the monthly Retirement Payment payable to
Employee's surviving spouse if eligible under Paragraph 6(a) for Pre-
Termination Death benefits shall be calculated as follows:
(1) Determine the monthly Retirement Payment to which the
Employee would be entitled if the Employee were eligible for Normal
Retirement under Paragraph 2(a) as of the Employee's date of death;
(2) Multiply the result in subparagraph (c)(1) by the
appropriate early commencement percentage as indicated below:
<TABLE>
<CAPTION>
Age of Employee
At Death Percentage
<S> <C>
64 50%
63 50%
62 50%
61 47%
60 44%
59 41%
58 38%
57 35%
56 32%
55 29%
54 and prior 25%
</TABLE>
(d) For purposes of this Paragraph 6 only, Employee's
"surviving spouse" shall mean the Employee's spouse at the time of Employee's
death.
-4-
<PAGE> 5
7. Post-Termination Death.
(a) Employee's surviving spouse (as defined in Paragraph 7(d))
will be eligible for Post-Termination Death benefits as of:
(1) The date Employee dies after benefits under this
Agreement have commenced; or
(2) The date Employee dies if such death occurs after the
Employee's employment with G-P and its subsidiaries has terminated, but
before Retirement Benefit Payments pursuant to Paragraph 2(b), 3(b), 4(b)
or 5(b) have commenced, and at a time when the Employee has met the
eligibility requirements for benefits under this Agreement stated in
Paragraphs 2(a), 3(a), 4(a) or 5(a).
(b) If Employee's surviving spouse (as defined in Paragraph
7(d)) is eligible for such benefits, Retirement Payments to Employee's
surviving spouse by reason of Employee's death after termination shall
commence on the first day of the month following the latest of:
(1) The death of Employee, or
(2) If eligible under Paragraph 7(a)(1), the last day of
the period for which Employee's benefit payments have been paid, or
(3) If eligible under Paragraph 7(a)(2), the Employee's
pay-through date.
Such payments shall continue monthly on the first day of each month during the
lifetime of the Employee's surviving spouse only and shall end with the payment
for the month of his or her death.
(c) The amount of the monthly Retirement Payment payable to
Employee's surviving spouse (as defined in Paragraph 7(d)) if eligible under
Paragraph 7(a) for Post-Termination Death benefits shall be calculated as
follows:
(1) If eligible under Paragraph 7(a)(1), Employee's
surviving spouse (as defined in Paragraph 7(d)) shall be entitled to the
payment of a monthly benefit for the rest of such spouse's lifetime equal
to fifty percent (50%) of the monthly Retirement Payment which was being
paid to Employee immediately before his or her death;
(2) If eligible under Paragraph 7(a)(2), Employee's
surviving spouse (as defined in Paragraph 7(d)) shall be entitled to the
payment of a monthly Retirement Payment for the rest of such spouse's
lifetime equal to fifty percent (50%) of the monthly Retirement Payment
which would have been payable to Employee if he or she had survived until
Retirement Payments commenced, provided however that if Employee dies
prior to attaining age sixty-two (62), the survivor benefit shall be
further adjusted as provided in Paragraph 6(c)(2).
(d) For purposes of this Paragraph 7 only (but subject to
subparagraph (e) below), Employee's "surviving spouse" means a spouse who is
Employee's lawful spouse on the date of Employee's death and (i) in the case
of Paragraph 7(c)(1), on the date the Employee's benefits under this Agreement
commenced or (ii) in the case of Paragraph 7(c)(2), on the date of Employee's
death.
(e) Notwithstanding anything in Paragraph 7(d) to the
contrary, if Employee is entitled to Retirement Payments and after termination
of employment with G-P and/or its subsidiaries, (i) Employee marries or
remarries after the date he or she reaches age sixty-two (62) or the date his
or her employment by G-P and/or its subsidiaries terminates, whichever is
later, and (ii) Employee desires to provide for the payment of a survivor
benefit to his or her new spouse if such spouse survives Employee, Employee
shall have the right to make an irrevocable election (in a form satisfactory
to G-P) to convert the monthly Retirement Payments to which he or she is
entitled under this Agreement into an actuarial equivalent benefit (as
determined by G-P using the actuarial factors specified in Paragraph 2(c))
which will provide a reduced monthly Retirement Payment to Employee for his or
her lifetime and, if Employee's new spouse survives Employee, will provide
such new spouse with a monthly benefit equal to fifty percent (50%) of
Employee's reduced monthly Retirement Payments for the rest of
-5-
<PAGE> 6
such new spouse's lifetime. If Employee marries or remarries after termination
because of disability under Paragraph 5, the provisions of this subparagraph
(without regard to clause (i)) shall apply.
8. Continuous Service.
For purposes of this Agreement, "continuous service with G-P
and/or its subsidiaries" shall mean a period of unbroken employment with G-P
and/or its subsidiaries. Employment with a subsidiary shall be counted only
for periods during which the subsidiary's relationship with G-P existed.
9. Forfeiture of Benefits.
As consideration for the benefits provided under this Agreement
and notwithstanding any other provisions of this Agreement, Employee shall
forfeit all entitlement to monthly Retirement Payments (whether to Employee or
Employee's spouse) if Employee, within a period of three (3) years after the
date Employee's employment with G-P and its subsidiaries terminates, whether
by retirement or otherwise, is employed as an officer, director, manager,
sales representative (if his or her responsibilities at G-P included sales) or
business consultant in the United States by another employer which, combined
with its affiliates, has annual sales of $25,000,000 or more and which is a
competitor with G-P or its subsidiaries in the United States (a "competing
position"). Employee shall notify the Chairman of the Board of the Company of
his or her acceptance of a competing position within ten (10) days after the
effective date of his acceptance and shall reimburse G-P for any payments
under this Agreement to which he is not entitled. G-P may offset this
obligation of employee against any and all obligations or liabilities it owes
to Employee, and if it is necessary to seek reimbursement through legal
process, Employee agrees to reimburse G-P for its costs and attorneys fees in
such an action. For purposes of this Paragraph 9: (i) the term "affiliate"
shall mean any entity directly or indirectly controlling, controlled by or
under common control with the employer in question, whether by stock
ownership, agreement or otherwise; (ii) the terms "control", "controlling" and
"controlled" shall refer to direct or indirect ownership of at least fifty
percent (50%) of the voting stock, partnership interests or income or other
beneficial interest with respect to the entity in question; and (iii) the term
"competitor with G-P or its subsidiaries" shall mean (A) with respect to any
non-executive officer who has had managerial and/or operational responsibility
for a period of at least six (6) months during the three (3) years prior to
termination for particular business unit(s), division(s) or subsidiary(ies) of
G-P or its subsidiaries, an entity which competes with G-P or its subsidiaries
with respect to any of the products manufactured and/or marketed by such
business unit(s), division(s) or subsidiary(ies); (B) with respect to
executive officers and officers who have had corporate staff responsibilities
for at least six (6) months during the three (3) years prior to termination,
any entity which competes with G-P or its subsidiaries in the lumber, plywood,
pulp, paper or chemical businesses in the United States. Once benefits are
forfeited under this provision they may not be reinstated, even if the
competing position is relinquished. If any aspect of this forfeiture
provision is determined to be unenforceable as drafted, it is the intention of
the parties that, to the extent permitted by applicable law, the objectionable
portion(s) of this provision shall be severed or restricted (as the case may
be) and that, except as so modified, the provision shall be enforced.
10. Nothing contained in this Agreement and no action taken pursuant
to the provisions of this Agreement shall create or be construed to create a
trust of any kind, or a fiduciary relationship between G-P and Employee, or
Employee's spouse, or any other person. This Agreement does not create any
escrow account, trust fund or any other form of asset segregation. Any
Retirement Payments due under the provisions of this Agreement shall be paid
from the general funds of G-P. To the extent any person acquires a right to
receive payments from G-P under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of G-P.
-6-
<PAGE> 7
11. The right of Employee or any other person to Retirement Payments
under this Agreement shall not be subject to the claims of their creditors or
others, nor to legal process, and shall not be assigned, transferred, pledged
or encumbered.
12. Nothing contained herein shall be construed as conferring upon
Employee the right to continue in the employ of G-P and/or its subsidiaries as
an executive or in any other capacity.
13. The annual Retirement Payments provided for by this Agreement
shall not constitute "compensation" for purposes of computing compensation for
any qualified deferred compensation plan maintained by G-P or its
subsidiaries.
14. The Board of Directors of G-P shall have full power and authority
to interpret, construe and administer this Agreement and the Board's
interpretation and construction thereof, and actions thereunder shall be
binding and conclusive on all persons for all purposes. No member of the
Board shall be liable to any person for any action taken or omitted in
connection with the interpretation and administration of this Agreement unless
attributable to his own willful misconduct or lack of good faith.
15. This Agreement shall be binding upon and inure to the benefit of
G-P and its subsidiaries, its successors and assigns, and to the Employee and
Employee's heirs, executors, administrators and legal representatives.
16. All actions for the enforcement of any rights under, or
interpretation of, this Agreement shall be brought in the courts of the State
of Georgia or (to the extent that jurisdictional requirements permit) in
federal courts located in the State of Georgia, and all participants in this
Plan agree to be subject to the jurisdiction of such courts for the purpose of
any such actions. The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the State of Georgia and, to the
extent applicable, federal law.
17. It is understood and agreed by the parties that if there is an
Executive Retirement Agreement between Employee and G-P entered into prior to
the date of this Agreement, this Agreement is a mutually-agreed amendment and
restatement of such Agreement and that, further, any such prior Agreement is
acknowledged to be superseded by this Agreement as of the effective date of
this Agreement specified above.
18. Any notices required by this Agreement shall be sent as follows:
If to: Employee: James F. Kelley
133 Peachtree Street N. E.
Atlanta, Georgia 30303
G-P: Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Chairman and Chief Executive Officer
Any party may specify in writing to the other party a change of address for
purposes of this Paragraph 18, and any such change shall be effective upon
receipt of such written notice.
IN WITNESS WHEREOF, G-P has caused this Agreement to be executed by
its duly authorized officer and Employee has hereunto set his/her hand as of
the date first above written.
GEORGIA-PACIFIC CORPORATION
By: /s/ A. D. Correll
------------------------------------
A. D. Correll
Chairman and Chief Executive Officer
EMPLOYEE:
/s/ James F. Kelley
--------------------------
James F. Kelley
- 7 -
<PAGE> 1
EXHIBIT 10.10
GEORGIA-PACIFIC CORPORATION
1995 ECONOMIC VALUE INCENTIVE PLAN
(As Adopted by Action of the Board of Directors on February 1, 1995)
By action of its Board of Directors on February 1, 1995, Georgia-Pacific
Corporation adopted the Georgia-Pacific Corporation Economic Value Incentive
Plan ("EVIP") for its senior management and staff effective for calendar year
1995 and subsequent Covered Years:
I. DEFINITIONS
For purposes of the EVIP, the following terms or phrases shall have the
indicated meanings:
1. "Affected Officer" means any officer of Georgia-Pacific Corporation as
of January 1 of any Covered Year (other than the CEO), who in the judgment of
the Committee may receive total compensation for the Covered Year in excess of
the limit on tax deductible compensation specified in Section 162(m) of the
Internal Revenue Code of 1986 or any statute which is the successor or
replacement of Section 162(m), as the same may be amended from time to time (and
any regulations promulgated thereunder). The Committee shall determine which
officer Participants in this Plan will be considered Affected Officers in any
Covered Year on or before the date of the Board's first meeting in such year.
2. "Annual Bonus Limit" means (i) for any Participant (other than the
CEO), the lesser of (A) 200% of the amount which is the product of (x) the
maximum total (Annual and Long-Term) bonus that the Participant could receive if
the Target EVA for the Corporation were achieved in the Covered Year (as
determined by the Committee under paragraph 1(a)(ii) of Section III) and (y) the
weighting assigned by the Committee (under paragraph 1(a)(iii) of Section III)
to the Annual Bonus opportunity for the Covered Year or (B) 100% of the
Participant's Rate of Base Salary on January 1 of the Covered Year; and (ii) for
the CEO, the lesser of (A) an amount equal to the amount described in (i)(A)
above calculated for the CEO or (B) 140% of the CEO's Rate of Base Salary on
January 1 of the Covered Year.
3. "Board" means the Board of Directors of the Corporation.
4. "Business Unit" means the Corporation and each business segment,
division or corporate staff department of the Corporation for which EVA
performance standards are set for a given Covered Year.
5. "CEO" means the Chairman and Chief Executive Officer of Georgia-
Pacific Corporation or, if one person does not hold both of these offices, the
Chief Executive Officer of Georgia-Pacific Corporation.
6. "Committee" means the Compensation Committee of the Board, as
constituted from time to time, or such subcommittee of that body as the
Compensation Committee shall specify to act for the Compensation Committee with
respect to this Plan, provided however that any such subcommittee shall consist
entirely of (but at least two) "outside directors" as that term is defined
pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from
time to time, or any statute which is a successor or replacement for such
statute (and applicable regulations promulgated thereunder).
7. "Compensation" means the Salary Grade midpoint of a Participant for a
given Covered Year determined as of January 1 of the Covered Year by the Plan
Administrator using the generally applicable salary grade classifications
generated by the Compensation Department of the Corporation. The determination
of "Compensation" shall take into account base salary increases retroactively
effective to
<PAGE> 2
that date as approved (in accordance with normal corporate procedures) by
management or by the Committee and the Board on or before the date of the
Board's first regular meeting during the Covered Year.
8. "Corporation" means Georgia-Pacific Corporation and its subsidiaries.
9. "Covered Year" means each calendar year beginning on or after January
1, 1995.
10. "EVA" means economic value added for the Covered Year, which, in turn,
is defined as net operating profit after tax minus a capital charge determined
by multiplying the Corporation's weighted average cost of debt and equity
capital for the Covered Year, as determined by the Committee prior to March 31
of the affected Covered Year, by the sum of the market value of the
Corporation's outstanding common stock and the market value of its outstanding
debt for the Covered Year, as determined by the Committee prior to March 31 of
the affected Covered Year (as adjusted for changes in average working capital
during the Covered Year). "Net operating profit after tax" is calculated by
adjusting operating profit (calculated using the Corporation's income statement
for the Covered Year) by eliminating the non-cash effect of (i) goodwill
amortization, (ii) changes in the allowance for doubtful accounts, (iii) changes
in contingency, inventory and compensation/employee benefit plan reserves and
(iv) all other material non-cash charges and also by deducting cash tax
payments. The determination of EVA results for the Corporation as a whole for
purposes of this Plan is the responsibility of the Committee; the Plan
Administrator shall have the responsibility for determining EVA results for each
other Business Unit, but such determination by the Plan Administrator must be
consistent with the Committee's determination of corporate EVA results, provided
that if an Affected Officer's Annual Bonus under this Plan for a Covered Year
will depend in part on the attainment of EVA performance goals in a Business
Unit other than the Corporation, the Committee shall be responsible for
determining the EVA results of that Business Unit. In particular (but without
limitation), the sum of Target EVA for all business segments and the sum of
Target EVA for all divisions must each equal the Target EVA for the Corporation.
11. "Employee" means any full-time, salaried employee of the Corporation.
12. "Executive Group" means one of the following groups of Participants:
Corporate Staff, Segment Heads, Segment Staff, Divisional Executives (as defined
by the CEO on an annual basis) and such other groups as may be specified by the
CEO for a given Covered Year.
13. "Long-Term Bonus Limit" means (i) for Participants other than the CEO,
the least of (A) the amount of the maximum total (Annual and Long-Term) bonus
the Participant could receive if the Target EVA for the Corporation were
achieved in the Covered Year (as determined by the Committee pursuant to
paragraph 1(a)(ii) of Section III), (B) 100% of the Participant's Rate of Base
Salary on January 1 of the Covered Year reduced by any Annual Bonus that may be
payable for that Covered Year or (C); the amount of the maximum total (Annual
and Long-Term) bonus the Participant could receive if the Maximum EVA for the
Corporation were achieved in the Covered Year (as determined by the Committee
pursuant to paragraph 1(a)(ii) of Section III) reduced by any Annual Bonus that
may be payable for that Covered Year and (ii) for the CEO, the lesser of (A) an
amount equal to twice the Annual Bonus to which he would be entitled for the
Covered Year or (B) 140% of the CEO's Rate of Base Salary on January 1 of the
Covered Year reduced by any Annual Bonus that may be payable for that Covered
Year.
14. "Maximum EVA" means the EVA at which the percentage of Compensation
paid as an Annual Bonus reaches its maximum, as determined by the Committee or
the CEO pursuant to subsection 1 of Section III.
15. "Participant" means an Employee of the Corporation who, for a given
Covered Year, meets the eligibility standards of Section II.
16. "Plan" or "EVIP" means the Georgia-Pacific Corporation 1995 Economic
Value Incentive Plan as set forth in this document, as amended from time to
time.
17. "Plan Administrator" means the person or entity having administrative
authority under this EVIP, as specified in Section IV.
-2-
<PAGE> 3
18. "Rate of Base Salary as of January 1 of the Covered Year" means a
Participant's rate of base annual salary in effect on January 1 of the Covered
Year, provided that the determination of "Rate of Base Salary on January 1 of
the Covered Year" shall take into account base salary increases retroactively
effective to that date as approved (in accordance with normal corporate
procedures) by management or by the Committee and the Board on or before the
date of the Board's first regular meeting during the Covered Year, and provided
further that, for Employees who become Participants for a Covered Year after the
commencement of that year, "Rate of Base Salary on January 1 of the Covered
Year" shall mean such Participant's rate of base annual salary in effect on the
date his/her participation commences.
19. "Salary Grade" means the salary grade of a Participant as established
from time to time by the Compensation Department of the Corporation in
accordance with the Corporation's generally applicable policies.
20. "Target EVA" means the EVA performance level at which the total
(Annual Bonus and Long-Term Bonus) bonus opportunity under this Plan will lie at
the median (50th percentile) of competitive practice, as determined by the
Committee or the CEO pursuant to subsection 1 of Section III.
21. "Threshold EVA" means the minimum EVA for which an Annual Bonus will
be paid, as determined by the Committee or the CEO pursuant to subsection 1 of
Section III.
II. ELIGIBILITY
1. Participation Criteria. An Employee will be eligible to participate
in the EVIP for a given Covered Year if he/she is, on January 1 of the Covered
Year, an officer of Georgia-Pacific Corporation (or becomes an officer during
the Covered Year) or, if a non-officer, has been designated by the CEO as a
Participant at the beginning of the year or has been added as a Participant in
the EVIP by act of the CEO. For each Covered Year, the CEO will also define
each of the Executive Groups and specify the Executive Group to which each
Participant (other than the CEO) belongs. The CEO will be assigned to the
Corporate Staff group.
2. Special Rules. Notwithstanding anything in subsection 1 of this
Section II to the contrary:
(a) A Participant who terminates employment with the Corporation during
the Covered Year may receive a prorated - or no - award pursuant to
subsection 4 of Section III.
(b) The CEO shall have authority, in his discretion, to add or delete
Employees from the Participant group, provided that no person may be
added as a Participant during the fourth calendar quarter of the
Covered Year and provided further that the bonus for an Employee who
is added as a Participant for a Covered Year will be prorated based on
the number of complete calendar months he/she was a Participant for
the Covered Year. In each case in which the CEO adds a Participant,
he shall designate the effective date of his/her participation and
his/her Executive Group.
(c) If a Participant's position with the Corporation changes during the
Covered Year so that his/her original designation to an Executive
Group no longer best reflects the nature of his/her responsibilities,
the CEO may, in his discretion, change the Executive Group to which
the Participant is assigned to the group which in the CEO's judgment
best reflects the nature of his/her job responsibilities for the
Covered Year as a whole.
(d) Participants in other incentive compensation programs (excluding any
stock option plan) maintained by the Corporation are not eligible to
participate in the EVIP.
III. AWARDS
Bonuses under the EVIP are composed of two different types of awards, viz.,
the annual bonus award ("Annual Bonus") and the long-term bonus award ("Long-
Term Bonus"):
1. Award of Annual Bonuses. Annual Bonuses for each Participant under
this EVIP will be an amount determined pursuant to standards adopted by the CEO
or the Committee prior to March 31 of the Covered Year as follows:
-3-
<PAGE> 4
(a) The Committee will determine, in its discretion:
(i) The identity of any Affected Officers for the Covered Year;
(ii) The Threshold EVA, Target EVA and Maximum EVA levels for such
Covered Year for the Corporation as a whole (and for any
Business Unit, the EVA performance of which affects the Annual
Bonus of an Affected Officer);
(iii) The total (Annual and Long-Term) bonus permissible under this
Plan (expressed as a percentage of Compensation) for each
Salary Grade at each of these EVA levels; and
(iv) The percentage of the total bonus opportunity for such Covered
Year which will comprise the Annual Bonus.
(b) For each Covered Year, the CEO shall, in his discretion, determine
(and report to the Committee):
(i) The appropriate Business Units (other than the Corporation) for
which EVA performance standards will be set for the Covered
Year;
(ii) The Threshold EVA, Target EVA and Maximum EVA levels for each
Business Unit established pursuant to subparagraph (i) of this
paragraph (b) (other than any Business Unit for which the
Committee is responsible for setting the EVA performance level
for the Covered Year);
(iii) The Annual Bonus for the Covered Year (expressed as a
percentage of Compensation) for each Salary Grade at each of
the EVA performance levels described in subparagraph (ii) of
this paragraph (b); and
(iv) The fractional weightings assigned to all Participants in each
Executive Group (other than the CEO) for the corporate,
business segment and division EVA performance levels to be used
in determining the Annual Bonus for each such Participant (such
weightings shall total 1 for each such Participant).
All determinations by the CEO as described in this paragraph (b)
shall be consistent with the EVA standards for the
Corporation (and, when required, any business segment or
division) by the Committee. In particular, but without
limitation, the sum of the division Target EVA standards and
the sum of business segment Target EVA standards must each
equal the Target EVA standards for the Corporation as a whole.
(c) EVA performance standards will be determined taking into account an
assessment of the Corporation's annual financial standards developed
by management for the Covered Year, relevant information concerning
industry conditions and market expectations.
(d) The CEO's Annual Bonus will be based 100% on the EVA performance of
the Corporation as a whole.
(e) The amount of Annual Bonus (expressed as a percentage of Compensation)
for any EVA level between a given EVA level and the next preceding or
following level shall be determined by interpolation between those two
levels.
(f) If the achieved EVA levels for any Business Unit for a Covered Year
are less than the Threshold EVA set for that Business Unit for that
year, no Annual Bonuses with respect to the performance of that
Business Unit shall be paid; if the achieved EVA levels for any
Business Unit for a Covered Year exceed the Maximum EVA set for that
Business Unit for that year, the percentage of Compensation
corresponding to the Maximum EVA for the affected Business Units shall
be paid.
(g) The Annual Bonus of any Participant in the Covered Year shall be
calculated as follows:
(i) After the close of a Covered Year and before the payment date
specified in subsection 3 of this Section III, the Committee
shall certify in writing the extent to which the EVA standards
for the Corporation as a whole (and for any other Business Unit
for which the Committee set the EVA standards for the Covered
-4-
<PAGE> 5
Year) determined pursuant to subsection 1 of this Section III
have been achieved for that Covered Year. Within the same
period and consistent with the Committee's findings regarding
the level of achieved EVA performance for the Covered Year by
the Corporation (and any other Business Unit for which the
Committee set the EVA standards for the Covered Year), the CEO
shall determine the extent to which the EVA standards set for
Business Units for which the Committee is not required to make
this determination pursuant to subsection 1 of this Section III
have been achieved for the Covered Year.
(ii) Based upon the achieved EVA performance for each applicable
Business Unit for the Covered Year determined in accordance
with subparagraph (i) of this paragraph (g), the corresponding
percentages of Compensation for the Salary Grade of each
Participant shall be determined using the standards established
pursuant to paragraphs (a), (b) and (c) of this subsection 1.
For purposes of this subparagraph (ii), "each applicable
Business Unit" shall be each Business Unit, the EVA performance
of which is reflected in the weighting established under
subparagraph (b)(iv) of this subsection 1 for use in
determining the Annual Bonuses of the Executive Group of which
the Participant is a member.
(iii) The Participant's Annual Bonus for the Covered Year will equal
the product of (x) the sum of the percentages calculated
pursuant to subparagraph (ii) of this paragraph (g) and (y) the
Participant's Compensation.
(h) Notwithstanding anything in this subsection 1 to the contrary, the
Annual Bonus for any Participant for the Covered Year may not exceed
the Annual Bonus Limit for that year.
2. Award of Long-Term Bonuses. Any Participant shall be eligible to
receive a Long-Term Bonus for a Covered Year regardless whether he/she receives
an Annual Bonus for that year, provided that, notwithstanding the foregoing, the
CEO will not be eligible for a Long-Term Bonus for the Covered Year if he is not
eligible for an Annual Bonus for that year. Long-Term Bonus amounts will be
determined as follows:
(a) Subject to the limits of this subsection 2, the CEO, in his
discretion, shall determine the amount of the Long-Term Bonus for the
Covered Year for each Participant (other than the CEO and each
Affected Officer) after reviewing the actions taken by the Business
Unit to which the Participant belongs during the Covered Year to
increase the long-term EVA of that Business Unit and/or the
Corporation as a whole. In conducting this review, the CEO may
consider any actions by Business Units he/she deems appropriate,
including but not limited to actions to (i) increase efficiency (by
increasing revenue or reducing costs using the same or less capital),
(ii) develop new investment opportunities and/or (iii) reduce or
divest under-performing assets.
(b) For each Affected Officer, the Long-Term Bonus for a Covered Year
shall equal the Long-Term Bonus Limit for such Affected Officer
(determined in accordance with subsection 14 of Section I), subject to
reduction by the Committee, in its discretion, based on its review and
evaluation of such performance criteria as the Committee may deem
appropriate.
(c) For the CEO, the Long-Term Bonus for a Covered Year shall equal 200%
of the Annual Bonus applicable to him/her for that year, subject to
reduction by the Committee in its discretion based on its review and
evaluation of such performance criteria as the Committee may deem
appropriate.
(d) Notwithstanding anything in this Plan to the contrary:
(i) The amount of the Long-Term Bonuses for each Participant
(including the CEO) will also reflect his/her individual
performance - and the performance of any Business Unit under
his/her supervision - with respect to the Corporation's
standing policies (as applicable and in effect from time to
time), in particular
-5-
<PAGE> 6
(but without limitation) the Corporation's
Code of Business Conduct and its safety and environmental
policies; and
(ii) For all Participants, the Long-Term Bonus for a Covered Year
may not exceed the Long-Term Bonus Limit for that year.
3. Payment of Awards. Awards shall be paid as soon as practicable after
the calculation of achieved EVA levels for the Covered Year, but in no event
later than March 15 following the end of the Covered Year. In the event of the
death of a Participant, any awards due to - or in respect of - him/her under
this Plan will be paid, first, to his/her surviving spouse (if any) and, if
there is no surviving spouse, to his/her estate.
4. Special Situations.
(a) A Participant whose employment with the Corporation terminates during
the Covered Year (i) for any reason after he/she has attained at least
age 65 or has attained age 55 and accumulated at least ten (10) years
of service for vesting purposes under the Georgia-Pacific Corporation
Savings and Capital Growth Plan, (ii) because of his/her death, (iii)
because of his/her total and permanent disability (as determined by
the Plan Administrator pursuant to the standards of the Georgia-
Pacific Corporation Salaried Long-Term Disability Plan, whether or not
the Participant has enrolled in that plan) or (iv) for any other
reason specifically approved by the Plan Administrator (provided that,
for purposes of this subparagraph (iv) only, the approval of the
Committee shall be required in the case of the CEO or an Affected
Officer) shall be entitled to a bonus award prorated to reflect the
number of complete calendar months actually worked during the Covered
Year payable at the same time bonuses for other Participants are paid
for that Covered Year.
(b) Subject to paragraph (a) of this subsection 4, Participants who during
the Covered Year (i) voluntarily terminate their employment with the
Corporation or (ii) are involuntarily terminated by the Corporation
for any reason will not be eligible to receive a bonus under this Plan
for the Covered Year.
5. Maximum Total Bonus Award. Notwithstanding anything in this Plan to
the contrary, no Participant may receive a total (Annual and Long-Term) bonus
award under this Plan in any Covered Year in excess of $2,000,000.
IV. ADMINISTRATION
The Plan will be administered by the Committee. Decisions and
determinations by the Committee shall be final and binding upon all parties,
including the Corporation, shareholders, Participants and other employees. The
Committee shall have the authority to administer the Plan, make all
determinations with respect to the construction and application of the Plan and
the Board resolutions establishing the Plan, adopt and revise rules and
regulations relating to the Plan and make any other determinations which it
believes necessary or advisable for the administration of the Plan. No member
of the Committee shall be liable to any person for any action taken or omitted
in connection with the interpretation and administration of this Plan unless
attributable to the member's own willful misconduct or lack of good faith. The
Committee is expressly authorized to appoint one or more individuals, who need
not be members of the Committee, or entities to administer the Plan and to make
all determinations with respect to the construction and application of the Plan,
and otherwise exercise all powers vested in the Committee under the Plan. Such
agents shall serve at the pleasure of the Committee. The decisions of any such
agents taken within the scope of his/her authority will have the same effect as
decisions by the Committee. Notwithstanding anything in this Section IV to the
contrary, the Committee may not delegate authority which under this Plan is
expressly reserved to the Committee alone.
-6-
<PAGE> 7
V. AMENDMENT OR TERMINATION
The Board, by action of the Committee, expressly reserves the right to
amend or terminate the EVIP at any time, provided that no Annual Bonus for a
Covered Year may thereby be reduced on or after December 31 of that Covered
Year.
VI. MISCELLANEOUS
1. Awards Unfunded. Awards payable pursuant to the EVIP (if any) shall
be paid solely from the general assets of the Corporation. No trust or other
funding device providing for the identification or segregation of assets to fund
EVIP awards has been established, nor is it the Corporation's intention to do
so. Each Participant shall be an unsecured creditor of the Corporation with
respect to any interest he or she may have in award payments under the EVIP.
2. Taxation of Awards. Awards under the EVIP will be compensation
subject to Federal and State tax withholding (including, without limitation,
FICA withholding) in the calendar year in which they are paid.
3. Retirement Plans and Welfare Benefit Plans. Except as otherwise
specified in the plan in question, awards under the EVIP will not be included as
"compensation" for purposes of the Corporation's retirement plans (both
qualified and non-qualified) or welfare benefit plans.
4. Spendthrift Clause. A Participant may not assign, anticipate,
alienate, commute, pledge or encumber any benefits to which he or she may become
entitled under the EVIP, nor are the awards subject to attachment or garnishment
by any creditor.
5. No Contract of Employment. The Corporation intends that the awards
provided under the EVIP be a term of employment and a part of each Participant's
compensation and benefit package. Participation in this Plan shall not
constitute an agreement (1) of the Participant to remain in the employ of and to
render his/her services to the Corporation or (2) of the Corporation to continue
to employ such Participant, and the Corporation may terminate the employment of
a Participant at any time with or without cause.
VII. EFFECTIVE DATE/SHAREHOLDER APPROVAL
1. Effective Date. The EVIP shall become effective on January 1, 1995.
2. Shareholder Approval. Notwithstanding anything in this EVIP to the
contrary, the EVIP shall be null and void from inception if it is not approved,
in a separate vote, by the affirmative vote of the holders of at least a
majority of the shares of the common stock of Georgia-Pacific Corporation
present or represented by Proxy and entitled to vote at a meeting of such
shareholders duly held in accordance with the applicable corporate law of the
State of Georgia and the By-Laws of the Corporation on or prior to December
31, 1995.
-7-
<PAGE> 1
EXHIBIT 10.11(i)
GEORGIA-PACIFIC CORPORATION
1995 SHAREHOLDER VALUE INCENTIVE PLAN
(Effective April 1, 1995)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
ARTICLE I DEFINITIONS 1
1.1 Approval Date 1
1.2 Board 1
1.3 Cause 2
1.4 Committee 2
1.5 Corporation 2
1.6 Effective Date 2
1.7 Employee 3
1.8 Fair Market Value of the Stock 3
1.9 Grant Date 3
1.10 Normal Grant 3
1.11 Option Agreement 4
1.12 Option Grant 4
1.12 Option Price 4
1.13 Participant 4
1.14 Peer Group Companies 4
1.15 Plan 4
1.16 Plan Administrator 4
1.18 Salary Grade 4
1.19 Stock 5
1.20 Subsidiary 5
1.21 Term or Term of the Plan 5
1.22 Total Shareholder Return 5
1.23 Vesting Date 6
1.24 Weighted Average Total Shareholder Return 6
ARTICLE II ELIGIBILITY 6
2.1 Selection of Participants 6
ARTICLE III INCENTIVE AWARDS 7
3.1 Option Grants 7
3.2 Augmented Option Grants 8
3.3 Normal and Accelerated Vesting of Option Grants 8
3.4 Special Vesting 10
3.5 Restrictions on Option Grants/Forfeitures 12
3.6 No Bar to Corporate Restructuring 14
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
3.7 Capital Readjustments/Option Grant Modifications 14
3.8 Change of Control 15
3.9 Fractional Shares 17
ARTICLE IV PLAN ADMINISTRATION 18
4.1 Plan Administrator 18
4.2 Delegation 18
ARTICLE V AMENDMENT AND TERMINATION 19
5.1 Amendment and Termination 19
ARTICLE VI MISCELLANEOUS PROVISIONS 19
6.1 Non-Transferability/Designation of Beneficiary 19
6.2 Continued Employment 20
6.3 Plan Unfunded 20
6.4 Taxation 20
6.5 Retirement Plans and Welfare Benefit Plans 21
6.6 Medium of Payment 21
6.7 No Cash Bonuses or Surrender Rights 21
6.8 Option Agreements 21
6.9 Governing Law 21
6.10 Severability 21
6.11 Headings/Gender 22
ARTICLE VII EFFECTIVE DATE/SHAREHOLDER APPROVAL 22
7.1 Effective Date 22
7.2 Shareholder Approval 22
</TABLE>
<PAGE> 4
GEORGIA-PACIFIC CORPORATION
1995 SHAREHOLDER VALUE INCENTIVE PLAN
By action of its Board of Directors and subject to the approval of its
shareholders, Georgia-Pacific Corporation has established the following
incentive compensation plan for specified key employees, to be known as the
"Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan" and to be
effective as of the Effective Date specified below. The purposes of this Plan
are to attract and retain qualified and competent Employees, to enhance the
growth and profitability of Georgia-Pacific Corporation and its Subsidiaries
(the "Corporation") and to maximize shareholder value by providing Employees
with the incentive of long-term rewards if they continue their employment and
attain established performance objectives. Annual grants of non-qualified
stock options will be made to Employees who are capable of having a significant
positive impact on the performance of the Corporation so that the interests of
such Employees will be more closely aligned with those of the Corporation's
shareholders.
ARTICLE I
DEFINITIONS
For purposes of this Plan, the following terms or phrases shall have
the indicated meanings:
1.1 Approval Date.
The date of the Committee's meeting at which Option Grants under this
Plan for a given Grant Date are determined and approved.
1.2 Board.
The Board of Directors of the Corporation.
<PAGE> 5
1.3 Cause.
"Cause" shall mean any of the following: (i) the willful failure of a
Participant to perform satisfactorily the duties consistent with his title and
position reasonably required of him by the Board or supervising management
(other than by reason of incapacity due to physical or mental illness); (ii)
the commission by a Participant of a felony, or the perpetration by a
Participant of a dishonest act or common law fraud against the Corporation or
any of its Subsidiaries; or (iii) any other willful act or omission (including
without limitation the violation of any corporate policy or regulation) which
could reasonably be expected to expose the Corporation to civil liability under
the law of the applicable jurisdiction or causes or may reasonably be expected
to cause significant injury to the financial condition or business reputation
of the Corporation or any of its Subsidiaries.
1.4 Committee.
The Compensation Committee of the Board of Directors of the
Corporation, as constituted from time to time, or such subcommittee of that
body as the Compensation Committee shall specify to act for the Compensation
Committee with respect to this Plan, provided however that any such
subcommittee shall consist entirely of (but at least two) "outside directors"
as that term is defined pursuant to Section 162(m) of the Internal Revenue Code
of 1986, as amended from time to time, or any statute which is a successor or
replacement for such statute (and applicable regulations promulgated
thereunder).
1.5 Corporation.
Georgia-Pacific Corporation , a Georgia corporation, its successors and
assigns.
1.6 Effective Date.
The Effective Date of this Plan, which shall be April 1, 1995, subject
to the subsequent approval of the shareholders of the Corporation.
-2-
<PAGE> 6
1.7 Employee.
A full-time, salaried employee of the Corporation (including, without
limitation, any officer of the Corporation).
1.8 Fair Market Value of the Stock.
On any date, the mean between the high and low sales prices of a share
of Stock on that date as reported in The Wall Street Journal, New York Stock
Exchange - Composite Transactions, or as reported in any successor quotation
system adopted prospectively for this purpose by the Committee, in its
discretion. The Fair Market Value of the Stock shall be rounded to the nearest
whole cent (with 0.5 cent being rounded to the next higher whole cent).
1.9 Grant Date.
The date as of which an Option Grant is deemed to have been made,
which shall be the effective date of the Option Grant as specified by the
Committee on the Approval Date.
1.10 Normal Grant.
The number of shares of Stock necessary, based on the Salary Grade of
a Participant at the Grant Date, to provide such Participant long-term
incentive compensation equivalent to the median (50th percentile) of prevailing
competitive practice with respect to long-term incentive compensation, as
determined based upon a comparative compensation study covering industrial
companies comparable to the Corporation in size and complexity of operations
conducted by a nationally recognized compensation consulting firm approved by
the Committee. For purposes of determining the Normal Grant for a Covered
Year, the Committee will use a Stock price (i) for 1995 only, selected by the
Committee, in its discretion, which, based upon the Committee's consideration
of such factors as current Stock price, Stock price movements over a period
deemed representative by the Committee and relevant information concerning
industry conditions and market trends, fairly represents the value of the Stock
on the Approval Date, and (ii) for other Covered Years, equal to the average
Fair Market Value of the Stock for the 5 consecutive trading days next
preceding the date which is 14 days prior to the Approval Date.
-3-
<PAGE> 7
1.11 Option Agreement.
A written agreement specifying the terms and conditions of each Option
Grant under this Plan, as described in Section 6.8.
1.12 Option Grant.
A non-qualified stock option to purchase a specified number of shares
of Stock at the Option Price specified in the Option Grant, subject to the
terms and conditions of this Plan and the governing Option Agreement.
1.13 Option Price.
The Fair Market Value of the Stock on the Grant Date.
1.14 Participant.
An Employee or former Employee who is selected as an Option Grant
recipient in accordance with Article II and who continues to hold outstanding
Option Grants under this Plan.
1.15 Peer Group Companies.
The companies included in the Standard & Poors Paper and Forest
Products Industry Index from time to time (but excluding the Corporation).
1.16 Plan.
The Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan
as described in this plan document.
1.17 Plan Administrator.
The person or entity having administrative authority under this Plan,
as specified in Article IV.
1.18 Salary Grade.
The salary grade of a Participant as established from time to time by
the Compensation Department of the Corporation in accordance with the
Corporation's generally applicable policies.
-4-
<PAGE> 8
1.19 Stock.
Georgia-Pacific Corporation common stock, eighty cents ($0.80) par
value per share.
1.20 Subsidiary.
Subsidiary shall mean any corporation (other than the Corporation) in
any unbroken chain of corporations beginning with the Corporation if, at the
time of reference, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
1.21 Term or Term of the Plan.
The 5-year period commencing on the Effective Date and ending on March
31, 2000.
1.22 Total Shareholder Return.
For a given period and a given common stock, the number determined by
the formula [(S(B)+S(D))P(E) - 100] / 100, where (i) "S(B)" is the number of
shares of the common stock (including fractional shares) that could be bought
with an initial $100 investment at P(B), or $100 / P(B); (ii) "S(D)" is the
total number of shares of the common stock (including fractional shares) which
could be purchased with the dividends (or allocated portion of a per share
dividend) paid on S(B) shares of the common stock during the measurement period
(and any additional shares or fractional shares allocated in accordance with
this subsection (ii) with respect to dividends paid during the measurement
period but prior to the dividend in question), determined in the case of each
such dividend paid using the closing price of the common stock on the trading
date coincident with or next preceding the date of payment of the dividend;
(iii) "P(B)" is the closing price of the common stock on the last trading day
before the first day of the measurement period; and (iv) "P(E)" is the closing
price of the common stock on the last trading day of the measurement period.
In calculating the Total Shareholder Return for a given common stock,
-5-
<PAGE> 9
the Plan Administrator will apply the principles of Section 3.7 (except for the
proviso in the last sentence of that section) as if that section applied to the
common stock.
1.23 Vesting Date.
The date upon which an Option Grant under this Plan first becomes
exercisable in accordance with the provisions of Sections 3.3 or 3.4.
1.24 Weighted Average Total Shareholder Return.
For any given measurement period, the average of the Total Shareholder
Returns for a named group of corporations with the return of each such
corporation weighted on the basis of its market capitalization at the beginning
of the measurement period.
ARTICLE II
ELIGIBILITY
2.1 Selection of Participants.
Prior to the Effective Date, but subject to the approval of this Plan
by the Board and the shareholders, the Committee, in its sole discretion, shall
designate those Employees who will be Participants in this Plan on the
Effective Date. The Grant Date for Participants selected pursuant to the
preceding sentence shall be the Effective Date. Prior to each Grant Date
following the Effective Date, the Committee, in its sole discretion, shall
designate the Employees who shall become Participants in this Plan at each such
Grant Date, provided that no Option Grant may have a Grant Date during the
first calendar quarter of any year. Whenever an Employee is designated as a
Participant on any Grant Date pursuant to this Section 2.1, the Plan
Administrator shall cause notice to be given to the Participant in writing
specifying:
(a) The Participant's Option Grant;
(b) The Grant Date for the Participant's Option Grant; and
(c) The Option Price for the Participant's Option Grant.
-6-
<PAGE> 10
The Plan Administrator shall also provide to each Participant with respect to a
given Grant Date an Option Agreement governing the Option Grant made on that
Grant Date executed on behalf of the Corporation and, if one has not been
supplied previously, a copy of this Plan.
ARTICLE III
INCENTIVE AWARDS
3.1 Option Grants.
Subject to the provisions of Section 3.2 regarding augmented Option
Grants, during the Term of this Plan, each Participant selected by the
Committee for any Grant Date (as determined by the Committee) shall receive an
Option Grant of a number of shares of Stock equal to a Normal Grant (as
determined by the Committee as of the Approval Date). The exercise price for
each Option Grant shall be the Option Price for the Grant Date for that Option
Grant. Except as provided in Section 3.7, the Option Price for an Option Grant
may not be modified after the Grant Date. Each such Option Grant shall be
subject to the provisions of this Plan and the Option Agreement approved by the
Committee pursuant to Section 6.8 governing that Option Grant. At no time
during the Term of the Plan may the aggregate of Option Grants outstanding and
the number of shares of Stock issued upon exercise of Option Grants under this
Plan exceed 8,100,000 shares of Stock (subject to adjustment in accordance with
Section 3.7). In addition, no Participant in this Plan may receive aggregate
Option Grants in excess of 200,000 shares of Stock during any calendar year
during the term of this Plan. Option Grants remain "outstanding" for purposes
of this Section 3.1 until forfeited under Section 3.5 or, to the extent not
exercised, for a period of 10 years from the Grant Date. Shares authorized by
this Plan but not subject to Option Grants under Section 2.1 and Option Grants
forfeited under Section 3.5 will be available for Option Grants to Participants
under Section 2.1. Shares issued pursuant to the exercise of a vested Option
Grant under this Plan may be authorized but unissued shares of Stock or
treasury Stock.
-7-
<PAGE> 11
3.2 Augmented Option Grants.
Notwithstanding anything in Section 3.1 to the contrary (but still
subject to the limitation on aggregate outstanding and individual Option Grants
provided in that Section): (i) in the event that the Corporation's Total
Shareholder Return for the 3, 4 or 5 full fiscal years of the Corporation
immediately preceding any Grant Date subsequent to the Effective Date is
greater than or equal to the 65th percentile - but less than the 75th
percentile - of the Total Shareholder Returns for Peer Group Companies, the
number of shares of Stock granted to a Participant as of such subsequent Grant
Date shall be 120% of the Normal Grant for that Participant (as determined by
the Committee); and (ii) in the event that the Corporation's Total Shareholder
Return for the 3, 4 or 5 full fiscal years of the Corporation immediately
preceding any Grant Date subsequent to the Effective Date is greater than or
equal to the 75th percentile of the Total Shareholder Return of Peer Group
Companies, the number of shares of Stock granted to a Participant as of such
subsequent Grant Date shall be 140% of the Normal Grant for that Participant
(as determined by the Committee). In the event that more than one of the
standards described in this Section 3.2 apply, the standard producing the
highest Option Grant will apply, provided that this Section 3.2 shall not apply
to the initial Option Grant to any Participant under this Plan.
3.3 Normal and Accelerated Vesting of Option Grants.
No Option Grant may be exercised prior to its Vesting Date, but on and
after its Vesting Date, an Option Grant may be exercised in accordance with -
and to the extent permitted under - the terms of this Plan and the applicable
Option Agreement. An Option Grant will vest without regard to performance
standards stated in this Section 3.3 on the 183rd day following the 9th
anniversary of the Grant Date. Option Grants are subject to accelerated
performance-based vesting in accordance with any of the following rules:
(a) An Option Grant will vest on the 3rd anniversary of the Grant
Date if the Corporation's Total Shareholder Return for the
immediately preceding 3
-8-
<PAGE> 12
full fiscal years exceeds the Weighted Average Total
Shareholder Return of all Peer Group Companies for the same
period.
(b) An Option Grant will vest on the 4th anniversary of the Grant
Date if the Corporation's Total Shareholder Return for the
immediately preceding 4 full fiscal years exceeds the Weighted
Average Total Shareholder Return of all Peer Group Companies
for the same period.
(c) An Option Grant will vest on the 5th anniversary of the Grant
Date if the Corporation's Total Shareholder Return for the
immediately preceding 5 full fiscal years exceeds the Weighted
Average Total Shareholder Return of all Peer Group Companies
for the same period.
Vesting under subsections (a), (b) and (c) shall be conditioned upon the
Committee's written certification that the performance vesting standards of
this Section 3.3 have been met. Vesting of Option Grants under this Section
3.3 is subject in all cases to the restrictions/forfeiture rules in Section
3.5. Option Grants vesting pursuant to this Section 3.3 may be exercised at
any time on or after the Vesting Date and prior to the 10th anniversary of the
Grant Date (not inclusive), provided that if a Participant's employment with
the Corporation and its Subsidiaries terminates for any reason other than
retirement (as defined in Section 3.4(b)(i)), death or disability (as defined
in Section 3.4(b)(iii)) after the Vesting Date of an Option Grant and before
that Option Grant has expired, the vested Option Grant may be exercised only
during the 90-day period following the Participant's date of termination or, if
shorter, during the remaining period before the Option Grant expires. If a
Participant's employment with the Corporation and its Subsidiaries terminates
for any reason other than retirement (as defined in Section 3.4(b)(i)), death
or disability (as defined in Section 3.4(b)(iii)) prior to the Vesting Date of
an Option Grant, the Option Grant will terminate as of the Participant's
termination date, and the Participant will have no further rights under that
Option Grant.
-9-
<PAGE> 13
3.4 Special Vesting.
(a) Notwithstanding anything in Sections 3.3 or 3.5 to the
contrary, the performance-based vesting provisions of
subsections (a), (b) and (c) of Section 3.3 shall operate to
vest any then-outstanding Option Grants held by Participants
who retire (as defined in Section 3.4(b)(i)), die or become
disabled (as defined in Section 3.4(b)(iii)) prior to the
Vesting Dates of such Option Grants even if such vesting
occurs after the termination of their employment with the
Corporation and its Subsidiaries.
(b) Notwithstanding anything in Sections 3.3 or 3.5 to the
contrary, if an Option Grant is not vested pursuant to the
performance-based vesting standards of subsections (a), (b)
and (c) of Section 3.3 or another provision of this Plan, it
will vest in the circumstances and on the date specified in
paragraphs (i) through (iii) below to the extent permitted by
the schedule set forth in Section 3.4(c):
(i) If a Participant terminates employment with the
Corporation and its Subsidiaries after attaining age
65 or age 55 and 10 years of service for vesting
purposes under the Georgia-Pacific Corporation
Savings and Capital Growth Plan (other than a
termination for Cause), on the later of his/her
retirement date or the 5th anniversary of the Grant
Date;
(ii) If the Participant dies, on the later of his/her date
of death or the 5th anniversary of the Grant Date; or
(iii) If the Participant becomes totally disabled as
defined under the Georgia-Pacific Corporation
Salaried Long-Term Disability Plan (whether or not
the Participant actually participates in that plan),
as determined by the Plan Administrator in its sole
discretion, on the later of his/her date of
termination of employment with the
-10-
<PAGE> 14
Corporation and its Subsidiaries because of such
disability or the 5th anniversary of the Grant Date.
(c) A Participant who is entitled to special vesting in accordance
with Section 3.4(b) above will vest in his/her outstanding
Option Grants as of the applicable date specified in Section
3.4(b) to the extent indicated in paragraphs (i) through (vi)
below:
(i) If special vesting described in Section 3.4(b)(i)
through (iii) occurs prior to the 5th anniversary of
the Grant Date of an outstanding Option Grant that
has not otherwise vested, 50% of that Option Grant
will vest and 50% will be forfeited.
(ii) If special vesting described in Section 3.4(b)(i)
through (iii) occurs on or after the 5th anniversary,
but prior to the 6th anniversary, of the Grant Date
of an outstanding Option Grant that has not otherwise
vested, 60% of that Option Grant will vest and 40%
will be forfeited.
(iii) If special vesting described in Section 3.4(b)(i)
through (iii) occurs on or after the 6th anniversary,
but prior to the 7th anniversary, of the Grant Date
of an outstanding Option Grant that has not otherwise
vested, 70% of that Option Grant will vest and 30%
will be forfeited.
(iv) If special vesting described in Section 3.4(b)(i)
through (iii) occurs on or after the 7th anniversary,
but prior to the 8th anniversary, of the Grant Date
of an outstanding Option Grant that has not otherwise
vested, 80% of that Option Grant will vest and 20%
will be forfeited.
(v) If special vesting described in Section 3.4(b)(i)
through (iii) occurs on or after the 8th anniversary,
but prior to the 9th
-11-
<PAGE> 15
anniversary, of the Grant Date of an outstanding
Option Grant that has not otherwise vested, 90% of
that Option Grant will vest and 10% will be
forfeited.
(vi) If special vesting described in Section 3.4(b)(i)
through (iii) occurs on or after the 9th anniversary
of the Grant Date of an outstanding Option Grant that
has not otherwise vested, 100% of that Option Grant
will vest.
(c) The special vesting dates specified in this Section 3.4 shall
be considered Vesting Dates for purposes of this Plan.
(d) Option Grants vesting pursuant to Section 3.4(a) may be
exercised at any time on or after the Vesting Date and prior
to the 10th anniversary of the applicable Grant Date (not
inclusive). Option Grants vesting pursuant to Section 3.4(b)
may be exercised at any time on or after the Vesting Date and
prior to the 183rd day following the Vesting Date (not
inclusive) or, if earlier, prior to the 10th anniversary of
the applicable Grant Date (not inclusive).
3.5 Restrictions on Option Grants /Forfeitures.
Option Grants under this Plan will be subject to the following
restrictions and forfeiture rules:
(a) Subject to Section 3.4, if a Participant's employment with the
Corporation is terminated for any reason prior to the Vesting
Date for an Option Grant, the Participant shall forfeit all
rights with respect to that Option Grant, and the Option
Agreement governing that Option Grant shall be null, void and
of no effect as of the date his/her employment terminates.
(b) An Option Grant shall be nontransferable and may not be sold,
hypothecated or otherwise assigned or conveyed by a
Participant to any
-12-
<PAGE> 16
party; provided that in the event of the incapacity (as
determined by the Plan Administrator) or death of the
Participant (but subject to Section 6.1), his/her
attorney-in-fact pursuant to a valid power of attorney giving
general or specific authority to make elections with respect
to outstanding Option Grants, his/her court-appointed guardian
or the custodian of his/her affairs or the executor or
administrator of his/her estate (as the case may be) may
exercise any rights with respect to any vested Option Grant
that the Participant could have exercised if he/she were still
alive or not incapacitated. No assignment or transfer of any
Option Grant or the rights represented thereby, whether
voluntary, involuntary, or by operation of law or otherwise,
except by will or the laws of descent and distribution, shall
vest in the assignee or transferee any interest or right
herein whatsoever, and immediately upon any attempt to assign
or transfer this Option Grant, this Option Grant shall
terminate and be of no force or effect.
(c) A Participant shall have no rights as a stockholder with
respect to outstanding Option Grants until the date of the
issuance or transfer of the shares to him and only after such
shares are fully paid. No adjustment shall be made for
dividends or other rights for which the record date is prior
to the date of such issuance or transfer.
(d) To the extent that a vested Option Grant is not exercised
during the period provided for its exercise under this Plan
and the related Option Agreement, the Participant shall
forfeit all rights with respect to that Option Grant and the
Option Agreement shall expire as of the close of the last day
of the prescribed exercise period.
(e) Notwithstanding anything in this Plan to the contrary, if a
Participant is terminated for Cause, all of such Participant's
outstanding Option Grants
-13-
<PAGE> 17
under this Plan for which the Vesting Date has occurred on or
prior to his/her date of termination shall terminate as of
such date of termination unless and to the extent that the
Committee determines (after taking into account the provisions
of Section 6.9) that such forfeiture in a given case would
violate applicable law.
3.6 No Bar to Corporate Restructuring.
The existence of this Plan or outstanding Option Grants under this
Plan shall not affect in any way the right or power of the Corporation or its
stockholders to make or authorize any and all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's capital structure or its
business, or any merger or consolidation of the Corporation, or any issue of
bonds, debentures, preferred or preference stocks ahead of or affecting the
Stock or the rights thereof, or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or part of its assets or business
or any other corporate act or proceeding, whether of a similar character or
otherwise. Any shares of stock accruing to outstanding Option Grants as a
result of any adjustment under Section 3.7 will be subject to the same
restrictions (and have the same Vesting Date) as the shares to which they
accrue.
3.7 Capital Readjustments/Option Grant Modifications.
The Option Grants under this Plan will be made in shares of the Stock
as constituted on the Grant Date of each Option Grant. In the event of any
merger, reorganization, consolidation, recapitalization, stock dividend, stock
split, or extraordinary distribution with respect to the Stock or other change
in corporate structure affecting the Stock, the Plan Administrator shall have
the authority to make such substitution or adjustments in the aggregate number
and kind of shares reserved for issuance under the Plan, in the maximum number
of shares which may be granted in any calendar year and in the number, kind and
Option Price of shares subject to outstanding Option Grants and/or such other
equitable substitution or adjustments as it may determine in its sole
discretion to be appropriate to ensure that all
-14-
<PAGE> 18
Participants are treated equitably as a result of any such event; provided,
however, that the number of shares subject to any Option Grant shall always be
a whole number.
3.8 Change of Control.
Notwithstanding any other provision of this Plan to the contrary, in
the event of a Change of Control of the Corporation (as defined in this Section
3.8), all outstanding Option Grants which are not yet vested shall vest as of
the effective date of such Change of Control if the Total Shareholder Return of
the Corporation for at least one of the 3-year, 4-year or 5-year periods ending
on the effective date of the Change of Control exceeds the Weighted Average
Total Shareholder Return of all Peer Group Companies for the same period.
Option Grants vested pursuant to this Section 3.8 may be exercised at any time
from and after the effective date of the Change of Control (which shall be
considered the applicable Vesting Date) and prior to the 10th anniversary of
the Grant Date. For the purposes of this Plan, a "Change of Control" shall
mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% of more of
either (i) the then outstanding shares of Stock (the
"Outstanding Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Corporation entitled
to vote generally in the election of directors (the
"Outstanding Voting Securities"); provided, however, that for
purposes of this subsection (a), the following acquisitions
shall not constitute a Change of Control: (i) any acquisition
directly from the Corporation, (ii) any acquisition by the
Corporation, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation
or (iv) any acquisition by any corporation pursuant to a
-15-
<PAGE> 19
transaction which complies with clauses (i), (ii), and (iii)
of subsection (c) of this Section 3.8; or
(b) Individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by
the Corporation's shareholders, was approved by a vote of at
least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Corporation (a "Business Combination"), in each
case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Stock and
Outstanding Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns the Corporation or all or
substantially all of the Corporation's
-16-
<PAGE> 20
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the
Outstanding Stock and Outstanding Voting Securities, as the
case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee
benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii)
at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
3.9 Fractional Shares.
Notwithstanding anything in this Plan to the contrary, Option Grants
shall always be in whole numbers of shares. In the event any adjustment to an
Option Grant pursuant to this Plan would otherwise result in the creation of a
fractional share interest, the affected Option Grant shall be rounded to the
nearest whole share (with 0.5 share rounded to the next higher whole number).
-17-
<PAGE> 21
ARTICLE IV
PLAN ADMINISTRATION
4.1 Plan Administrator.
The Plan will be administered by the Committee. Decisions and
determinations by the Committee shall be final and binding upon all parties,
including the Corporation, shareholders, Participants and other employees. The
Committee shall have the authority to administer the Plan, make all
determinations with respect to the construction and application of the Plan and
the Board resolutions establishing the Plan, adopt and revise rules and
regulations relating to the Plan and make any other determinations which it
believes necessary or advisable for the administration of the Plan. No member
of the Committee shall be liable to any person for any action taken or omitted
in connection with the interpretation and administration of this Plan unless
attributable to the member's own willful misconduct or lack of good faith.
Where specified in this Plan, Plan Administrator actions will be subject to
approval of the shareholders of the Corporation.
4.2 Delegation.
The Committee is expressly authorized to appoint one or more
individuals, who need not be members of the Committee, or entities to
administer the Plan and to make all determinations with respect to the
construction and application of the Plan, and otherwise exercise all powers
vested in the Committee under the Plan. Such agents shall serve at the
pleasure of the Committee. The decisions of any such agents taken within the
scope of his/her authority will have the same effect as decisions by the
Committee. Notwithstanding anything in this Section 4.2 to the contrary, the
Committee may not delegate its authority to determine the Participants at any
Grant Date or to make or adjust Option Grants of Stock under this Plan.
-18-
<PAGE> 22
ARTICLE V
AMENDMENT AND TERMINATION
5.1 Amendment and Termination.
The Board expressly reserves the right to amend or terminate the Plan
at any time, provided, however, that no amendment or termination may modify the
terms and conditions of any Option Grant made to a Participant prior to the
adoption of any such amendment or termination or of the related Option
Agreement (except as may be required by law) without the written approval of
the affected Participant(s). Notwithstanding the foregoing, no amendment may,
without the approval of the Shareholders of the Corporation:
(a) Increase the maximum number of shares of Stock authorized for
aggregate outstanding and individual Option Grants under
Section 3.1 (increases pursuant to Section 3.7 will not be
considered amendments for purposes of this Section);
(b) Extend the Term of this Plan;
(c) Amend the provisions of this Section 5.1; or
(d) Modify or permit modification of the Option Price for any
outstanding Option Grant made pursuant to this Plan
(modifications of the Option Price pursuant to Section 3.7
will not be considered amendments for purposes of this
Section).
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Non-Transferability/Designation of Beneficiary.
(a) Except as provided in subparagraph (b), a Participant may not
either voluntarily or involuntarily assign, anticipate,
alienate, commute, pledge or encumber any Option Grant which
he/she may receive under the Plan,
-19-
<PAGE> 23
nor may the same be subject to attachment or garnishment by
any creditor of a Participant.
(b) Notwithstanding anything in subsection (a) to the contrary, a
Participant may designate a person or persons to receive, in
the event of his death, any rights to which he would be
entitled under the Plan. Such a designation shall be made in
writing, and filed with the Corporation. A beneficiary
designation may be changed or revoked by a Participant at any
time by filing a written statement of such change or
revocation with the Corporation. If a Participant fails to
designate a beneficiary, then Section 3.5(b) will apply.
6.2 Continued Employment.
Neither participation in this Plan nor any Option Agreement shall
constitute an agreement (1) of the Participant to remain in the employ of and
to render his/her services to the Corporation or a Subsidiary or (2) of the
Corporation or a Subsidiary to continue to employ such Participant, and the
Corporation may terminate a Participant at any time with or without cause.
6.3 Plan Unfunded.
The compensation provided pursuant to this Plan (if any) shall be
provided solely from the general assets of the Corporation. No trust or other
funding device providing for the identification or segregation of assets to
fund this Plan has been established, nor is it the Corporation's intention to
do so. Each Participant shall be a general and unsecured creditor of the
Corporation with respect to any interest he/she may have under this Plan.
6.4 Taxation.
This Plan may give rise to compensation subject to federal and state
tax withholding (including, without limitation, FICA withholding) in the
calendar year in which vested Option Grants are exercised, and such withholding
taxes shall be the responsibility of the Participant exercising the options.
-20-
<PAGE> 24
6.5 Retirement Plans and Welfare Benefit Plans.
Except as otherwise specified in this Plan and the plan in question,
the value of compensation under this Plan will not be included as
"compensation" for purposes of the Corporation's retirement plans (both
qualified and non-qualified) or welfare benefit plans.
6.6 Medium of Payment.
The Committee, in its discretion, may specify in the Option Agreements
that the Option Price shall be payable upon the exercise of the Option Grant
either (i) in United States dollars in cash or by certified check, bank draft
or postal or express money order payable to the order of the Corporation, or
(ii) in shares of Stock having at the time the Option Grant is exercised a Fair
Market Value equal to the purchase price of the shares acquired pursuant to the
exercise of the Option Grant, or (iii) a combination thereof.
6.7 No Cash Bonuses or Surrender Rights.
No cash bonuses may be granted with respect to an Option Grant under
this Plan, and no Option Grant or Option Agreement may provide that in lieu of
the exercise of the Option Grant, or any portion thereof, the Participant may
surrender his/her Option Grant, or any portion thereof, to the Corporation.
6.8 Option Agreements.
Option Grants made pursuant to the Plan shall be evidenced by Option
Agreements in such form as the Committee shall, from time to time, approve,
provided that such agreements shall comply with, reflect and be subject to the
terms of this Plan.
6.9 Governing Law.
The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the State of Georgia and, where
applicable, federal law.
6.10 Severability.
If any provision of this Plan should be held illegal or invalid for
any reason, such determination shall not affect the provisions of this Plan,
but instead the Plan shall be construed as if such provisions had never been
included herein.
-21-
<PAGE> 25
6.11 Headings/Gender.
Headings contained in this Plan are for convenience only and shall in
no event be construed as part of this Plan. Any reference to the masculine,
feminine or neuter gender shall be a reference to other genders as appropriate.
ARTICLE VII
EFFECTIVE DATE/SHAREHOLDER APPROVAL
7.1 Effective Date.
This Plan shall become effective on the Effective Date as defined in
Section 1.6.
7.2 Shareholder Approval.
Notwithstanding anything in this Plan to the contrary, the Plan shall
be null and void from inception if the Plan is not approved by affirmative
votes of the holders of a majority of the securities of the Corporation present
or represented by proxy and entitled to vote at a meeting duly held in
accordance with the applicable corporate law of the State of Georgia and the
By-Laws of the Corporation on or prior to April 1, 1996.
-22-
<PAGE> 1
EXHIBIT 10.11(ii)
GEORGIA-PACIFIC CORPORATION
SHAREHOLDER VALUE INCENTIVE STOCK OPTION
THIS AGREEMENT, dated April 1, 1995 by and between
GEORGIA-PACIFIC CORPORATION, a Georgia corporation (hereinafter called the
"Corporation"), and _________________________ (hereinafter called "Optionee");
W I T N E S S E T H:
WHEREAS, the Optionee is now employed by the Corporation or a
Subsidiary in a key capacity and the Corporation desires to have him/her remain
in the employment of the Corporation or a Subsidiary and to afford him/her the
opportunity to acquire or enlarge his/her stock ownership in the Corporation by
granting him/her options to purchase from the Corporation up to, but not
exceeding in the aggregate, __________ shares of the Corporation's Stock, as
hereinafter more specifically stated, the exercise of which is subject to
attainment of stated corporate, business segment and division performance
goals, so that he may have a direct proprietary interest in the Corporation's
general success and in the achievement of the specific performance goals
related to the Corporation as a whole and the business segment and division in
which he/she works; and
WHEREAS, the options described in this Agreement have been
granted pursuant to, and are governed by, the Georgia-Pacific Corporation 1995
Shareholder Value Incentive Plan
<PAGE> 2
adopted by the Corporation's Board of Directors effective April 1, 1995 (the
"Plan") and are subject to the approval of that Plan by the shareholders of the
Corporation on or before April 1, 1996;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto do hereby mutually agree
as follows:
1. OPTION GRANT. Subject to the terms and conditions
set forth herein, the Corporation hereby grants to the Optionee during the
period commencing on the date hereof (the "Grant Date") and ending on March 31,
2005, the option to purchase from the Corporation, from time to time, as
hereinafter more specifically stated, at a price of $___________ per share, up
to but not exceeding in the aggregate, the number of shares of the
Corporation's Stock as set forth on the preceding page of this Agreement (or
such portion of such shares as may be vested and exercisable), which option may
be exercised, in whole or in part, from time to time, commencing on the
applicable Vesting Date as determined in accordance with Section 2 or 3 (but
only as to the portion then becoming exercisable) and for the exercise period
beginning on such Vesting Date and continuing to the end of the applicable
exercise period specified in this Agreement. Notwithstanding anything to the
contrary in this Agreement (but subject to the exercise limitations specified
in this Agreement), if the Optionee is on a leave of absence or is absent on
military or government service as of the date of this Agreement, the Optionee
may not exercise all or any part of the options granted hereby prior to the
later of (i) the date the Optionee returns to active employment with the
Corporation or a Subsidiary or (ii) the Vesting Date for all or any portion of
this option grant (but only as to the portion then becoming exercisable). If
the Optionee is not on leave of absence or absent on military or government
service at the date of this Agreement or returns to active employment with the
Corporation or a Subsidiary thereafter, the options described in this Agreement
shall be immediately effective (subject to the exercise limitations
-2-
<PAGE> 3
provided in Section 2) and may become exercisable and may be exercised during
a subsequent leave of absence or absence for military or government service.
2. NORMAL VESTING. This option grant (or any portion
thereof) may in no event be exercised prior to its Vesting Date, but on and
after its Vesting Date (to the extent of the number option shares then becoming
exercisable), it may be exercised in accordance with - and to the extent
permitted under - the terms of the Plan and this Agreement. This option grant
will vest without regard to performance standards stated in this Section 2 on
the 183rd day following the 9th anniversary of the Grant Date. This option
grant is subject to accelerated performance-based vesting in accordance with
any of the following rules:
(a) This option grant will vest on the 3rd anniversary of
the Grant Date if the Corporation's Total
Shareholder Return for the immediately preceding 3
full fiscal years exceeds the Weighted Average Total
Shareholder Return of all Peer Group Companies for
the same period.
(b) This option grant will vest on the 4th anniversary of
the Grant Date if the Corporation's Total
Shareholder Return for the immediately preceding 4
full fiscal years exceeds the Weighted Average Total
Shareholder Return of all Peer Group Companies for
the same period.
(c) This option grant will vest on the 5th anniversary of
the Grant Date if the Corporation's Total
Shareholder Return for the immediately preceding 5
full fiscal years exceeds the Weighted Average Total
Shareholder Return of all Peer Group Companies for
the same period.
Vesting under subsections (a), (b) and (c) shall be conditioned upon the
Committee's written certification that the performance vesting standards of
this Section 2 have been met. Vesting of this option grant under this Section
2 is subject in all cases to the restrictions/forfeiture rules in Sections 4
and 5. Subject to those rules, if this option grant vests pursuant to this
Section 2, it may be exercised at any time on or after the Vesting Date and
prior to the 10th anniversary of the
-3-
<PAGE> 4
Grant Date (not inclusive), provided that if the Optionee's employment with the
Corporation and its Subsidiaries terminates for any reason other than
retirement (as defined in Section 3(b)(i)), death or disability (as defined in
Section 3(b)(iii)) after the Vesting Date of this option grant and before it
has expired, the option grant may be exercised only during the 90-day period
following the Optionee's date of termination or, if shorter, during the
remaining period before this option grant expires in accordance with this
Agreement. If a Participant's employment with the Corporation and its
Subsidiaries terminates for any reason other than retirement (as defined in
Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) prior
to the Vesting Date of this option grant, this option grant will terminate as of
the Participant's termination date, and the Participant will have no further
rights hereunder.
3. SPECIAL VESTING. This option grant (or the portion
designated below in Section 3(c)) shall vest and become exercisable under the
circumstances and subject to the terms and conditions specified in this Section
3 (subject to the provisions of Section 5):
(a) Notwithstanding anything in Sections 2 or 4 to the
contrary, the performance-based vesting provisions of
subsections (a), (b) and (c) of Section 2 shall
operate to vest this option grant to the extent that
it remains outstanding when the Optionee retires (as
defined in Section 3(b)(i)), dies or becomes disabled
(as defined in Section 3(b)(iii)) prior to its
Vesting Date even if such vesting occurs after the
termination of the Optionee's employment with the
Corporation and its Subsidiaries.
(b) Notwithstanding anything in Sections 2 or 4 to the
contrary, if this option grant is not vested pursuant
to the performance-based vesting standards of
subsections (a), (b) and (c) of Section 2 or another
provision of this Agreement, it will vest in the
circumstances and on the date specified in paragraphs
(i) through (iii) below to the extent permitted by
the schedule set forth in Section 3(c):
-4-
<PAGE> 5
(i) If the Optionee terminates
employment with the Corporation and
its Subsidiaries after attaining age
65 or age 55 and 10 years of service
for vesting purposes under the
Georgia-Pacific Corporation Savings
and Capital Growth Plan (other than
a termination for Cause), on the
later of his/her retirement date or
the 5th anniversary of the Grant
Date;
(ii) If the Optionee dies, on the later
of his/her date of death or the 5th
anniversary of the Grant Date; or
(iii) If the Optionee becomes totally
disabled as defined under the
Georgia-Pacific Corporation Salaried
Long-Term Disability Plan (whether
or not the Optionee actually
participates in that plan), as
determined by the Plan Administrator
in its sole discretion, on the later
of his/her date of termination of
employment with the Corporation and
its Subsidiaries because of such
disability or the 5th anniversary of
the Grant Date.
(c) If the Optionee becomes entitled to special vesting
in accordance with Section 3(b) above, this option
grant, if then still outstanding, will vest as of the
applicable date specified in Section 3(b) to the
extent indicated in paragraphs (i) through (iii)
below:
(i) If the special vesting event described in
Section 3(b)(i) through (iii) occurs prior to
the 5th anniversary of the Grant Date of this
option grant (which has not otherwise
vested), 50% of this option grant will vest
and 50% will be forfeited.
(ii) If special vesting described in Section
3(b)(i) through (iii) occurs on or after the
5th anniversary, but prior to the 6th
anniversary, of the Grant Date of this option
grant (which has not otherwise
-5-
<PAGE> 6
vested), 60% of this option grant will vest
and 40% will be forfeited.
(iii) If special vesting described in Section
3(b)(i) through (iii) occurs on or after the
6th anniversary, but prior to the 7th
anniversary, of the Grant Date of this option
grant (which has not otherwise vested), 70%
of this option grant will vest and 30% will
be forfeited.
(iv) If special vesting described in Section
3(b)(i) through (iii) occurs on or after the
7th anniversary, but prior to the 8th
anniversary, of the Grant Date of this option
grant (which has not otherwise vested), 80%
of this option grant will vest and 20% will
be forfeited.
(v) If special vesting described in Section
3(b)(i) through (iii) occurs on or after the
8th anniversary, but prior to the 9th
anniversary, of the Grant Date of this option
grant (which has not otherwise vested), 90%
of this option grant will vest and 10% will
be forfeited.
(vi) If special vesting described in Section
3(b)(i) through (iii) occurs on or after the
9th anniversary of the Grant Date of this
option grant (which has not otherwise
vested), 100% of this option grant will vest.
(d) The special vesting dates specified in this Section 3
shall be considered Vesting Dates for purposes of
this Agreement.
(e) If this option grant vests pursuant to Section 3(a),
it may be exercised at any time on or after its
Vesting Date and prior to the 10th anniversary of its
Grant Date (not inclusive). If this option grant (or
any portion thereof) vests pursuant to Section 3(b),
it may be exercised (to the extent
-6-
<PAGE> 7
it has vested) at any time on or after its Vesting
Date and prior to the 183rd day following its Vesting
Date (not inclusive) or, if earlier, prior to the
10th anniversary of its Grant Date (not inclusive).
4. RESTRICTIONS/FORFEITURE RULES. This option grant
will be subject to the following restrictions and forfeiture rules:
(a) Subject to Section 3, if the Optionee's employment
with the Corporation and its Subsidiaries is
terminated for any reason prior to the Vesting Date
for this option grant (or any portion thereof), the
Optionee shall forfeit all rights with respect to
this option grant, and this Agreement shall be null,
void and of no effect as of the date his/her
employment terminates.
(b) This option grant shall be nontransferable and may
not be sold, hypothecated or otherwise assigned or
conveyed by the Optionee to any party; provided that
in the event of the incapacity (as determined by the
Plan Administrator) or death of the Optionee, his/her
attorney-in-fact pursuant to a valid power of
attorney giving general or specific authority to make
elections with respect to this option grant, his/her
court-appointed guardian or the custodian of his/her
affairs or the executor or administrator of his/her
estate (as the case may be) may exercise any rights
with respect to this option grant that the
Participant could have exercised if he/she were still
alive or not incapacitated. No assignment or
transfer of this option or the rights represented
thereby, whether voluntary, involuntary, or by
operation of law or otherwise, except by will or the
laws of descent and distribution, shall vest in the
assignee or transferee any interest or right herein
whatsoever, and immediately upon any attempt to
assign or transfer this option, this option shall
terminate and be of no force or effect.
-7-
<PAGE> 8
(c) The Optionee shall not be deemed to be a shareholder
of the Corporation - and shall have no rights as a
stockholder - with respect to the shares covered by
this option grant until the date (i) such shares have
been issued or transferred to him/her and (ii)
payment in full for such shares has been received by
the Corporation as provided in this Agreement. No
adjustment shall be made for dividends or other
rights for which the record date is prior to the date
of such issuance or transfer.
(d) To the extent that this option grant is vested, but
not exercised during the period provided for its
exercise under this Agreement, the Participant shall
forfeit all rights with respect to this option grant
and this Agreement shall expire as of the close of
the last day of the prescribed exercise period.
5. TERMINATION FOR CAUSE. Notwithstanding anything in
this Option Agreement to the contrary, if the Optionee is terminated for
Cause, this option grant shall terminate as of such date of termination
regardless whether a Vesting Date has occurred on or prior to his/her date of
termination regardless whether a Vesting Date has occured on or prior to
his/her date of termination unless and to the extent that the Committee
determines (after taking into account the provisions of Section 16) that such
forfeiture in a given case would violate applicable law.
6. EXERCISE OF OPTION. The option hereby granted shall
be exercised by the delivery to the Treasurer of the Corporation or his
delegate, from time to time, of written notice, signed by the Optionee,
specifying the number of shares the Optionee then desires to purchase, together
with cash, certified check, bank draft or postal or express money order to the
order of the Corporation for an amount in United States dollars equal to the
sum of: (a) the option price of such shares and (b) an amount sufficient to
pay all state and federal withholding taxes (including, without limitation,
FICA) with respect to the exercise (the total of (a) and (b) shall be
-8-
<PAGE> 9
referred to as the "Exercise Amount"). In the alternative, the Optionee may
tender payment for the option shares in the form of shares of Stock having a
Fair Market Value on the date of exercise equal to the Exercise Amount or a
combination of (i) shares of Stock and (ii) cash, certified check, bank draft
or postal or express money order to the order of the Corporation in an amount
in United States dollars equal to the difference between the Exercise Amount
and the Fair Market Value of the tendered shares of Stock on the date of
exercise. If the written notice of exercise is mailed, the date of its receipt
by the Treasurer of the Corporation or his delegate shall be considered the
date of exercise of the option by the Optionee. An exercise of stock options
granted under this Agreement will generate compensation subject to federal and
state tax withholding (including, without limitation, FICA withholding) in the
calendar year of each exercise, and all such withholding taxes shall be the
responsibility of the Optionee. The Committee may also authorize alternative
procedures for exercising options under this Agreement. Within thirty (30)
business days after any such exercise of the option in whole or in part by the
Optionee, the Corporation shall deliver to the Optionee a certificate or
certificates representing the aggregate number of shares with respect to which
such option shall be so exercised, registered in the Optionee's name. The
Optionee shall not have the right, in lieu of the exercise of the option, to
surrender the option granted hereby, or any portion thereof, in order to
receive shares covered by this option grant.
7. DATE OF TERMINATION. Except to the extent otherwise
provided in subsections (a) through (c) of this Section 7, for purposes of this
Agreement, the Optionee's date of termination shall be deemed to be his/her
last day worked:
(a) The Optionee's employment by the Corporation shall be
deemed to continue during such periods as he/she is
employed by a Subsidiary. If the Optionee shall be
transferred from the Corporation to a Subsidiary or
from a Subsidiary to the Corporation or from a
Subsidiary to another Subsidiary, his/her employment
shall not be deemed to be terminated by reason of
such
-9-
<PAGE> 10
transfer. If, while the Optionee is employed by a
Subsidiary, such Subsidiary shall cease to be a
Subsidiary and the Optionee is not thereupon
transferred to and employed by the Corporation or
another Subsidiary, the date that the Optionee's
employer ceases to be a Subsidiary shall be deemed to
be a termination of employment.
(b) The Optionee's date of termination on account of
total disability shall be the last day of his/her
salary continuation period under the Corporation's
policy providing for salary continuation for salaried
employees who are medically unable to work because of
illness or injury or, if later, the date any personal
leave of absence he/she may be granted under the
policies of the Corporation immediately following
such period of salary continuation terminates in
accordance with such policies.
(c) The Plan Administrator (as hereinafter defined) shall
have absolute and uncontrolled discretion to
determine whether any authorized leave of absence or
absence on military or government service taken by
the Optionee shall constitute a termination of
employment for the purposes of this Agreement.
8. NO BAR TO CORPORATE RESTRUCTURING. The existence of
this option shall not affect in any way the right or power of the Corporation
or its stockholders to make or authorize any and all adjustments,
recapitalizations, reorganizations or other changes in the Corporation's
capital structure or its business, or any merger or consolidation of the
Corporation, or any issue of bonds, debentures, preferred or preference stocks
ahead of or affecting the Stock or the rights thereof, or the dissolution or
liquidation of the Corporation, or any sale or transfer of all or part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
-10-
<PAGE> 11
9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS.
The option grant under this Plan will be made in shares of the Stock of the
Corporation as constituted on the Grant Date for this option grant. In the
event of any merger, reorganization, consolidation, recapitalization, stock
dividend, stock split, or extraordinary distribution with respect to the Stock
or other change in corporate structure affecting the Stock, the Plan
Administrator shall have the authority to make such substitution or adjustments
in the number, kind and option price of shares subject to this option grant
and/or such other equitable substitution or adjustments as it may determine in
its sole discretion to be appropriate to ensure that all similarly situated
optionees under the Plan are treated equitably as a result of any such event;
provided, however, that the number of shares subject to any option grant shall
always be a whole number. In the event any adjustment to this option grant
pursuant to this Agreement would otherwise result in the creation of a
fractional share interest, the number of shares under this option grant shall
be rounded to the nearest whole share (with 0.5 share rounded to the next
higher whole number).
10. CHANGE OF CONTROL. Notwithstanding any other
provision of this Agreement to the contrary, in the event of a Change of
Control of the Corporation (as defined in this Section 10), this option grant,
if then outstanding and not yet vested, shall vest as of the effective date of
such Change of Control if the Total Shareholder Return of the Corporation for
at least one of the 3-year, 4-year or 5-year periods ending on the effective
date of the Change of Control exceeds the Weighted Average Total Shareholder
Return of all Peer Group Companies for the same period. If this option grant
vests pursuant to this Section 10, it may be exercised at any time from and
after the effective date of the Change of Control (which shall be considered
the applicable Vesting Date) and prior to the 10th anniversary of its Grant
Date. For the purposes of this Agreement, a "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person") of beneficial
ownership
-11-
<PAGE> 12
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% of more of either (i)
the then outstanding shares of Stock (the "Outstanding
Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Corporation
entitled to vote generally in the election of
directors (the "Outstanding Voting Securities");
provided, however, that for purposes of this
subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition
directly from the Corporation, (ii) any acquisition by
the Corporation, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation
controlled by the Corporation or (iv) any acquisition
by any corporation pursuant to a transaction which
complies with clauses (i), (ii), and (iii) of
subsection (c) of this Section 10; or
(b) Individuals who, as of the Effective Date, constitute
the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the
Board; provided, however, that any individual
becoming a director subsequent to the date hereof
whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of
at least a majority of the directors then comprising
the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result
of an actual or threatened election contest with
respect to the election or removal of directors or
other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the
Board; or
(c) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation
-12-
<PAGE> 13
(a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Outstanding Stock and Outstanding Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the
then outstanding voting securities entitled to vote
generally in the election of directors, as the case
may be, of the corporation resulting from such
Business Combination (including, without limitation,
a corporation which as a result of such transaction
owns the Corporation or all or substantially all of
the Corporation's assets either directly or through
one or more subsidiaries) in substantially
the same proportions as their ownership, immediately
prior to such Business Combination, of the
Outstanding Stock and Outstanding Voting Securities,
as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of
the Corporation or such corporation resulting from
such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively,
the then outstanding shares of common stock of the
corporation resulting from such Business Combination
or the combined voting power of the then outstanding
voting securities of such corporation except to the
extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of
the members of the board of directors of the
corporation resulting from such Business Combination
were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the
action of the Board, providing for such Business
Combination; or
-13-
<PAGE> 14
(d) Approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the
Corporation.
11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this
Agreement to the contrary notwithstanding, if, at any time specified herein for
the exercise of this option or the delivery of shares to the Optionee, any law
or regulations of any governmental authority having jurisdiction in the matter
shall require either the Corporation or the Optionee to take any action or
refrain from action in connection therewith or to delay such exercise, then the
delivery of such shares on such exercise shall be deferred until such action
shall have been taken or such restriction on action shall have been removed.
12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions
precedent to the granting of the option and all other rights provided
hereunder, the Optionee and any other person who acquires any rights hereunder
agrees that any dispute or disagreement which shall arise under, or as a result
of, or pursuant to, this Agreement may be determined by the Plan Administrator
constituted under the Plan (the "Plan Administrator") in the Plan
Administrator's absolute and uncontrolled discretion; and that any such
determination or interpretation of the terms of this Agreement or the Plan or
any other determination by either such Plan Administrator shall be final,
binding and conclusive on all persons affected thereby. The Plan Administrator
shall have the authority to administer the Plan, make all determinations with
respect to the construction and application of the Plan, the Board resolutions
establishing the Plan and this Agreement, adopt and revise rules and
regulations relating to the Plan and make any other determinations which it
believes necessary or advisable for the administration of the Plan (subject to
the provisions of the Plan regarding Plan administration). Questions regarding
the options granted under this Agreement and the administration of the Georgia-
Pacific Corporation 1995 Shareholder Value Incentive Plan may be addressed to
the Treasurer's Department of the Corporation.
-14-
<PAGE> 15
13. NOT INCENTIVE STOCK OPTIONS. Anything in this
Agreement to the contrary notwithstanding, the Corporation and Optionee
acknowledge and agree that the Plan was not intended to provide for the
issuance of "incentive stock options" as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, and that the options granted pursuant to this
Agreement are not "incentive stock options" as so defined.
14. CONTINUED EMPLOYMENT. This Agreement shall not be
deemed to limit or restrict the right of the Corporation or any Subsidiary to
terminate the Optionee's employment at any time, for any reason, with or
without cause, or to limit or restrict the right of the Optionee to terminate
his employment with the Corporation or any Subsidiary at any time. In the
event of termination of the Optionee's employment with the Corporation and all
Subsidiaries, such employee shall be eligible to exercise only options on the
number of shares that then or thereafter become available for purchase pursuant
to Section 3 hereof (but subject to Section 5). Optionee's services shall be
subject to the direction of the Board of Directors of the Corporation or such
Subsidiary or such officer or officers as the respective Boards may designate
from time to time and shall be rendered at such locations as the respective
Boards or any such officer may determine.
15. AMENDMENT OR TERMINATION. This Agreement may be
amended or terminated prior to the expiration dates set forth herein only with
the mutual agreement and consent of the Optionee and the Corporation, and then
only to the extent permitted under the Plan.
16. GOVERNING LAW. This Agreement shall be construed and
its provisions enforced and administered in accordance with the laws of the
State of Georgia and, where applicable, federal law.
-15-
<PAGE> 16
17. INTERPRETATION. This Agreement shall at all times be
interpreted so as to be consistent with the intent, purposes and specific
language of the Plan.
18. SEVERABILITY. If any provision of this Agreement
should be held illegal or invalid for any reason, such determination shall not
affect the other provisions of this Agreement, but instead the Agreement shall
be construed as if such provisions had never been included herein.
19. HEADINGS/GENDER. Headings contained in this
Agreement are for convenience only and shall in no event be construed as part
of this Agreement. Any reference to the masculine, feminine or neuter gender
shall be a reference to other genders as appropriate.
20. NOTICES. Any notice which either party hereto may be
required or permitted to give to the other shall be in writing, and may be
delivered personally or by mail, postage prepaid, addressed as follows: (i) to
the Corporation, Georgia-Pacific Corporation, 133 Peachtree Street, N.E.,
Atlanta, Georgia 30303, Attention: Treasurer, or at such other address as the
Corporation, by notice to the Optionee, may designate in writing from time to
time; (ii) to the Optionee at the address indicated in the Optionee's then
current personnel records, or at such other address as the Optionee, by notice
to the Treasurer of the Corporation at the above address, may designate in
writing from time to time. Such notices shall be deemed given upon receipt.
21. DEFINITIONS. For purposes of this Agreement, the
following terms shall be defined as follows:
(a) "Cause" for the purposes of this Agreement shall mean
any of the following: (i) the willful failure of the
Optionee to perform satisfactorily the duties
consistent with his title and position reasonably
required of him by the Board or supervising
management (other than by reason of incapacity
-16-
<PAGE> 17
due to physical or mental illness); (ii) the
commission by the Optionee of a felony, or the
perpetration by the Optionee of a dishonest act or
common law fraud against the Corporation or any of
its Subsidiaries; or (iii) any other willful act or
omission (including without limitation the violation
of any corporate policy or regulation) which could
reasonably be expected to expose the Corporation to
civil liability under the law of the applicable
jurisdiction or causes or may reasonably be expected
to cause significant injury to the financial
condition or business reputation of the Corporation
or any of its Subsidiaries.
(b) "Corporation" shall mean Georgia-Pacific Corporation,
a Georgia corporation, its successors and assigns.
(c) "Committee" shall mean the Compensation Committee of
the Board of Directors of the Corporation, as
constituted from time to time, or such subcommittee
of that body as the Compensation Committee shall
specify to act for the Compensation Committee with
respect to the options granted under the Plan,
provided however that any such subcommittee shall
have at least two members and shall consist entirely
of "outside directors" as that term is defined
pursuant to Section 162(m) of the Internal Revenue
Code of 1986, as amended from time to time, or any
statute which is a successor or replacement for such
statute (and applicable regulations promulgated
thereunder).
(d) "Fair Market Value of the Stock" shall mean, on any
date, the mean between the high and low sales prices
of a share of Stock on that date as reported in The
Wall Street Journal, New York Stock Exchange -
Composite Transactions, or as reported in any
successor quotation system adopted prospectively for
this purpose by the Committee, in its discretion.
-17-
<PAGE> 18
The Fair Market Value of the Stock shall be rounded
to the nearest whole cent (with 0.5 cent being
rounded to the next higher whole cent).
(e) "Grant Date" shall mean the date of this Agreement.
(f) "Plan" shall mean the Georgia-Pacific Corporation
1995 Shareholder Value Incentive Plan as adopted by
the Corporation's Board of Directors effective April
1, 1995.
(g) "Plan Administrator" shall mean the person or entity
having administrative authority under the Plan, as
specified in Article IV of the Plan.
(h) "Peer Group Companies" shall mean the companies
included in the Standard & Poors Paper and Forest
Products Industry Index from time to time (but
excluding the Corporation).
(i) "Stock" shall mean Georgia-Pacific Corporation common
stock, eighty cents ($0.80) par value per share.
(j) "Subsidiary" shall mean any corporation (other than
the Corporation) in any unbroken chain of
corporations beginning with the Corporation if, at
the time of reference, each of the corporations other
than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock
in one of the other corporations in such chain.
(k) "Total Shareholder Return" shall mean, for a given
period and a given common stock, the number
determined by the formula [(S(B)+S(D))P(E) - 100] /
100, where (i) "S(B)" is the number of shares of the
common stock (including fractional shares) that could
be bought with an initial $100 investment at P(B), or
$100 / P(B); (ii) "S(D)" is the total number of
shares of the common stock (including fractional
shares) which could be purchased with the dividends
(or allocated portion of a per share dividend) paid
on S(B) shares of the common stock during the
measurement period
-18-
<PAGE> 19
(and any additional shares or fractional shares
allocated in accordance with this subsection (ii)
with respect to dividends paid during the measurement
period but prior to the dividend in question),
determined in the case of each such dividend paid
using the closing price of the common stock on the
trading date coincident with or next preceding the
date of payment of the dividend; (iii) "PB" is the
closing price of the common stock on the last trading
day before the first day of the measurement period;
and (iv) "PE" is the closing price of the common
stock on the last trading day of the measurement
period. In calculating the Total Shareholder Return
for a given common stock, the Plan Administrator will
apply the principles of Section 9 (except for the
last sentence of that section) as if that section
applied to the common stock.
(l) "Vesting Date" shall mean the date upon which options
granted under this Agreement first become exercisable
in accordance with the provisions of Sections 2, 3 or
10.
(m) "Weighted Average Total Shareholder Return" shall
mean, for any given measurement period, the average
of the Total Shareholder Returns for a named group of
corporations with the return of each such corporation
weighted on the basis of its market capitalization at
the beginning of the measurement period.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to
be executed by its duly authorized officers, under its corporate seal, and the
Optionee has executed
-19-
<PAGE> 20
this Agreement, as of this day and year first above written.
GEORGIA-PACIFIC CORPORATION
By: ____________________________
A. D. Correll
Chairman and Chief Executive Officer
ATTEST:
______________________________
Mary E. Moore, Assistant Secretary
OPTIONEE
________________________________
NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET.
-20-
<PAGE> 21
OPTIONEE'S PERSONAL DATA
(Please Print)
___________________________________________________
Full Name
ADDRESS: __________________________________________________________
__________________________________________________________
__________________________________________________________
SOCIAL SECURITY NUMBER: _____________________________________________
DATE OF BIRTH: _________________________________________________________
Month, Day and Year
DIVISION: _________________________ LOCATION: __________________________
-21-
<PAGE> 1
EXHIBIT 10.13
AGREEMENT
THIS AGREEMENT, effective as of March 15, 1993, among Georgia-Pacific
Corporation (together with its subsidiaries being hereinafter referred to
collectively as "Georgia-Pacific"), Hercules Incorporated (together with its
subsidiaries being hereinafter referred to collectively as "Hercules"), and Lee
M. Thomas (hereinafter called "Thomas"):
WHEREAS, Thomas is a member of the Board of Directors of Hercules
Incorporated, and
WHEREAS, Thomas has been offered and has accepted a position as an
officer of Georgia-Pacific Corporation effective April 1, 1993, and
WHEREAS, Georgia-Pacific and Hercules have independently determined
that the level of competing sales of each corporation does not preclude Thomas
from serving as a member of the Board of Directors of Hercules Incorporated
while also serving as an officer of Georgia-Pacific Corporation pursuant to the
exceptions to Clayton Act, Section 8 as amended 1990 (Sec. 19-2(8)), and
WHEREAS, all parties, in an effort to resolve certain legal and
ethical issues inevitably faced by an individual performing potentially
conflicting roles as a director of one firm and an officer of another are
establishing the basis of conduct the parties shall adhere to in order to
accommodate the business interests of each party while ensuring compliance with
U.S. antitrust and all other applicable State and Federal law:
NOW, THEREFORE, the parties hereto in consideration of the mutual
promises hereinafter set forth agree as follows:
ARTICLE I - DEFINITIONS
1.1 "Trade Secret" shall mean information, including a formula,
pattern, compilation, program, device, method, technique or process, that: (a)
derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use; and (b)
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
1.2 "Confidential Information" shall mean proprietary and
confidential financial, business and technical information, other than a Trade
Secret, which is of tangible or intangible value and is not public information
or is not generally known or available other than to those directors, officers,
employees, contractors, customers or agents to whom it must be confided in
order to apply it to the uses intended.
<PAGE> 2
1.3 "Chemicals Business" means the formulation, manufacture,
development, promotion, sale, and distribution of chemicals derived from crude
tall oil and chemicals used in the manufacture of paper products for imparting
useful properties thereto including, without limitation, sizing, wet-strength,
dry-strength and other chemicals useful in paper manufacturing.
ARTICLE II - CONFIDENTIALITY
A. Hercules Information
2.1 In the course of his role as a member of the Hercules
Incorporated Board of Directors, Thomas may have access to and receive
disclosures from Hercules of Hercules' Trade Secret and Confidential
Information. Thomas shall use such disclosed information solely for the
purpose of fulfilling his obligation as a member of the Hercules Incorporated
Board of Directors. Thomas shall not directly or indirectly disclose to any
third party or otherwise use any of Hercules' Trade Secret or Confidential
Information except as provided above, and specifically Thomas shall not
disclose any such information to Georgia-Pacific or use any such Trade Secret
or Confidential Information on behalf of Georgia-Pacific and/or affiliates,
directors, officers, employees or agents of Georgia-Pacific.
2.2 The restrictions on disclosure of Hercules' Trade
Secret and Confidential Information of paragraph 2.1 shall remain in effect
unless such information becomes available to the public through action of
Hercules.
B. Georgia-Pacific Information
2.3 In the course of his employment as an officer of
Georgia-Pacific Corporation, Thomas may have access to and receive disclosures
from Georgia-Pacific of Georgia-Pacific's Trade Secret and Confidential
Information. Thomas shall use such disclosed information solely for the
purpose of fulfilling his duties as an officer of Georgia-Pacific Corporation.
Thomas shall not directly or indirectly disclose to any third party or
otherwise use any of Georgia-Pacific's Trade Secret or Confidential Information
except as provided above, and specifically Thomas shall not disclose any such
information to Hercules or use any such Trade Secret or Confidential
Information on behalf of Hercules and/or affiliates, directors, officers,
employees or agents of Hercules.
2.4 The restrictions on disclosure of Georgia-Pacific
Trade Secret and Confidential Information under paragraph 2.3 shall remain in
effect at all times during the term of this Agreement and thereafter: (a) as
to any item of Confidential Information, for a period of two (2) years
following the termination of Thomas' employment with Georgia-Pacific; and (b)
as to any Trade Secret, for such time as such item shall continue to constitute
a trade secret under applicable law.
<PAGE> 3
ARTICLE III - COMPETITIVE INFORMATION
3.1 Georgia-Pacific shall use reasonable efforts to establish
specific guidelines and procedures designed to isolate Thomas from information
the exchange of which between Georgia-Pacific and Hercules could constitute a
violation of any applicable antitrust or trade law or regulation
("Competitively Sensitive Information"), including, without limitation,
information regarding the business and affairs of Georgia-Pacific's Chemicals
Business that could reasonably be expected to be competitively sensitive with
Hercules' Chemicals Business or any other business of Hercules. Thomas shall
abide by such guidelines and procedures and Georgia-Pacific shall direct its
employees to abide thereby. The specific guidelines and procedures expected to
be established by Georgia-Pacific are as set forth in Attachment 1 which forms
a part of this Agreement. These guidelines may be modified as necessary by
Georgia-Pacific provided that in the opinion of the Senior Vice President - Law
of Georgia-Pacific Corporation, the modified guidelines provide reasonable
basis to isolate Thomas from Georgia-Pacific's Chemicals Business or any other
business that could be competitively sensitive with Hercules. Georgia-Pacific
shall notify Hercules Incorporated's General Counsel of any changes made in
such guidelines and procedures.
3.2 Information regarding general plant issues (environmental,
health and safety) and government affairs which are appropriately discussed
between Hercules and Georgia-Pacific, due to the toll manufacturing agreements
between the parties relating to Georgia-Pacific's production of rosin tackifier
at Crossett, Arkansas or Hercules' conversion of rosin for use at Toledo ,
Oregon, or general information communicated between Hercules and
Georgia-Pacific in the context of both Georgia-Pacific's and Hercules'
membership in trade organizations, such as CMA, are specifically excluded from
the guidelines and procedures regarding Competitively Sensitive Information.
This exclusion is not intended to permit Thomas to disclose or use any
Competitively Sensitive Information.
3.3 Thomas shall excuse himself from participation in any matter
brought to the Hercules Board or a committee thereof as to which,
notwithstanding any guidelines and procedures established pursuant to paragraph
3.1, he is aware of relevant Competitively Sensitive Information which,
pursuant to paragraph 3.1, he should not possess.
3.4 The parties hereto acknowledge the critical importance in
complying with U.S. antitrust law of avoiding any disclosure or use by Thomas
of Competitively Sensitive Information regarding either Georgia-Pacific's or
Hercules' Chemicals Business or any other business of Georgia-Pacific or
Hercules' Chemicals Business which could be competitive with the other.
Competitively Sensitive Information may include, without limitation, capital
expenditures; revenues and earnings and projected revenues and earnings,
write-offs and other financial information; products, customer and supplier
lists, pricing and costs information; business and marketing plans and
proposals; manufacturing, production and operational methods, processes and
techniques, technical data, designs, drawings and specifications; inventions
(whether patentable or unpatentable and whether reduced to practice), ideas,
research and development, know-how, formulas, compositions and trade secrets;
acquisition and divestiture plans and proposals; computer software and
processing systems; rights, obligations
<PAGE> 4
and liabilities; and all copies and tangible embodiments thereof (in whatever
form or medium). Notwithstanding the confidentiality provisions of Article II
hereof, Thomas agrees that he shall not directly or indirectly disclose to
Hercules or use on behalf of Hercules any Competitively Sensitive Information
of Georgia-Pacific, and that he shall not directly or indirectly disclose to
Georgia-Pacific or use on behalf of Georgia-Pacific any Competitively Sensitive
Information of Hercules. The foregoing restraint shall remain in effect as to
any item of Georgia-Pacific's Competitively Sensitive Information unless and
until such item becomes available to the public through action of
Georgia-Pacific. Such restraint shall remain in effect as to any item of
Hercules' Competitively Sensitive Information unless and until such item
becomes available to the public through action of Hercules.
ARTICLE IV - CONFLICTING BUSINESS TRANSACTIONS
4.1 Thomas and Hercules acknowledge and agree that any information
or business opportunity of which Thomas becomes aware, other than directly in
the course of his service on the Hercules Incorporated Board, that is
potentially useful or valuable to Georgia-Pacific's business, will be disclosed
to Georgia-Pacific and will not be disclosed to Hercules, whether or not such
information or business opportunity might also be useful or valuable to
Hercules. Thomas and Georgia-Pacific acknowledge and agree that any
information or business opportunity of which Thomas becomes aware directly in
the course of his service on the Hercules Incorporated Board, will be disclosed
to Hercules and will not be disclosed to Georgia-Pacific, whether or not such
information or business opportunity might also be useful or valuable to
Georgia-Pacific. Thomas shall excuse himself from participation in any matter
brought to the Hercules Board or a committee thereof which relates to any
information disclosed by Thomas to Georgia-Pacific pursuant to this paragraph.
4.2 Thomas shall excuse himself from any participation in any
matters brought to the Hercules Incorporated Board or a committee of said Board
involving contracts or transactions between Hercules and any business unit of
Georgia-Pacific or affiliates of Georgia-Pacific.
4.3 Thomas acknowledges and agrees that he believes in good faith
that service on the Hercules Incorporated Board does not conflict with his duty
as an officer of Georgia-Pacific Corporation to act in its best interest.
Thomas shall promptly resign from the Hercules Incorporated Board if at any
time (a) in his view a conflict could be reasonably expected to arise between
the performance of services as a member of the Hercules Incorporated Board of
Directors and performance of his duties as an officer of Georgia-Pacific
Corporation; or (b) this Agreement is held to violate applicable law; or (c) he
is requested to do so by the Hercules Incorporated Board.
ARTICLE V - COMPLIANCE WITH SECURITIES LAWS
5.1 Hercules and Georgia-Pacific shall comply with their
respective responsibilities under applicable Federal and State laws including
U.S. securities laws regarding Thomas' serving as both a Hercules Director and
a Georgia-Pacific officer, including any relevant disclosure requirements of
any applicable laws.
<PAGE> 5
ARTICLE VI - CERTIFICATION
6.1 Thomas shall submit to Hercules and Georgia-Pacific on or
before July 10 and January 10 of each year a certification to the effect that
he has complied with all obligations of this Agreement during the relevant
prior six (6) month period. The certification shall include a statement that
he is not aware of any conflicts that have arisen since the date of the last
certification, and that he is not aware of any business arrangement between
Hercules and Georgia-Pacific which has created a conflict which necessitates
(a) consideration by the parties, (b) a modification of the terms of this
Agreement, or (c) other appropriate action to ensure that all parties are in
compliance with U.S. antitrust laws as well as other applicable State and
Federal laws.
6.2 Hercules and Georgia-Pacific, respectively, hereby certify to
Thomas that their respective "competitive sales" with the other are less than
the threshold provided in 15 U.S.C.A. Section 19(a)(2) (1991 Supp.), as amended
and shall immediately notify Thomas if at any time such "competitive sales" are
not less than such threshold.
ARTICLE VII - REMEDIES
7.1 Thomas acknowledges that breach of this Agreement by him shall
constitute grounds for termination of his employment by Georgia-Pacific,
possible forfeiture of post-employment retirement benefits from Georgia-Pacific
and termination of his membership as a Director of Hercules for cause and
possible forfeiture of all director benefits from Hercules.
7.2 Hercules, Georgia-Pacific and Thomas each reserve all rights
against the other in law and in equity to recover damages sustained or to seek
injunctions or other equitable relief based upon a violation of this Agreement.
Each of the parties acknowledges and agrees that the other parties would be
damaged irreparably in the event any of the provisions of this Agreement are
not performed in accordance with their specific terms or otherwise are
breached. Accordingly, each of the parties agrees that the other party shall
be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of the United
States or any State hereof having jurisdiction over the parties and the matter
in addition to any other remedy to which they may be entitled, at law or in
equity.
ARTICLE VIII - RESPONSIBILITIES OF THE PARTIES
No party hereto or their counsel shall be responsible for advising or
failing to advise any other party hereto in connection with this Agreement, or
for any liability imposed on any other party as a result of such party's acting
in accordance herewith. The parties each represent and warrant that this
Agreement does not conflict with any other agreement to which they are a party.
Thomas acknowledges that he is not serving on the Hercules Board at the request
of Georgia-Pacific and is not entitled to indemnification by Georgia-Pacific
from liability arising from his service in such capacity. Thomas further
acknowledges that he is not serving as an officer of
<PAGE> 6
Georgia-Pacific at the request of Hercules and is not entitled to
indemnification by Hercules from liability arising from his service in such
capacity.
ARTICLE IX - TERM
The term of this Agreement shall be for the shorter of the term of
Thomas' tenure as a member of the Hercules Incorporated Board of Directors or
as an officer of Georgia-Pacific Corporation. All secrecy and non-use
provisions of this Agreement shall survive termination.
ARTICLE X - LAW
The terms of this Agreement shall be governed by and construed in
accordance with internal laws of the State of Delaware without giving effect to
any choice or conflict of law provision or rule (whether the State of Georgia
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
This Agreement shall not confer any rights or remedies upon any person
other than the parties and their respective successors.
ARTICLE XI - WAIVER
No waiver by any party of any default or breach of covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or
subsequent default or breach hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
ARTICLE XII - SEVERABILITY
The unenforceability or invalidity of any provision of this Agreement
shall not affect the validity or enforceability of the remaining provisions
hereof, but such remaining provisions shall be construed and interpreted in
such a manner as to carry out fully the intent of the parties hereto, provided,
however, that should any judicial body interpreting this Agreement deem any
provision hereof to be unreasonably broad in time, scope or otherwise, it is
the intent and desire of the parties hereto that such judicial body, to the
greatest extent possible, reduce the breadth of such provision to the maximum
legally allowable parameters rather than deeming such provision totally
unenforceable or invalid.
ARTICLE XIII - ENTIRE AGREEMENT
This Agreement constitutes the entire understanding of the parties
with respect to the subject matter hereof and shall supersede any prior
understanding or agreement to the contrary, and may not be amended or
discharged except in a writing signed by all parties hereto.
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written acknowledging their willingness and agreement
to be bound to the terms of this Agreement.
HERCULES INCORPORATED
By: /s/ Thomas L. Gossage
---------------------------------------------------
Title: Chairman, President and Chief Executive Officer
Date: March 29, 1993
GEORGIA-PACIFIC CORPORATION
By: /s/ A.D. Correll
Title: President and Chief Operating Officer
Date: March 29, 1993
LEE M. THOMAS
By: /s/ Lee M. Thomas
Date: March 29, 1993
<PAGE> 8
ATTACHMENT 1
Thomas shall be responsible in acting as a Georgia-Pacific officer to
use reasonable efforts to avoid exposure to any Competitively Sensitive
Information of Georgia-Pacific that may, if disclosed to Hercules, have the
potential to adversely affect competition between Hercules and
Georgia-Pacific's Paper and Pulp Chemical Business. Such information shall
include the following as applied to any portion of Georgia-Pacific's business
which is in competition with Hercules, more particularly to any of Georgia-
Pacific's Paper and Pulp Chemical business:
- Prices, costs and sales of products
- Production data and distribution data
- Personnel lists and related data
- Strategic plans
- Business direction
- Acquisition plans
- Expansion plans
- G-P GO and other profit-improvement projects and studies
- Research and development programs
The foregoing list is intended to be representative and not all
inclusive of types of information to which Thomas shall be restricted pursuant
to this Agreement.
Thomas shall have the individual responsibility and the obligation to
use reasonable best efforts to avoid exposure and access to the types of
information described above and shall
- Excuse himself from all discussions involving or which appear to
have the potential to involve any such information
- Refrain from accessing or reviewing any such information
- Require his staff at Georgia-Pacific to screen all documents coming
to him to ensure they do not contain any such information
- Immediately report any deviation or suspected deviation of the
foregoing responsibilities to Georgia-Pacific's General Counsel.
<PAGE> 9
Georgia-Pacific shall advise relevant officers and employees of the
importance of avoiding disclosure of information of the kind described above to
Thomas. Specifically, relevant officers and employees shall be directed and
reminded annually
- To refrain from discussion of such information in Thomas' presence
- To sanitize any documents or other communications directed or
copied to Thomas to eliminate any such information
- To review the effectiveness of existing procedures and, if
necessary, to institute any additional procedures with the prior concurrence of
Georgia-Pacific's General Counsel deemed to be necessary to restrict Thomas'
exposure to such information.
The information which shall be restricted to Thomas, as described
above, shall not include general information such as environmental and health
and safety issues, government affairs and related information which are known
to Hercules as a result of appropriate communications in connection with the
Toll Manufacturing Agreements between Georgia-Pacific and Hercules, or
information communicated between Hercules and Georgia-Pacific in the context of
each party's membership in trade organizations such as CMA. This exclusion
shall not permit Thomas to disclose to Hercules any Competitively Sensitive
Information.
<PAGE> 1
EXHIBIT 11
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF PER SHARE EARNINGS (Unaudited)
(Thousands, except per share amounts)
<TABLE>
<CAPTION>
For the year ended December 31,
------------------------------------
1994 1993 1992
-------- -------- ---------
<S> <C> <C> <C>
Income (Loss)
- ------------
Income (loss) before extraordinary
item and accounting changes $326,000 $(18,000) $ (60,000)
Extraordinary item, net of taxes (11,000) (16,000) (9,000)
Cumulative effect of accounting
changes, net of taxes (5,000) - (55,000)
-------- -------- ---------
Net income (loss) $310,000 $(34,000) $(124,000)
======== ======== =========
Weighted Average Shares
- -----------------------
Common shares outstanding, net of
restricted stock 89,069 87,711 86,402
Add - shares assumed to be issued
under long-term incentive
(restricted stock), stock
option and stock purchase
plans at the average market
price 635 - -
-------- -------- ---------
Primary shares 89,704 87,711 86,402
Add - additional shares assumed to be
issued under long-term incentive
(restricted stock), stock option
and stock purchase plans at the
quarter-end market price (if
higher than average market price) 88 1,365 1,840
-------- -------- ---------
Fully diluted shares 89,792 89,076 88,242
======== ======== =========
Income (Loss) Per Share
- -----------------------
Income (loss) before extraordinary
item and accounting changes $ 3.66 $ (.21) $ (.69)
Extraordinary item, net of taxes (.12) (.18) (.10)
Cumulative effect of accounting
changes, net of taxes (.06) - (.64)
-------- -------- ---------
Net income (loss) $ 3.48 $ (.39) $ (1.43)
======== ======== =========
Income (Loss) Per Share - Primary
and Fully Diluted
- -------------------
Income (loss) before extraordinary
item and accounting changes $ 3.63 $ (.20) $ (.68)
Extraordinary item, net of taxes (.12) (.18) (.10)
Cumulative effect of accounting
changes, net of taxes (.06) - (.62)
-------- -------- ---------
Net income (loss) $ 3.45 $ (.38) $ (1.40)
======== ======== =========
</TABLE>
A single presentation of income (loss) per share is made on the Statements
of Income because the effects of assuming issuance of common shares under
long-term incentive (restricted stock), stock option and stock purchase plans
are either antidilutive or insignificant.
<PAGE> 1
EXHIBIT 12
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
For the year ended December 31,
--------------------------------------
1994 1993 1992
---------- -------- --------
<S> <C> <C> <C>
Fixed charges:
Total interest costs $ 460,000 $516,000 $567,000
One-third of rent expense 17,000 18,000 19,000
---------- -------- --------
Total fixed charges 477,000 534,000 586,000
Add (deduct):
Income (loss) before income
taxes, extraordinary item and
accounting changes 572,000 23,000 (74,000)
Interest capitalized, net of
amortization 11,000 17,000 18,000
---------- -------- --------
Earnings for fixed charges $1,060,000 $574,000 $530,000
========== ======== ========
Ratio of earnings to fixed charges 2.22x 1.07x .90x
========== ======== ========
</TABLE>
<PAGE> 1
EXHIBIT 13
HIGHLIGHTS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
(Dollar amounts, except per share,
and shares are in millions) 1994 1993
- -----------------------------------------------------------------
<S> <C> <C>
Net sales $12,738 $12,287
Income (loss) before extraordinary item and
cumulative effect of accounting
change 326 (18)
Income (loss) per share before extraordinary item
and cumulative effect of accounting
change 3.66 (.21)
Cash provided by operations* 829 489
Capital expenditures 894 467
Cash dividends paid 145 142
Total assets at year-end 10,728 10,545
Total debt at year-end** 5,721 5,737
Total debt to capital at year-end, book basis 56.0% 57.0%
Total debt to capital at year-end, market basis 46.9% 48.0%
- -----------------------------------------------------------------
Cash dividends paid per share of common stock $ 1.60 $ 1.60
Market price per share of common stock
at year-end $ 71.50 $ 68.75
Shares of common stock outstanding
at year-end 90.5 90.3
- -----------------------------------------------------------------
</TABLE>
* Excludes the accounts receivable sale program.
** Includes the proceeds from the accounts receivable sale program
under the assumption that at the end of the program the proceeds
will be replaced by debt.
<PAGE> 2
BUILDING PRODUCTS
Georgia-Pacific is the leading manufacturer and distributor of building
products in the United States. The company produces plywood, oriented strand
board and other wood panels, lumber, gypsum wallboard, chemicals and other
products at 136 facilities in the U.S., one in Canada and two in Mexico.
Exports for this segment in 1994 were $198 million.
The company's building products business is primarily affected by the
level of housing starts; the level of repairs, remodeling and additions;
commercial building activity; the availability and cost of financing; and
changes in the industry's capacity.
Building products profits remained at record levels in 1994. Rising
interest rates had a muted impact on the construction industry, as they were
offset by stronger consumer confidence, employment and income growth.
DISTRIBUTION. Georgia-Pacific is the leading wholesaler of building products
in the U.S. During 1994, the company announced plans to restructure its
Distribution Division to improve customer service, grow the business and reduce
costs by implementing better organizational, logistical and information
systems. The effort began with a prototype reconfiguration of the current
branch network in the Southern region that will include a sales center
supported by strategically located warehousing/delivery locations. The new
delivery network will provide more reliable service and an increased breadth
of inventory.
To supplement Georgia-Pacific's production and to offer customers a
broader line of building products, we also purchase products from other
manufacturers. In 1994, these purchases totalled $2.9 billion.
Our largest export markets are in the Caribbean and Europe. We also have
building products sales offices in the United Kingdom, the Netherlands and
Mexico.
WOOD PANELS. The largest producer of structural wood panels in the U.S.,
Georgia-Pacific accounts for about 20 percent of domestic capacity. Our 16
softwood plywood plants and four oriented strand board plants can produce 6.4
billion square feet of panels annually. About 60 percent of our plywood
production is devoted to specialty applications such as decorative siding,
sanded plywood and concrete forms.
Oriented strand board (OSB) is a non-veneered structural panel made from
strands of wood arranged in layers and bonded with resin. OSB serves many of
the same uses as plywood, including roof decking, sidewall sheathing and floor
underlayment.
Georgia-Pacific is also a major producer of manufactured board products
for many industrial and construction applications. Hardboard, particleboard,
panelboard, softboard and medium-density fiberboard are made from logs,
sawdust, shavings and chips at 20 mills. Applications include furniture,
cabinets, housing, fixtures and other industrial products.
LUMBER. Georgia-Pacific is the second-largest lumber producer in the U.S.,
manufacturing about 2.5 billion board feet annually -- approximately 5 percent
of domestic lumber production. Most of our 41 lumber mills are located in the
South. Products include Southern pine, a variety of Appalachian and Southern
hardwoods, cypress, redwood, cedar, spruce, Western pine, Douglas fir and
pressure-treated Southern pine.
Demand for the company's engineered lumber products has increased rapidly
in recent years, primarily as a result of the reduced availability and higher
prices of conventional wide-dimension lumber. Laminated veneer lumber (LVL) and
wood I-joists, made from veneer, oriented strand board and sawn lumber, can be
designed to meet the precise performance requirements of roofing and flooring
systems.
GYPSUM PRODUCTS. The third-largest producer of gypsum products in the U.S.,
Georgia-Pacific's 10 gypsum board plants have an annual capacity of 3.1 billion
square feet. Gypsum products include wallboard, fire-door cores, plaster and
joint compound. The company also operates three mills that can produce a total
of 235,000 tons of 100-percent recycled paperboard used in the manufacture of
gypsum wallboard and 30,000 tons of dry felt used in the roofing industry. The
company owns gypsum reserves of approximately 121 million recoverable tons, an
estimated 51-year supply at current production rates.
<PAGE> 3
CHEMICALS. Georgia-Pacific is the forest products industry's leading supplier
of resins, adhesives and specialty chemicals, shipping more than 3 billion
pounds of thermosetting resins and paper chemicals annually from its 16 resin
plants to company mills and outside customers. Georgia-Pacific also produces
chemicals for use in other industries.
FOREST RESOURCES. Georgia-Pacific owns or controls more than 6 million acres
of timber and timberlands in the U.S. and Canada. Approximately 70 percent of
company timber is in the South, 20 percent in the East and 10 percent in the
West. Timber holdings include Southern pines and hardwoods; Douglas fir,
hemlock and other species in the Pacific Northwest; redwood, Douglas fir, true
firs and Western pines in Northern California; and numerous species of
hardwoods and softwoods in Maine, West Virginia and Wisconsin. These
timberlands and other timber controlled through long-term contracts supply a
significant part of Georgia-Pacific's wood fiber requirements.
PULP AND PAPER
Georgia-Pacific produces containerboard and packaging, communication papers,
market pulp and tissue at 83 facilities in the United States and one in Canada.
The company's combined 8.7 million tons of pulp, paper and paperboard capacity
represent approximately 8 percent of the United States' total annual capacity.
Exports for the pulp and paper segment in 1994 were $822 million, consisting
primarily of market pulp and containerboard.
Markets for Georgia-Pacific's pulp and paper products are affected
primarily by changes in industry capacity, the level of economic growth in the
U.S. and export markets, and fluctuations in currency exchange rates.
Prices for Georgia-Pacific's pulp and paper products increased markedly
during 1994. Tight supply and improving economies in the U.S. and export
markets accounted for this improvement.
CONTAINERBOARD AND PACKAGING. Georgia-Pacific produces containerboard,
corrugated containers and packaging, bleached paperboard, and kraft paper. The
company is the second-largest producer of containerboard in the U.S. Georgia-
Pacific's four containerboard mills have a combined annual capacity of 3
million tons of linerboard and corrugating medium, representing approximately 10
percent of U.S. capacity. Approximately 65 percent of Georgia-Pacific's
containerboard production is used by the company's corrugated packaging plants.
Georgia-Pacific sells the remainder to independent converters in the U.S.,
Central America, Western Europe and the Far East. During 1994, the company
exported 380,000 tons of containerboard.
In addition to standard corrugated containers, Georgia-Pacific's packaging
plants manufacture many specialty packaging products. These include double- and
triple-wall boxes, bulk bins, water-resistant packaging and high-finish and
preprinted packaging for point-of-sale displays. Our Technology and Development
Center uses the latest technology to design and test packaging for Georgia-
Pacific's customers.
The company can produce 400,000 tons of bleached paperboard each year for
use in frozen food containers, food service items and other products. Georgia-
Pacific annually produces approximately 350,000 tons of kraft paper, primarily
for use in grocery and multiwall bags.
Prices for Georgia-Pacific's containerboard and packaging products made a
dramatic rebound in 1994. Declining inventories, coupled with a surge in demand
for corrugated boxes, pushed prices to record levels.
COMMUNICATION PAPERS. The company is the largest producer of communication
papers in the U.S. Also known as uncoated free-sheet, communication papers are
used in office reprographics and commercial printing, business forms,
stationery, tablets, envelopes and checks. Georgia-Pacific's seven uncoated
free-sheet paper mills have a combined annual capacity of 2.2 million tons,
approximately 16 percent of U.S. industry capacity.
During 1994, the company converted its largest communication papers mills
at Ashdown, Arkansas, and Port Hudson, Louisiana, to the alkaline sizing
(precipitated calcium carbonate) process. This new process results in stronger,
higher-quality sheets, while reducing costs for chemicals and wood fiber.
Prices for communication papers made a significant recovery in the second
half of 1994 after bottoming during the second quarter. Tight supply and rising
market pulp prices continued to push paper prices higher through year-end.
<PAGE> 4
MARKET PULP. As the world's second-largest market pulp producer, Georgia-
Pacific's six mills have a combined annual capacity of 1.9 million tons,
approximately 18 percent of domestic capacity. The company produces Southern
softwood, Southern hardwood and Northern hardwood pulps for use in the
manufacture of many paper grades. Georgia-Pacific is also a major supplier of
fluff pulp and other specialty pulps. Fluff pulp is used primarily in
disposable diapers and other sanitary items. These products continue to
experience growing demand, particularly in developing countries.
Georgia-Pacific exports approximately 65 percent of its market pulp,
primarily to Europe, Asia and Latin America.
Market pulp prices nearly doubled in 1994 compared with 1993 lows.
Improving demand and low worldwide inventory spurred the price increases.
TISSUE. Georgia-Pacific ranks fifth among U.S. producers of tissue, with
approximately 9 percent of the industry's capacity. Georgia-Pacific annually
manufactures more than 500,000 tons of tissue at five mills. The company sells
most of its consumer products under the brand names Angel Soft(r), Sparkle(r),
Coronet(r), MD(r) and Delta(r) through major retailers of food and general
merchandise. Georgia-Pacific also produces commercial tissue products for
industrial, food service, office, hotel and hospital markets.
Demand for tissue products tends to be relatively stable through economic
cycles. Competition in the industry is intense. Increasing pulp prices put
upward pressure on tissue prices during 1994.
ENVIRONMENT
Good environmental stewardship is critical to ensuring that Georgia-Pacific
remains a strong, profitable company in the future. For that reason, the
company has placed an emphasis on protecting the environment while at the same
time responsibly using our natural resources to make the paper and building
products on which the nation and the global economy depend.
When it comes to environmental principles, practices and performance,
Georgia-Pacific continues to demonstrate leadership through its actions and
accomplishments.
Environmental policy at Georgia-Pacific is set at the highest level of the
company. The company's Environmental Policy Committee has direct access to the
board of directors and regularly provides them with environmental reports. In
1994, the board had input in the issuance of a comprehensive set of
environmental principles to guide the company's performance in protecting the
environment.
The principles cover four main areas -- management focus, conservation and
sustainable use of resources, protection of health and the environment, and
community awareness. They integrate environmental policy, practice and
performance, committing Georgia-Pacific to a steady, long-range course of
protection and improvement at every manufacturing facility, forestry operation
and distribution center owned or operated by the company.
In support of these principles, more than 60 specific goals have been
established for every facet of the company's operations, many with an assigned
target completion date between 1995 and 2000. To accomplish these goals, teams,
schedules and progress milestones are in place.
Management focus on the environment at Georgia-Pacific means ensuring that
environmental stewardship is everyone's job. To assure compliance with company
policies and government laws and regulations, environmental audits are
performed regularly at all facilities and forestry operations. Strategic
environmental plans and environmental training within each business unit are
required.
In the area of conservation and sustainable use of resources, the
company's principles cover such key concerns as sustainable forest management,
conservation of natural resources and energy efficiency. In each of these
categories, Georgia-Pacific is taking steps necessary to make its operations
consistent with the values of sustainable use. Examples include efforts to
reduce life-cycle environmental impact through source reduction, focus on
processes and products, and increased reuse, recovery and recycling.
As a manager of more than six million acres of forestlands in North
America, the company continues to play a major leadership role in innovative
forest management concepts. Forestland managers for the company are
illustrating how economic forest uses, conservation goals and wildlife habitat
protection are compatible.
<PAGE> 5
In 1994, for example, an unprecedented agreement emerged when the company
joined with The Nature Conservancy to establish a plan for permanent joint
management of more than 21,000 acres of environmentally significant Georgia-
Pacific lands along North Carolina's Lower Roanoke River. Hailed nationally as
a new course for forest management within unique ecosystems, the agreement
creates a hands-on partnership approach to forest management for economic
values as well as long-term conservation and habitat values.
Also covered within the company's environmental principles is protection
of health and the environment, including clean and safe operations, employee
safety and health, waste reduction, and scientific and technological innovation.
Georgia-Pacific's investment in manufacturing operations for the future
reflects this forward-looking commitment. In refining and expanding its
production of engineered wood products, the company is advancing
environmentally sound, technologically innovative solutions for the supply of
new building products. By efficiently utilizing young, fast-growing trees and
residual wood fiber, engineered wood products maximize the sustainable use of
available natural resources.
A fourth area addressed in the principles is promotion of community
awareness. The principles ensure that community involvement, response to public
concerns and voluntary disclosure -- including regular environmental progress
reports -- are fixtures at Georgia-Pacific.
The company completed a significant step in promoting awareness with
publication in 1994 of its first Environmental and Safety Report, entitled
Where We Stand.
Ultimately, the company's long-range effort to pursue environmental
leadership through pollution prevention should result in fewer penalties,
increased manufacturing efficiencies and reduced operating costs. By linking
previous actions and accomplishments to achievable environmental goals,
Georgia-Pacific believes it can effectively add value for the shareholder.
For a copy of Georgia-Pacific's Environmental and Safety Report, please
write to: Corporate Communications, Dept. GS, P.O. Box 105605, Atlanta, GA
30348.
<PAGE> 6
MANAGEMENT'S DISCUSSION AND ANALYSIS
1994 COMPARED WITH 1993
Net sales of $12.7 billion for the year ended December 31, 1994 were 3.7
percent higher than 1993 net sales. The Corporation reported net income of $310
million for the year ended December 31, 1994 compared with a net loss of $34
million in 1993. The 1994 results include a $33 million (37 cents per share)
net after-tax gain primarily from the sales of the envelope manufacturing and
roofing businesses, an $11 million (12 cents per share) after-tax
extraordinary loss from the early retirement of debt and a $5 million (6 cents
per share) one-time, after-tax charge for an accounting change. The 1993
results include a $16 million (18 cents per share) after-tax extraordinary
loss from the early retirement of debt and a net after-tax gain of $7 million
(8 cents per share) on the sale of the Corporation's paper distribution
business.
The building products segment reported an increase in net sales and operating
profits for the year ended December 31, 1994 compared with 1993, primarily due
to higher prices for most building products. Net sales were $7.6 billion in
1994 compared with net sales of $7.1 billion in 1993, an increase of 7.0
percent. Operating profits were $989 million in 1994 compared with profits of
$973 million in 1993. Return on sales decreased to 13.1% in 1994 from 13.8% in
1993, primarily due to higher wood costs.
SELECTED INDUSTRY SEGEMENT DATA
<TABLE>
<CAPTION>
Year ended December 31
---------------------------
(Millions, except per share) 1994 1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales
Building products $ 7,561 $ 7,067 $ 6,112
Pulp and paper 5,138 5,188 5,711
Other operations 39 32 24
- ---------------------------------------------------------------------------
Total net sales $12,738 $12,287 $11,847
===========================================================================
Operating profits
Building products $ 989 $ 973 $ 691
Pulp and paper 171 (187) (8)
Other operations 10 10 9
Other income (loss) 57 (26) -
- ---------------------------------------------------------------------------
Total operating profits 1,227 770 692
General corporate expense (169) (205) (166)
Interest expense (453) (513) (565)
Cost of accounts receivable
sale program (33) (29) (35)
(Provision) benefit for
income taxes (246) (41) 14
- ---------------------------------------------------------------------------
Income (loss) before extraordinary
item and accounting changes 326 (18) (60)
Extraordinary item,
net of taxes (11) (16) (9)
Cumulative effect of accounting
changes, net of taxes (5) - (55)
- ---------------------------------------------------------------------------
Net income (loss) $ 310 $ (34) $ (124)
===========================================================================
Per share:
Income (loss) before extraordinary
item and accounting changes $ 3.66 $ (.21) $ (.69)
Extraordinary item, net of taxes (.12) (.18) (.10)
Cumulative effect of accounting
changes, net of taxes (.06) - (.64)
- ---------------------------------------------------------------------------
Net income (loss) $ 3.48 $ (.39) $ (1.43)
===========================================================================
</TABLE>
<PAGE> 7
Prices for the Corporation's softwood lumber and plywood products averaged
approximately 7 percent and 6 percent higher, respectively, than prices in
1993. In addition, 1994 prices for oriented strand board and gypsum products
were up over 1993 levels. The price increases were offset by a rise in wood
costs compared with 1993, particularly for plywood and softwood lumber. Wood
costs in both these areas increased by approximately 18 percent in 1994 from
1993 levels. Prices for all of these products ended the year at levels higher
than the 1994 averages.
Demand for building products was stronger in 1994 due in part to an
improved economy and an increase in housing starts compared with 1993.
Increases in interest rates during 1994 and early 1995 are expected to
adversely affect demand to some extent.
The Corporation's pulp and paper segment reported net sales of $5.1
billion for the year ended December 31, 1994, a slight decrease from net sales
of $5.2 billion for 1993. Excluding the net sales attributable to the
Corporation's paper distribution and envelope manufacturing businesses (sold
in 1993 and 1994), net sales increased 14.9 percent to $5.1 billion in 1994
from $4.4 billion in 1993. Pulp and paper segment operating profits of $171
million were reported for 1994 compared with an operating loss of $187 million
for 1993.
The profits of the pulp and paper segment increased significantly in 1994,
primarily as a result of higher prices for most of the Corporation's pulp and
paper products, particularly market pulp, containerboard and communication
papers. Average market pulp prices have increased more than $100 per ton
compared with 1993 averages; average containerboard prices increased by more
than $50 per ton compared with 1993 averages; and average communication papers
prices were approximately $15 per ton higher than 1993 averages. Prices for
all of these products ended the year at levels higher than the 1994 averages.
Improved demand in 1994, due in part to stronger growth in U.S. and world
economies, had a positive impact on prices in the pulp and paper segment.
Inventories are lower than 1993 levels for most products, and at the end of
1994 many customers were on allocation. Based on current market conditions, the
Corporation anticipates further improvements in 1995 pulp and paper results.
In 1994, the Corporation recognized a net pretax gain of approximately $57
million ($33 million after taxes) primarily from the sales of five roofing
plants and its envelope manufacturing business. In 1993, the Corporation
recognized a pretax loss of $26 million ($7 million gain after taxes) related
to the sale of its paper distribution business. These amounts are reflected as
other income (loss) in the accompanying statements of income.
General corporate expense decreased 17.6 percent to $169 million in 1994
from $205 million in 1993. The decrease is primarily attributable to
compensation programs tied to the Corporation's common stock price.
The Corporation's interest expense and cost of accounts receivable sale
program were a combined $486 million, a decrease of 10.3 percent compared with
$542 million in 1993. Lower expense in 1994 is primarily the result of the
expiration of $800 million in interest rate exchange agreements which had
effectively fixed the rates on a portion of the Corporation's variable rate
debt.
Excluding asset sales, the Corporation reported pretax income before
extraordinary item and accounting change of $515 million and an income tax
provision of $222 million for the year ended December 31, 1994 compared with
pretax income before extraordinary item of $49 million and an income tax
provision of $74 million for the year ended December 31, 1993. The effective
tax rate used to calculate the provision for income taxes for both periods was
higher than the statutory rates used to calculate federal and state income
taxes primarily because of nondeductible goodwill amortization expense
associated with past business acquisitions.
Effective January 1, 1994, the Corporation adopted Financial Accounting
Standard Number 112 (FAS 112), "Employers' Accounting for Postemployment
Benefits." FAS 112 requires accrual-basis recognition of benefits provided by
an employer to former or inactive employees after employment but before
retirement. The adoption of FAS 112 resulted in a one-time, after-tax charge
of $5 million (6 cents per share) in the 1994 first quarter.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL. During 1994, the Corporation's cash provided by operations, together
with proceeds from asset sales, was sufficient to fund capital expenditures and
pay dividends. In 1995, the Corporation expects its cash flow from operations,
together with proceeds from any asset sales and available financing sources, to
be sufficient to fund planned capital investments, pay dividends and make
scheduled debt payments.
<PAGE> 8
OPERATING ACTIVITIES. In 1994, cash provided by operations was $829 million
compared with $389 million in 1993. Included in the 1994 results are tax
payments to the Internal Revenue Service (IRS) of $84 million to settle the
1989 and 1990 tax years for Georgia-Pacific Corporation and to resolve
substantially all pending income tax issues related to Great Northern Nekoosa
Corporation for the years 1985 through 1990. The 1993 results include a
reduction of the accounts receivable sale program of $100 million and payments
to the IRS of $205 million to settle the 1984 through 1988 tax years for
Georgia-Pacific Corporation and to substantially settle the 1982 through 1984
tax years for Great Northern Nekoosa Corporation. Excluding these items, cash
provided by operations increased by $219 million in 1994 compared with 1993.
INVESTING ACTIVITIES. Capital expenditures increased to $894 million in 1994
from $467 million in 1993. In addition, pretax proceeds received from the
sales of assets and other investing activities were $245 million in 1994,
compared with $265 million in 1993.
Capital expenditures in 1994 include $410 million in the pulp and paper
segment, $401 million in the building products segment, $44 million for timber
and timberlands and $39 million of other expenditures. Capital expenditures of
slightly in excess of $1 billion are currently projected for 1995, including
approximately $580 million for projects started prior to 1995.
The 1995 projected spending within the pulp and paper segment includes
improvements at the Corporation's Toledo, Oregon, and Big Island, Virginia,
containerboard mills which will begin in 1995 and are expected to be completed
in late 1996. These improvements will help increase recycled containerboard
production, upgrade product quality and reduce production costs. Total project
costs are estimated at $250 million, including approximately $120 million in
1995. The 1995 projected spending within the building products segment
includes the continuation of projects started in 1994 such as the construction
of two oriented strand board plants in Virginia and West Virginia, and the
construction of a medium-density fiberboard plant in Canada.
During 1994, the Corporation spent approximately $120 million on capital
expenditures for pollution control and abatement. The Corporation's 1995
capital expenditure budget includes approximately $200 million for
environmental-related projects. Certain other capital projects which are
being undertaken for the primary reasons of improving financial returns or
safety will also include expenditures for pollution control.
The Corporation expects to increase its environmental capital expenditures
over the next several years in order to conform its operations to increasingly
stringent standards for compliance with air, water and solid and hazardous
waste regulations. In December 1993, the Environmental Protection Agency (EPA)
proposed regulations known as the "Cluster" Rule to implement portions of the
Clean Air Act of 1990 and the Clean Water Act applicable to pulp and paper
facilities. The EPA will consider comments received from companies about the
proposed rules prior to the adoption of final regulations. In connection with
the rule-making process, the Corporation is evaluating the potential impact of
such proposed regulations and the possible changes to the Corporation's capital
expenditures over the next several years. Based on preliminary estimates, the
Corporation could be required to spend up to $1.7 billion during the 1996-1998
period to comply with the regulations if they are issued as currently proposed.
The ultimate financial impact of the regulations cannot be predicted with any
reasonable certainty at this time and will depend on several factors, including
possible changes in the proposed regulations and new developments in control
process technology. Additionally, this estimate was determined without
consideration as to whether the required expenditures can be economically
justified. There also is a possibility that the implementation deadline of
1998 in the proposed regulations will be extended when the final regulations are
issued. Although the proposed regulations currently are scheduled to be issued
in late 1995, the EPA has indicated that final regulations may not be issued
until 1996.
The Corporation completed the sales of five roofing plants and its
envelope manufacturing business during 1994, which resulted in after-tax cash
proceeds of $156 million. The Corporation continues to review its business
units to identify those that are not strategic to its principal operations.
During 1993, the Corporation completed the sale of its paper distribution
business which resulted in after-tax cash proceeds of $222 million.
<PAGE> 9
FINANCING ACTIVITIES. At December 31, 1994 and 1993, the Corporation's total
debt was $5.7 billion, which includes $700 million for the accounts receivable
sale program. Increases in bank overdrafts of $39 million and commercial paper
and short-term notes of $218 million in 1994 were offset by a $273 million
decrease in long-term debt since December 31, 1993.
In April 1994, the Corporation redeemed approximately $204 million
principal amount of its 10-1/4% Debentures Due September 15, 2018. The
Corporation reported an after-tax extraordinary loss of $11 million (12 cents
per share) related to this early retirement in the 1994 first quarter.
The Corporation has a $1.5 billion unsecured revolving credit facility
which is used for direct borrowings and as support for commercial paper and
other short-term borrowings, including bid borrowings made under this
agreement. Effective November 30, 1994, the Corporation amended the Credit
Agreement with substantially the same lending group to extend the termination
date until 1999. The credit agreement contains certain restrictive covenants
described in Note 5 of the Notes to Financial Statements. The Corporation was
in compliance with these covenants at December 31, 1994. As of December 31,
1994, $632 million of committed credit was available in excess of all
short-term borrowings outstanding under or supported by the facility.
At December 31, 1994, the Corporation's weighted average interest rate on
its total debt, including the $700 million accounts receivable sale program
(which is currently scheduled to expire in May 1995 although all or a portion
might be refinanced on a long-term basis in 1995) and floating rate debt, was
8.3%. At December 31, 1994, the Corporation had outstanding interest rate
exchange agreements which effectively converted $946 million of floating rate
obligations with a weighted average interest rate of approximately 5.5% to
fixed rate obligations with an average effective interest rate of
approximately 9.2%. As of December 31, 1994, the Corporation's total floating
rate debt, including the accounts receivable sale program, exceeded related
interest rate exchange agreements by approximately $1.3 billion. Interest
rate exchange agreements of $800 million, outstanding at December 31, 1993,
expired during 1994. Interest rate exchange agreements of $450 million,
outstanding at December 31, 1994, will expire during 1995.
The Corporation has disclosed the fair value of its short-term and long-
term debt and its interest rate exchange agreements in accordance with
Financial Accounting Standard Number 107 (FAS 107), "Disclosures about Fair
Value of Financial Instruments." In addition, the Corporation adopted Financial
Accounting Standard Number 119, "Disclosure about Derivative Financial
Instruments and Fair Value of Financial Instruments," effective December 31,
1994, which requires entities to provide in their financial statements
information about derivative financial instruments and to provide a summary of
this information together with FAS 107 disclosures. Refer to Note 6 of the
Notes to Financial Statements for this presentation.
As of December 31, 1994, the Corporation had registered for sale up to $500
million of debt securities under a shelf registration statement filed with the
Securities and Exchange Commission.
OTHER. The Corporation employs approximately 47,000 people. The majority of
the hourly employees are members of unions. Georgia-Pacific considers its
relationship with its employees to be good. Seventy-three union contracts are
subject to negotiation and renewal in 1995, including seven at large paper
facilities.
For a discussion of commitments and contingencies, see Note 10 of the Notes
to Financial Statements.
1993 COMPARED WITH 1992
Georgia-Pacific's 1993 consolidated net sales were $12.3 billion, slightly
above 1992 net sales of $11.8 billion. The 1993 net loss was $34 million (39
cents per share), an improvement over the 1992 net loss of $124 million ($1.43
per share). The 1993 results include a $16 million (18 cents per share) after-
tax extraordinary loss from the early retirement of debt and a $48 million (55
cents per share) after-tax charge due to the increase in federal income tax
rates resulting from the Revenue Reconciliation Act of 1993. The 1992 results
include a $55 million (64 cents per share) net after-tax charge for an
accounting change and a $9 million (10 cents per share) after-tax
extraordinary loss from the early retirement of debt.
The building products segment reported 1993 net sales of $7.1 billion, up
15.6 percent from $6.1 billion in 1992. In addition, this segment reported
profits of $973 million in 1993 compared with profits of $691 million in 1992,
an increase of 40.8 percent. Accordingly, the return on sales increased from
11.3% in 1992 to 13.8% in 1993.
The profits of this segment improved primarily as a result of average
prices for the Corporation's plywood and softwood lumber products being higher
by approximately 10 percent and 25 percent, respectively, in 1993 compared with
1992. The impact of these higher prices was partially offset by an increase of
approximately 15 percent in wood costs in 1993 compared with 1992. Supply
constraints attributable to environmental factors had a positive impact on
prices during 1993.
<PAGE> 10
Results for the Corporation's pulp and paper segment in 1993 were down
significantly from 1992. Net sales of $5.2 billion were reported in 1993, down
8.4 percent from $5.7 billion during 1992. This segment also recorded a $187
million loss in 1993 compared with a loss of $8 million in 1992. Earnings
declined primarily as a result of 1993 average prices for most of the
Corporation's pulp and paper products being lower than 1992 average prices.
Market pulp prices had declined by more than $100 per ton; containerboard
prices had declined by more than $20 per ton; and communication papers had
declined by more than $10 per ton when comparing 1993 average prices with 1992
average prices.
Prices for most of the products in the pulp and paper segment finished the
1993 year lower than average prices for the full year. Although not enough to
offset the reduced revenue from price declines, the Corporation made efforts
during 1993 to improve productivity and reduce costs at its mills which
resulted in savings in excess of $100 million. To achieve these cost savings,
the mills reduced overtime and administrative expenses, increased machine
efficiencies, better managed raw material and supply inventories and reduced
waste.
During 1993, the Corporation recognized a pretax loss of $26 million ($7
million gain after taxes) related to the sale of the Corporation's paper
distribution business. This amount is reflected as other loss in the
accompanying statements of income.
General corporate expense increased 23.5 percent from $166 million in 1992
to $205 million in 1993. Approximately $32 million of the increase was
attributable to compensation programs tied to the Corporation's common stock
price, including approximately $22 million that was attributable to an increase
in the cash bonus portion of the Corporation's long-term incentive program due
to the increase in the marginal individual income tax rate enacted as part of
the Revenue Reconciliation Act of 1993.
The Corporation's 1993 interest expense and cost of accounts receivable
sale program were a combined $542 million, a decrease of 9.7 percent compared
with 1992. Lower expense in 1993 is primarily the result of reduced levels of
debt and a lower weighted average interest rate.
Excluding the sale of its paper distribution business, the Corporation
reported pretax income before extraordinary item of $49 million and an income
tax provision of $74 million for 1993. The effective tax rate differed from
the federal statutory tax rate primarily because of the one-time charge for
the 1 percent increase in the federal income tax rate that went into effect in
1993 and nondeductible goodwill amortization expense associated with past
business acquisitions.
The Corporation reported a $74 million pretax loss for 1992 before the
extraordinary item and cumulative effect of the accounting change. The 1992
tax benefit of $14 million resulted in an effective tax rate of 18.9 percent.
The pretax loss on which tax expense was computed, excluding the extraordinary
item and the cumulative effect of the accounting change, was approximately $37
million. This amount differs from the 1992 reported pretax loss by $37 million
primarily because of nondeductible goodwill amortization expense associated
with past business acquisitions.
As a result of the decline in interest rates that occurred throughout most
of 1993, the Corporation decreased both the discount rate and long-term rate of
return assumptions in the 1993 valuation of its pension obligations. The
discount rate was reduced from 8 percent to 7 percent and the long-term rate of
return was reduced from 11.5 percent to 10 percent. In addition, the
Corporation reduced its assumed rate of increase in future compensation levels
from 6 percent in 1992 to 5 percent in 1993. These changes increased the 1994
expense related to these obligations by approximately $18.4 million, which
after being offset by other factors resulted in an overall increase in the 1994
expense from 1993 of approximately $7 million.
The Corporation adopted Financial Accounting Standard Number 109,
"Accounting for Income Taxes" (FAS 109), effective January 1, 1992. The $55
million one-time, after-tax charge resulted primarily from providing deferred
income taxes for differences between the remaining net book values and the tax
bases of net assets acquired in purchase transactions other than the
acquisition of Great Northern Nekoosa Corporation (GNN), partially offset by a
reduction in previously provided deferred taxes to reflect the lower current
statutory income tax rate. Also as a part of the adoption of FAS 109, the
Corporation recorded adjustments to various balance sheet accounts which
resulted from adjusting to pretax amounts the carrying values of certain
assets and liabilities related to the Corporation's acquisition of GNN in
March 1990.
<PAGE> 11
STATEMENTS OF INCOME
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Year ended December 31
---------------------------
(Millions, except per share amounts) 1994 1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $12,738 $12,287 $11,847
- ---------------------------------------------------------------------------
Costs and expenses
Cost of sales 9,881 9,765 9,397
Selling, general and
administrative 1,143 1,196 1,170
Depreciation and depletion 746 764 789
Interest 453 513 565
Other (income) loss (57) 26 -
- ---------------------------------------------------------------------------
Total costs and expenses 12,166 12,264 11,921
- ---------------------------------------------------------------------------
Income (loss) before income taxes,
extraordinary item and
accounting changes 572 23 (74)
Provision (benefit) for income taxes 246 41 (14)
- ---------------------------------------------------------------------------
Income (loss) before extraordinary item
and accounting changes 326 (18) (60)
Extraordinary item - loss from
early retirement of debt,
net of taxes (11) (16) (9)
Cumulative effect of accounting
changes, net of taxes (5) - (55)
- ---------------------------------------------------------------------------
Net income (loss) $ 310 $ (34) $ (124)
===========================================================================
Per share:
Income (loss) before extraordinary item
and accounting changes $ 3.66 $ (.21) $ (.69)
Extraordinary item - loss from early
retirement of debt, net of taxes (.12) (.18) (.10)
Cumulative effect of accounting
changes, net of taxes (.06) - (.64)
- ---------------------------------------------------------------------------
Net income (loss) $ 3.48 $ (.39) $ (1.43)
===========================================================================
Average number of shares outstanding 89.1 87.7 86.4
===========================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 12
STATEMENTS OF CASH FLOWS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Year ended December 31
-------------------------
(Millions) 1994 1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Cash provided by (used for) operations
Net income (loss) $ 310 $ (34) $(124)
Adjustments to reconcile net income
(loss) to cash provided by operations:
Depreciation 695 711 747
Depletion 51 53 42
Deferred income tax benefit (33) (104) (133)
Amortization of goodwill 59 59 59
Stock compensation programs (4) 53 42
Gain on sales of assets (14) (32) (33)
Amortization of debt issue costs,
discounts and premiums 10 7 6
Other (income) loss (57) 26 -
Cumulative effect of accounting changes,
net of taxes 5 - 55
(Increase) in receivables (217) (174) (87)
(Increase) decrease in inventories (44) (93) 61
Change in other working capital 40 40 193
Increase (decrease) in taxes payable (12) (158) 13
Change in other assets and other
long-term liabilities 40 35 27
- ---------------------------------------------------------------------------
Cash provided by operations 829 389 868
- ---------------------------------------------------------------------------
Cash provided by (used for) investing
activities
Capital expenditures
Property, plant and equipment (850) (421) (347)
Timber and timberlands (44) (46) (37)
- ---------------------------------------------------------------------------
Total capital expenditures (894) (467) (384)
Proceeds from sales of assets 249 260 55
Other (4) 5 (4)
- ---------------------------------------------------------------------------
Cash (used for) investing activities (649) (202) (333)
- ---------------------------------------------------------------------------
Cash provided by (used for) financing
activities
Repayments of long-term debt (333) (576) (566)
Additions to long-term debt 53 511 754
Fees paid to issue debt - (5) (7)
Increase (decrease) in bank overdrafts 39 52 (50)
Increase (decrease) in commercial paper
and other short-term notes 218 (41) (519)
Cash dividends paid (145) (142) (140)
- ---------------------------------------------------------------------------
Cash (used for) financing activities (168) (201) (528)
- ---------------------------------------------------------------------------
Increase (decrease) in cash 12 (14) 7
Balance at beginning of year 41 55 48
- ---------------------------------------------------------------------------
Balance at end of year $ 53 $ 41 $ 55
===========================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
BALANCE SHEETS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
December 31
--------------------
(Millions, except shares and per share amounts) 1994 1993
- -----------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash $ 53 $ 41
Receivables, less allowances of
$28 and $32 566 377
Inventories
Raw materials 390 367
Finished goods 809 786
Supplies 275 262
LIFO reserve (265) (213)
- -----------------------------------------------------------------------
Total inventories 1,209 1,202
- -----------------------------------------------------------------------
Other current assets 34 26
- -----------------------------------------------------------------------
Total current assets 1,862 1,646
- -----------------------------------------------------------------------
Timber and timberlands, net 1,363 1,381
- -----------------------------------------------------------------------
Property, plant and equipment
Land and improvements 246 237
Buildings 1,066 1,074
Machinery and equipment 9,881 9,550
Construction in progress 307 125
- -----------------------------------------------------------------------
Total property, plant and equipment,
at cost 11,500 10,986
Accumulated depreciation (6,012) (5,538)
- -----------------------------------------------------------------------
Property, plant and equipment, net 5,488 5,448
- -----------------------------------------------------------------------
Goodwill 1,773 1,832
- -----------------------------------------------------------------------
Other assets 242 238
- -----------------------------------------------------------------------
Total assets $10,728 $10,545
=======================================================================
<CAPTION>
December 31
--------------------
1994 1993
- -----------------------------------------------------------------------
<S> <C> <C>
Liabilities and shareholders' equity
Current liabilities
Bank overdrafts, net $ 212 $ 173
Commercial paper and other short-term
notes 868 650
Current portion of long-term debt 37 57
Accounts payable 603 582
Accrued compensation 182 184
Accrued interest 89 114
Other current liabilities 334 304
- -----------------------------------------------------------------------
Total current liabilities 2,325 2,064
- -----------------------------------------------------------------------
Long-term debt, excluding current
portion 3,904 4,157
- -----------------------------------------------------------------------
Other long-term liabilities 825 827
- -----------------------------------------------------------------------
Deferred income tax liabilities 1,054 1,095
- -----------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity
Common stock, par value $.80; 150,000,000
shares authorized; 90,466,000 and 90,269,000
shares issued 72 71
Additional paid-in capital 1,220 1,202
Retained earnings 1,382 1,217
Long-term incentive plan deferred
compensation (39) (56)
Other (15) (32)
- -----------------------------------------------------------------------
Total shareholders' equity 2,620 2,402
- -----------------------------------------------------------------------
Total liabilities and shareholders' equity $10,728 $10,545
=======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 14
STATEMENTS OF SHAREHOLDERS' EQUITY
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
(Millions, except shares and per share amounts) Long-term
Additional incentive
Common stock Common paid-in Retained plan deferred
shares issued Total stock capital earnings compensation Other
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
87,421,000 December 31, 1991 $2,736 $70 $1,045 $1,657 $(28) $ (8)
Net loss (124) - - (124) - -
Cash dividends
declared - $1.60 per
common share (140) - - (140) - -
Common stock issued:
186,000 Stock option plan 12 - 12 - - -
Employee stock
112,000 purchase plan 4 - 4 - - -
Long-term
392,000 incentive plan 22 - 33 - (11) -
Other (2) - - - - (2)
- ------------------------------------------------------------------------------------------------------------
Balance at
88,111,000 December 31, 1992 2,508 70 1,094 1,393 (39) (10)
Net loss (34) - - (34) - -
Cash dividends
declared - $1.60 per
common share (142) - - (142) - -
Common stock issued:
107,000 Stock option plans 7 - 7 - - -
Employee stock
1,575,000 purchase plans 55 1 54 - - -
Long-term
476,000 incentive plan 26 - 43 - (17) -
Other (18) - 4 - - (22)
- ------------------------------------------------------------------------------------------------------------
Balance at
90,269,000 December 31, 1993 2,402 71 1,202 1,217 (56) (32)
Net loss 310 - - 310 - -
Cash dividends
declared - $1.60 per
common share (145) - - (145) - -
Common stock issued:
97,000 Stock option plans 7 - 7 - - -
Employee stock
49,000 purchase plan 3 - 3 - - -
Long-term
51,000 incentive plan 24 1 6 - 17 -
Other 19 - 2 - - 17
- ------------------------------------------------------------------------------------------------------------
Balance at
90,466,000 December 31, 1994 $2,620 $72 $1,220 $1,382 $(39) $(15)
============================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the
accounts of Georgia-Pacific Corporation and subsidiaries (the Corporation).
All significant intercompany balances and transactions are eliminated in
consolidation.
REVENUE RECOGNITION. The Corporation recognizes revenue when title to the
goods sold passes to the buyer, which is generally at the time of shipment.
INCOME (LOSS) PER SHARE. Income (loss) per share is computed based on net
income (loss) and the weighted average number of common shares outstanding (net
of restricted stock). The effects of assuming issuance of common shares under
long-term incentive, stock option and stock purchase plans were either
insignificant or antidilutive. The number of shares used in the income (loss)
per share computations were 89,069,000 in 1994, 87,711,000 in 1993 and
86,402,000 in 1992.
INVENTORY VALUATION. Inventories are valued at the lower of average cost or
market and include the cost of materials, labor and manufacturing overhead.
The last-in, first-out (LIFO) dollar value pool method was used to determine the
cost of approximately 53% and 45%, respectively, of inventories at December 31,
1994 and 1993.
PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment are recorded at
cost. Lease obligations for which the Corporation assumes substantially all
the property rights and risks of ownership are capitalized. Replacements of
major units of property are capitalized and the replaced properties are retired.
Replacements of minor components of property and repair and maintenance costs
are charged to expense as incurred.
Depreciation is computed by the straight-line method over the estimated
useful lives of the related assets. Upon retirement or disposition of assets,
cost and accumulated depreciation are removed from the related accounts and any
gain or loss is included in income.
Effective January 1, 1993, the Corporation changed the estimated useful
lives used to compute depreciation for land improvements, buildings and certain
machinery and equipment added on or after that date. Lives for land
improvements were changed from 20 years to 25 years. Lives for buildings were
changed from 20 to 33 years to 20 to 45 years. Lives for certain machinery and
equipment were extended but remain within a range from 3 to 20 years. These
changes were made to better reflect the estimated periods during which such
assets will remain in service.
The Corporation capitalizes interest on projects when construction takes
considerable time and entails major expenditures. Such interest is charged to
the property, plant and equipment accounts and amortized over the approximate
life of the related assets in order to properly match costs with revenues
resulting from the facilities. Interest capitalized, expensed and paid were as
follows:
<TABLE>
<CAPTION>
Year ended December 31
------------------------
(Millions) 1994 1993 1992
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Total interest costs $460 $516 $567
Interest capitalized (7) (3) (2)
- ----------------------------------------------------------------------
Interest expense $453 $513 $565
======================================================================
Interest paid $481 $529 $544
======================================================================
</TABLE>
TIMBER AND TIMBERLANDS. The Corporation depletes its investment in timber
based on the total fiber that will be available during the estimated growth
cycle. Timber carrying costs are expensed as incurred.
LANDFILLS AND LAGOONS. The Corporation accrues for landfill closure costs over
the periods that benefit from the use of the landfill and accrues for lagoon
clean-out costs over the useful period between clean-outs.
GOODWILL. The Corporation amortizes costs in excess of fair value of net
assets of businesses acquired using the straight-line method over a period not
to exceed 40 years. Recoverability is reviewed annually or sooner if events or
changes in circumstances indicate that the carrying amount may exceed fair
value. Recoverability is then determined by comparing the undiscounted net
cash flows of the assets to which the goodwill applies to the net book value
including goodwill of those assets.
Amortization expense was $59 million in 1994, 1993 and 1992. Accumulated
amortization at December 31, 1994 and 1993 was $307 million and $247 million,
respectively.
ENVIRONMENTAL MATTERS. The Corporation recognizes a liability for
environmental costs when it believes the liabilities are probable and the
amounts can be reasonably estimated. The liabilities are developed based on
currently available information and reflect the participation of other
potentially responsible parties depending on the parties' financial condition
and probable contribution. The accruals are recorded at undiscounted amounts
and are reflected as other liabilities in the accompanying balance sheets. No
amounts have been recorded for potential recoveries from insurance carriers.
Environmental costs are generally capitalized when the costs improve the
condition of the property or the costs prevent or mitigate future
contamination. All other costs are expensed.
RECLASSIFICATIONS. Certain 1993 and 1992 amounts have been reclassified to
conform with the 1994 presentation.
<PAGE> 16
NOTE 2. INDUSTRY SEGMENT INFORMATION
Manufactured product lines in the building products segment consist primarily
of wood panels (plywood, hardboard, particleboard and oriented strand board),
lumber, gypsum products and chemicals.
Manufactured product lines in the pulp and paper segment consist primarily
of containerboard and packaging (linerboard, medium, bleached board, kraft
paper and corrugated packaging), communication papers, market pulp and tissue.
Timber and timberlands are managed to supply raw materials to both the pulp
and paper and building products segments. Profits from sales of logs and chips
to the pulp and paper segment and to outside customers in the ordinary course
of business are included in the operating profits of the building products
segment.
During the years 1992 through 1994, sales to foreign markets represented
less than 10% of total sales to unaffiliated customers. No single customer
accounted for more than 10% of total sales to unaffiliated customers in any
year during that period.
<TABLE>
<CAPTION>
Year ended December 31
------------------------------------------------
(Millions) 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales
Building products $ 7,561 60% $ 7,067 58% $ 6,112 52%
Pulp and paper 5,138 40 5,188 42 5,711 48
Other operations 39 - 32 - 24 -
- ------------------------------------------------------------------------------------------------------------
Total net sales $12,738 100% $12,287 100% $11,847 100%
============================================================================================================
Operating profits
Building products $ 989 81% $ 973 126% $ 691 100%
Pulp and paper 171 14 (187) (24) (8) (1)
Other operations 10 - 10 1 9 1
Other income (loss)* 57 5 (26) (3) - -
- ------------------------------------------------------------------------------------------------------------
Total operating profits 1,227 100% 770 100% 692 100%
=== === ===
General corporate expense (169) (205) (166)
Interest expense (453) (513) (565)
Cost of accounts receivable sale program (33) (29) (35)
(Provision) benefit for income taxes (246) (41) 14
- ------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary item and
accounting changes 326 (18) (60)
Extraordinary item - loss from early
retirement of debt, net of taxes (11) (16) (9)
Cumulative effect of accounting changes,
net of taxes (5) - (55)
- ------------------------------------------------------------------------------------------------------------
Net income (loss) $ 310 $ (34) $ (124)
============================================================================================================
Depreciation, depletion and goodwill
amortization
Building products $ 200 25% $ 215 26% $ 206 24%
Pulp and paper 585 73 595 72 626 74
Other and general corporate 20 2 13 2 16 2
- ------------------------------------------------------------------------------------------------------------
Total depreciation, depletion and
goodwill amortization $ 805 100% $ 823 100% $ 848 100%
============================================================================================================
Capital expenditures**
Building products $ 401 45% $ 146 31% $ 111 29%
Pulp and paper 410 46 261 56 217 56
Timber and timberlands 44 5 46 10 37 10
Other and general corporate 39 4 14 3 19 5
- ------------------------------------------------------------------------------------------------------------
Total capital expenditures $ 894 100% $ 467 100% 384 100%
============================================================================================================
Assets
Building products $ 2,061 19% $ 1,726 16% $ 1,634 15%
Pulp and paper 6,917 64 6,909 66 7,414 68
Timber and timberlands 1,363 13 1,380 13 1,402 13
Other and general corporate 387 4 530 5 462 4
- ------------------------------------------------------------------------------------------------------------
Total assets $10,728 100% $10,545 100% 10,912 100%
============================================================================================================
</TABLE>
* Other income (loss) primarily represents the results of various asset
divestitures as described in Note 3. If these amounts had been
included in segment operating profits, building products operating
profits would have been $1,013 million in 1994 and pulp and
paper operating profits would have been $204 million in 1994 and
$(213) million in 1993.
** Capital expenditures represent additions (at cost) to property, plant
and equipment and timber and timberlands.
<PAGE> 17
NOTE 3. ASSET DIVESTITURES
The following divestitures were completed during the years 1994 and 1993. The
Corporation had no major divestitures in 1992. The pretax gains and losses
associated with these sales are included in other income (loss) in the
accompanying statements of income.
- - In February 1994, the Corporation completed the sale of five roofing plants
located in Oklahoma, Texas, Ohio, Georgia and Pennsylvania. The sale resulted
in after-tax cash proceeds of approximately $39 million. The Corporation
recognized a pretax gain of $24 million ($15 million after taxes).
- - In February 1994, the Corporation completed the sale of its envelope
manufacturing business which included 15 envelope manufacturing plants and
certain assets of another plant. The sale resulted in after-tax cash proceeds
of approximately $117 million. The Corporation recognized a pretax gain of $39
million ($24 million after taxes).
- - In July 1993, the Corporation completed the sale of its paper distribution
business which included 80 distribution centers in 31 states. The transaction
resulted in after-tax cash proceeds of approximately $222 million. The
Corporation recognized a $26 million pretax loss and a $7 million after-tax
gain on the transaction. The large tax benefit resulted from the loss on the
sale as well as the fact that the tax basis was significantly greater than the
financial basis of stock included in the assets sold in the transaction.
NOTE 4. RECEIVABLES
The Corporation has a large, diversified customer base, which includes some
customers who are located in foreign countries. The Corporation closely
monitors extensions of credit and has not experienced significant losses
related to its receivables. In addition, a significant portion of the
receivables from foreign sales are covered by either export credit insurance
or confirmed letters of credit to help ensure collectibility.
Supplemental information on the accounts receivable balances at December
31, 1994 and 1993 is as follows:
<TABLE>
<CAPTION>
December 31
--------------
(Millions) 1994 1993
- ----------------------------------------------------------------------
<S> <C> <C>
Receivables
Trade $515 $358
Other 79 51
- ----------------------------------------------------------------------
594 409
Less allowances 28 32
- ----------------------------------------------------------------------
Receivables, net $566 $377
======================================================================
</TABLE>
The Corporation had sold fractional ownership interests in a defined pool of
trade accounts receivable for $700 million as of December 31, 1994 and 1993.
The sold accounts receivable are excluded from receivables in the accompanying
balance sheets. The full amount of the allowance for doubtful accounts has
been retained because the Corporation has retained substantially the same risk
of credit loss as if the receivables had not been sold. A portion of the cost
of the accounts receivable sale program is based on the purchasers' level of
investment and borrowing costs. Additionally, the Corporation pays fees based
on its senior debt ratings. The total cost of the program, which was $33
million in 1994, $29 million in 1993 and $35 million in 1992, is included in
selling, general and administrative expense in the accompanying statements of
income.
Under the accounts receivable sale agreement, the maximum amount of the
purchasers' investment is subject to change based on the level of eligible
receivables and restrictions on concentrations of receivables. The agreement
was amended in October 1993 which reduced the program from $800 million to $700
million. In 1994, the term of the program was extended until May 27,1995.
<PAGE> 18
NOTE 5. INDEBTEDNESS
The Corporation's indebtedness included the following:
<TABLE>
<CAPTION>
December 31
----------------
(Millions) 1994 1993
- ----------------------------------------------------------------------
<S> <C> <C>
Debentures, 9.3% average rate,
payable through 2023 $2,600 $2,804
Notes, 8.2% average rate,
payable through 2000 928 974
Commercial paper and other short-term
notes, 6.3% average rate 868 650
Revenue bonds, 5.7% average rate,
payable through 2026 389 375
Other loans, 7.5% average rate,
payable through 2010 53 96
- ----------------------------------------------------------------------
4,838 4,899
Less:
Commercial paper and other
short-term notes 868 650
Current portion of long-term debt 37 57
Unamortized discount 29 35
- ----------------------------------------------------------------------
Long-term debt, excluding
current portion $3,904 $4,157
======================================================================
</TABLE>
For information regarding financial instruments, see Note 6.
The scheduled maturities of long-term debt for the next five years are as
follows: $37 million in 1995, $9 million in 1996, $314 million in 1997, $447
million in 1998 and $28 million in 1999.
NOTES AND DEBENTURES. During 1994, the Corporation prepaid approximately $221
million in principal of its outstanding debt, resulting in an after-tax
extraordinary loss of $11 million ($19 million before taxes).
During 1993, the Corporation issued $250 million of 8-1/4% Debentures Due
March 1, 2023, and $250 million of 8-1/8% Debentures Due June 15, 2023. In
addition, the Corporation prepaid approximately $317 million in principal of
its outstanding debt during 1993, resulting in an after-tax extraordinary loss
of $16 million ($27 million before taxes).
REVOLVING CREDIT FACILITY. On June 30, 1993, the Corporation entered into an
agreement with Bank of America National Trust and Savings Association and 22
other domestic and international banks which provides an unsecured revolving
credit facility of $1.5 billion. The revolving credit facility is being used
as support for commercial paper and other short-term borrowings. Effective
November 30, 1994, the Corporation amended the Credit Agreement with
substantially the same lending group to extend the termination date until 1999,
reduce the commitment and facility fees and reduce the applicable margin on any
draws under the facility. As of December 31, 1994, $632 million of committed
credit was available in excess of all short-term borrowings outstanding under
or supported by the facility.
Borrowings under the amended agreement bear interest at the election of
the Corporation at either (A) the higher of the Federal Funds Rate plus 1/2%
or the reference rate or (B) LIBOR plus .37% or (C) fixed or floating rates
set by competitive bids. Fees associated with this revolving credit facility
include a commitment fee of .08% per annum on the unused portion of the
commitments and a facility fee of .08% per annum on the aggregate commitments
of the lenders. Fees and margins may be adjusted upward or downward according
to a pricing grid based on the Corporation's long-term debt ratings.
The revolving credit agreement contains certain restrictive covenants. The
covenants include a maximum leverage ratio (funded indebtedness to operating
cash flow) of 4.5 to 1.0 which is to be maintained throughout the term of the
Credit Agreement. As of December 31, 1994, the leverage ratio was 3.0 to 1.0.
COMMERCIAL PAPER AND OTHER SHORT-TERM NOTES. These borrowings are classified
as current liabilities although all or a portion of them might be refinanced
on a long-term basis in 1995.
OTHER. At December 31, 1994, the amount of long-term debt secured by property,
plant and equipment and timber and timberlands was not material.
<PAGE> 19
NOTE 6. FINANCIAL INSTRUMENTS
The carrying amount and fair value of the Corporation's financial instruments
are as follows:
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
--------------------- ---------------------
Carrying Fair Carrying Fair
(Millions) Amount Value Amount Value
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial paper and
other short-term notes
(Note 5) $ 868 $ 868 $ 650 $ 650
Notes and debentures
(Note 5) 3,528 3,520 3,778 4,172
Revenue bonds
(Note 5) 389 385 375 375
Other loans
(Note 5) 53 53 96 96
Interest rate exchange
agreements * 12 * 99
Accounts receivable
sale program
(Note 4) 700 700 700 700
- ------------------------------------------------------------------------------
</TABLE>
* The Corporation accrued interest of $10 million and $31 million at
December 31, 1994 and 1993, respectively, related to these agreements.
COMMERCIAL PAPER AND OTHER SHORT-TERM NOTES. The carrying amounts approximate
fair value because of the short maturity of these instruments.
NOTES AND DEBENTURES. The fair value of notes and debentures was estimated
primarily by obtaining quotes from brokers for these and similar issues. For
notes and debentures for which there are no quoted market prices, the fair
value was estimated by calculating the present value of anticipated cash flows.
The discount rate used was an estimated borrowing rate for similar debt
instruments with like maturities.
REVENUE BONDS AND OTHER LOANS. The fair value of revenue bonds and other loans
was estimated by calculating the present value of anticipated cash flows. The
discount rate used was an estimated borrowing rate for similar debt instruments
with like maturities.
INTEREST RATE AND FOREIGN CURRENCY EXCHANGE AGREEMENTS. The Corporation has
used interest rate and foreign currency exchange agreements in the normal
course of business to manage and reduce the risk inherent in interest rate and
foreign currency fluctuations.
Under the interest rate exchange agreements, the Corporation makes payments
to counterparties at fixed interest rates and in turn receives payments at
variable rates. The Corporation entered into interest rate exchange agreements
in prior years to protect against the increased cost associated with a rise in
interest rates. During 1994, $800 million in interest rate exchange agreements
expired. At December 31, 1994, the Corporation had outstanding interest rate
exchange agreements which effectively converted $946 million of floating rate
obligations with a weighted average interest rate of 5.5 % to fixed rate
obligations with an average effective interest rate of approximately 9.2%.
These agreements have a weighted average maturity of approximately 2.3 years.
During 1995, $450 million of these agreements will expire. As of December 31,
1994, the Corporation's total floating rate debt, including the accounts
receivable sale program, exceeded related interest rate exchange agreements by
approximately $1.3 billion.
The estimated fair value of the Corporation's liability under interest
rate exchange agreements at December 31, 1994 and 1993 was $12 million and $99
million, respectively, and represents the estimated amount the Corporation
could have paid to terminate the agreements. The fair value at December 31,
1994 and 1993 was estimated by calculating the present value of anticipated
cash flows. The discount rate used was an estimated borrowing rate for similar
debt instruments with like maturities. The Corporation accrued interest of $10
million and $31 million at December 31, 1994 and 1993, respectively, related to
these agreements.
The Corporation enters into foreign exchange contracts, futures and
options, the amounts of which were not material to the consolidated financial
position of the Corporation at December 31, 1994.
The Corporation may be exposed to losses in the event of nonperformance of
counterparties, but does not anticipate such nonperformance.
OTHER. Due to the short-term nature of current assets and current liabilities,
their carrying amounts approximate fair value.
<PAGE> 20
NOTE 7. INCOME TAXES
The provision (benefit) for income taxes includes income taxes currently
payable and those deferred because of temporary differences between the
financial statement and tax bases of assets and liabilities. The provision
(benefit) for income taxes consists of the following:
<TABLE>
<CAPTION>
Year ended December 31
------------------------
(Millions) 1994 1993 1992
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Federal income taxes:
Current $229 $128 $ 105
Deferred (19) (89) (117)
State income taxes:
Current 50 17 14
Deferred (14) (15) (16)
- ----------------------------------------------------------------------
Provision (benefit) for income taxes $246 $ 41 $ (14)
======================================================================
Income taxes paid, net of refunds $251 $300 $ 68
======================================================================
</TABLE>
Income taxes paid during 1994 and 1993 included $84 million and $205 million,
respectively, to the Internal Revenue Service to settle substantially all
pending income tax issues for years prior to 1991.
The federal statutory income tax rate was 35% for years ended December 31,
1994 and 1993 and 34% for year ended December 31, 1992. The provision
(benefit) for income taxes is reconciled to the federal statutory rate as
follows:
<TABLE>
<CAPTION>
Year ended December 31
-------------------------
(Millions) 1994 1993 1992
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Provision (benefit) for income
taxes computed at the federal
statutory tax rate $200 $ 8 $(25)
State income taxes, net of
federal benefit 23 1 (3)
Goodwill amortization 23 23 22
Permanent differences on
assets sold - (23) -
Federal statutory tax rate
increase - 33 -
Foreign sales corporation (5) (2) (6)
Percentage depletion (1) (1) (1)
Life insurance, net (1) (1) (1)
Dividends-novested LTIP shares (1) (1) (1)
Meals and entertainment
disallowance 3 1 1
Other 5 3 -
- ----------------------------------------------------------------------
Provision (benefit) for
income taxes $246 $ 41 $(14)
======================================================================
</TABLE>
As a result of the Revenue Reconciliation Act of 1993, the Corporation incurred
after-tax charges in 1993 of $33 million due to the 1 percent increase in the
corporate income tax rate and $14 million related to the cash bonus portion of
its long-term incentive program due to the increase in the marginal individual
income tax rate.
Effective January 1992, the Corporation changed its method of accounting
for income taxes from the deferred method to the liability method required by
Financial Accounting Standard Number 109 (FAS 109), "Accounting for Income
Taxes." FAS 109 requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. The cumulative effect of adopting
FAS 109 as of January 1, 1992 was to increase the 1992 net loss by $55 million.
The components of the net deferred income tax liabilities are as follows:
<TABLE>
<CAPTION>
December 31
-----------------
(Millions) 1994 1993
- ----------------------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Compensation related accruals $ 305 $ 303
Other accruals and reserves 74 88
Other 27 76
- ----------------------------------------------------------------------
406 467
Valuation allowance - -
- ----------------------------------------------------------------------
406 467
- ----------------------------------------------------------------------
Deferred income tax liabilities:
Property, plant and equipment (1,242) (1,333)
Timber and timberlands (170) (167)
Other (48) (62)
- ----------------------------------------------------------------------
(1,460) (1,562)
- ----------------------------------------------------------------------
Deferred income tax liabilities, net $(1,054) $(1,095)
======================================================================
</TABLE>
As of December 31, 1993, deferred income tax assets included alternative
minimum tax credit carryforwards of $48 million which were utilized to offset
1994 tax payments.
<PAGE> 21
NOTE 8. RETIREMENT PLANS
DEFINED BENEFIT PENSION PLANS. Most of the Corporation's employees participate
in noncontributory defined benefit pension plans. These include plans which
are administered solely by the Corporation and union-administered multiemployer
plans. The Corporation's funding policy for solely administered plans is based
on actuarial calculations and the applicable requirements of federal law.
Contributions to multiemployer plans are generally based on negotiated labor
contracts.
Benefits under the majority of plans for hourly employees (including
multiemployer plans) are primarily related to years of service. The
Corporation has separate plans for salaried employees and officers under which
benefits are primarily related to compensation and years of service. The
officers' plan is not funded and is non-qualified for federal income tax
purposes.
Plan assets consist principally of common stocks, bonds, mortgage
securities, interests in limited partnerships, cash equivalents and real
estate. At December 31, 1994 and 1993, respectively, $70 million and $57
million of noncurrent prepaid pension cost was included in other assets.
Accrued pension cost of $67 million and $79 million at December 31, 1994 and
1993, respectively, was included in other long-term liabilities.
Pursuant to the provisions of Financial Accounting Standard Number 87 (FAS
87), "Employers' Accounting for Pensions," intangible assets of $30 million
were recorded as of December 31, 1994 and 1993 in order to recognize the
required minimum liability.
The following table sets forth the funded status of the solely administered
plans and the amounts recognized in the accompanying balance sheets.
<TABLE>
<CAPTION>
Year ended December 31, 1994 Year ended December 31, 1993
----------------------------------- -----------------------------------
Plans having Plans having Plans having Plans having
assets in excess accumulated assets in excess accumulated
of accumulated benefits in of accumulated benefits in
(Millions) benefits excess of assets benefits excess of assets
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulated benefit obligation
at November 30
Vested portion $ 868 $336 $ 896 $373
Nonvested portion 24 18 27 17
- ------------------------------------------------------------------------------------------------------------
892 354 923 390
Effect of projected future
compensation levels 6 7 4 14
- ------------------------------------------------------------------------------------------------------------
Projected benefit obligation
at November 30 898 361 927 404
Plan assets at fair value
at November 30 1,083 290 1,101 312
- ------------------------------------------------------------------------------------------------------------
Plan assets in excess of (less than)
projected benefit obligation 185 (71) 174 (92)
Unrecognized net (gain) loss (93) 22 (80) 57
Unrecognized prior service cost (6) 31 (17) 30
Unrecognized net asset from initial
application of FAS 87 (16) (11) (20) (15)
Adjustment required to recognize
minimum liability - (38) - (59)
- ------------------------------------------------------------------------------------------------------------
Prepaid (accrued) pension cost
at December 31 $ 70 $(67) $ 57 $(79)
============================================================================================================
</TABLE>
<PAGE> 22
Net periodic pension cost for solely and jointly administered pension plans
included the following:
<TABLE>
<CAPTION>
Year ended December 31
-------------------------
(Millions) 1994 1993 1992
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Service cost of benefits earned $ 81 $ 80 $ 75
Interest cost on projected benefit
obligation 93 96 96
Actual return on plan assets (21) (185) (157)
Net amortization and deferral (126) 30 11
Contributions to multiemployer
pension plans 4 4 4
- ----------------------------------------------------------------------
Net periodic pension cost $ 31 $ 25 $ 29
======================================================================
</TABLE>
The following assumptions were used:
<TABLE>
<CAPTION>
1994 1993 1992
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate used to determine
the projected benefit
obligation 8.5% 7.0% 8.0%
Rate of increase in future
compensation levels used
to determine the projected
benefit obligation 6.0 5.5 6.0
Expected long-term rate of return
on plan assets used to
determine net periodic
pension cost 10.0 10.0 11.5
- ----------------------------------------------------------------------
</TABLE>
During 1993, the Corporation recognized a net aggregate pretax settlement of
$12.7 million resulting from pension obligations assumed by the purchaser in
certain asset divestitures (Note 3).
DEFINED CONTRIBUTION PLANS. The Corporation sponsors several defined
contribution plans to provide eligible employees with additional income upon
retirement. The Corporation's contributions to the plans are based on employee
contributions and compensation. These contributions totaled $43 million in
1994, $44 million in 1993 and $43 million in 1992.
<PAGE> 23
RETIREE HEALTH CARE AND LIFE INSURANCE BENEFITS. The Corporation provides
certain health care and life insurance benefits to eligible retired employees.
Salaried participants generally become eligible for retiree health care
benefits after reaching age 55 with 10 years of service or after reaching age
65. Benefits, eligibility and cost-sharing provisions for hourly employees
vary by location and/or bargaining unit. Generally, the medical plans pay a
stated percentage of most medical expenses reduced for any deductible and
payments made by government programs and other group coverage. The plans are
unfunded.
In 1991, the Corporation began transferring its share of the cost of post-
age 65 health care benefits to future salaried retirees. It is currently
anticipated that the Corporation will continue to reduce the percentage of the
cost of post-age 65 benefits that it will pay on behalf of salaried employees
who retire in each of the years 1995 through 1999 and that the Corporation will
continue to share the pre-age 65 cost with future salaried retirees, but will
no longer pay any of the post-age 65 cost for salaried employees who retire
after 1999.
The following table sets forth the status of the plans, reconciled to the
accrued postretirement benefit cost recognized in the Corporation's balance
sheet at December 31, 1994 and 1993:
<TABLE>
<CAPTION>
December 31
--------------
(Millions) 1994 1993
- ----------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees $223 $273
Fully eligible active plan participants 26 33
Other active participants 100 135
- ----------------------------------------------------------------------
349 441
Unrecognized net gain (loss) 52 (60)
Unrecognized prior service cost 5 6
- ----------------------------------------------------------------------
Accrued postretirement benefit cost $406 $387
======================================================================
</TABLE>
Net periodic postretirement benefit cost included the following components:
<TABLE>
<CAPTION>
Year ended
December 31
------------------------
(Millions) 1994 1993 1992
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Service cost of benefits earned $ 9 $ 9 $ 6
Interest cost on accumulated
postretirement benefit obligation 28 31 27
Amortization of loss 1 1 -
- ----------------------------------------------------------------------
Net periodic postretirement benefit cost $38 $41 $33
======================================================================
</TABLE>
<PAGE> 24
For measuring the expected postretirement benefit obligation, a 12 percent, 13
percent and 14 percent annual rate of increase in the per capita claims cost
was assumed for 1994, 1993 and 1992, respectively. The rate was assumed to
decrease 1 percent per year to 7 percent in 1999 and remain at that level
thereafter. The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 8.0 percent at December 31,
1994, 6.5 percent at December 31, 1993 and 7.5 percent at December 31, 1992.
If the annual health care cost trend rate were increased by 1 percent, the
accumulated postretirement benefit obligation would have increased by 13
percent as of December 31, 1994, 15 percent as of December 31, 1993 and 13
percent as of December 31, 1992. The effect of this change on the aggregate
of service and interest costs would be an increase of 17 percent for 1994 and
1993 and 14 percent for 1992.
OTHER. Effective January 1, 1994, the Corporation adopted Financial Accounting
Standard Number 112 (FAS 112), "Employers' Accounting for Postemployment
Benefits." FAS 112 requires accrual-basis recognition of benefits provided by
an employer to former or inactive employees after employment but before
retirement. The adoption of FAS 112 resulted in a one-time, after-tax charge
of $5 million (6 cents per share) in the 1994 first quarter.
NOTE 9. COMMON AND PREFERRED STOCK
The Corporation's authorized capital stock consists of 10 million shares of no
par value Preferred Stock and 25 million shares of no par value Junior
Preferred Stock, of which no shares were issued at December 31, 1994, and 150
million shares of Common Stock, par value $.80 per share.
At December 31, 1994, the following authorized shares of the Corporation's
common stock were reserved for issue:
<TABLE>
<CAPTION>
1994
- ----------------------------------------------------------------------
<S> <C>
1993 Employee Stock Purchase Plan 1,015,000
1990 Long-Term Incentive Plan 2,860,000
1994 Employee Stock Option Plan 1,000,000
1993 Employee Stock Option Plan 285,000
1984 Employee Stock Option Plan 472,000
- ----------------------------------------------------------------------
Common stock reserved 5,632,000
======================================================================
</TABLE>
EMPLOYEE STOCK PURCHASE PLANS. At December 31, 1994, the Corporation had
1,015,000 shares of common stock reserved for issuance under the 1993 Employee
Stock Purchase Plan (Purchase Plan) at a subscription price of $57.06.
Subscribers have the option to receive a refund of their payments plus interest
at a rate of 5% per annum in lieu of stock. Additional shares can no longer be
subscribed under the Purchase Plan, which expires on July 31, 1995.
Approximately 7,000 subscribers remained in the Purchase Plan at December 31,
1994.
Under the Purchase Plan, the Corporation issued 49,000 shares and 2,000
shares of common stock in 1994 and 1993, respectively. Under the 1991 Employee
Stock Purchase Plan (which expired on May 31, 1993), the Corporation issued
1,573,000 shares and 112,000 shares of common stock in 1993 and 1992,
respectively.
LONG-TERM INCENTIVE PLANS. The Corporation initially reserved 4,000,000 shares
for issuance under the 1990 Long-Term Incentive Plan (Incentive Plan).
Specified portions of allocated shares under this plan are awarded as
restricted stock, at no cost to the employee, based on increases in average
market value of the Corporation's common stock. At the time restricted shares
are awarded, the market value of the stock is added to common stock and
additional paid-in capital and an equal amount is deducted from shareholders'
equity (long-term incentive plan deferred compensation). Long-term incentive
plan deferred compensation is amortized over the vesting (restriction) period,
generally five years, with adjustments made quarterly for market price
fluctuations. At the time awarded shares become vested, the Corporation will
pay on behalf of each participant a cash bonus in the amount of the estimated
income tax liability to be incurred by the participant as a result of the
award and cash bonus. Shares totaling 1,154,000 have been awarded under the
Incentive Plan, of which 908,000 restricted shares remained outstanding as of
December 31, 1994.
The Incentive Plan replaced the 1988 Long-Term Incentive Plan (1988
Incentive Plan). A total of 1,420,000 shares were awarded to plan participants
under the 1988 Incentive Plan. As of December 31, 1994, all such shares had
either vested or been forfeited based on the provisions of the 1988 Incentive
Plan.
The Corporation recognized Incentive Plan and 1988 Incentive Plan
compensation expense of $37 million in 1994, $69 million in 1993 and $36
million in 1992.
<PAGE> 25
EMPLOYEE STOCK OPTION PLANS. The 1994 Employee Stock Option Plan (1994 Option
Plan) provides for the granting of stock options to certain key employees who
are not officers. There also are options outstanding under both the 1993
Employee Stock Option Plan (1993 Option Plan) and the 1984 Employee Stock
Option Plan (1984 Option Plan).
Except with respect to the 1994 Option Plan, holders of stock options are
paid cash bonuses, payable upon exercise of an option, of an amount not to
exceed the amount by which the market value of the common stock, as defined,
exceeds the option price. In addition, holders of options granted under plans
other than the 1994 Option Plan may surrender all or part of the related stock
option in exchange for common stock with a fair market value equal to the
amount by which the market value of the shares covered by the option exceeds the
aggregate option exercise price.
Except for the 1994 Option Plan (which is noncompensatory for financial
reporting purposes), compensation resulting from stock options and cash bonuses
was initially measured at the grant date based on the market value of the
common stock, and adjustments are made quarterly for market price fluctuations.
The Corporation recognized 1993 Option Plan and 1984 Option Plan compensation
expense of $6 million in 1994, $14 million in 1993 and $15 million in 1992.
Additional information relating to the Corporation's employee stock option
plans is as follows:
<TABLE>
<CAPTION>
Year ended December 31
----------------------------------
1994 1993 1992
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Options outstanding
at January 1 1,055,000 981,000 1,029,000
Options granted 937,000 472,000 446,000
Options exercised/
surrendered (291,000) (267,000) (464,000)
Options cancelled (55,000) (131,000) (30,000)
- ----------------------------------------------------------------------
Options outstanding
at December 31 1,646,000 1,055,000 981,000
Options available
for grant at
December 31 111,000 99,000 244,000
- ----------------------------------------------------------------------
Total reserved shares 1,757,000 1,154,000 1,225,000
======================================================================
Options exercisable
at December 31 757,000 654,000 557,000
======================================================================
Option prices
per share:
Granted $64-$75 $59 $66
Exercised/surrendered $39-$66 $34-$66 $34-$46
Cancelled $39-$75 $39-$66 $34-$66
======================================================================
</TABLE>
SHAREHOLDER RIGHTS PLAN. The Corporation has a Shareholder Rights Plan
pursuant to which preferred stock purchase rights are issued at the rate of
one Right for each share of common stock. The Rights expire on July 31, 1999,
unless redeemed earlier. The Rights are exercisable only if a person or group
acquires 15% or more of the Corporation's common stock or announces a tender
offer for 30% or more of the common stock. In such event, each Right entitles
the holder to buy, at an exercise price of $175, one one-hundredth of a newly
issued share of Series A Junior Preferred Stock, of which 5 million shares
were reserved at December 31, 1994. Due to the nature of its dividend,
liquidation and voting rights, the economic value of one one-hundredth of a
share of Junior Preferred Stock should approximate the economic value of one
share of common stock. In addition, if one of several specified events
(generally involving self-dealing transactions by an acquiror of the
Corporation's common stock or a business combination involving the
Corporation) occurs, each Right generally entitles the holder to buy, at an
exercise price of $175 (subject to adjustments), shares of either the
Corporation's Series A Junior Preferred Stock or the acquiror's common stock,
in either case having a market value of twice the exercise price.
<PAGE> 26
NOTE 10. COMMITMENTS AND CONTINGENCIES
The Corporation is a party to various legal proceedings incidental to its
business and is subject to a variety of environmental and pollution control
laws and regulations in all jurisdictions in which it operates. As is the
case with other companies in similar industries, the Corporation faces
exposure from actual or potential claims and legal proceedings involving
environmental matters. The Corporation is self-insured for general liability
claims up to $5 million per occurrence. Liability insurance in effect during
the last several years provides coverage for environmental matters only to a
limited extent.
The Corporation is involved in environmental remediation activities at
numerous sites where it has been notified that it is or may be a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act or similar state "superfund" laws and at certain of its own
properties. Of the known sites in which it is involved, the Corporation
estimates that approximately 45 percent are being investigated, approximately
40 percent are being remediated and approximately 15 percent are being monitored
(an activity which occurs after either site investigation or remediation has
been completed). The ultimate costs to the Corporation for the remediation of
many of these sites cannot be predicted with certainty due to the often unknown
magnitude of the pollution or the necessary cleanup, the varying costs of
alternative cleanup methods, the amount of time necessary to accomplish such
cleanups, the evolving nature of cleanup technologies and government
regulations and the inability to determine the Corporation's share of
multi-party cleanups or the extent to which contribution will be available
from other parties. The Corporation has established reserves for
environmental remediation costs for these sites in amounts which it believes
are probable and reasonably estimable. Based on analysis of currently
available information and previous experience with respect to the cleanup of
hazardous substances, the Corporation believes that it is reasonably possible
that costs associated with these sites may exceed current reserves by amounts
that may prove insignificant or that could range, in the aggregate, up to
approximately $79 million. This estimate of the range of reasonably possible
additional costs is less certain than the estimates upon which reserves are
based, and in order to establish the upper limit of such range, assumptions
least favorable to the Corporation among the range of reasonably possible
outcomes were used. In estimating both its current reserve for environmental
remediation and the possible range of additional costs, the Corporation has
not assumed it will bear the entire cost of remediation of every site to the
exclusion of other known potentially responsible parties who may be jointly
and severally liable. The ability of other potentially responsible parties to
participate has been taken into account, based generally on the parties'
financial condition and probable contribution on a per site basis. No amounts
have been recorded for potential recoveries from insurance carriers.
In the fourth quarter of 1992, the Corporation filed suit in the State of
Washington against numerous insurance carriers for coverage under comprehensive
general liability insurance policies issued by those carriers. The Corporation
is seeking a declaratory judgment to the effect that past and future
environmental remediation and other related costs with respect to certain of
the sites are covered by such policies.
During 1994, the Corporation received and responded to two comprehensive
information requests from the Environmental Protection Agency (EPA) concerning
air emissions at approximately 30 of the Corporation's facilities which
manufacture oriented strand board, medium-density fiberboard, plywood and
particleboard. A third request relating to these same facilities was received
in January 1995. On August 5, 1994, the EPA issued a Notice of Violation (NOV)
with respect to alleged violations of certain requirements of the Clean Air Act
at these facilities relating to, among other things, alleged emissions of
volatile organic compounds from sources constructed or modified since 1978.
The Corporation expects to be able to negotiate settlements of the allegations
contained in the NOV with the EPA and the state environmental agencies involved
on terms which the Corporation considers reasonable. The Corporation expects
these settlements will entail the payments of fines and the agreement by the
Corporation to install air emission control equipment at certain of its plants.
Approximately 220 suits involving 9,160 plaintiffs are currently pending in
several state courts in Mississippi. The suits allege a variety of torts
including nuisance, trespass and infliction of emotional distress primarily
related to the alleged discharge of dioxin into the Leaf River from a pulp mill
owned by a subsidiary of the Corporation. Three of these cases have been
tried. A total of $241,000 in compensatory damages and $4 million in punitive
damages were awarded to three plaintiffs in the first two cases (Simmons and
Ferguson) with respect to certain claims. The jury found in favor of the
Corporation with respect to a fourth plaintiff. The Corporation appealed both
judgments. On July 8, 1993, in the third Mississippi dioxin case tried, the
jury returned a verdict in favor of the Corporation on all counts. The
plaintiffs have filed a notice of appeal. The Mississippi Supreme Court heard
oral arguments in Simmons and Ferguson on March 21, 1994. At February 16,
1995, no decision on these appeals have been issued.
In early 1994 two dioxin cases pending in federal court in Mississippi were
voluntarily dismissed with prejudice by the plaintiffs. On September 1, 1994,
the circuit court judge to whom almost all the remaining Mississippi dioxin
cases have been assigned lifted a stay which he had entered pending the Supreme
Court's decision in Simmons and Ferguson. None of such cases pending against
the Corporation have yet been set for trial.
<PAGE> 27
Although there can be no assurances as to the ultimate outcome of the
approximately 220 suits pending against the Corporation for alleged discharges
of dioxin, based on the opinions of counsel the Corporation believes that
substantial grounds exist for reversal of the judgments in Simmons and
Ferguson, and that it has meritorious defenses to the remaining lawsuits.
Suit has been filed against the mill's insurance carriers seeking a
declaratory judgment to the effect that these dioxin claims are covered by
various insurance policies issued to the Corporation.
The Corporation and many other companies are defendants in suits brought in
various courts around the nation by plaintiffs who allege that they have
suffered personal injury as a result of exposure to asbestos-containing
products. The Corporation currently is defending claims of approximately
27,300 such plaintiffs and anticipates that additional suits or claims will be
filed against it over the next several years. These suits allege a variety of
lung and other diseases based on alleged exposure to products previously
manufactured by the Corporation. In many cases the plaintiffs are unable to
demonstrate that they have suffered any compensable loss as a result of such
exposure.
The Corporation generally resolves asbestos cases by voluntary dismissal
or settlement for amounts it considers reasonable given the facts and
circumstances of each case. The amounts it has paid in settlement have been
substantially covered by product liability insurance, and the Corporation
believes that it has insurance available in amounts adequate to cover
substantially all of the reasonably foreseeable damages and settlement amounts
arising out of claims and suits currently pending. The Corporation also
anticipates that equivalent amounts of insurance will be available with respect
to the disposition of suits and claims that may be filed against the
Corporation in the future, but there can be no assurance in this regard. The
Corporation has established reserves for liabilities and legal defense costs
for these suits and claims in amounts it believes are probable and reasonably
estimable. It also has recorded a receivable for expected insurance
recoveries with respect to pending suits and claims.
Although the ultimate outcome of these environmental matters and legal
proceedings cannot be determined with certainty, based on presently available
information management believes that adequate reserves have been established
for probable losses with respect thereto and that such ultimate outcome, after
taking such reserves into account, will not have a material adverse effect on
the consolidated financial position of the Corporation.
NOTE 11. RELATED PARTY TRANSACTIONS
The Corporation is a 50% partner in a joint venture (GA-MET) with Metropolitan
Life Insurance Company (Metropolitan). GA-MET owns and operates the
Corporation's office headquarters complex in Atlanta, Georgia. The Corporation
accounts for its investment in GA-MET under the equity method.
At December 31, 1994, GA-MET had an outstanding mortgage loan payable to
Metropolitan in the amount of $158 million. The note bears interest at 9-1/2%,
requires monthly payments of principal and interest through 2011 and is secured
by the land and building of the Atlanta headquarters complex. In the event of
foreclosure, each partner has severally guaranteed payment of one-half of any
shortfall of collateral value to the outstanding secured indebtedness. Based
on the present market conditions and building occupancy, the likelihood of any
obligation to the Corporation with respect to this guarantee is considered
remote.
<PAGE> 28
NOTE 12. UNAUDITED SELECTED QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
First Quarter* Second Quarter* Third Quarter* Fourth Quarter*
----------------------------------------------------------------------------
(Millions, except
per share amounts) 1994 1993 1994 1993 1994 1993 1994 1993
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $2,942 $2,937 $3,187 $3,197 $3,267 $2,975 $3,342 $3,178
Gross profit (net sales
minus cost of sales) 610 678 605 618 747 621 895 605
Income (loss) before
extraordinary item
and accounting change** 56 41 14 5 87 (28) 169 (36)
Net income (loss)** 40 41 14 (3) 87 (36) 169 (36)
Income (loss) per share
before extraordinary
item and accounting
change .63 .47 .16 .06 .98 (.33) 1.89 (.41)
Net income (loss)
per share .45 .47 .16 (.03) .98 (.42) 1.89 (.41)
Dividends declared per
common share .40 .40 .40 .40 .40 .40 .40 .40
Price range of common stock
High 77.25 69.50 67.00 69.25 79.00 64.13 78.50 75.00
Low 63.00 55.00 56.75 56.38 60.00 59.25 66.13 59.00
- -------------------------------------------------------------------------------------------------------------
</TABLE>
* Certain 1994 and 1993 quarterly amounts have been reclassified
to conform with fourth quarter 1994 presentation.
** Includes after-tax gains (losses) primarily related to asset divestitures
of $33 million in the 1994 first quarter, $(3) million in the 1993 first
quarter and $10 million in the 1993 third quarter.
<PAGE> 29
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and the Board of Directors of Georgia-Pacific Corporation:
We have audited the accompanying balance sheets of Georgia-Pacific
Corporation (a Georgia corporation) and subsidiaries as of December 31, 1994
and 1993 and the related statements of income, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Corporation'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 Georgia-Pacific Corporation
and subsidiaries as of December 31, 1994 and 1993 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted accounting principles.
As explained in Note 7 to the financial statements, effective January 1,
1992, the Corporation changed its method of accounting for income taxes.
/s/ Arthur Andersen LLP
- -----------------------
Arthur Andersen LLP
Atlanta, Georgia
February 16, 1995
<PAGE> 30
REPORT ON MANAGEMENT'S RESPONSIBILITIES
Management of Georgia-Pacific Corporation is responsible for the preparation,
integrity and fair presentation of the consolidated financial statements and
the estimates and judgments upon which certain amounts in the financial
statements are based. Management is also responsible for preparing the other
financial information included in this annual report. In our opinion, the
financial statements on the preceding pages have been prepared in conformity
with generally accepted accounting principles, and the other financial
information in this annual report is consistent with the financial statements.
Management is also responsible for establishing and maintaining a system of
internal control over financial reporting, which encompasses policies,
procedures and controls directly related to, and designed to provide reasonable
assurance as to, the reliability of the published financial statements. An
independent evaluation of the system is performed by the Corporation's internal
audit staff in order to confirm that the system is adequate and operating
effectively. The Corporation's independent public accountants also consider
certain elements of the internal control system in order to determine their
auditing procedures for the purpose of expressing an opinion on the financial
statements. Management has considered any significant recommendations
regarding the internal control system which have been brought to its attention
by the internal audit staff or independent public accountants and has taken
steps it deems appropriate to maintain a cost-effective internal control
system. The Audit Committee of the Board of Directors, consisting of
independent directors, provides oversight to the financial reporting process.
The Corporation's internal auditors and independent public accountants meet
regularly with the Audit Committee to discuss financial reporting and internal
control issues and have full and free access to the Audit Committee.
There are inherent limitations in the effectiveness of any system of
internal control, including the possibility of human error and the
circumvention or overriding of controls. Accordingly, even an effective
internal control system can provide only reasonable assurance with respect to
financial statement preparation. Furthermore, the effectiveness of an
internal control system can vary over time due to changes in conditions.
Management believes that as of December 31, 1994, the internal control
system over financial reporting is adequate and effective in all material
respects.
/s/ James E. Terrell
- --------------------
James E. Terrell
Vice President and Controller
/s/ John F. McGovern
- --------------------
John F. McGovern
Senior Vice President - Finance and Chief Financial Officer
/s/ A. D. Correll
- -----------------
A. D. Correll
Chairman and Chief Executive Officer
February 16, 1995
<PAGE> 31
SELECTED FINANCIAL DATA -- OPERATIONS
Georgia-Pacific Corporation and Subsidiaries
CASH DIVIDENDS TO EARNINGS
Cash dividends declared (common and preferred) divided by net income (loss).
EARNINGS TO INTEREST
Income (loss) from continuing operations before income taxes, extraordinary
items and accounting changes plus interest expense divided by total interest
cost (interest expense plus capitalized interest). In the 1994, 1993, 1992,
1991 and 1990 calculations, respectively, $33 million, $29 million, $35
million, $59 million and $48 million cost of the accounts receivable sale
program was included in interest expense.
CASH FLOW TO INTEREST
Cash provided by continuing operations plus interest expense divided by total
interest cost (interest expense plus capitalized interest). In the 1993, 1991
and 1990 calculations, respectively, cash provided by continuing operations
excludes $(100) million, $(50) million and $850 million from the accounts
receivable sale program. In the 1994, 1993, 1992, 1991 and 1990 calculations,
respectively, the $33 million, $29 million, $35 million, $59 million and $48
million cost of accounts receivable sale program was included in interest
expense.
EFFECTIVE INCOME TAX RATE
Provision (benefit) for income taxes divided by income (loss) from continuing
operations before income taxes, extraordinary items and accounting changes.
<TABLE>
<CAPTION>
Year ended December 31
- -----------------------------------------------------------------------------------------------------------
(Dollar amounts, except per share,
and shares are in millions) 1994 1993 1992 1991 1990* 1989 1988
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net sales $12,738 $12,287 $11,847 $11,524 $12,665 $10,171 $9,509
- -----------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of sales 9,881 9,765 9,397 9,164 9,738 7,621 7,452
Selling, general and administrative 1,143 1,196 1,170 1,137 951 689 632
Depreciation and depletion 746 764 789 724 699 514 450
Interest 453 513 565 584 606 260 197
Other (income) loss (57) 26 - (344) (48) - -
- -----------------------------------------------------------------------------------------------------------
Total costs and expenses 12,166 12,264 11,921 11,265 11,946 9,084 8,731
- -----------------------------------------------------------------------------------------------------------
Income (loss) from continuing
operations before unusual items,
income taxes, extraordinary
items and accounting changes 572 23 (74) 259 719 1,087 778
Unusual items - - - - - - -
Provision (benefit) for income taxes 246 41 (14) 293 354 426 311
- -----------------------------------------------------------------------------------------------------------
Income (loss) from continuing
operations before extraordinary
items and accounting changes 326 (18) (60) (34) 365 661 467
(Loss) from discontinued
operations, net of taxes - - - - - - -
Extraordinary items and accounting
changes, net of taxes (16) (16) (64) (108) - - -
- -----------------------------------------------------------------------------------------------------------
Net income (loss) $ 310 $ (34) $ (124) $ (142) $ 365 $ 661 $ 467
===========================================================================================================
Cash provided by continuing
operations** $ 829 $ 489 $ 868 $ 630 $ 1,223 $ 1,358 $ 865
===========================================================================================================
Other statistical data
Per common share
Income (loss) from continuing
operations before extraordinary
items and accounting changes $ 3.66 $ (.21) $ (.69) $ (.40) $ 4.28 $ 7.42 $ 4.76
(Loss) from discontinued
operations - - - - - - -
Extraordinary items and accounting
changes (.18) (.18) (.74) (1.25) - - -
- -----------------------------------------------------------------------------------------------------------
Net income (loss) $ 3.48 $ (.39) $ (1.43) $ (1.65) $ 4.28 $ 7.42 $ 4.76
===========================================================================================================
Dividends declared $ 1.60 $ 1.60 $ 1.60 $ 1.60 $ 1.60 $ 1.45 $ 1.25
Average shares of common stock
outstanding 89.1 87.7 86.4 85.8 85.3 89.1 98.1
Shares of common stock outstanding
at year-end 90.5 90.3 88.1 87.4 86.7 86.7 94.8
Cash dividends to earnings 44.5% 100%+ 100%+ 100%+ 38.1% 19.7% 26.3%
Earnings to interest 2.1 1.0 0.9 1.4 2.0 5.0 4.4
Cash flow to interest 2.7 1.9 2.4 1.9 2.7 5.9 4.8
Effective income tax rate 43.0% 178.3% (18.9)% 113.1% 49.2% 39.2% 40.0%
===========================================================================================================
<CAPTION>
Year ended December 31
- -----------------------------------------------------------------------------
(Dollar amounts, except per share,
and shares are in millions) 1987 1986 1985 1984
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net sales $8,603 $7,223 $6,716 $6,682
- -----------------------------------------------------------------------------
Costs and expenses
Cost of sales 6,777 5,783 5,553 5,441
Selling, general and administrative 583 511 431 426
Depreciation and depletion 387 339 310 282
Interest 124 138 132 156
Other (income) loss - - - -
- -----------------------------------------------------------------------------
Total costs and expenses 7,871 6,771 6,426 6,305
- -----------------------------------------------------------------------------
Income (loss) from continuing
operations before unusual items,
income taxes, extraordinary
items and accounting changes 732 452 290 377
Unusual items 66 33 19 19
Provision (benefit) for income taxes 340 189 102 143
- -----------------------------------------------------------------------------
Income (loss) from continuing
operations before extraordinary
items and accounting changes 458 296 207 253
(Loss) from discontinued
operations, net of taxes - - (30) (134)
Extraordinary items and accounting
changes, net of taxes - - 10 -
- -----------------------------------------------------------------------------
Net income (loss) $ 458 $ 296 $ 187 $ 119
=============================================================================
Cash provided by continuing
operations** $ 781 $ 575 $ 771 $ 509
=============================================================================
Other statistical data
Per common share
Income (loss) from continuing
operations before extraordinary
items and accounting changes $ 4.23 $ 2.70 $ 1.84 $ 2.28
(Loss) from discontinued
operations - - (.29) (1.31)
Extraordinary items and accounting
changes - - .10 -
- -----------------------------------------------------------------------------
Net income (loss) $ 4.23 $ 2.70 $ 1.65 $ .97
=============================================================================
Dividends declared $ 1.05 $ .85 $ .80 $ .70
Average shares of commong stock
outstanding 107.5 104.1 103.0 102.2
Shares of common stock outstanding
at year-end 104.7 107.3 103.2 102.5
Cash dividends to earnings 25.1% 32.8% 49.7% 71.4%
Earnings to interest 6.9 4.2 2.7 3.3
Cash flow to interest 6.8 4.9 5.6 4.0
Effective income tax rate 42.6% 39.0% 33.0% 36.1%
=============================================================================
</TABLE>
* The results of Great Northern Nekoosa Corporation and its
subsidiaries have been included beginning on March 9, 1990.
** Excludes the accounts receivable sale program.
<PAGE> 32
SELECTED FINANCIAL DATA -- FINANCIAL POSITION, END OF YEAR
Georgia-Pacific Corporation and Subsidiaries
BOOK VALUE PER COMMON SHARE
Shareholders' equity minus the unamortized discount on redeemable preferred
stock, divided by shares of common shock outstanding as of the end of the year.
TOTAL DEBT TO CAPITAL, BOOK BASIS
Total debt divided by the sum of total debt, deferred income taxes, other long-
term liabilities, redeemable preferred stock and shareholders' equity as of the
end of the year. Total debt includes bank overdrafts, commercial paper and
short-term notes, current portion of long-term debt, long-term debt and
accounts receivable sold.
TOTAL DEBT TO CAPITAL, MARKET BASIS
Total debt divided by the sum of total debt and the market value of
shareholders' equity as of the end of the year. Total debt includes bank
overdrafts, commercial paper and short-term notes, current portion of long-term
debt and accounts receivable sold. The value of shareholders' equity is the
market price of common stock multiplied by the number of common stock shares
outstanding.
CURRENT RATIO
Current assets divided by current liabilities as of the end of the year.
<TABLE>
<CAPTION>
Year ended December 31
- -----------------------------------------------------------------------------------------------------------
(Dollar amounts, except per share,
and shares are in millions) 1994 1993 1992 1991 1990* 1989 1988
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Financial position, end of year
Current assets $ 1,862 $ 1,646 $ 1,607 $ 1,562 $ 1,766 $1,829 $1,892
Timber and timberlands, net 1,363 1,381 1,402 1,377 1,630 1,246 1,289
Property, plant and equipment, net 5,488 5,448 5,831 5,567 6,341 3,691 3,723
Net assets of discontinued operations - - - - - - -
Goodwill 1,773 1,832 1,891 1,949 2,042 91 101
Other assets 242 238 181 174 284 202 113
- -----------------------------------------------------------------------------------------------------------
Total assets 10,728 10,545 10,912 10,629 12,063 7,059 7,118
- -----------------------------------------------------------------------------------------------------------
Current liabilities 2,325 2,064 2,452 2,722 2,535 924 1,013
Long-term debt 3,904 4,157 4,019 3,743 5,218 2,336 2,514
Other long-term liabilities 825 827 731 633 407 241 168
Deferred income taxes 1,054 1,095 1,202 795 928 841 788
Redeemable preferred stock - - - - - - -
- -----------------------------------------------------------------------------------------------------------
Shareholders' equity $ 2,620 $ 2,402 $ 2,508 $ 2,736 $ 2,975 $2,717 $2,635
- -----------------------------------------------------------------------------------------------------------
Working capital $ (463) $ (418) $ (845) $(1,160) $ (769) $ 905 $ 879
- -----------------------------------------------------------------------------------------------------------
Other statistical data
Capital expenditures (including
acquisitions)** $ 894 $ 467 $ 384 $ 528 $ 3,789 $ 499 $1,552
Capital expenditures (excluding
acquisitions)** 894 467 384 528 866 493 711
Per common share
Market price: High 79.00 75.00 72.00 60.25 52.13 62.00 42.88
Low 56.75 55.00 48.25 36.25 25.38 36.63 30.75
Year-end 71.50 68.75 62.38 53.63 37.25 48.50 36.88
Book value 28.95 26.60 28.47 31.30 34.31 31.35 27.79
Total debt to capital, book basis 56.0% 57.0% 57.0% 60.1% 63.6% 40.1% 44.1%
Total debt to capital, market basis 46.9% 48.0% 51.7% 57.2% 69.9% 37.7% 44.8%
Current ratio .8 .8 .7 .6 .7 2.0 1.9
===========================================================================================================
<CAPTION>
Year ended December 31
- -----------------------------------------------------------------------------
(Dollar amounts, except per share,
and shares are in millions) 1987 1986 1985 1984
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial position, end of year
Current assets $1,729 $1,420 $1,291 $1,406
Timber and timberlands, net 915 844 804 840
Property, plant and equipment, net 3,048 2,691 2,606 2,270
Net assets of discontinued operations - - 11 158
Goodwill 92 - - -
Other assets 90 160 154 111
- -----------------------------------------------------------------------------
Total assets 5,874 5,115 4,866 4,785
- -----------------------------------------------------------------------------
Current liabilities 996 837 631 640
Long-term debt 1,298 893 1,257 1,383
Other long-term liabilities 156 125 69 34
Deferred income taxes 744 695 606 503
Redeemable preferred stock - 113 156 190
- -----------------------------------------------------------------------------
Shareholders' equity $2,680 $2,452 $2,147 $2,035
- -----------------------------------------------------------------------------
Working capital $ 733 $ 583 $ 660 $ 766
- -----------------------------------------------------------------------------
Other statistical data
Capital expenditures (including
acquisitions)** $ 825 $ 482 $ 642 $ 710
Capital expenditures (excluding
acquisitions)** 550 444 624 403
Per common share
Market price: High 52.75 41.25 27.38 25.75
Low 22.75 24.75 20.50 18.00
Year-end 34.50 37.00 26.50 25.00
Book value 25.59 22.70 20.59 19.58
Total debt to capital, book basis 31.4% 26.3% 32.0% 35.7%
Total debt to capital, market basis 31.2% 23.3% 33.9% 37.4%
Current ratio 1.7 1.7 2.0 2.2
=============================================================================
</TABLE>
* The financial position of Great Northern Nekoosa Corporation and
its subsidiaries has been included beginning March 1990.
** Represents additions, at cost, to property, plant and equipment and
timber and timberlands.
<PAGE> 33
SALES AND OPERATING PROFITS BY INDUSTRY SEGMENT
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Year ended December 31
- ------------------------------------------------------------------------------------------------------------
(Millions) 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales
Building products
Wood panels $ 3,159 25% $ 2,913 24% $ 2,543 22% $ 2,097 18%
Lumber 2,720 21 2,672 22 2,055 17 1,819 16
Chemicals 334 3 267 2 240 2 223 2
Gypsum products 320 3 236 2 216 2 222 2
Roofing 157 1 180 1 185 2 183 2
Other 871 7 799 7 873 7 861 7
- ------------------------------------------------------------------------------------------------------------
7,561 60 7,067 58 6,112 52 5,405 47
- ------------------------------------------------------------------------------------------------------------
Pulp and paper
Containerboard and packaging 2,185 17 1,902 15 2,001 17 2,008 17
Communication papers 1,310 10 1,195 10 1,070 9 1,134 10
Tissue 740 6 713 6 682 6 664 6
Market pulp 772 6 579 5 681 6 645 6
Paper distribution and envelopes 35 - 748 6 1,208 10 1,218 10
Other 96 1 51 - 69 - 420 4
- ------------------------------------------------------------------------------------------------------------
5,138 40 5,188 42 5,711 48 6,089 53
- ------------------------------------------------------------------------------------------------------------
Other operations 39 - 32 - 24 - 30 -
- ------------------------------------------------------------------------------------------------------------
Continuing operations $12,738 100% $12,287 100% $11,847 100% $11,524 100%
============================================================================================================
Operating results*
Building products $ 989 81% $ 973 126% $ 691 100% $ 344 32%
Pulp and paper 171 14 (187) (24) (8) (1) 362 34
Other operations 10 - 10 1 9 1 17 2
Other income (loss)** 57 5 (26) (3) - - 344 32
- ------------------------------------------------------------------------------------------------------------
Continuing operations $ 1,227 100% $ 770 100% $ 692 100% $ 1,067 100%
============================================================================================================
<CAPTION>
Year ended December 31
- ------------------------------------------------------------------------------------------------------------
(Millions) 1990*** 1989 1988 1987
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales
Building products
Wood panels $ 2,296 18% $ 2,488 24% $2,442 26% $2,355 28%
Lumber 1,966 16 2,109 21 2,134 22 2,002 23
Chemicals 247 2 253 3 241 2 189 2
Gypsum products 270 2 299 3 305 3 361 4
Roofing 192 2 194 2 189 2 194 2
Other 952 7 745 7 718 8 654 8
- ------------------------------------------------------------------------------------------------------------
5,923 47 6,088 60 6,029 63 5,755 67
- ------------------------------------------------------------------------------------------------------------
Pulp and paper
Containerboard and packaging 2,440 19 1,578 15 1,433 15 1,246 15
Communication papers 1,360 11 983 10 796 8 621 7
Tissue 719 6 679 7 590 6 539 6
Market pulp 779 6 728 7 533 6 314 4
Paper distribution and envelopes 1,027 8 - - - - - -
Other 377 3 74 1 84 1 90 1
- ------------------------------------------------------------------------------------------------------------
6,702 53 4,042 40 3,436 36 2,810 33
- ------------------------------------------------------------------------------------------------------------
Other operations 40 - 41 - 44 1 38 -
- ------------------------------------------------------------------------------------------------------------
Continuing operations $12,665 100% $10,171 100% $9,509 100% $8,603 100%
============================================================================================================
Operating results*
Building products $ 423 29% $ 533 36% $ 428 41% $ 533 58%
Pulp and paper 979 67 917 63 616 58 383 41
Other operations 17 1 15 1 10 1 10 1
Other income (loss)** 48 3 - - - - - -
- ------------------------------------------------------------------------------------------------------------
Continuing operations $ 1,467 100% $ 1,465 100% $1,054 100% $ 926 100%
============================================================================================================
<CAPTION>
Year ended December 31
- ------------------------------------------------------------------------------------------
(Millions) 1986 1985 1984
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales
Building products
Wood panels $1,864 26% $1,666 25% $1,637 25%
Lumber 1,676 23 1,434 21 1,461 22
Chemicals 155 2 173 3 186 3
Gypsum products 375 5 377 6 360 5
Roofing 230 3 260 4 268 4
Other 553 8 560 8 540 8
- ------------------------------------------------------------------------------------------
4,853 67 4,470 67 4,452 67
- ------------------------------------------------------------------------------------------
Pulp and paper
Containerboard and packaging 1,029 15 1,037 15 909 13
Communication papers 461 6 356 5 445 7
Tissue 502 7 514 8 507 8
Market pulp 221 3 157 2 225 3
Paper distribution and envelopes - - - - - -
Other 68 1 70 1 25 -
- ------------------------------------------------------------------------------------------
2,281 32 2,134 31 2,111 31
- ------------------------------------------------------------------------------------------
Other operations 89 1 112 2 119 2
- ------------------------------------------------------------------------------------------
Continuing operations $7,223 100% $6,716 100% $6,682 100%
==========================================================================================
Operating results*
Building products $ 500 73% $ 391 86% $ 379 63%
Pulp and paper 146 22 29 6 202 34
Other operations 35 5 35 8 20 3
Other income (loss)** - - - - - -
- ------------------------------------------------------------------------------------------
Continuing operations $ 681 100% $ 455 100% $ 601 100%
==========================================================================================
</TABLE>
* Operating results are before income taxes, interest, cost of accounts
receivable sale program, general corporate expenses, unusual items,
extraordinary items and accounting changes.
** Other income (loss) includes a net $57 million pretax gain in 1994, a net
$26 million pretax loss in 1993, a net $344 million pretax gain in 1991 and
a net $48 million pretax gain in 1990 primarily resulting from asset
divestitures. If these amounts had been included in segment operating
profits, pulp and paper operating profits would have been $204 million in
1994, $(213) million in 1993, $546 million in 1991 and $939 million in 1990;
building products operating profits would have been $1,013 million in 1994,
$504 million in 1991 and $511 million in 1990.
***Sales and operating profits of Great Northern Nekoosa Corporation and
its subsidiaries have been included beginning on March 9, 1990.
<PAGE> 34
OPERATING STATISTICS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
As of December 31, 1994 Production
- -----------------------------------------------------------------------------------------------------------
Number of Annual
Facilities Capacity 1994 1993 1992 1991 1990*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Pulp and paper
Paper (t.tons)
Containerboard and packaging
Linerboard and medium 4 2,941 3,105 3,030 2,889 2,936 3,139
Other paperboard 5 678 646 567 526 522 544
Kraft paper 2 342 345 343 377 358 354
Communication papers 7 2,184 2,064 2,119 2,002 1,994 1,780
Tissue 5 588 586 594 576 556 553
Groundwood papers - - - - - 603 531
Market pulp, shipments (t.tons) 6 1,938 1,977 1,940 1,829 1,793 1,667
- -----------------------------------------------------------------------------------------------------------
Total paper and market pulp 29 8,671 8,723 8,593 8,199 8,762 8,568
===========================================================================================================
Converting
Corrugated packaging (t.tons) 38 2,618 2,327 2,065 1,917 1,816 2,225
Tissue (t.tons) 6 615 544 543 521 491 497
Other 11
- -----------------------------------------------
Total paper, market pulp and converting 84
===============================================
Building products
Wood panels
Softwood plywood (3/8") (m.sq.ft.) 16 5,299 5,445 5,462 5,133 4,968 5,395
Hardwood plywood (sm) (m.sq.ft.) 2 600 448 477 458 424 437
Hardboard (1/8") (m.sq.ft.) 8 1,397 1,365 1,388 1,330 1,202 1,203
Particleboard (3/4") (m.sq.ft.) 9 1,382 1,190 1,089 977 932 984
Oriented strand board (3/8") (m.sq.ft.) 4 1,031 1,028 1,045 1,011 851 969
Panelboard (1/8") (m.sq.ft.) 1 379 378 366 365 332 344
Softboard (1/2") (m.sq.ft.) 1 250 241 247 234 237 252
Medium-density fiberboard (3/4")
(m.sq.ft.) 1 100 95 98 92 79 88
Lumber (m.bd.ft.) 41 2,763 2,523 2,580 2,568 2,570 2,674
Moulding (m.bd.ft.) 2 21 17 21 23 22 36
Gypsum board (m.sq.ft.) 10 3,063 2,786 2,409 2,112 1,955 2,309
Roofing**-shingles (t.squares) - - 959 7,274 7,447 7,775 7,674
Formaldehyde (m.lbs.) 14 2,066 2,006 1,809 1,614 1,540 1,547
Thermosetting resins (m.lbs.) 16 3,013 2,926 2,761 2,571 2,377 2,470
Other 14
- -----------------------------------------------
Total building products 139
===============================================
Distribution centers 134
Other operations 2
===============================================
Resources (as of December 31)
North American timberlands (t.acres)
Owned 5,732 5,821 5,942 5,969 8,203***
Controlled 681 681 707 922 1,047***
===========================================================================================================
<CAPTION>
Production
- -----------------------------------------------------------------------------------------------------------
1989 1988 1987 1986 1985 1984
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Pulp and paper
Paper (t.tons)
Containerboard and packaging 1,419 1,297 1,318 1,146 976 740
Linerboard and medium 555 458 393 368 368 374
Other paperboard 350 356 348 394 452 529
Kraft paper 1,161 970 868 731 552 574
Communication papers 519 511 490 496 476 486
Tissue - - - - - -
Groundwood papers 1,194 870 718 611 587 629
Market pulp, shipments (t.tons)
- -----------------------------------------------------------------------------------------------------------
Total paper and market pulp 5,198 4,462 4,135 3,746 3,411 3,332
===========================================================================================================
Converting
Corrugated packaging (t.tons) 1,258 1,270 1,205 1,102 1,025 874
Tissue (t.tons) 467 462 446 437 432 422
Other
- ---------------------------------------
Total paper, market pulp and converting
=======================================
Distribution centers
Building products
Wood panels
Softwood plywood (3/8") (m.sq.ft.) 5,341 5,545 5,050 4,706 4,414 4,443
Hardwood plywood (sm) (m.sq.ft.) 420 456 357 335 311 343
Hardboard (1/8") (m.sq.ft.) 1,203 1,198 1,159 349 368 361
Particleboard (3/4") (m.sq.ft.) 1,062 1,004 695 425 410 381
Oriented strand board (3/8") (m.sq.ft.) 873 793 652 525 173 96
Panelboard (1/8") (m.sq.ft.) 318 330 295 248 290 311
Softboard (1/2") (m.sq.ft.) 242 238 231 241 239 243
Medium-density fiberboard (3/4") (m.sq.ft.) 74 62 59 75 76 69
Lumber (m.bd.ft.) 2,426 2,324 1,956 1,784 1,684 1,650
Moulding (m.bd.ft.) 29 30 30 8 - -
Gypsum board (m.sq.ft.) 2,403 2,406 2,620 2,473 2,495 2,412
Roofing**-shingles (t.squares) 8,106 7,155 6,976 7,361 7,789 7,539
Formaldehyde (m.lbs.) 1,454 1,394 1,309 1,233 1,188 1,169
Thermosetting resins (m.lbs.) 2,372 2,362 2,136 1,805 1,650 1,527
Other
- ---------------------------------------
Total building products
=======================================
Distribution centers
Other operations
=======================================
Resources (as of December 31)
North American timberlands (t.acres)
Owned 5,430 5,480 4,910 4,700 4,760 4,920
Controlled 670 1,010 670 530 480 480
===========================================================================================================
</TABLE>
sm = surface measure basis
t = thousands
m = millions
The Corporation has 221 manufacturing facilities in the United States,
one recycled-paper mill and one particle board plant in Canada, and two
wood moulding manufacturing facilities in Mexico.
* The production of Great Northern Nekoosa facilities has been included
beginning on March 9, 1990.
** Roofing operations were sold in February, 1994.
*** Excludes 540,000 fee acres and 98,000 controlled acres of timberland
sold in January 1991.
<PAGE> 35
INVESTOR INFORMATION
CORPORATE HEADQUARTERS
Georgia-Pacific Center, 133 Peachtree Street, N.E.
Atlanta, Georgia 30303
STOCK EXCHANGES AND SYMBOLS
Georgia-Pacific Corporation Common Stock is listed on the New York Stock
Exchange ("NYSE"). The Corporation's NYSE symbol is "GP"; however, the stock
is quoted as "GaPac" in stock table listings in newspapers. G-P options are
traded on the Philadelphia Stock Exchange.
TRANSFER AGENT AND REGISTRAR
First Chicago Trust Company of New York
Post Office Box 2500
Jersey City, New Jersey 07303-2500
SHAREHOLDER INFORMATION
For shareholder information, contact the Transfer Agent and Registrar, First
Chicago Trust Company of New York, at Post Office Box 2500, Jersey City, New
Jersey 07303-2500, or telephone (201) 324-0498.
Registered G-P shareholders are eligible to participate in the G-P Dividend
Reinvestment Plan. For information on the Plan, contact the Plan agent, First
Chicago Trust Company of New York, Post Office Box 2500, Jersey City, New
Jersey 07303-2500.
Number of shareholders of record at December 31, 1994: 44,000.
FINANCIAL INFORMATION
A copy of the Georgia-Pacific 1994 Annual Report to the Securities and Exchange
Commission on Form 10-K will be supplied without charge. Annual Statistical
Updates are also available. Requests for financial information should be
directed to: Investor Relations, Georgia-Pacific Corporation, P.O. Box 105605,
Atlanta, Georgia 30348, or telephone (404) 652-5555
Georgia-Pacific is an equal opportunity employer.
Photo Description:
Georgia-Pacific would like to thank the employees of the Monticello, Georgia,
and Leaf River, Mississippi, mills for their cooperation and participation in
telling the company's story this year.
(c)1995 Georgia-Pacific Corporation. All rights reserved.
ANGEL SOFT, SPARKLE, CORONET, MD, DELTA, HOPPER and KIANA are registered
trademarks and PROTERRA and FLECKS are trademarks of Georgia-Pacific
Corporation.
Printed on Georgia-Pacific papers:
Cover -- Hopper(r) Kiana(r) Smooth White 100 lb. cover
Text -- Hopper(r) Kiana(r) Smooth White 80 lb. text
Proterra (tm) Flecks (tm) Stucco 70 lb. text
Design: Samata Associates
Principal Photography: Marc Norberg
Typography: Fine Print Typography, Inc.
Lithography: George Rice & Sons
Lithography in the United States of America
<PAGE> 1
EXHIBIT 21
GEORGIA-PACIFIC CORPORATION SUBSIDIARIES
The following table lists each subsidiary of the Registrant as of March 1, 1995
indented under the name of its immediate parent, the percentage of each
subsidiary's voting securities beneficially owned by its immediate parent and
the jurisdiction under the laws of which each subsidiary was organized:
GEORGIA-PACIFIC CORPORATION SUBSIDIARIES
% of Voting
Name Securities Jurisdiction
Georgia-Pacific Corporation - Georgia
A) Amador Central Railroad 100 California
B) Arkansas Louisiana & Mississippi
Railroad Company 100 Delaware
C) Ashley, Drew & Northern Railway
Company 100 Arkansas
D) Blue Rapids Railway Company 100 Kansas
E) Brunswick Pulp & Paper Company 100 Delaware
F) Brunswick Pulp Land Company, Inc. 100 Delaware
G) Eastern Consolidated Paper Co. 100 Delaware
H) Fordyce and Princeton R. R. Co. 100 Arkansas
I) Georgia-Pacific Development Company 100 Delaware
1) Dunes West Joint Venture,
A Partnership 100 1 South Carolina
a) Dunes West Recreation
Association, Inc. 100 Delaware
J) Georgia-Pacific Holdings, Inc. 100 Delaware
K) Georgia-Pacific Investment Company 100 Oregon
L) Georgia-Pacific Pulpwood Company 100 Delaware
M) Georgia-Pacific Resins, Inc. 100 Delaware
N) Georgia-Pacific West, Inc. 100 Oregon
1) Aztec Trading Company, S.A. 100 Panama
2) Beaver Wood Fibre Company
Limited, The 100 Ontario
3) G-P Flakeboard Limited 67 Ontario
4) Georgia-Pacific Asia, Inc. 100 Delaware
a) Georgia-Pacific-Asia (H. K.)
Limited 100 Hong Kong
5) Georgia-Pacific Building Materials
Sales, Ltd. 100 New Brunswick
6) Georgia-Pacific de Mexico, S. de
R. L. de C. V. 100 2 Mexico
7) Georgia-Pacific Foreign Sales
Corporation 100 Barbados
8) Georgia-Pacific Global Corporation 100 Oregon
<PAGE> 2
9) Georgia-Pacific GmbH 100 Germany
10) Georgia-Pacific Italia S.r.l. 100 3 Italy
11) Georgia-Pacific SA 100 Switzerland
12) Georgia-Pacific U.K. Limited 100 England
13) Georgia Steamship Company, Inc. 100 Delaware
14) St. Croix Pulpwood, Limited 100 New Brunswick
O) Georgia Temp, Inc. 100 Delaware
P) Gloster Southern Railroad Company 100 Delaware
Q) Great Northern Nekoosa Corporation 100 Maine
1) G-P Envelope Holdings, Inc. 100 Delaware
2) Chattahoochee Industrial Railroad 100 Georgia
3) Envases Industriales de Costa Rica,
S.A. 33.33 Costa Rica
4) F. A. Marsden, Limited 100 United Kingdom
5) Fipasa-Fibras, Panama, S.A. 50 Panama
6) Great Southern Paper Company 100 Georgia
7) Industria Panamena de Papel, S.A. 50 Panama
8) Leaf River Corporation 100 Delaware
a) Leaf River Forest Products, Inc. 100 Delaware
i) Old Augusta Railroad Company 100 Mississippi
9) Nekoosa Packaging Corporation 100 Delaware
a) Nekoosa Packaging Mexican
Paper Corporation 100 Delaware
10) Nekoosa Papers Inc. 100 Wisconsin
R) Mill Services and Manufacturing, Inc. 100 Delaware
S) National Management, Inc. 100 Oregon
T) Phoenix Athletic Club, Inc. 100 Georgia
U) Saint Croix Water Power Company, The 100 New Brunswick
V) Southwest Millwork and Specialties, Inc. 100 Delaware
1) Maderas Howrey S. A. de C. V. 100 4 Mexico
W) Sprague's Falls Manufacturing Company
(Limited), The 100 Canada
X) St. Croix Water Power Company 100 Maine
Y) Thacker Land Company 57 West Virginia
Z) Tomahawk Land Company 100 Delaware
AA) XRS, Inc. 100 Delaware
Notes
1 50% of the partnership of Dunes West Joint Venture is owned by Georgia-
Pacific Development Company and 50% is owned by Georgia-Pacific
Investment Company.
2 Georgia-Pacific de Mexico, S. de R. L. de C. V. is owned by Georgia-
Pacific West, Inc. and Georgia-Pacific Investment Company.
3 99% of the stock of Georgia-Pacific Italia S.r.l. is issued to Georgia-
Pacific West, Inc. and the remaining 1% is issued to Georgia-Pacific
Holdings, Inc. Georgia-Pacific Italia S.r.l. is in liquidation effective
December 31, 1994.
4 99.6% of Series A stock of Maderas Howrey S. A. de C. V. is issued to
Southwest Millwork and Specialties, Inc. and the remaining .4% is issued
to Eastern Consolidated Paper Co., Georgia-Pacific Pulpwood Company,
Georgia-Pacific Holdings, Inc. and Georgia-Pacific West, Inc. in equal
parts. 100% of Series B stock and 100% of Series C stock of Maderas
Howrey S. A. de C. V. are issued to Southwest Millwork and Specialties,
Inc.
Each subsidiary is included in the consolidated financial statements of
the Registrant.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports included or incorporated by reference in this Annual Report on
Form 10-K, into Georgia-Pacific Corporation's previously filed Registration
Statement No. 2-93184; Registration Statement No. 2-99381; Registration
Statement No. 2-97165; Registration Statement No. 2-99380; Registration
Statement No. 2-76072; Registration Statement No. 2-68688; Registration
Statement No. 33-5964; Registration Statement No. 33-16528; Registration
Statement No. 33-18482; Registration Statement No. 33-21018; Registration
Statement No. 33-23776; Registration Statement No. 33-25446; Registration
Statement No. 33-26985; Registration Statement No. 33-11341; Registration
Statement No. 33-37930; Registration Statement No. 33-38561; Registration
Statement No. 33-48331; Registration Statement No. 33-48329; Registration
Statement No. 33-48330; Registration Statement No. 33-34810; Registration
Statement No. 33-39693; Registration Statement No. 33-43453; Registration
Statement No. 33-45892; Registration Statement No. 33-48041; Registration
Statement No. 33-51182; Registration Statement No. 33-52815; Registration
Statement No. 33-52823; Registration Statement No. 33-62498; Registration
Statement No. 33-58664; Registration Statement No. 33-65208; Registration
Statement No. 33-48328; Post-Effective Amendment No. 1 to Registration
Statement No. 2-64516; and Post-Effective Amendment No. 5 (with respect to the
1974 Employee Stock Option Plan), Post-Effective Amendment No. 6 (with respect
to the Savings and Capital Growth Plan) and Post-Effective Amendment No. 7
(with respect to the Savings and Capital Growth Plan) to Registration Statement
No. 2-53427.
/S/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Atlanta, Georgia
March 13, 1995
<PAGE> 1
EXHIBIT 24
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ ROBERT CARSWELL
----------------------
ROBERT CARSWELL
-1-
<PAGE> 2
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ JEWEL PLUMMER COBB
----------------------
JEWEL PLUMMER COBB
-2-
<PAGE> 3
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 3rd
day of February, 1995.
/s/ JANE EVANS
----------------------
JANE EVANS
-3-
<PAGE> 4
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ DONALD V. FITES
----------------------
DONALD V. FITES
-4-
<PAGE> 5
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ HARVEY C. FRUEHAUF, JR.
---------------------------
HARVEY C. FRUEHAUF, JR.
-5-
<PAGE> 6
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ RICHARD V. GIORDANO
-----------------------
RICHARD V. GIORDANO
-6-
<PAGE> 7
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ DAVID R. GOODE
----------------------
DAVID R. GOODE
-7-
<PAGE> 8
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ T. MARSHALL HAHN, JR.
------------------------
T. MARSHALL HAHN, JR.
-8-
<PAGE> 9
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 3rd
day of February, 1995.
/s/ M. DOUGLAS IVESTER
----------------------
M. DOUGLAS IVESTER
-9-
<PAGE> 10
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ FRANCIS JUNGERS
----------------------
FRANCIS JUNGERS
-10-
<PAGE> 11
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ Robert E. McNair
----------------------
ROBERT E. MCNAIR
-11-
<PAGE> 12
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and any
and all instruments and documents filed as a part of or in connection with such
amendments or supplements; (4) Registration Statements on Form S-8 covering
(a) 8,100,000 shares of the Common Stock of the Corporation related to the 1995
Shareholder Value Incentive Plan and (b) 2,000,000 shares of the Common Stock of
the Corporation related to the 1995 Employee Stock Purchase Plan, and any and
all amendments to, and supplements to any prospectus contained in, such
Registration Statements and any and all instruments and documents filed as a
part of or in connection with such amendments or supplements; and (5) any other
reports or registration statements to be filed by the Corporation with the
Commission and/or any national securities exchange under the Securities Exchange
Act of 1934, as amended, and any and all amendments thereto, and any and all
instruments and documents filed as part of or in connection with such reports or
registration statements or reports or amendments thereto; and in connection with
the foregoing, to do any and all acts and things and execute any and all
instruments which such attorneys-in-fact and agents may deem necessary or
advisable to enable this Corporation to comply with the securities laws of the
United States and of any State or other political subdivision thereof; hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any one
of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ Louis W. Sullivan
---------------------
LOUIS W. SULLIVAN
-12-
<PAGE> 13
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or
both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"),
hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F.
Khoury, and each of them, his or her true and lawful attorney-in-fact and agent
to sign (1) any and all amendments to, and supplements to any prospectus
contained in, the Registration Statement on Form S-3 No. 33-65208 (related to
$500,000,000 aggregate principal amount of debt securities of the Corporation),
the Registration Statements on Form S-8, No. 33-62498 (related to the 1993
Employee Stock Purchase Plan), No. 33-52823 (related to the 1994 Employee Stock
Option Plan), No. 33-58664 (related to the 1993 Employee Stock Option Plan), No.
33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth
Plan) and No. 33-52815 (related to Georgia-Pacific Corporation Hourly 401(k)
Savings Plan) filed with the Securities and Exchange Commission (the
"Commission"), and any and all instruments and documents filed as a part of or
in connection with such amendments or supplements; (2) the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994; (3) any and all
amendments to, and supplements to any prospectus contained in or relating to,
the Registration Statements on Form S-8, Nos. 33-48329, 33-48330 and 33-48331,
relating to the Georgia-Pacific Corporation (GNN) Investment Plan For Union
Employees, Georgia-Pacific Corporation Investment Plan For Certain Non-Union
Hourly Employees of Butler Paper Company and Leaf River Forest Products, Inc.
and Georgia-Pacific Corporation Supplemental Hourly 401(K) Savings Plan, and
any and all instruments and documents filed as a part of or in connection with
such amendments or supplements; (4) Registration Statements on Form S-8
covering (a) 8,100,000 shares of the Common Stock of the Corporation related
to the 1995 Shareholder Value Incentive Plan and (b) 2,000,000 shares of the
Common Stock of the Corporation related to the 1995 Employee Stock Purchase
Plan, and any and all amendments to, and supplements to any prospectus
contained in, such Registration Statements and any and all instruments and
documents filed as a part of or in connection with such amendments or
supplements; and (5) any other reports or registration statements to be filed
by the Corporation with the Commission and/or any national securities exchange
under the Securities Exchange Act of 1934, as amended, and any and all
amendments thereto, and any and all instruments and documents filed as part of
or in connection with such reports or registration statements or reports or
amendments thereto; and in connection with the foregoing, to do any and all
acts and things and execute any and all instruments which such attorneys-in-
fact and agents may deem necessary or advisable to enable this Corporation to
comply with the securities laws of the United States and of any State or other
political subdivision thereof; hereby ratifying and confirming all that such
attorneys-in-fact and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st
day of February, 1995.
/s/ James B. Williams
---------------------
JAMES B. WILLIAMS
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA PACIFIC CORPORATION FOR THE TWELVE MONTHS ENDED
DECEMBER 31, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 53
<SECURITIES> 0
<RECEIVABLES> 594
<ALLOWANCES> 28
<INVENTORY> 1,209
<CURRENT-ASSETS> 1,862
<PP&E> 11,500
<DEPRECIATION> 6,012
<TOTAL-ASSETS> 10,728
<CURRENT-LIABILITIES> 2,325
<BONDS> 3,904
<COMMON> 72
0
0
<OTHER-SE> 2,548
<TOTAL-LIABILITY-AND-EQUITY> 10,728
<SALES> 12,738
<TOTAL-REVENUES> 12,738
<CGS> 9,881
<TOTAL-COSTS> 9,881
<OTHER-EXPENSES> 746
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 453
<INCOME-PRETAX> 572
<INCOME-TAX> 246
<INCOME-CONTINUING> 326
<DISCONTINUED> 0
<EXTRAORDINARY> (11)
<CHANGES> (5)
<NET-INCOME> 310
<EPS-PRIMARY> 3.45
<EPS-DILUTED> 3.45
</TABLE>
